The desire of the Philippines to post faster economic growth of 7-8 percent is attainable, but the country needs to also focus investment support on the capital-intensive industrial sector.
This was according to the Asian Development Bank, which said the country’s decent but relatively stagnant pace of growth and its failure to trim the proportion of poor Filipinos can be traced to the lack of investments in the industrial sector.
Although the robust growth of the services sector was quite helpful, the ADB said this should come together with heavy investments in the industrial sector.
Norio Usui, country director of the ADB for the Philippines, said that unlike the services sector, the industrial sector required much bigger capital and offered employment opportunities even to people who failed to complete formal education.
This sector, therefore, has better ability to lift more poor people out of poverty compared with the services sector, he said.
“To increase the potential growth of the Philippines, the country must work (using) two legs,” Usui said, referring to both sectors, during an economic forum organized by the Management Association of the Philippines (MAP).
The services sector, which is driven by the business process outsourcing industry, has significantly fueled economic growth over the past decade.