Written by: Ra Solomon
In partnership with the World Bank Group, the Ateneo Economics Association (AEA) held the Word Bank Country Partnership Framework #KayaYanBayan Forum to discuss economic updates of the East Asia and Pacific region and World Bank’s project: Country Partnership Framework (CPF) in the Philippines, held last August 22 at the Escaler Hall, Ateneo de Manila University.
According to the World Bank, the main goals of the CPF Consultations are to evoke the views of citizens and beneficiaries in order to strengthen the CPF’s relevance to the Philippine context, foster strong CPF ownership by key stakeholders which includes the government, and promote alignment with national priorities and complementarity with other development partners.
To start the forum, Mr. Souleymane Coulibaly, the lead economist and program leader for equitable Growth, Finance and Institutions for Brunei, Malaysia, the Philippines and Thailand Country Management Unit, mentioned the importance of neighboring countries’ economies to a country.
Coulibaly stated that headwinds contributed to softening growth momentum in the region. Unresolved trade tensions and the possibility of new ones arising like a United States of America and China trade war could affect the Philippines and for Coulibaly, the Philippines must focus on faster production and logistics to attract investors to the Philippines for the country not to be a victim of the US-China war.
Photo by: Monica Araza
However, Coulibaly noted that despite the headwinds, the region’s economy exhibited resilience through 2018 because of robust domestic demand on the back of benign inflationary pressures, strong labor market outcomes, and in some cases fiscal stimulus. This robust domestic demand supported poverty reduction in the region as there were better job opportunities leading to a share of the middle class to grow.
Coulibaly then tackled the importance of investing for the right infrastructure for the future. Expenditure shall be efficiently focused on health, education, and human capital investment. Also, he states that for the economy to grow further a multifaceted policy approach is required.
There must be a focus on short term on managing global headwinds by strengthening depleted fiscal buffers. In the medium term, a renewed focus on structural reforms in the context of changing global economic forces and efforts to raise investment and boost human capital will be needed. Improving the private sector’s opportunities will play an important role as it will ensure a more sustainable growth pattern, especially in a constrained policy environment.
Lastly, Coulibaly suggests that there must be an increased resilience to economic shocks and promote greater economic security. To achieve this, the governments in the region can focus on strengthening social insurance and assistance programs.
Clarissa David, Senior Communications Officer of the World Bank, then discussed five key themes that the World Bank considered pivotal in propelling the Philippine economy namely: Human Capital, Progress, Inequality, Resilience, and Peace.
David mentioned that the Philippines can achieve its full potential by boosting human capital. It was revealed that according World Bank Human Capital Index, Filipino children born today will only achieve 55% of their potential productivity, in comparison to a situation with full educational and health support. Also, according to World Bank, it is worthy to take note that even though there have been advances in the Philippine education system, 12.8 years of schooling in the Philippine system only equates to 8.4 years of studying in high-performing systems. On the other hand, it was also mentioned that the Philippines has one of the most advanced social protection systems in East Asia with programs such as Pantawid Pamilya and pensions.
Photo by: Monica Araza
The difficulty of work in the Philippines was highlighted next, as most jobs’ wages are minimum and offers little-to-no benefits, and the pace of creation of good jobs remains inadequate. According to World Bank, the Philippines ranked 124 out of 190 economies in terms of ease of doing business. In addition, the Philippines remain to have restrictive labor regulations, weak infrastructure, and an underperforming agricultural sector.
In terms of inequality, growth in the Philippines has not been highly inclusive as incomes have grown much more slowly than GDP per capita, while the wealth of the richest Filipinos has expanded at a rate far exceeding the growth of the overall economy, according to World Bank. This exemplifies the rate of inequality in the Philippines, as the gap between the rich and the masses continues to be one of the highest in the world.
David then mentioned that the Philippines should be ready to combat climate change and be on the look-out for the environment. As one of the countries hit by the most number of typhoons and earthquakes in a year, at least 74% of Filipinos are vulnerable to natural disasters. As global warming continues to be a threat, a good disaster risk management must be developed for the country to become resilient.
To end, David stated that if the Philippines want long term-sustainable development, there must be long-term sustainable peace. As conflicts in the Mindanao region have taken its toll against development and poverty reduction, the recent formation of the Bangsamoro Autonomous Muslim Region of Mindanao gives new hope for peace in the region.
In alignment with the forum, AEA also held a three-day exhibit in the SEC-B foyer in the Ateneo last August 20,22, and 23 where students had the chance to voice out their opinions on solutions and suggestions for the five key themes.
Photo by: JT Valiente
Photo by: JT Valiente