GETTING THE FUNDAMENTALS RIGHT ERNESTO ERNES TO M. M. PE PERNIA, - - PowerPoint PPT Presentation

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GETTING THE FUNDAMENTALS RIGHT ERNESTO ERNES TO M. M. PE PERNIA, - - PowerPoint PPT Presentation

Aug 14, 2023 650 likes •887 views

GETTING THE FUNDAMENTALS RIGHT ERNESTO ERNES TO M. M. PE PERNIA, NIA, PhD PhD Sec Secretar retary y of So of Socioe cioecon conomic P omic Plann lanning ing National National Economic and Development Authority Economic and

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SLIDE 1

ERNES ERNESTO TO M.

  • M. PE

PERNIA, NIA, PhD PhD

Sec Secretar retary y of So

  • f Socioe

cioecon conomic P

  • mic Plann

lanning ing National National Economic and Development Authority Economic and Development Authority

GETTING THE FUNDAMENTALS RIGHT

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SLIDE 2

KEY MESSAGES

1. PH economic growth has been on a sharp monotonic uptrend for 3.5 decades, making the economy among the fastest-rising in the world. 2. PH economy has undergone structural transformation – increasingly driven by investment in lieu of consumption, and industry instead of service sector; both are typically highly job-generating. 3. Total factor productivity (capital & labor coupled with technology) increasing remarkably, surpassing those of other traditionally dynamic ASEAN economies.

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SLIDE 3

KEY MESSAGES

4. While the macroeconomy appears robust, inequality across regions, besides across households, remains highly skewed, and chronic poverty persists. 5. Thus, the thrust of PDP 2017-2022, as spelled out in National Spatial Strategy, is regional & rural development, and decongesting the mega urban-industrial region centered around Metro Manila. 6. Most of the infrastructure projects under government's "Build Build Build" program are intended to benefit lagging regions, either intra-regionally

  • r via inter-regional connectivity.

7. Infrastructure program will create mass employment, vitalize the regions, and markedly reduce inequality and poverty.

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SLIDE 4

PH is one of the fastest-moving economies in Asia

198 0 198 1 198 2 198 3 198 4 198 5 198 6 198 7 198 8 198 9 199 0 199 1 199 2 199 3 199 4 199 5 199 6 199 7 199 8 199 9 200 0 200 1 200 2 200 3 200 4 200 5 200 6 200 7 200 8 200 9 201 0 201 1 201 2 201 3 201 4 201 5

2

  • 2
  • 4
  • 6
  • 8

4 6 8

6.3

%

2010-2016

4.5

%

2000-2009

2.8

%

1990-1999

2.0

%

1980-1989 Source: Philippine Statistics Authority (PSA)

Philippine economic growth rate, 1980-2017 (Q1)

Photo source: Vuringroup.com

201 6

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SLIDE 5

PARTICULARS 2016 2016 2017 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr GROSS DOMESTIC PRODUCT 6.9 7.1 7.1 6.6 6.9 6.4 GROSS NATIONAL INCOME 7.3 7.0 6.6 6.0 6.7 5.9 Agri, Fishery and Forestry (4.3) (2.0) 3.0 (1.3) (1.3) 4.9 Industry 9.3 7.6 8.8 7.9 8.4 6.1

  • .w. Manufacturing

8.0 6.2 6.8 7.0 7.0 7.5 Services 7.5 8.2 6.8 7.2 7.4 6.8 Household Final Consumption Exp. 7.1 7.5 7.2 6.2 7.0 5.7 Gov’t Final Consumption Exp. 11.8 13.5 3.1 4.5 8.4 0.2 Capital Formation 31.5 30.3 21.7 14.7 23.7 7.9

  • .w. Fixed Capital Formation

28.3 30.3 25.4 18.5 25.2 11.8 Exports 10.2 10.6 9.0 13.4 10.7 20.3 Imports 21.1 25.4 13.3 15.4 18.5 17.5

GDP growth breakdown, 2016 and 2017 (Q1)

Photo source: Vuringroup.com

Household Final Consumption Exp

5.7%

FIXED CAPITAL FORMATION

11.8%

SERVICES

6.8%

MANUFACTURING

7.5%

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SLIDE 6

Total factor productivity (capital & labor coupled with technology) increasing remarkably, surpassing other traditionally dynamic ASEAN economies

Photo source: birt.actuate.com

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SLIDE 7

Economic growth targets for 2017-2022

1/ PSA’s actual figures revised as of April 2017 2/ Adopted by the Development Budget Coordination Committee (DBCC) as of December 2016

Real GDP Growth Rate (%)

6.5-7.5 6.9 6.1 6.1

7.0-8.0

Projections

2/

2017 2018 2019 2020 2021 2022 2015 2016 2014

Actual

1/

Photo source: Vuringroup.com

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SLIDE 8

Photo source: Greenpeace USA

Inflation to remain within the government’s target of 2% - 4%

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SLIDE 9

RISKS ISKS AND ND UN UNCERTAIN INTIES IES

  • Fragile recovery in developed economies
  • Possibility of uneven global growth prospects
  • Protectionist and nationalist sentiments in the West
  • Greater volatility of capital flows and exchange rate
  • Oil price volatility
  • Geopolitical tensions in various regions
  • Weather disturbances
  • Inflationary pressures from oil price volatility and high food prices
  • Logistical bottlenecks in implementation of infrastructure projects

We remain vigilant and well- positioned against the downside risks to growth.

External Domestic

Photo source: Rappler

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SLIDE 10

ASEAN TRADE AND INVESTMENTS

EU

  • 10%
  • 17%

U.S.

  • 9%
  • 11%

ASEAN

  • 24%
  • 18%

TRADE FDIs

Photo source: www.globaltrademag.com

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SLIDE 11

Demand side

  • Household consumption:

remittance inflows, better employment prospects

  • Government spending on physical

infrastructure and human capital investment

  • Private investment in industry and

manufacturing

  • Exports of services: IT-Business

Process Management (BPM) and tourism

EXPECTED EXPECTED DRIVERS OF GR DRIVERS OF GROWTH WTH

Supply side

  • Resurgence of agriculture and

fishery

  • Manufacturing resurgence
  • Continuing growth of the IT-BPM

sector

  • Influx of tourists

Photo source: johninthephils.blogspot.com

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SLIDE 12

Government will ramp up infrastructure spending to PhP 8.4 trillion until 2022 – from 5.3% of GDP in 2017 up to 7.4% of GDP in 2022

Photo source: infrastructurene.ws

THE PHILIPPINES’ GOLDEN AGE OF INFRASTR INFRASTRUCTURE UCTURE

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SLIDE 13

Three-Year Rolling Infrastructure Program (TRIP)

PhP4 trillion indicative total investment requirement from 2018 to 2020

*DepEd’s proposed budget for infrastructure outlay was based on FY 2017 GAA

Sectoral Breakdown TRIP for 2018-2020 (PhP Bn) 2018 2019 2020 Total % Transportation 627.37 764.56 937.84 2,329.77 58.03% Water Resources 79.21 72.55 87.26 239.02 5.95% Social Infrastructure* 390.90 339.88 312.70 1,043.48 25.99% Energy 15.08 12.36 12.67 40.11 1.00% ICT 53.17 41.54 18.14 112.85 2.81% Others 17.72 14.95 19.99 52.66 1.31% Administrative Building 85.92 72.28 38.79 196.99 4.91% Total 1,269.37 1,318.12 1,427.39 4,014.88 100.00%

Photo source: blue-works.com

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SLIDE 14

Thank you and mabuhay!

www.neda.gov.ph pdp.neda.gov.ph build.gov.ph

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SLIDE 15

Photo source: Vuringroup.com

2017 ECONOMIC PERFORMANCE

NE T PRIMA RY INCOME (NPI) GROSS N A TIONA L INCOME (GNI) GROSS DOMESTIC PRODUC T (GDP)

6 . 4

%

5 . 9

%

3 . 9

% 6 . 9

%

6 . 6

%

7 . 3

%

9 . 4

%

3 . 3

%

6 .

%

Q1 2017 Q1 2016 Q4 2016

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SLIDE 16

Photo source: Vuringroup.com

16

6.4%

6.9%

CHINA

PHILIPPINES VIETNAM INDONESIA THAILAND

5.1% 5.1% 3.3%

For the first quarter, the Philippines

  • vertook both Vietnam’s and

Indonesia’s 5.1-percent growth, and Thailand’s 3.3-percent. The country ranked second to China’s 6.9-percent while India has not released its data.

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SLIDE 17

Photo source: Vuringroup.com

17

By Industrial Origin

YEAR-ON-YEAR GROWTH R A TES

4. 9

%

6. 1

%

9 . 3

%

6. 8

%

7 . 5

%

5. 7

%

7 . 1

%

0. 2

%

1 1. 8

%

7. 9

%

31 . 5

%

20. 3

%

10 . 2

%

17. 5

%

21 . 1

%

Q1 201 6 Q1 201 7 Q1 201 6 Q1 201 7

By Expenditure shares

  • 4

. 3

%

Agriculture, Fishery and Forestry Industry Services

Household Final Consumption Expenditure Exports Capital Formation Gov’t Final Consumption Expenditure Imports

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SLIDE 18

8.4 4.6 6.2 7.6 5.6 5.1 6.9 6.4

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0

Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016 Q1 2017

Gross Domestic Product (GDP) Growth (%)

Post-Election Period Years with National Elections

Photo source: primer.com.ph

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SLIDE 19

Photo source: primer.com.ph

4.6 5.1 6.9 6.4

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 Q1 2011 Q12015 Q12016 Q12017

Gr Gross ss Do Domestic ic Pro rodu duct (GD GDP) ) Gr Growth th (%) %)

Source: Philippine Statistics Authority (PSA)

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SLIDE 20

Photo source: johninthephils.blogspot.com

Demand Side

4.8 6.0 7.1 5.7 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0

Household Final Consumption Expenditure Growth (%)

Q1 2011 Q12015 Q12016 Q12017

  • 14.9

0.0 11.8 0.2

  • 20.0
  • 15.0
  • 10.0
  • 5.0

0.0 5.0 10.0 15.0

Government Final Consumption Expenditure Growth (%)

Q1 2011 Q12015 Q12016 Q12017 27.8 15.7 31.5 7.9 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0

Capital Formation Growth (%)

Q1 2011 Q12015 Q12016 Q12017 Source: Philippine Statistics Authority (PSA)

  • 158.4
  • 45.2
  • 163.3
  • 1.8
  • 200.0
  • 150.0
  • 100.0
  • 50.0

0.0

Net Exports Growth (%)

Q1 2011 Q12015 Q12016 Q12017

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SLIDE 21

Supply Side

4.3 1.0

  • 4.3

4.9

  • 6.0
  • 4.0
  • 2.0

0.0 2.0 4.0 6.0

Agriculture, Hunting, Forestry and Fishing Growth (%)

Q1 2011 Q12015 Q12016 Q12017 6.9 5.5 9.3 6.1 0.0 2.0 4.0 6.0 8.0 10.0

Industry Sector Growth (%)

Q1 2011 Q12015 Q12016 Q12017 3.3 5.6 7.5 6.8 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0

Service Sector Growth (%)

Q1 2011 Q12015 Q12016 Q12017 Source: Philippine Statistics Authority (PSA)

Photo source: ph.undp.org