By Elijah Joseph C. Tubayan
Reporter
THE PHILIPPINES expects to attain upper middle-income status earlier than projected even as it missed last year’s unemployment target, the National Economic and Development Authority (NEDA) said on Tuesday.
NEDA Undersecretary for Policy and Planning Rosemarie G. Edillon said the country may reach $4,100 per capita gross national income (GNI) by 2019.
“The target for the PDP (Philippine Development Plan) is that we’ll be an upper middle-income country by 2022, but we think we’ll get to that status much earlier. I think we’ll breach that as early as next year,” Ms. Edillon said in a media briefing on the 2017 Socioeconomic Report, noting that GNI per capita stood at $3,580 as of end-2016.
World Bank counts among upper middle-income economies — those with a GNI per capita of $3,956-12,235 — the likes of China, Malaysia, Russia and South Africa, among others. High-income economies are those with GNI per capita of at least $12,236; lower middle-income countries are those with $1,006-3,955 GNI per capita; and low-income economies, up to $1,005.
The report noted that GNI grew 6.5% in 2017 compared to 4.1% in 2015, breaching a 4.5% target that year and even the five percent goal for 2018 and 2019.
Still, last year also saw a 5.1-5.4% target unemployment rate for 2017 missed, with preliminary estimates showing the rate actually picked up to 5.7% from 5.5% in 2016.
The economy last year also saw a net loss of 663,243 jobs against the goal to generate 900,000-1.1 million jobs.
Youth unemployment rate stood at 14.4% last year, missing a 11% target. “We are implementing the K-12: last year was the first year we implemented the year 12. Therefore, it brought out youth from the labor market. Last year we gave money for the free tuition fee for higher education,” Ms. Edillon explained. “It’s still a good thing since that is investing in human capital.”
Underemployment rate — reflecting workers who wanted another job or more hours of work in order to meet their needs — in areas outside the National Capital Region (NCR) provided the silver lining, sliding to 17.4% last year from 19.7% in 2016. “We have exceeded the target of 18.3-20.3% underemployment rate target that we have set for the year,” Ms. Edillon said. “This is consistent with our objective of making sure that development outside NCR also progresses.”
She said the government is now banking on its P8-trillion infrastructure development program to give people more jobs.
“The ‘Build, Build, Build’… will really create a number of jobs. Alongside construction activities, there would be increased activity in manufacturing. There will be direct employment but we will have increased employment in those sectors that feed in the construction industry,” Ms. Edillon explained, saying the infrastructure plan is estimated to generate a total of 1.7 million jobs by 2022.
“The implication of that is it means that our vision of being a high-income country by 2040 is really within reach. The challenge is that for this growth be inclusive. This one lifts everybody up, a rising tide that everybody be included in the growth process.”
Sought for comment, Al Faithrich Navarrete, an economist at the University of Santo Tomas, said “[t]he increasing (growth) rate of the GNI can be attributed to high foreign direct investments (FDI) received by the Philippines in 2017. This increasing rate of inward FDI is an indicator that investors find the Philippines conducive for business,” he said in a mobile phone message.
“The infrastructure program would create positive contribution to GNI,” he added, explaining for instance that “[i]ncreasing infrastructure for transportation will not only ease traffic congestion but will stimulate more economic activity that will benefit the country in the long run.”
Measures that NEDA is supporting this year include the shift to rice tariffs from a mandated minimum import volume system that is expected to ease inflation of this grain, as well as lifting of foreign ownership/participation restrictions in more economic activities and sectors like telecommunications, construction and education. “We are looking at it strategically. We are starting with the education sector because… we need to build a big workforce. As you increase the quality of human capital, you also attract investments in these high-tech industries,” Ms. Edillon explained.
Ms. Edillon said that the 11th Foreign Investment Negative List will be up for President Rodrigo R. Duterte’s approval in the next NEDA Board meeting, which she hopes would convene within the month.
The administration aims to prod economic growth to 7-8% annually until 2022, when Mr. Duterte ends his six-year term, from a 6.3% average in 2010-2016, cut unemployment rate to 3-5% also by 2022 from 5.5% in 2016 poverty incidence to 14% from 21.6% in 2015.
“A number of… reforms will have begun implementation this year and the changes will be fully felt in 2019. There will be changes in the market such as the entrance of new players, new production patterns, there will be a new way in which citizens will be transacting with government [and in] the way government delivers goods and services to the public,” said Ms. Edillon.
“There may be some handholding necessary for sectors that will be adversely affected during the transition. This must be done with utmost sensitivity, but with the objective of facilitating the transition and fully implementing the change.”

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