THE National Economic and Development Authority (NEDA) said weak manufacturing is preventing the Philippines from achieving its poverty-reduction goals.
“Given the country’s low level of development, the steady decline of agriculture and manufacturing’s share in GDP (gross domestic product) significantly limits our opportunities for poverty reduction,” NEDA Secretary Arsenio M. Balisacan said during the Economic Journalists Association of the Philippines-San Miguel Corp. economic forum.
The manufacturing sector accounted for 0.9 percentage point (ppt) of the 5.7% GDP growth reported in the first quarter, according to the Philippine Statistics Authority.
In comparison, net exports of goods and services accounted for 1.2 ppts of GDP. Mr. Balisacan said the services sector made up about two-thirds of GDP growth.
“We want growth that delivers prosperity. And so, we need to see those high productivity sectors and those pillars of growth must also come in and augment services,” he added.
He noted that growth in the manufacturing sector was a primary driver of poverty reduction in many Asian economies.
The Philippines’ poverty rate fell to 22.4% in the first half of 2023 from 23.7% two years earlier.
The government aims to slash the poverty rate to 9% by the time it steps down in mid-2028.
“While we continue to buoy consumption and enhanced services, we must reinvigorate the other pillars of economic growth, investments and exports, particularly manufacturing and agribusiness, to sustain growth and make it more resilient in the years and decades to come,” Mr. Balisacan said.
“So that’s why if you look at our efforts, we are so focused on improving the ecosystem for investment,” he added.
The ICT (information and communications technology) and BPM (business process management) industries can serve to strengthen manufacturing, Mr. Balisacan added.
The S&P Global Philippines Manufacturing Purchasing Managers’ Index, which measures factory activity, slowed in the Philippines to 51.3 in June from 51.9 in May due to low demand and reduced worker numbers. — Beatriz Marie D. Cruz