CEBU, Philippines - Economist Perry Fajardo said there is a need for the Philippines to invest on capital formation and implement the most awaited release of government expenditure on infrastructure, health and education.
Fajardo said although the 6.41 percent in the country’s Gross Domestic Product (GDP) in the first three months of this year is encouraging, it should be complemented with more push on employment generation not related to exports.
He said 80 percent of the GDP is consumed by Filipinos, “very little is left for savings and investments.” The reason why, the government should encourage Filipinos to invest and make allocations for savings.
The export sector he said is still on the “danger zone”, while the United States, the largest market for Philippine products is not yet on the economic rebound track. Europe on the other hand, is threatened by another round of recession.
“When export is down, so do the manufacturing industries that mainly depend on the export market,” Fajardo said, thus the government should act now in order to cushion the probable effects of external problems.
The growth in the household consumption is also threatened by the unresolved economic crises in the giant economies of US and Europe. Although, the remittances of the Overseas Filipino Workers (OFWs) is sustained, Fajardo said the size of the remittance may vary depending on the economic conditions of the countries where Filipinos are currently working.
Likewise, the Philippines should also do its assignment in improving the competitiveness ranking.
In the recent competitiveness ranking, the Philippines is at the tailend of the rank, while other countries in Asia like Vietnam, Indonesia, Malaysia, India, are getting ahead of the Philippines.
Vietnam now is considered as the fastest growing economy in Asia. Because of this, the Phlippines should recognize its challenge in competing with other countries, so that foreign investments will flow easily.
“Low competitiveness, means low investments,” Fajardo said during the recent first quarter 2012 economic briefing, hosted by the Cebu Business Club (CBC) at the Marco Polo Plaza Hotel Cebu.
Aside from improving competitiveness and boost other sectors, Fajardo suggested that the government should also make efforts in pushing growth in the education sector, health, among others.
The agriculture sector should also be given utmost attention in terms of development programs, and buget allocation.
In the first three months of this year, the education sector grew only by 1.7 percent while the health sector recorded an 11.8 percent.
The furniture and fixture industry grew by 86 percent buoyed by the robust real estate industry which also posted a 24.3 percent growth in the first quarter of this year. (FREEMAN)