MANILA, FEBRUARY 26, 2011 – Philippine President Benigno S. Aquino said today that the country is committed to the goal of achieving inclusive growth and reiterated his resolve for “a transparent, accountable government, worthy of the people’s trust.”
“Our nation has always aspired for an economy where the growth powered by private enterprise is felt by a larger number of people,” said President Aquino at the close of the Philippines Development Forum (PDF), the first under his administration, where the Government discussed the new Philippine Development Plan (PDP 2011-2016). “In the seven months that I and my team have been in office, we have witnessed an upsurge of optimism in our economy. In a short span of time, we are fulfilling our promise to curb corruption and reduce poverty.”
The theme of the 2011 PDF is “Implementing President Aquino’s Social Contract to Achieve Inclusive Growth.” More than 300 representatives from national government agencies, local government units, international development partners, private sector, civil society organizations, and the academe participated. The priorities of the new PDP are: attaining high rate of economic growth that provides productive employment opportunities; equalizing access to development opportunities for all Filipinos; and implementing effective social safety nets to protect and enable those who do not have the capability to participate in the economic growth process.
“President Aquino is committed to using his political capital to push for reforms that will make the Philippines globally competitive,” said Finance Secretary Cesar Purisima, Chair of the 2011 PDF. “The task is to provide a more predictable environment that will attract more investors and where things are done in an honest, fair and transparent manner. We believe that shining daylight into the crevices of governance eventually leads to empowerment of the citizenry and growth that benefits the poor.”
Development partners conveyed their strong support for the PDP as the guiding framework for implementing President Aquino’s Social Contract with the Filipino people, which is enshrined in President Aquino’s platform of governance. They agreed that with effective implementation of the plan as well as adequate support and collaboration of development partners, the Government will be able to sustain high levels of growth and reduce poverty.
“We are confident that with the implementation of the PDP, coupled with the renewed optimism and strong trust of the Filipino people in the leadership of President Aquino, a new window of opportunity has been created for inclusive growth in the Philippines,” said World Bank Country Director Bert Hofman, co-chair of the 2011 PDF.
The development partners congratulated the Government for early reforms that demonstrated Government’s commitment to be fiscally responsible, transparent and performance–oriented. They noted the strong growth posted last year, the timely passage of the first budget of the new administration, and the priority given to the conditional cash transfers program and the household targeting system. They encouraged the initial steps taken to make local governments more accountable through performance based grants and similar mechanisms to make budgeting processes open, transparent and consultative. They also praised the openness of the government to work with civil society and partners.
The Government and the development partners recognized that the central development challenge for the country is to maintain high growth rates and increase the impact of more growth on the livelihood of the poor. Participants recognized that the programs and policies presented in the PDP have the potential to achieve sustained inclusive growth, while recognizing that implementation would require a concerted effort among all stakeholders in society. Civil society organizations acknowledged the greater space for civil society involvement and emphasized the need to focus on asset reform, better coordination among anticorruption agencies, greater access to information, and development of the poorest areas of Mindanao.
The Government and development partners discussed priorities and programs under three major clusters namely, governance and security, human development and the economy.
Governance and Security
The discussion in the governance cluster highlighted the importance of improving governance and the rule of law to respond to citizens’ needs for public services, accelerate poverty reduction, and improve the climate for public sector investment. The Government highlighted the importance of rebuilding people’s trust in public institutions through rule of law and good local governance, strengthening democratic institutions through “open” governance, achieving peace and development in Mindanao, and reforming the security sector.
The participants also welcomed the efforts of the government to tackle corruption. They encouraged taking legal actions against cases of graft and fraud; diligently undertaking lifestyle checks for public officials, systematically addressing the vulnerabilities in government departments; and expanding opportunities for citizen participation. The government noted the importance of full transparency in the use of resources by national and local government agencies.
Development partners noted the importance of providing sustainable livelihood and supporting economic integration of conflict-affected areas with centers of growth as some of the critical elements of sustaining peace in Mindanao which at the same time contribute to inclusive growth. Many development partners expressed willingness to help the Government pursue the peace process and the development of Mindanao, especially those affected by armed conflict.
To equalize access to development opportunities, the PDP focuses both on developing the human capital of the poor in order to enable them to take better advantage of emerging income-earning opportunities. It also aims to reduce barriers to equitable access to land, credit, technology and infrastructure services. According to the PDP, human capital development will be promoted through increased public investment in more and better quality education services, as well as on improving public health, nutrition and other basic social services.
To put in place effective social safety nets, the PDP focuses on expanding the coverage of social protection mechanisms that have proven effective and responsive, such as the conditional cash transfer program (4Ps), expanding the public health insurance program for the poor, and an improved targeting of public expenditures. Looking toward the longer term, it also emphasizes the need to strengthen disaster risk and climate change management. The development partners noted the slow progress in attaining some of the Millennium Development Goals or MDGs (universal primary education, improving maternal health, and combating pandemic diseases, particularly HIV), as well as the large discrepancies across regions in achieving the MDGs, and presented specific subsectoral targets and policies for achieving them.
The development partners expressed support to fast-track the implementation of the universal health care as part of the commitment to the MDGs, implement the school-based management system to improve retention and participation rates of students, and ensure the empowerment and protection of the poor, vulnerable and disadvantaged individuals from all types of risks through the proposed convergence framework. They also noted that inclusive development can only be attained with gender equality and the economic, social and political empowerment of women. The government explained the need for continuing dialogue with various sectors of society on reproductive health care in the context of the need to provide opportunities for informed choice to reduce maternal mortality.
The participants considered the Government’s focus on medium-term fiscal consolidation appropriate, given the need to create more fiscal space, which will strengthen the ability of the budget to respond effectively to future shocks. In order to achieve fiscal consolidation and scale up priority spending it will be essential to raise the tax effort. In this context, the Government’s intention to strengthen tax administration is deemed appropriate.
The participants acknowledged the PDP targets of a revenue-to-GDP ratio of about 19 percent by 2016 and reduced deficit and debt levels to at most 2 percent and below 50 percent respectively. To deliver on these targets while reducing corruption and improving equity, both for tax policy measures an in-depth tax administration reform will be required.
Development partners welcomed the Government’s Public-Private Partnership (PPP) agenda as an effective means to provide urgently needed infrastructure and pledged their support for strengthening the Government’s capacity to successfully promote, develop and manage PPPs. Development partners also expressed support for the aspirations of the PDP to promote job creation and economic growth, in particular with regard to improving the investment climate and transparency of public tenders.
They also noted that, in order to mobilize financial resources from the private sector and to attract more investment to the Philippines, it is essential that the business environment be substantially improved, and that the strong commitment shown in this regard is translated into concrete measures that are steadily implemented on the ground.
Development partners also noted that achieving food security will remain a challenge in the years ahead and indicated support for the agriculture, agribusiness, and food security reforms that the Government is undertaking. They applauded the government’s intentions to close the agribusiness infrastructure gap through PPPs.
“If these plans are implemented and actions taken, we can look forward to the next PDF where we will be able to report that PPP projects have successfully taken off, investments have gone up, jobs have been created, people’s incomes have increased, and poverty has fallen,” Mr. Hofman added.