29 Framework for Reducing Vulnerability of Individuals and Families, PDP 2017-2022

Economic Development

CLUSTER ASSESSMENT

Jocelyn C. Cuaresma

ovERviEw of THE RESEARCH

This chapter makes an assessment of the economic development sector performance of the Aquino Administration from 2010-2016. Being part of the NCPAG’s Research Project on Assessing the Performance of the Aquino Administration, this paper adopts the Project’s overall aim of delivering an objective, factual and guided assessment of the accomplishments, legacy and challenges faced by the Aquino administration.

Specifically, the research reviewed the accomplishments of representative subsectors and/or agencies within the Economic Development Sector vis-à-vis agency plans, programs and initiatives designed to implement President Aquino’s Social Contract, as contained in the Philippine Development Plan 2011-2016, State of the Nation Addresses (SONA), SONA Technical Reports and other official documents. The review determined major and pressing economic issues and challenges related to effectiveness in delivering economic public services, and drew up lessons and recommendations towards improving the administration of economic development reforms in the country. The analysis takes off from key result area (KRA) no. 3 of the President’s social contract with the Filipino people, namely, rapid, inclusive, and sustained economic growth – to achieve rapid economic expansion that generates jobs and livelihood for and increase the income of the poor while moving away from the boom-and-bust cycle of the economic performance of the past”. The sector pursued the following specific goals (Executive Order No. 43, dated May 13, 2011): • promote an environment conducive to the growth and competitiveness of private enterprises and the creation of jobs; • ensure the reliability of vital infrastructure, technologies and energy that facilitate the movement of people, goods, services and information; • improve farms and rural enterprises to achieve food security; • undertake research and development to support micro-, small and medium enterprises and of national industries; • improve national productivity and domestic competitiveness; and • ensure deep and widest distribution of economic opportunities and benefits.

The economic development sector is chaired by the Department of Finance (DOF) and composed of the following agencies as members: National Economic and Development Authority (NEDA) Secretariat, Department of Trade and Industry (DTI), Department of Budget and Management (DBM), Department of Public Works and Highways (DPWH), Department of Transportation and Communications (DOTC), Department of Energy (DOE), Department of Science and Technology (DOST), Department of Tourism (DOT), Department of Agriculture (DA), and the Department of the Interior and Local Government (DILG).

The study gathered inputs from the five Public Lectures on the Aquino Presidency and Administration that UPNCPAG conducted on April 14, 19, 21, 28 and May 3, 2016), where representatives of selected government agencies presented self-assessments of their respective agencies’ accomplishments. The forum on Economic Development, held on May 3, 2016, highlighted the accomplishments of three departments [NEDA, DOTC and DA] out of the nine departments classified under the Economic Development Cluster.

The paper is divided into five parts. Part 1 contains this introductory discussion and setting of the scope of the research. Part 2 gives an overview of the economic situation from 2001 to 2010 or prior to the Aquino administration. Part 3 highlights the performance and accomplishments of the economic development sector from 2011 to 2016 and of select agencies or sub-sectors. Part 4 summarizes the findings, conclusions and lessons learned.

The paper employed a desk review of existing reports, studies, accounts and assessments of the performance of the Economic Development Sector from 2010 to 2016 around the KRA, “Rapid, Inclusive and Sustained Growth”. It maps out important policies, programs and philosophies that define the sectors accomplishments. As such, the sector review and analysis revolves around the following: 1. Goals and targets set in 2010 and challenges the government had to address 2. Key strategies [policies, programs, reforms] to achieve the goals 3. Key accomplishments during the period 4. Challenges and concerns 5. Lessons and ways forward

Government reports, independent reviews by members of the academe, civil society organizations, media, and developmental institutions, and other relevant resources were utilized to guide the analyses.

THE nATionAl EConomy in 2011

Poverty and GDP Growth

One way to depict the year 2011 and prior years is to see the performance of the administration of former President Gloria Arroyo. Arroyo (2009) described the Philippine economy in 2010 as an economy of strong economic fundamentals amidst successive global crises in fuel, food and finance. According to Arroyo, the economy has proved its resilience to crises, evidenced by an upgrade in Moody’s credit rating. On her 10th year in office, Arroyo claimed to have built more and better infrastructure than her predecessor, President Estrada. To be fair to Estrada, whose stay in office lasted only two and half, Arroyo was expected to have accomplished more in her more than 9 years as President.

But if the economy is in good shape in 2010, the poverty data is not in concurrence. As when Arroyo end her term of office, the country’s poverty incidence among families stood at 20.9% in 2009, only slightly lower than the 21.1% in 2006 (National Statistical Coordination Board, 2011). In terms of the magnitude of poor families, amidst the continuous increase in population, there were more poor families in 2009 (4.036 million families) than in 2006 (3.809 million families).

The Aquino administration planned to bring down the poverty incidence among population to 20-23% by 2015 (PDP 2011-2016 Mid-Term Update, p. 9). Looking back to the Millennium Development Goals (MDGs), the country’s goal of cutting in half the poverty incidence of 32% in 2000 to 16% by 2015 was not achieved. In certain provinces, poverty even worsened. Among individuals, the poverty incidence is slightly lower at 26.3% in 2009 than the 26.6% in 2006 (Philippine Statistics Authority, 2017). (see Figure IV.1).

Figure IV.1. Philippines – Poverty Incidence (PI) and Subsistence Incidence (SI)among Population, in percent

Source: PSA (2006 ; 2009)

In 2000, the Philippines had a much lower poverty incidence of 22% compared to some ASEAN neighbors. The countries of Lao PDR, Vietnam, Cambodia and Indonesia had a poverty incidence as high as 41% to 46% in 2000. By 2010, all four countries were able to very significantly reduce their poverty incidence, unlike the Philippines, whose poverty rate even grew by one percentage point as shown in Figure IV.2 ASEAN (2017). 72