THE MALAYA BUSINESS NEWS TEAM
The Philippines faces a pivotal moment in its development path and must embark on sweeping reform to boost productivity and anchor long-term growth amid accelerating global disruption, DEPDev Secretary Arsenio Balisacan said at the launch of the latest World Bank report on Tuesday.
Without timely action, he warned, the country risks sliding into economic stagnation and deepening inequality.
In his foreword to the World Bank’s latest Growth and Jobs Report, Balisacan laid out a sobering assessment of the shifting global terrain.
Geopolitical fractures, AI disruption, demographic transitions, and climate volatility are redrawing the map of economic opportunity, raising the risk of widespread worker displacement and widening wealth gaps, he said.
espite these headwinds, the Philippines has posted one of the strongest post-pandemic recoveries in Asia. Poverty incidence dropped to 15.5 percent in 2023, better than pre-pandemic levels, while unemployment fell to 4.3 percent this year, surpassing government targets.
“The country has made notable progress,” Balisacan said, crediting hard-won gains since the pandemic shock.
Still, deep structural issues remain. Most of the country’s growth, he noted, has been driven by labor expansion and capital buildup rather than productivity. Regional disparities persist, with per capita GDP in Metro Manila nearly nine times that of the Bangsamoro region. And job quality remains low, with informality continuing to dominate the labor market.
With the country’s demographic window of opportunity rapidly narrowing, Balisacan urged a pivot to investment and innovation-led strategies.
Growth must shift from consumption to competitiveness, anchored in infrastructure, education, and stronger institutions, he said. A three-pillar framework in the World Bank report outlines reforms to attract high-quality investments and unlock productivity gains.
Raising labor productivity in lagging sectors like agriculture and SMEs, Balisacan stressed, will require deeper digital adoption, streamlined regulations, and an aggressive push for market openness.
“Free trade agreements can be catalysts for reform and competition,” he said, noting the need to enhance competitiveness in energy, food, and connectivity sectors.
At the heart of inclusive development, he said, is investing in people — a healthy, skilled workforce supported by efficient systems and well-governed local institutions.
“National averages don’t tell the whole story,” Balisacan said. “Progress must be shared, spatially and socially.”
Balisacan also flagged the importance of fiscal prudence. With public debt still elevated, the government must focus its limited spending on high-impact programs with measurable outcomes — from education and healthcare to food security and inclusive infrastructure.
“This is a decisive moment,” he said. “The choices we make today will shape the country’s economic future for generations.” — Ruelle Castro
