President Aquino delivers his third State of the Nation Address today amid a continuing global economic slump that has affected the Philippines’ main export markets and weakened employment opportunities for the country’s ever-growing army of overseas workers.
Because Philippine growth has not been as heavily dependent on exports as other more competitive economies, the country has weathered the global storm better than others. Overseas workers’ remittances have also been steady despite the global slump.
The World Bank, which sees the Philippine economy growing by 4.6 percent this year, notes that the growth can be sustained amid the global slowdown by making the country more conducive to job-generating investments big and small. This can be possible through increased spending in infrastructure, education and health, the World Bank declared in its latest Philippines Quarterly Update. Growth forecasts can be affected by the situation in the eurozone, which could worsen in the coming months. Increased spending needs better tax collection and resource management.
The nation’s international credit rating has steadily improved and inflation is low. The peso continues to appreciate – a blessing for many, but worrisome for exporters and overseas workers. Business confidence remains high, although this has yet to translate into a substantial surge in direct investments. The confidence is an indication of appreciation for anti-corruption efforts – the cornerstone of governance in the Aquino administration.
While President Aquino is expected to cite gains in this effort, corruption isn’t going away overnight, or even within the remainder of his term. The best he can aim for is to put in place measures that will help make reforms irreversible, regardless of who succeeds him in 2016.
The President has to exert more effort to level the playing field and improve the investment climate, increase national competitiveness, ease poverty and keep the public safe. There will be gains reported today in the SONA, but still too much work ahead to achieve sustained and inclusive growth.