MANILA. Economic managers led by Finance Secretary Cesar Purisima and Central Bank Governor Amando Tetangco Jr. laid the growth framework of the Aquino government. (Virgil Lopez/Sunnex)
The new economic team is composed of Finance Secretary Cesar Purisima, National Economic and Development Authority (Neda) Director General Cayetano Paderanga Jr., Trade and Industry Secretary Gregory Domingo, Budget Secretary Florencio Abad Jr., and Bangko Sentral ng Pilipinas Amando Tetangco Jr.
The group outlined several measures to attain the medium-term goals of the government.
Paderanga said the Aquino administration is on track of meeting the five to six percent economic growth for 2010 on the back of strong first quarter performance (7.3 percent) and renewed public and investor confidence in the government.
"For 2010, we expect GDP (gross domestic product) to grow at 5 percent. For 2011 to 2016, we are targeting a higher annual growth path that will bring us above 7 percent," he noted.
"At these growth rates and given the right policies, economic gains will translate into higher per capita income and effectively reduce poverty," he added during the mid-year economic briefing at the Dusit Thani Hotel in Makati City.
Paderanga said the goals can only be achieved if the government is serious in ensuring stable macroeconomy and other factors like investments electricity, transport, water, irrigation and solid waste management.
Earlier, Social Welfare and Development Secretary Corazon Soliman added that the government has provisions on incentives for good governance in the local level and social protection mechanisms like the expansion of conditional cash transfer program.
Paderanga said government will need the support of the private sector in advancing its development agenda.
Purisima, on the other hand, said that the government has yet to identify the 20 projects that will be financed through public-private partnerships, although these will center on tourism, food supply chain and general infrastructure.
"We will have a PPP conference on October and we are hoping to implement two to three projects within this year," he said.
Paderanga said that some foreign-based companies have already expressed interest to pour in money for the projects, adding that the economic team is more than willing to discuss the PPP proposal.
"Advancing infrastructure development will provide access to raw materials and markets, lower costs of transporting goods, and thus lower the prices of commodities," he said.
Meantime, Purisima said that the government will strengthen tax collection to rein in the budget deficit, which is expected to be at P325 billion or 3.9 percent of the economy at the end of the year.
"We are serious in our tax collection efforts. After only less than two months in office, the Aquino administration has already filed four major tax evasion cases and two major smuggling cases. We are confident that these will lead to convictions," he said.
In a related development, Paderanga said the government should try to raise the level of investment vis-a-vis the savings rate.
"We are hoping that it will increase (investment rate) so that it will be at par with the savings rate. The savings rate is around 18 percent and the investment rate is around 13 to 14. The difference is quite big," he said.
Paderanga also disclosed that the proposed P1.645-trillion budget for 2011 earmarked a lower capital outlay as percentage of GDP compared to 2010.
The Department of Finance (DOF) has set P322.2 billion for capital outlay or 3.6 percent of GDP for 2011 as compared to this year's P318.2 billion or 3.8 percent.
Infrastructure spending was set at P249.7 billion or 2.8 percent of GDP for 2011, from this year's P247.8 billion or 3 percent of GDP.
"You must also try to increase the savings rate even further which means we have to come up with the institutions that will mobilize the available funds. Right now many of those funds are either being consumed or being invested abroad. We would like that to be invested here," he said.
"It's not easy to bring that up but we're hoping that with better business environment, with increased business confidence, the level will move up," Paderanga added. (Virgil Lopez/Sunnex)