INVESTMENTS in the energy sector must “come quickly” if the Philippines is to build up the necessary energy reserves to support the government’s growth targets, according to the National Economic and Development Authority (Neda).
In an open forum at the 43rd National Conference of Employers of the Employers Confederation of the Philippines (ECOP) on Wednesday, Socioeconomic Planning Secretary Arsenio M. Balisacan said energy is an important consideration, particularly in attaining the 6.5 to 8 percent medium-term growth target.
Balisacan said the government is not prioritizing one particular energy source but is open to a sustainable mix of sources that can provide affordable and reliable power for the economy to secure and create decent jobs.
“Clearly, for us, as economic managers, we see that energy as an important, a binding constraint to the attainment of this growth and that’s why it’s very high in our economic agenda. We must ensure that investment into that sector must come in, and must come in quickly, because with 6.5 to 8 percent growth, that reserve can easily be wiped out,” Balisacan said.
Balisacan said the advancements in renewable energy must also be considered in coming up with an energy mix for the country in the coming years. He noted that advancements in these energy sources may allow the economy to include more of these sources in the power mix.
He acknowledged that nuclear energy sources can also be an “efficient, affordable, and sustainable and reliable” power source for the Philippines. The President, in his first State of the Nation Address (Sona), said the government will explore nuclear energy opportunities to address the country’s energy issues.
“We are not closed to any [energy] sources, but of course given the development in renewables, for example, the competitiveness of renewables as a source of energy has substantially improved in recent years so we also need to seize the opportunities there,” Balisacan stressed.
Jobs, poverty reduction
THE Neda chief reiterated the government’s targets on unemployment which the administration aims to reduce to 4 to 5 percent, or better than pre-pandemic times, by 2028. This will be supported by targets seeking to increase the share of wage and salaried workers to around 53 to 55 percent in 2028 from 48 percent in 2021. This augurs well for reducing poverty incidence down to 9 percent in 2028 from 18.1 percent in 2021.
Balisacan thinks this will be achievable given that the country can latch on to its demographic dividends. He said the working-age population of the country has grown faster than the total population between 2000 and 2020.
The data showed that the growth of the Working-Age population reached 53.8 percent over the 20-year period. The country’s total population growth only increased 42.4 percent.
Achieving these targets remains feasible despite the challenges faced by the Philippine economy, Balisacan said, adding that this optimism stems from the actual data showing poverty declined by 6.8 percentage points between 2015 and 2016.
“A productive and skilled workforce supported by critical infrastructure, which is fundamental to any dynamic economy, is more likely to access the numerous job and market opportunities made available by a growing economic pie. This access is key to raising incomes quickly and sustainably, leading to rapid poverty reduction,” Balisacan said.
A dozen risks
NEDA recently outlined at least a dozen domestic and external risks that could derail the country’s economic recovery—seven being domestic in nature and the rest, external risks posed by the global economy.
The domestic risks Balisacan cited include the spread of the African swine fever and other highly-infectious animal diseases; low production of agricultural commodities; inclement weather (typhoons, re-emergence of La Niña) and natural disasters and local value chain disruptions.
His list also includes the government’s tighter fiscal space; limited absorptive capacity of implementing agencies and local government units; and the emergence of new Covid-19 variants.