NEDA: Investment climate key to sustained PH economic growth

The Philippines' long-term economic growth hinges on fostering a favorable investment climate that encourages diversification across multiple sectors, according to the National Economic and Development Authority (NEDA). In a recent address during the US-ASEAN Business Council’s (USABC) Third Quarterly Philippines Committee Call, NEDA Secretary Arsenio Balisacan emphasized the government's dedication to enhancing the investment environment and aligning with advancements made by other Asian nations.

Balisacan highlighted that for the Philippine economy to sustain its growth and achieve inclusive development, there must be a focus on boosting sectors beyond just consumption and services. “Bolstering the economy's other growth pillars is crucial to ensuring sustainable and inclusive development,” he stated. He underscored that substantial investments are essential to attract additional investments that generate high-quality jobs and elevate the economy to higher value-added sectors.

One of the major challenges currently facing the Philippines is insufficient infrastructure, which has negatively impacted the country’s competitiveness. Balisacan acknowledged the need to address this issue, noting that inadequate infrastructure has hindered economic progress and limited opportunities. He emphasized that tackling infrastructure deficits is vital for improving the country's global competitiveness and fostering economic growth.

Despite these challenges, Balisacan remains optimistic about the Philippines' economic future. He pointed out two key trends that are likely to drive increased demand in the coming decades. First, the country has experienced sustained economic growth, supported by strong fundamentals such as moderate inflation and a dynamic labor market. This has led to rising incomes and improved overall welfare. Second, the Philippines is in a demographic “sweet spot,” with a growing working-age population outpacing the total population. This presents a unique opportunity to boost economic growth, provided that the country can invest in infrastructure that enhances the productivity of the expanding workforce.

“The Marcos Administration has made significant strides in creating an enabling investment ecosystem,” Balisacan said. “These actions are designed to ‘roll out the red carpet’ and facilitate private sector investments across various economic sectors, as well as expedite the development of critical supporting infrastructure.” He emphasized that the government’s efforts are geared toward making it easier for the private sector to invest and contribute to the country's economic development.

Public-private partnerships (PPPs) were also highlighted as a crucial element in the Philippines' economic strategy. Balisacan underscored the importance of the private sector in expanding both physical and social infrastructure projects. PPPs are seen as a vital mechanism for leveraging private sector expertise and investment to complement government efforts in infrastructure development.

Ambassador Brian McFeeters (ret.), the USABC’s Senior Vice President and Regional Managing Director, echoed Balisacan’s sentiments, noting a marked increase in interest from U.S. companies in the Philippine market. He stressed the importance of maintaining open dialogues with the private sector to continue attracting investment and fostering economic growth.