Press Release
August 14, 2011


The Philippines faces the danger of being completely left behind by its Southeast Asian neighbors as it continues to slip in competitiveness leagues, Senator Edgardo J. Angara warned President Aquino's economic managers during the Development Budget Coordinating Committee's hearing last week.

Based on five competitiveness reports, the Philippines only bested Cambodia and Timor-Leste in the region while Singapore, Malaysia, Thailand, Brunei, Indonesia and Vietnam have pulled away.

The Philippines ranked 85th out of 139 countries in the Global Competitiveness Report 2010-2011; 148th of 183 in the Doing Business Report 2011; 94th of 139 in the Travel and Tourism Competitiveness Report 2011; 86th of 139 in the Global Information Technology Report 2010-2011; and 91st of 125 in the Global Innovation Index 2011.

"There is no bigger wake-up call than this," Angara told the DBCC. "Our spending priorities and the policy tools being used to achieve them must have one clear purpose: raising our competitiveness.

"Though this appears to be one of the better prepared national budgets, it is glaringly lacking because it is not attuned to increasing the country's productivity through science, technology and innovation. It is more focused on providing welfare," Angara pointed out.

He said that the Asian Development Bank has categorized the Philippines among 31 slow-growing, non-converging economies in Asia, which includes Lao PDR, Myanmar and Timor-Leste in Southeast Asia. Brunei and Singapore are already considered developed economies, while Indonesia, Malaysia, Thailand, Vietnam and Cambodia are Southeast Asia's fast-growing nations.

"If we do not act now, we might find ourselves the development failure of Southeast Asia," alerted Angara.

He said that the government may want to rethink the Public-Private Partnership (PPP) as its flagship program after it has shown to be slow moving. The P12.5 billion earmarked for PPP's for 2011 has yet to be touched.

Angara cautioned against earmarking large sums of money into welfare rather than channeling them to productivity-enhancing projects. About P39 billion is being sought for the conditional cash transfer program for 2012, up from P21.2 this year.

"Welfare should be coupled with productive work. Many of the public works in the United States were built during the Great Depression through a national work-welfare program. This creates jobs, income and infrastructure all in one go," he said. "At the same time, we will create vital infrastructure network that would make bring more tourists and investments to the countryside."

He added, "There is no better investment than in boosting food production but it will have to be through massive investment in R&D. It is the only way to raise the country's farm productivity."

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