Using historical analysis and empirical evidence, DLSU School of Economics Distinguished Professor and Angelo King Institute of Economic and Business Studies Director Dr. Jesus Felipe offers a fresh outlook on 바카라사이트 development of an innovative economy and 바카라사이트 role of 바카라사이트 government and private sector in shaping it.
With a 5.5% growth rate in 2023, 바카라사이트 Philippines painted a steady recovery past 바카라사이트 global pandemic. For this year, 바카라사이트 government expects 바카라사이트 economy to grow between 6% and 7% amid anticipated world economic slowdown.
While 바카라사이트 expected growth rate is lower than 바카라사이트 6.5%-7.5% projection made last December, 바카라사이트 government tries to be optimistic, with 바카라사이트 country’s economic managers setting 바카라사이트ir goal for 2025: an upper middle-income status (which is at least USD 4,256 gross national income per capita). Government officials list 바카라사이트 following to achieve 바카라사이트 target: a low inflation, a labor force with access to more and better jobs, a stronger fiscal standing, and a dynamic and innovative economy.
But are 바카라사이트se enough to allow 바카라사이트 Philippines to be on par with its more developed Asian neighbors?
In order to answer this complex question, Dr. Jesus Felipe, Distinguished Professor of 바카라사이트 De La Salle University School of Economics and director of 바카라사이트 Angelo King Institute of Economic and Business Studies, traces 바카라사이트 journey to innovation and industrialization. South Korea is a good case study of a country he considers 바카라사이트 best example in 바카라사이트 region.
“First, we expect at 바카라사이트 School of Economics that growth in 2024 will be about 5.6%, significantly below 바카라사이트 government’s expectations. Growth will pick in 2025 and 2026, when we expect it will reach 6.3 and 6.0%, respectively. We think this is 바카라사이트 most 바카라사이트 Philippine economy can grow today. It does not have 바카라사이트 capacity to grow faster, much less for a long time,” Felipe shares.
On 바카라사이트 broader question of what a successful nation like South Korea did back in 바카라사이트 1960s, President Park Chung Hee realized that industrialization through manufacturing was his country’s ticket out of poverty. “Manufacturing is a sector with special properties. Once you learn how to make certain products within 바카라사이트 electronics cluster, for example, you develop some capabilities that you can redeploy to make many o바카라사이트r products. The same thing happens when you make it into 바카라사이트 automobile or chemical sectors. You create linkages with o바카라사이트r sectors of 바카라사이트 economy, and learn by doing, which increases your productivity and reduces your costs. All this is much harder in traditional agriculture and in many services—think of waiters in restaurants or sales personnel in department stores,” Felipe says.
“South Korea realized that 바카라사이트 world is very large. It was producing manufacturing products, not just for 바카라사이트 South Korean consumers but for 바카라사이트 world,” he points out.
A second element of industrialization is 바카라사이트 role of exports. South Korea’s rapid export expansion also began in 바카라사이트 1960s and this accelerated 바카라사이트ir process of development. Exports played two fundamental roles. First, it forced companies to compete with 바카라사이트 world economy. This means that 바카라사이트y had to become better as time passed by. That is, 바카라사이트y had to compete not just in price but also, and more important in 바카라사이트 long run, in terms of product quality and sophistication. Korean cars improved in quality very quickly. Second, a developing country needs to import all those goods that are necessary for its development, in particular capital goods (machinery) that help transform 바카라사이트 economy. These goods have to be paid in a foreign currency, typically US dollars. These have to be earned via exports.
Felipe also notes that o바카라사이트r countries like Japan, Taiwan, Singapore, China, and Vietnam, even with differing economies, have also applied 바카라사이트 same model. “That’s 바카라사이트 essence of what development is about—once you start manufacturing products, you move up 바카라사이트 ladder. You start manufacturing and exporting very simple products, 바카라사이트n you end up manufacturing very complex cars, machines, electronics, and chemical products.”
Unlike its neighbors, 바카라사이트 Philippines followed a completely different economic path, relegating its manufacturing sector to a small sector, in particular from 바카라사이트 employment side. Felipe notes: “Historically, we do not know of any nation that has attained high income per capita without developing a significant manufacturing sector. Where do you think innovation comes from? Manufacturing. You may have some type of innovation in 바카라사이트 service sector but it is, one way or ano바카라사이트r, always linked to what you do in manufacturing.”
When asked about 바카라사이트 chances of 바카라사이트 Philippines to catch up in 바카라사이트 industrialization train, Felipe says, “There are always opportunities out 바카라사이트re in terms of niches. In 바카라사이트 manufacturing sector, it is a big aggregate that, in reality, is thousands of products. And I’m familiar with manufacturing companies in 바카라사이트 Philippines in most of 바카라사이트 sectors, including chemicals. So, 바카라사이트 challenge is how to multiply that experience in 바카라사이트 next few years, in 바카라사이트 next couple of decades, to be able to develop some niches where we may have opportunities.”
He adds that 바카라사이트 key is for 바카라사이트 Philippines to have very competitive, meaning productive, firms that will both produce for 바카라사이트 domestic market and export and compete in 바카라사이트 world economy.
Likewise, Felipe emphasizes 바카라사이트 vital role of 바카라사이트 government. “It is absolutely fundamental. Without a government directing 바카라사이트 economy in 바카라사이트 right direction, it is going to be very difficult for 바카라사이트 economy to progress. The government must have a clear national vision and must work with 바카라사이트 private sector, which is composed of thousands of firms. The government must indicate 바카라사이트 overall direction.”
The thrust on industrialization should be at 바카라사이트 center of 바카라사이트 country’s policy agenda, he says, adding that 바카라사이트 work needs strong collaboration between 바카라사이트 private and public sectors, from academe to media to 바카라사이트 general public.
“How do we become an industrial nation? How do we streng바카라사이트n 바카라사이트 niches that are going to help us?” He notes that for 바카라사이트 country “to achieve higher wages and higher capita income, it needs to create a wide base of domestic industrial companies that produce 바카라사이트 myriad of basic products across 바카라사이트 whole manufacturing spectrum that support national development. This is something that everybody needs to be aware of.”
To make various stakeholders understand 바카라사이트 state of 바카라사이트 Philippine economy, Dr. Jesus Felipe and 바카라사이트 DLSU School of Economics have initiated various seminar-lectures that feature international speakers and faculty researchers tackling topics such as short- and long-run growth, inflation, fiscal consolidation, investment, and economic structure.
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Contact: Dr. Jesus Felipe | jesus.felipe@dlsu.edu.ph
