FEBRUARY 14, 2025 – As the Philippines navigates tensions and uncertainties arising from global megatrends, it must maintain its sound economic fundamentals while embracing coordination and cooperation as mechanisms to respond to various economic shocks.
Delivering the Temasek Distinguished Speaker Lecture at the Lee Kuan Yew School of Public Policy (LKYSPP), National University of Singapore on February 11, National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan emphasized how the Philippines has much at stake in this collective action for rules-based, positive-sum policy responses.
In his lecture, Balisacan highlighted the key megatrends shaping regional and global development. These include rising inequality, growing protectionism, increasing use of industrial policy to promote disruptive technologies, and a costly energy transition amid worsening climate change.
Such megatrends are affecting the policy environment for open trade and investment, which had been pivotal to the region’s socioeconomic transformation in the past half-century. This will have consequences for the development trajectories of Asia’s emerging economies, including the Philippines.
“Asia’s low- and middle-income countries face a range of megatrends that shape and constrain—or, viewed positively, enable and facilitate—their development strategies. Yet these same megatrends can also open up new avenues for growth if acted upon strategically, employing both reactive measures to meet immediate challenges and forward-looking policies to anticipate emerging opportunities,” said Balisacan.
He then shared the Philippines’ development narrative. In particular, he outlined how the country can build on the strong economic momentum it has built over the last two decades by further strengthening economic resilience.
First, Balisacan emphasized the importance of diversifying the Philippine economy beyond consumption and services. The government must create an enabling investment climate, aggressively increase the country’s presence in regional and global markets to strengthen the external sector, and enact structural reforms to improve the functioning of markets for critical sectors.
Second, the government must enable the adoption of technologies from the frontier and foster innovation to sustain productivity growth. To leverage such technologies, the Philippines will need to invest significantly in its human capital. This is also expected to boost economic growth, as the country seeks to reap the benefits of its demographic dividend.
“Fortunately, the Philippines is well-positioned to leverage its dense migrant networks to support capacity building and technology infusion, especially in this age of digital connectedness. More importantly, this calls for policies addressing emigration and encouraging talent to return, such as sufficient funding for research and strengthening academe-industry linkages,” the NEDA chief said.
Finally, he also underscored the need to strengthen partnerships with traditional allies, like-minded nations, and ASEAN middle powers, by focusing on trade, investment, and development cooperation amid the unfolding trade war and climate crisis. A favorable environment for global trade and investment will be key to the country’s drive toward greater economic diversification, high-quality job creation, and accelerated poverty reduction.
“Partnership at the regional and international levels, especially among smaller, open economies caught in the rivalry between economic giants… is more crucial now than ever,” he concluded.
The prestigious Temasek Distinguished Speaker Lecture series provides a platform for speakers to share valuable insights with the public policy community.
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