MANILA - The next Philippine president must understand economics to steer economic recovery amid the COVID-19 pandemic, a former Socioeconomic Planning Secretary said on Thursday.

At an online economic briefing hosted by the Management Association of the Philippines, former chief of the National Economic and Development Authority (NEDA) Cielito Habito first said the next leader should have a background and knowledge in economics because every economic decision will affect all Filipinos.

"We hope that the next leader will really understand, at the very least, the fundamental concepts of economies and, ideally, once schooled in economics," Habito said.

The next government also needs to upgrade the healthcare system, strengthen food security, and improve the agriculture sector, he said.

One way to do this, according to Habito, is to embrace free trade agreements, including the Regional Comprehensive Economic Partnership (RCEP).

"We should start looking at these trade agreements more for the opportunities and stop this very defensive posture," Habito said.

He added that the Philippines might be losing investments and exports to RCEP member countries.

"The longer we stay out of it, we are sending a bad signal that we are vacillating and we may end up actually being the victim of trade and investment diversion."

Habito also urges leaders to copy the good practices of the country's Asian neighbors, especially in agriculture.

He said the country needs to increase its budget for agriculture to the level of other ASEAN countries.

Habito also said policymakers need to see beyond farm gate prices and look at the entire value chain of agriculture to achieve scale economies by clustering or consolidating farm management, sufficiently financing small farmers, and letting the provinces lead in this sector.

"We should help our farmers the right way and that is precisely to help them boost their productivity and therefore their incomes so they can be competitive in an environment of trade openness and not have to be blocking every trade agreement that comes our way on a very defensive note," Habito said.

NEDA Director-General Sec. Karl Kendrick Chua meanwhile highlighted the need to continue economic reforms implemented by the current and the previous administrations.

"I hope their economic advisers would be known so that we can have a more engaging discussion to understand and to also share what the administration has done," Chua said.

He said there is a very strong track record of managing the economy well over 3 administrations and that this should continue, and not be reversed.

"The prudent, disciplined management of fiscal resources should continue," Chua said.

He added that the liberalization of key industries such as rice production, public utilities, telecoms, airlines, and other sectors should not be reversed.

"Otherwise, you will have, I think, more challenging problems that will be faced," Chua said.

Habito agreed that liberalizing key industries should be continued.

"Our biggest fear is that there will be a reversal, there will be attempts to reverse these game-changing reforms. We hope this will not happen to the next administration."

Rong Qian, Senior Economist at the World Bank in the Philippines, also said the economic reforms must not be abandoned, especially as the world will still feel the effects of the pandemic in the years to come.

"The next administration needs to implement and continue those reforms that [were] started by the government so we can continue to have high growth, to grow at 6-7 percent," Qian said.

She said that by end of 2023, advanced economies will have recovered but the rest of the world will still be below pre-pandemic levels of output.

The Philippines suffered its worst economic contraction in 2020 as the country implemented one of the strictest and longest lockdowns in the world.

Tha Asian Development Bank has said that the country still lags behind its neighbors in terms of returning to pre-pandemic growth.

• ASEAN research org cuts PH growth forecast, says more vulnerable to new variants
• Philippines lags neighbors in returning to pre-pandemic growth rates: ADB study

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