Incoming NEDA chief Balisacan: Second time around

Art Fuentes, ABS-CBN News

Posted at Jun 30 2022 04:11 PM

MANILA - Incoming Socioeconomic Planning Secretary Arsenio Balisacan will need to steer an economy that appears on the way to recovery but is facing both old and new risks to growth. 

Balisacan is a veteran when it comes to the post. He already served as NEDA director-general under former President Benigno “Noynoy” Aquino III from 2012 to 2016.

He was also Agriculture undersecretary during the Estrada administration from 2000 to 2001. And before being designated again as NEDA chief by President Ferdinand Marcos Jr., Balisacan was chair of the Philippine Competition Commission, an office tasked to level the playing field in different sectors of the economy. 

During Balisacan’s first term in NEDA, the Philippines’ gross domestic product grew 6.8 percent in 2012, and 7.1 percent in 2016. GDP grew at an average of 6.3 percent during the Aquino administration – this was the highest 6-year average in the last 40 years, Balisacan recalled.

His experience in the Aquino administration will come in handy in addressing some of the economic issues that the incoming Marcos administration is facing. 

Balisacan will be part of a team inheriting an economy that has outperformed its neighbors in bouncing back from the pandemic. 

Gross domestic product grew 8.3 percent in the first quarter, as the country opened up more sectors of the economy, and the omicron surge proved less lethal than previous surges.

However, the Marcos administration will also need to address surging inflation, a looming food crisis, and a debt that has ballooned to a historic high. The COVID-19 pandemic is also isn’t over yet. 

President Rodrigo Duterte’s massive infrastructure push and pandemic response pushed up the national debt to P12.76 trillion at the end of April. 

This is more than double the debt level (P5.95 trillion) that Balisacan saw at the end of his first term as Socioeconomic Planning chief in June 2016.

Balisacan said that to address this fiscal issue, the government must "reinvigorate, reexamine and bring back PPPs [Public Private Partnerships]." 

The former Dean of the UP School of Economics has said that he plans to “reinvigorate” Public Private Partnerships which was the preferred mode of investment in infrastructure during the late Aquino’s term. 

"We’ll reach out to the private sector because the private sector plays a strong role in economic developments, which is also my firm view that without the private sector, we can't really expect to go far," he said in an interview with ANC.

This is in contrast to the Duterte administration’s preference for Official Development Assistance’ or borrowing from foreign lenders to fund infrastructure projects. 

But with interest rates rising globally, and the peso weakening against the dollar, funding infrastructure through foreign borrowings is no longer as easy as before. 

Balisacan said he also plans to review the Build, Build Build program of the Duterte administration. 

He said this doesn’t mean that these projects will be discontinued unless some of these projects are “obviously wrong.”

To make growth more inclusive, Balisacan wants to boost manufacturing.

“The lessons of recent history is that if you have a manufacturing sector in the early stages of your development, poverty reduction is so fast and likely sustainable," he said. 

Balisacan said the Philippines needs to address poverty if it wants to join the ranks of prosperous countries.

"My advocacy has always been in anything of the things we do, government must be pursuing things that achieve the common good. And for us and for me in part, those are poverty reduction and the reduction in socioeconomic inequities which have been a cancer that we should have addressed long ago," Balisacan has said. 

Meanwhile, Russia’s invasion of Ukraine has made an already difficult recovery even more tenuous as it sent fuel prices skyrocketing and pushed commodity prices even higher. Some economists are even worried about possible stagflation–where the economy stagnates and prices continue increasing. The pandemic is also far from over. 

“There’s so much urgency. We cannot afford to buy time,” Balisacan said. 

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