|
Philippines Development Planning
The responsibility for economic planning was vested in the
National Economic and Development Authority. Created in January
1973, the authority assumed the mandate both for macroeconomic
planning that had been undertaken by its predecessor
organization, the National Economic Council, and project planning
and implementation, previously undertaken by the Presidential
Economic Staff. National Economic and Development Authority plans
calling for the expansion of employment, maximization of growth,
attainment of fiscal responsibility and monetary stability,
provision of social services, and equitable distribution of
income were produced by the Marcos administration for 1974-77,
1978-82, and 1983-88, and by the Aquino administration for
1987-92. Growth was encouraged largely through the provision of
infrastructure and incentives for investment by private capital.
Equity, a derivative goal, was to be achieved as the result of a
dynamic economic expansion within an appropriate policy
environment that emphasized labor-intensive production.
The National Economic and Development Authority Medium-Term
Development Plan, 1987-92 reflected Aquino's campaign themes:
elimination of structures of privilege and monopolization of the
economy; decentralization of power and decision making; and
reduction of unemployment and mass poverty, particularly in rural
areas. The private sector was described as both the "initiator"
and "prime mover" of the country's development; hence, the
government was "to encourage and support private initiative," and
state participation in the economy was to be minimized and
decentralized. Goals included alleviation of poverty, generation
of more productive employment, promotion of equity and social
justice, and attainment of sustainable economic growth. Goals
were to be achieved through agrarian reforms; strengthening the
collective bargaining process; undertaking rural, labor-intensive
infrastructure projects; providing social services; and expanding
education and skill training. Nevertheless, as with previous
plans, the goals and objectives were to be realized, trickle-down
fashion, as the consequence of achieving a sustainable economic
growth, albeit a growth more focused on the agricultural sector.
The plan also involved implementing more appropriate,
market-oriented fiscal and monetary polices, achieving a more
liberal trade policy based on comparative advantage, and
improving the efficiency and effectiveness of the civil service,
as well as better enforcement of government laws and regulations.
Proper management of the country's external debt to allow an
acceptable rate of growth and the establishment of a "pragmatic,"
development-oriented foreign policy were extremely important.
Economic performance fell far short of plan targets. For
example, the real GNP growth rate from 1987 to 1990 averaged 25
percent less than the targeted rate, the growth rate of real
exports was one-third less, and the growth rate of real imports
was well over double. The targets, however, did provide a basis
for discussion of consistency of official statements and whether
the plan growth rates were compatible with the maintenance of
external debt-repayment obligations. The plan also set
priorities. Both Aquino's campaign pronouncements and the
policies embodied in the planning document emphasized policies
that would favorably affect the poor and the rural sector. But,
because of dissension within the cabinet, conflicts with
Congress, and presidential indecisiveness, policies such as land
and tax reform either were not implemented or were implemented in
an impaired fashion. In addition, the Philippines curtailed
resources available for development projects and the provision of
government services in order to maintain good relations with
international creditors.
The Philippine government has undertaken to provide
incentives to firms, both domestic and foreign, to invest in
priority areas of the economy since the early 1950s. In 1967 an
Investment Incentives Act, administered by a Board of Investments
(BOI), was passed to encourage and direct investment more
systematically. Three years later, an Export Incentives Act was
passed, furthering the effort to move the economy beyond importsubstitution manufacturing. The incentive structure in the late
1960s and 1970s was criticized for favoring capital-intensive
investment as against investments in agriculture and export
industries, as well as not being sufficiently large. Export
incentives were insufficient to overcome other biases against
exports embodied in the structure of tariff protection and the
overvaluation of the peso.
The investment incentive system was revised in 1983, and
again in 1987, with the goal of rewarding performance,
particularly exporting and labor-intensive production. As a
results of objections made by the United States and other
industrial nations to export-subsidy provisions contained in the
1983 Investment Code, much of the specific assistance to
exporters was removed in the 1987 version. The 1987 Investment
Code delegates considerable discretionary power over foreign
investment to the government Board of Investments when foreign
participation in an enterprise exceeds 40 percent. Legislation
under consideration by the Philippine Congress in early 1991
would limit this authority. Under the new proposal, foreign
participation exceeding 40 percent would be allowed in any area
not covered by a specified "negative list."
Data as of June 1991
|
