Finance Secretary Benjamin Diokno highlighted Mindanao’s unique position to boost the country’s economic progress during the Philippine Economic Briefing (PEB) in Davao with the theme, Agenda for Prosperity: Economic Transformation toward Inclusivity and Sustainability, on August 9, 2023 at the DusitD2 Hotel, Davao City.
“From infrastructure to tourism to clean energy, the island of Mindanao is uniquely positioned to power the country’s economic progress and lead our transformation journey in the years ahead,” Secretary Diokno said in his keynote address.
To empower the region, the Department of Finance (DOF) has been working closely with international development partners to secure financing for its economic reforms, food security, infrastructure, climate adaptation and mitigation, disaster resiliency, post-conflict rehabilitation, as well as peace and development.
The country currently has 194 high-impact infrastructure flagship projects (IFPs) in the pipeline, 76 of which are located in Mindanao with an indicative total cost of PHP 2.4 trillion.
These include projects to ease congestion and improve connectivity in the region, such as the Davao Public Transport Modernization Project, Mindanao Railway Project, Samal Island-Davao City Connector Bridge, Davao City Expressway, and Panguil Bay Bridge.
Apart from these, Secretary Diokno stressed the need to increase airport capacity––a critical factor in revitalizing tourism.
According to a report by S&P Global, international tourism spending was estimated at PHP 549 billion, while domestic tourism spending was estimated at PHP 3.1 trillion. Therefore, the recovery of domestic tourism could be a significant growth driver in 2023 due to its share in the overall contribution of tourism to gross domestic product (GDP).
Dubbed as the Land of Promise, Mindanao has massive potential for mining of critical minerals and renewable energy (RE) such as hydroelectricity, geothermal, wind, and solar power.
According to Secretary Diokno, the government will harness this geographical advantage by ensuring the sustainability of the extractives sector and transforming it into an engine for sustainable development.
Secretary Diokno, along with Department of Budget and Management (DBM) Secretary Amenah F. Pangandaman, National Economic and Development Authority (NEDA) Undersecretary Joseph J. Capuno, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Francisco G. Dakila, Jr., and Vice President for Philippine Chamber of Commerce and Industry (PCCI) Mindanao Arturo M. Milan participated in a panel discussion on a fast-growing and forward-looking economy.
Secretary Pangandaman gave an overview of the 2023 national budget, which has been disbursed at 90 percent as of June 30, 2023. On August 2, 2023, the DBM also submitted its proposed 2024 national budget of PHP 5.768 trillion, which is 9.5 percent higher than the 2023 budget.
Meanwhile, NEDA Undersecretary Capuno said that the government will implement cross-cutting strategies such as digitalization, public-private partnerships (PPPs), and servicification to transform the Philippine economy.
On price stability, BSP Deputy Governor Dakila reported that the BSP remains optimistic that inflation will return to target by the fourth quarter of 2023, in view of the sustained decrease of inflation rate as of July.
On financial inclusion, he shared the opportunities for investments in Islamic Finance, one of which is the issuance of Sukuk bonds.
From the private sector’s perspective, PCCI Mindanao Vice President Milan said that there are bright spots, especially in Mindanao, in the areas of transportation, infrastructure, health care, education, agriculture, digitalization, and energy.
“In my opinion, the aspect of energy security has to be constantly present. Otherwise, all these bright spots in our economy will not be possible…Energy after all is an indispensable necessity not only in our development efforts, but also in our modern living. For this reason it is imperative that we retain reliable and affordable power for everyone,” he said.
He also said that the private sector closely monitors trends in climate change, inflation, and fuel prices.
NEDA also discussed its proposed short-to-medium interventions under the Davao Regional Development Plan 2023-2028, which aims to increase gross regional domestic product (GRDP) from 7.8 to 9.3 percent and cut poverty incidence from 9.5 to 9.9 percent.
The second panel consisted of Department of Transportation (DOTr) Secretary Jaime J. Bautista, Department of Information and Communications Technology (DICT) Secretary Ivan John E. Uy, Department of Public Works and Highways (DPWH) Undersecretary Maria Catalina Cabral, Department of Energy (DOE) Undersecretary Sharon Garin, Public-Private Partnership (PPP) Center Executive Director Ma. Cynthia C. Hernandez, and Japan International Cooperation Agency (JICA) Chief Representative in the Philippines Sakamoto Takema discussed the latest updates on infrastructure, including projects in the pipeline.
To facilitate the implementation of the PPP program, Hernandez said that the PPP Center has conducted capacity building activities, as well as provided technical assistance to empower implementing agencies to engage in these projects.
Since the start of the Marcos administration, the NEDA Board has approved four (4) PPP projects, namely: the University of the Philippines-Philippine General Hospital (UP-PGH) Cancer Center PPP Project; Tarlac-Pangasinan-La Union Expressway (TPLEX) Extension Project; Rehabilitate, Operate, Expand, and Transfer (ROET) of the Ninoy Aquino International Airport (NAIA) PPP Project; and the Upgrade, Expansion, Operation, and Maintenance of the Laguindingan International Airport.
JICA Chief Representative Takema praised the Philippine economic managers for improving the country’s current fiscal position and stressed the Philippines’ healthy debt ratio.
“So simply saying, the Philippines’ situation is very healthy now. The Philippines is promising,” he said.
He also emphasized that the key to growth is expanding cooperation now, citing the 194 IFPs, 55 percent of which will be financed through official development assistance (ODA).
The Philippines is one of the top beneficiaries of ODA from Japan. The first phase of the Metro Manila Subway Project is one of JICA’s most significant projects in the country.
Finally, the third panel discussed developments and emerging opportunities in key economic sectors. Panelists were Department of Trade and Industry (DTI) Secretary Alfredo E. Pascual, Department of Labor and Employment (DOLE) Secretary Bienvenido E. Laguesma, Department of Agriculture (DA) Undersecretary Mercedita A. Sombilla, Department of Tourism (DOT) Undersecretary Mae Elaine T. Bathan, Department of the Interior and Local Government (DILG) Undersecretary Marlo L. Iringan, and Davao City Chamber of Commerce & Industry, Inc. President John Carlo B. Tria.
Secretary Pascual discussed the Philippine Export Development Plan (PEDP) 2023-2028, which aims to transform the Philippines’ export industry into a significant economic engine by investing in infrastructure, streamlining the regulatory environment for businesses, promoting Philippine exports, and providing financial assistance to exporters.
He also shared the DTI’s micro, small and medium enterprises (MSME) development programs and export strategies for Mindanao, among these include fostering innovation hubs, e-commerce and digitalization, as well as International Trade Fair Participation.
Tria, on the other hand, highlighted infrastructure’s supporting role in driving growth, saying, “Infrastructure of the government is a kickstarter. It’s not what drives economic growth in the long-term. It kickstarts growth in the short-term, because when public infrastructure is installed, private developments start to converge.”
He also saw digitalization as the key to boosting the ease of doing business in the country.
“As private sector partners, I think this is going to be the wave of the future. Wala nang turning back dito. Pag nag simula nang mag digital, the clamor for even faster digitalization will continue,” he said.
(There is no turning back. Once you go digital, the clamor for even faster digitalization will continue.)
The PEB in Davao was jointly organized by the BSP and the DOF. It was attended by more than 400 members of the business and financial communities, industry associations, local government units, non-government organizations, academe, and media.
