There was a mixed response to the news that the Philippines has entered upper-middle income status according to the World Bank’s metrics. This came after the country’s gross national income per capita hit USD 4,850 this year – a goal that the government has been trying to achieve in the forty years it has been categorized as a lower-middle income country.
The government has, naturally, painted the news as a win for its efforts to strengthen our economic fundamentals and attract investment to our shores. Some observers, on the other hand, have bemoaned that the status upgrade means little to nothing for Filipinos who are still struggling with rising prices, particularly the middle class who are squeezed by cost concerns and lack of services and support from the public sector. Some have even mocked the idea that the Philippines and Singapore are not in the same field, even if both are technically under the same category now.
Perhaps the most sober assessment came from Department of Economy, Planning and Development secretary Arsenio Balisacan, who called the promotion a call for stakeholders to continue working to make sure these much-touted economic benefits reach every Filipino. Reforms, he said, should be implemented faster to make sure the Philippines withstands external pressures that seemingly overwhelm it today, particularly rising energy costs and continued vulnerability to natural calamities.
Indeed, the headline figures surrounding the promotion glosses over some very important details. Regional growth rates remain very unequal, with economic opportunities still concentrated in NCR, regions 3 and 4A, and the urban centers of Visayas and Mindanao. While much has been said of efforts to decentralize and distribute growth, these are for the long term – and there’s always the risk that projects like New Clark City would just act as an investment heaven for those who need to park their assets somewhere, rather than a hotpot of opportunity for locals who need to get on the ladder.
Yes, it’s worth noting that these long term projects are starting to attract investment to other parts of the country. Years after the expansion of Luzon’s highway network to Tarlac and Pangasinan, those provinces, as well as Pampanga and Zambales, are seeing higher demand for new facilities from local and foreign companies. (Finance secretary Frederick Go recently announced that Foxconn will be establishing a presence in New Clark City, as part of the country’s involvement in the Pax Silica Initiative led by the United States.) But there’s always the fear that our growth is outpacing our capacity. Manila’s roads continue to be congested. Our seaports and airports are just as congested too, with a cargo capacity issue already going on for months, causing shipment delays and even production shutdowns in the case of one semiconductor company heavily affected by the issues at NAIA.
There’s a lot of talk about making the Philippines an attractive location for investment, and some stakeholders are slowly figuring out where we are best situated amidst global value chains. But we have to remember that to be a top-of-mind location for these companies, we have to improve connectivity, and fast. We’re thinking of physical connectivity as well as digital connectivity. We’re thinking of capacity for our ports. We’re thinking of systems to facilitate the faster movement of both people and goods – and in this case, the tweak can be as simple as operating 24/7 instead of closing up shop for the weekend.
But of course, these should not come at the expense of the living conditions of Filipinos. Our exposure to calamities should have long made environmental protection top of mind, but between the controversial removal of trees in Manila for the sake of yet another elevated highway, and concerns being raised about the Pax Silica Initiative’s impact on water supplies, we seem to have forgotten our home in favor of barely seen “economic benefits”.
And that’s what it all ultimately boils down too. The headline figure does suggest our economy is growing, and there are many reasons to agree with this assessment. But the Philippines has over 7,600 islands, and each one has a very different story. If they don’t feel whatever upper-middle income status means, then have we truly succeeded?
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Henrik Batallones is the marketing and communications director of SCMAP, and editor-in-chief of its official publication, Supply Chain Philippines. More information about SCMAP is available at scmap.org.
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