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Economist links manufacturing to more inclusive growth, poverty alleviation

Source: Business Mirror (

Supporting the expansion of manufacturing is key to achieving sustained and inclusive economic development and to eradicating abject poverty in the Philippines, according to an eminent economist and academic.

Raul V. Fabella, national scientist and professor emeritus at the University of the Philippines School of Economics, said the contribution of manufacturing and industry to local output or the GDP, have declined in recent years, coinciding with developmental slowdown and unabated poverty in the country.

Referencing data from the World Bank for the period 1986-2009, Fabella noted that manufacturing share fell from 25 percent in 1986 to 19 percent in 2009, while industry share fell from 35 percent to 29 percent. In contrast, services share rose from 40 percent in 1986 to 57 percent in 2009.

The Philippines’s manufacturing sector has been bucking the trend observed among the least developed countries (LDCs) that are fast catching up with more developed peers, and is following the pattern observed in mature economies, Fabella said.

He said “catch-up LDCs” tend to post gains in the shares of manufacturing and industrial sectors, while recording either losses or gains in the share of the service sectors.

On the other hand, mature economies like South Korea manifest loss in the shares of industry and manufacturing, even as they mark gains or flat growth in services.

The Philippines “mimics mature economy trends,” Fabella observed during a recent presentation on the topic inclusive capitalism in low-income economies.

Comparing Philippine performance with those of fast-rising developing economies in Asia and those of developed nations from 1986 to 1996, Fabella showed that emerging economies during that period demonstrated big spikes in the shares of manufacturing and industry in relation to GDP. 

Indonesia, Malaysia, Thailand, and China all showed robust positive growth for manufacturing and industry during the 10-year period; in contrast, the shares of these two sectors in the Philippines contracted, while services posted healthy expansion during the period. 

In the same span of time, South Korea, Germany  and the United States registered growth surges in services share, while showing deep cuts in the shares of industry and manufacturing, Fabella added.

In terms of poverty reduction, meanwhile, Fabella cited figures showing how poverty rates in the Philippines were much lower than either China or Vietnam circa 1990, but that by around 2010, China and Vietnam had drastically lowered their poverty rates, while poverty in the Philippines remained high, having gone down only slightly.

The economist stressed that institutional and policy changes are needed to stimulate Philippine economic growth and significantly slash high poverty rates.  

He suggests “embracing rather than fearing a weak peso to sustain investment-led growth.” 

He also calls for the scaling up of the quantity and quality of Philippine infrastructure under the government’s “Build, Build, Build” program, and seeks the lowering of the cost of power, including by connecting the Visayas and Mindanao grids to give substantial new capacity to the Visayas region.

His other recommendations include for the government to amend the Public Service Act and lift the constitutional limits to foreign ownership, and continue its strategic retreat to its core competence by, for example, privatizing the Metro Rail Transit and Ninoy Aquino International Airport 1 and 3. 


RVF: Embrace weaker peso

Source: Business Mirror (

The government should welcome a weak peso rather than fear it if it wants to cut poverty faster and attract more foreign investments, according to an economist from the University of the Philippines (UP).

In a presentation at the Ayala-UP School of Economics (UPSE) Forum on Monday, National Scientist and UP Professor Emeritus Raul V. Fabella said a weak peso will make the Philippines an attractive investment destination and will encourage businessmen to consider long-term investments in the country.

To significantly reduce poverty incidence in the country, Fabella said the ratio of foreign investments to total investments should go up to as much as 30 percent.

“Even up to now, China’s [foreign] investment rate is around 40 percent. With 30 percent, we will be able to improve our infrastructure. To make it sustainable, the Philippines should have open markets and, I claim, that we should embrace rather than fear the weak peso,” he said.

However, Foundation for Economic Freedom Vice Chairman Romeo Bernardo said he does not agree that a weak peso can help cut poverty faster.

Bernardo also added allowing the peso to depreciate further just to make the country’s business environment more competitive could hurt the poor.

A weak peso would make imported products more expensive. This is a major concern, especially for a country like the Philippines—a net food and fuel importer.

“[A weaker peso] could lead to labor demands for higher wages and feed inflation further. This will not only negate the depreciation we need but could lead to a real appreciation, not to mention the impact of inflation on the poorest sectors,” Bernardo said.

But Fabella said the Philippines could take a cue from China, whose economic success was largely due to its decision to allow the entry of more foreign investors. He added that China’s economic success was ushered in by Deng Xiaoping, who opened his country’s doors to the world after Mao Zedong’s death in 1976.

Allowing free enterprise, foreign investment, and earning from exports enabled China to lift 600 million of its citizens out of poverty between 1980 and 2014. Poverty incidence rate fell to ,6.5 percent in 2014, from 88 percent in 1980.

Fabella said the government should also roll out improvements in the country’s infrastructure and lower the cost of power to attract more foreign investors.

He said lowering power costs could include exempting manufacturing firms from paying feed-in tariffs and completing the so-called One PHL Power Grid, as the country’s power grids remain “fragmented.”

Fabella said the government should consider continuing its privatization efforts, which could be aided by the lifting of restrictions in some economic sectors.

He noted that the privatization of government’s telecommunication assets in the 1990s enabled the business-process outsourcing sector to flourish in the Philippines.

Addressing poverty is one of the primary targets under the Millennium Development Goal (MDGs) and the new Sustainable Development Goals. Under the MDGs, poverty should have been halved by 2015. The SDGs aim to wipe out poverty by 2030.

However, the Philippines failed to meet its target of goal of cutting poverty incidence to 17 percent by 2015 under the MDGs. The target was based on the 34-percent rate in 1990, the baseline year for the MDGs.

In October former UPSE Dean Ramon Clarete said the Philippine GDP must grow by at least 6 percent every year until 2030 to eradicate poverty. Clarete said this economic growth should be accompanied by a 5-percent annual growth in per-capita income over a period of 25 years.

GDP growth in the Philippines averaged 6.2 percent between 2010 and 2015. In 2016 GDP expanded by 6.9 percent and 6.4 percent in the first semester.

Growing the economy, Clarete said, requires making food cheap and accessible for all as well as boosting the country’s trade and investment growth. Clarete noted that rice remains expensive not only for consumers but also for farmers.

Data showed that this is largely due to expensive trade costs. Clarete said trade costs in the Philippines are very high. The United Nations Economic and Social Commission for Asia and the Pacific pegged trade costs at 50 percent of world prices.

Commissioner Guanzon guest speaker at the 2017 UPSE recognition program for graduating students

Speaker 2 - Recognition Day 2017 (20170623)

Commission of Elections Commissioner Ma. Rowena Guanzon was the guest of honor and speaker at the 2017 Recognition Rites of the U.P. School of Economics held on 23 June 2017. You may read her speech here.

She was introduced by Dr. Cielo D. Magno, Assistant Professor at the UP School of Economics (pictured below). You may read her introduction here.

Magno Speaker 3 - Recognition Day 2017 (20170623)

UPSE has 5 new professors emeriti

Prof Emeritii-V03

From left: Professors Florian A. Alburo, Ruperto P. Alonzo, Gwendolyn R. Tecson, Dante B. Canlas, and Benjamin E. Diokno

UPSE Alumni Homecoming 2016 – UP Street bEats

Vice President Maria Leonor “Leni” Robredo (alumni Batch ‘86) joins her UPSE family during the annual alumni homecoming, dubbed UP Street bEats, last 22 October 2016 at the UPSE grounds.


Joining the Vice President are the other cabinet members from UPSE (from Left to right), Dr. Ernesto Pernia (NEDA); Dr. Benjamin Diokno (DBM), Sec. Liza Maza (NAPC), Mr. Ramon Lopez (DTI) and Dr. Arsenio Balisacan (PCC).


Earlier in the program, the first UPSE Dean, Dr. Amado Castro, led the alumni in the launch of a photo exhibit, Ibang Klase si Doc, a collection of class pictures taken over the years by Dean Amado.


Two hundred alumni came to this event for a night of fun and renewal of ties with the UPSE community.

Prof. Jeff Ducanes receives Outstanding Scientific Paper award from NAST

Dr. Geoffrey M. Ducanes (3rd from left) receives an Outstanding Scientific Paper award from the National Academy of Science and Technology (NAST) for his paper Are remittances inducing laziness in households? : a reexamination of the evidence.

Prof. Majah-Leah Ravago is Outstanding Young Scientist in Economics

Dr. Majah-Leah V. Ravago (3rd from right) is the 2016 recipient of the National Academy of Science and Technology (NAST) – Outstanding Young Scientist (OYS) Award in the field of Economics.

Philippines among Top Performers in East Asia and Pacific – WB Report

SINGAPORE, OCTOBER 5, 2015—East Asia remains one of the main growth drivers of the world economy, accounting for nearly two-fifths of global economic growth, according to a new World Bank report. Overall, the region is expected to grow 6.5 percent in 2015, moderating slightly from 6.8 percent last year.

The Philippines is among the strongest performers in the region because of strong fundamentals. Economic growth is projected to improve from 5.8 percent in 2015 to 6.4 percent in 2016.

Visit this link to read the press release.

UPD has five new professors emeriti

By: Albino C. Gamba Jr. (UPDate Diliman)

(AUG. 7)—The UP Board of Regents (BOR) at its 1309th meeting on July 22, 2015 approved the appointments of five UP Diliman (UPD) faculty members as professors emeriti.

They are Dr. Grace J. Alfonso from the College of Mass Communication (CMC), Dr. Raul V. Fabella from School of Economics (SE), Dr. Emerlinda R. Roman from Cesar E.A. Virata School of Business (VSB), Prof. Nestor O. Vinluan from College of Fine Arts (CFA) and Dr. Rosario Torres-Yu from the College of Arts and Letters (CAL).

Professor Emeritus, a title for life, is conferred upon retired faculty members in recognition of their exceptional achievement and exemplary service to the University.

Alfonso, a professor at the Film Institute, is the current chancellor of UP Open University (UPOU) and president of the Philippine Society for Distance Learning. She also chairs the Commission on Higher Education (CHED) Technical Panel for Transnational and Distance Education.

She is also a painter and a sculptor. Alfonso sculpted the UPOU Oblation erected in Los Baños, Laguna in 2005, as well as the trophies for the CHED Republica Award in 2005 and 2007. She is a recipient of the 2015 Concepcion Dadufalza Award for Distinguished Achievement and the UP Arts Productivity System as Artist 1 in 2011.

Meanwhile, Fabella whose fields of interest are in economic theory, agricultural economics and international economics, served as SE dean from 1998 to 2007.

For his pioneering works in “novel analytic constructs which turn out to be useful for problems in economics,” he was conferred the Order of National Scientist in 2011. The Order of National Scientist is the highest honor given by the Philippine president to an individual who has made significant contributions in the field of science and technology in the country.

Roman, on the other hand, served the UP administration in various capacities. She is the centennial and first woman president of the University (2005 to 2011). She also served as UPD chancellor from 1991 to 1993 and from 1999 to 2005, UPD Vice Chancellor for Administration from 1985 to 1988, and Secretary of the University and of the BOR from 1988 to 1991.

Roman received numerous awards, among them: the Lingkod Bayan Award (2007) from the Civil Service Commission and the Office of the President of the Republic of the Philippines; Ordre National de la Legion d’Honneur, au grade de Chevalier (National Order of the Legion of Honour, Rank of Knight) from the President of the Republic of France through the French Embassy in Manila (2009); and The Outstanding Filipino Award (TOFIL) in Education in 2011 from the JCI Senate Philippines and Insular Life.

Vinluan, a multimedia artist working on paintings, sculpture and installation works, served as CFA dean from 1989 to 1998. Vinluan is a recipient of the Cultural Center of the Philippines Thirteen Artists award in 1974. He has represented the Philippines in various art festivals and exhibitions abroad such as Hong Kong, Japan, Singapore and USA, among others.

Completing the awardees is Torres-Yu from the Departamento ng Filipino at Panitikan ng Pilipinas. She is an award-winning author, editor and translator of books on language, literature, gender, labor movement and children literature.

Her creative writing and scholarly works in literature were recognized by the University through the following: UP Arts Productivity System Award (2009-2011), Gawad Chanselor para sa Natatanging Guro (2008), UP Centennial Professorial Chair (2008 and 2010), UP Centennial Faculty Grant (2009 and 2011), International Publication Award (2009 and 2010) and Gawad sa Natatanging Publikasyon sa Filipino (2001).

Torres-Yu served as CAL dean from 2000 to 2003. She was also appointed as Vice Chancellor for Student Affairs from 1993 to 1996 and director of Sentro ng Wikang Filipino from 2012 until her retirement in October 2014.

Professors emeriti remain in the faculty roster of the University, thus giving the current students, junior faculty members and researchers the chance to be mentored by the esteemed teachers and scholars.

Professors emeriti receive one-time monetary award of P150,000. The honorees are also accorded lifetime library privileges, UP Health Service privileges and free admission to cultural shows in UP, among others.

SourceUPDate Diliman

SDSN Philippines Launched in Manila

DSC_0035Just a few hours after consensus was reached in New York on the Sustainable Development Goals (SDGs) outcome document, SDSN Philippines was launched in Manila on Monday, August 3, 2015. Over 300 participants from universities, civil society, the private sector, the Philippine Government, and the international community welcomed the new network which uniquely places universities and other research and knowledge institutions to contribute to the attainment of the SDGs in this rapidly growing Southeast Asian nation of more than 100 million people.

SDSN Director, Professor Jeffrey Sachs, drew attention to the historic agreement of 193 nations earlier that same day in New York. He said that the SDGs will mark “the end of business as usual” and guide a “change in direction” for the world. Professor Sachs noted that the Philippines would be hard hit by climate change, and is especially vulnerable to typhoons, floods, droughts, and sea level rise. He highlighted the special role and responsibilities of universities in leading innovation and problem solving, while preparing a new generation of sustainable development practitioners.

Representing the Philippine Government, Professor Arsenio M. Balisacan, Secretary of Socioeconomic Planning and Director of the National Economic and Development Authority, a former Dean and Professor of Economics at the University of the Philippines at Diliman, drew attention to recent impressive economic growth in the Philippines – averaging 6.2% per annum for the past 5 years. However, Professor Balisacan argued that “economic growth is necessary but not sufficient for sustainable development”. He called on the academe, civil society, and the private sector to work with government “to invest in sustainable solutions through closer partnerships”.

Numerous high-level participants from diverse sectors gave strong vocal support for the mission of SDSN Philippines and the need for the SDGs. Speakers included: Professor Solita Collas-Monsod, convener and former Chair of the Philippine Human Development Network and former Minister of Socio-economic Planning; Secretary Florencio Abad, Secretary of the Department of Budget and Management; Mr. Jose Rocamora, renowned political activist and civil society leader and Lead Convener of the National Anti-Poverty Commission; Professor Leonor Magtolis Briones, head of the Alternative Budget Initiative of Social Watch Philippines; Mr. Metodio Maraguinot, Jr., a youth leader and founder and president of YouthLEAD Philippines; Mr. Ola Almgren, United Nations Resident Coordinator in the Philippines; and Mr. Roger Carlson, representing USAID, which provided generous financial support for the launch.

Immediately following the public launch, members of the inaugural SDSN Philippines Leadership Council (LC) signed a Pledge of Commitment and convened.

Coming from one of the lead convernors and one of the major organizers of the launch, UP School of Economics, was unanimously elected LC Chair Professor Emmanuel S. de Dios. Professor de Dios is Oscar M. Lopez Sterling Professor of Law and Economics and former Dean at the UP School of Economics. The LC further agreed to establish a Secretariat for SDSN Philippines at the UP School of Economics and to convene a multi-stakeholder planning meeting to develop and prioritize an SDSN action agenda within the next three to four months. UPSE welcomes taking an active role in initiatives towards the attainment of sustainable development in the country as it celebrates its 50th year anniversary.