The Philippine Development Plan

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The Philippine Development Plan (PDP) 2011-2016: Social Contract With Whom? 1
The Philippine Development Plan (PDP) 2011-2016:
Social Contract With Whom?
June 21, 2011
www.ibon.org
The plan proposes massive investments in physical infrastructure, fostering business confidence, giving short-term cash outlays, and ensuring transparent and responsive governance to develop the country. The essential economic thrust is straightforward: stick to the globalization policies implemented over the last decades, deepen and broaden privatization through Public-Private Partnerships (PPPs), and selectively implement social protection programs especially conditional cash transfers (CCTs).The Philippine Development Plan (PDP) 2011-2016: Social Contract With Whom? 2

he Aquino administration adopted the Philippine Development Plan (PDP) 2011-2016 in March this year which the National Economic and Development Authority (NEDA) formally released to the public on May 30, 2011. The PDP is the government‟s blueprint for implementing its declared “Social Contract with the Filipino People”. The plan sums up the administration‟s chosen economic direction and defines its strategies and programs for the next six years. The meat of the nearly 400-page document is divided into 10 chapters. The introduction (15 pages) summarizes the state of the economy and the plan‟s approach. The key strategies are then outlined in nine chapters on macroeconomic policy (24 pages), industry and services (38), agriculture and fisheries (18), infrastructure (57), financial system (22), good governance (25), social development (56), peace and security (9), and the environment (32).

The PDP 2011-2016 acknowledges how the large majority of Filipinos have not benefited from economic growth and declares that it aims for „inclusive growth‟. It says the problem is largely because of inadequate investment (due to insufficient infrastructure and governance lapses) and inadequate human capital (due to declining education, poor health services and inadequate safety nets). Correspondingly, the plan proposes massive investments in physical infrastructure, fostering business confidence, giving short-term cash outlays, and ensuring transparent and responsive governance to develop the country. The essential economic thrust is straightforward: stick to the globalization policies implemented over the last decades, deepen and broaden privatization through Public-Private Partnerships (PPPs), and selectively implement social protection programs especially conditional cash transfers (CCTs).

Problematic development plan
Such a plan however poses serious problems for the economy and the people. It misinterprets the country‟s underdevelopment and, by insisting on the discredited „free market‟ development model, will not result in higher growth nor reduce poverty. It avoids redistributing the country‟s resources and increasing the social and economic power of the poor majority. If anything it even exaggerates private profit-seeking as a means to social development to justify diverting public resources for private gain. The plan has low ambition and is not decisive in addressing the country‟s poverty, backwardness and underdevelopment.

First and most basic, the PDP 2011-2016 does not offer anything new in terms of strategies for more genuinely inclusive economic growth. The plan‟s main problem is that it dogmatically stays the course of „free market‟ policies of globalization that have been so destructive for the country. This means the government foregoing strategic economic planning and letting the market and private sector decide on economic activity in the country – where national development is then expected to more or less spontaneously happen. The plan builds on the accumulated globalization policies of previous administrations including the Arroyo government. For instance, it hails “the industrial structure [as] now fairly undistorted by subsidies...
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