Only Economic Growth Will Make Philippines More Disaster Resilient, Senate Leader Says

  • Date: 29/12/13
  • Mia M. Gonzalez, Business Mirror

While the Philippines has earned a reputation as one of the better performers in the region, it needs more legislation to help it nurture a truly resilient economy that would withstand man-made and natural disasters that pummeled parts of the country in 2013.  To make the economy more resilient, the country requires a liberalized economic environment that would enable the economy to grow at a faster rate.

Senate President Pro Tempore Ralph Recto said in an interview that the P140-billion rehabilitation and reconstruction fund in the 2014 General Appropriations Act (GAA), a Senate amendment in the budget, was “precisely” created to sustain the country’s economic resilience, after the disasters that hit parts of the country this year.

“That’s 1 percent of GDP [gross domestic product]. The faster they’re able to spend that then they have a chance for the economy to grow at sustainable levels,” said Recto, former director general of the National Economic and Development Authority (Neda).

To make the country more resilient to disasters, Recto proposed a 25-percent minimum increase in the Internal Revenue Allotment (IRA) of local government units (LGUs) to give them “greater autonomy.”

“The absorptive capacity of the national government is very weak. Why not download resources to the local government units so that they can spend all this money faster?” he said.

Recto said even if the national government has P140 billion for rehabilitation and reconstruction in 2014, the challenge would be its absorptive capacity to spend all of it, so it would need some help from LGUs.

“Even if you give the national government P140 billion, it may not have the absorptive capacity to spend that. So download some of it to the local governments,” he said.

Recto said only 5 percent of the income of local governments go to their calamity fund, which he believes is “not enough,” especially as “only 30 percent of the 5 percent can be used for disaster risk reduction.”

“All of that has to be changed….The last time we amended the Local Government Code was in 1992. So I think all of that is needed. If you want the economy to grow at a much faster rate, tap the local governments,” he said.

The senator said to make the economy more resilient, the country requires a liberalized economic environment that would enable the economy to grow at a faster rate than 7 percent, which would require amendments on constitutional provisions on land ownership and business ownership.

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