In 2016, the Philippines posted a stunning economic growth rate of 6.8%, allowing it to hold on to its title as one of the fastest growing economies in Asia.
That is, of course, welcome news for the country and for the economy. However, as the recently concluded Natural Capital Accounting Conference shows us, economic growth comes with an additional responsibility for the government to ensure that our positive economic trajectory is both inclusive and sustainable. To do that, we at the Philippine Statistics Authority (PSA) are working on macroeconomic indicators that will give development planners a holistic view of the inflows and outflows of our economy.
The Philippines is fortunate to have vast natural resources. To cite some examples, the abundance of our mineral deposits makes us the fifth most mineralized country in the world while our myriad of marine and water systems makes our seas epicenters of biodiversity.
When we talk about economic performance of the country, we talk about jobs and economic services or products that are generated in the Philippines from the use of these natural resources, which are all reflected in country’s GDP.
Currently, we arrive at GDP estimates without accounting for how our natural resources are depleted in the course of economic activity. We now realize that while the information we get from measuring GDP is extremely valuable, it lacks a dimension to give development planners a holistic view of growth.
The vision for the Philippines is to make environmental adjustments to the macroeconomic indicators so we can assess if economic activity is sustainable. By factoring in adjusted net savings and adjusted net income into GDP, we can determine if growth is sustainable.
A positive adjusted net savings would mean that growth is sustainable, while a negative one would mean that the country is depleting its natural resources faster than it can reproduce them.
These indicators are especially important now with the launch of the Sustainable Development Goals which emphasize three pillars in monitoring how countries perform: economic, social and environment.
Already, the Philippines’ national accounts have two satellite accounts that produce more details for the report of GDP. The tourism satellite account and health satellite accounts provide the measures of economic activity in the tourism and health sectors.
We are also looking at the valuation of our minerals and mangroves. We have already disseminated the results of our minerals accounting. Currently, we are in the process of working with other environmental concerns such as the forests.
These data will be used to support the national development action steps laid out in President Rodrigo Duterte’s Philippine Development Plan or the 0+10 Agenda.
Incorporating environment concerns in our data measurements will serve as an important measure in monitoring the accomplishments of the administration.
The PSA is mandated to do this accounting but we cannot do this without our partners - the ones we get data from. Our collective goal to sustain the country’s economic growth will bring all government agencies together.
Specific to the PSA, we are working on our organizational structure and including additional divisions for our macroeconomic service. We are building our talent pool by training our staff so there will always be technical people available. A ready division that can do the work ensures continuity and institutionalization of the process.
The PSA is embracing its mandate to provide our stakeholders with data such as environmentally adjusted macroeconomic indicators to guide the country’s path to economic growth that is sustainable and inclusive.
In October, the PSA will host the International Conference on Sustainable Development Goals that will provide a venue to cascade the latest accomplishments and innovations of various organizations in addressing the data challenges brought by the Sustainable Development Goals. (Philippine Statistics Authority/ Lisa Bersales, PhD., National Statistician)