Food, jobs, investments

These are the three gravest problems of the Philippines.

These problems are aggravated by two equally ponderous problems – graft and red tape.

The food shortage is 25 percent of demand. Since food is 50 percent of the consumer basket or price index, a food shortage means high inflation. High inflation means high interest rates. High interest rates mean business and economic slowdown.

Economic slowdown means fewer basic goods and services available for the masses. And job shortages. Combine high inflation and high unemployment and you have what is called misery.

The job shortage is 1.5 million jobs yearly. The job shortage is so severe the Philippines has exported 12 million humans to over 100 countries in search of jobs and economic security. These 12 million expats are among the best of brain and brawn of the Philippines, nearly all gone for good. It is manpower the Philippines needs badly to make every Filipino a middle income earner.

In 2021, the Philippine Institute of Development Studies (PIDS) estimated the jobs shortages by 2025, for the skills that count today: 13,964 in the life sciences, 569,903 in engineering, 9,698 in the physical sciences and 13,285 in math and statistics.

The World Bank’s solution to the Philippines’ severe jobs problem? Let more Filipinos migrate, but in an orderly manner. (See WB February 2023 paper, “Philippine Jobs Report, Shaping a Better Future for the Filipino Workforce.”)

The Philippines receives the smallest foreign direct investments (FDI) among the six major ASEAN countries, only $9.2 billion in 2022, down from $12 billion in 2021. Singapore got $141.2-billion FDI, Indonesia $22 billion, Vietnam $17.9 billion, Malaysia $17.1 billion and Thailand $9.9 billion.

To grow at the level of Vietnam, the Philippines needs annually $18 billion in FDI; we get only half that. Over the next ten years, the Philippines easily needs P107 trillion ($1.8 trillion) in domestic and foreign investments for its GDP to grow at 10 percent per year (the minimum growth required for the country to catch up with its more prosperous neighbors).

At the same time, gross fixed capital formation (GFCF), as a percentage of GDP, has fallen, from 27