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Peace key driver of growth

December 7, 2023 Mario Fetalino Jr. 110 views

Mario FetalinoMY little e-bike – the one that I use for short distance travelling — lost power the other day. My guess is it had battery problem.

I searched for a repair service in the internet yesterday and found one near my place. After making a call, two guys immediately came to my house in e-scooters to do the fixing.

They quickly buckled down to work and brought power back to my tiny vehicle. In less than 30 minutes, they earned P300 plus a humble tip to encourage a job well done.

Grateful, the two spent a few more minutes talking to me and revealed they have been getting a lot of repair jobs lately.

This is not surprising especially if we take into account the increasing demand for e-bikes. The e-bike industry is said to be experiencing a boom this year and seen to continue growing beyond 2023. E-bikes are environment-friendly and easy to maintain.

But aside from the e-bike industry, other businesses are participating well in the national economic recovery. Fact is, the Philippine economy is robustly expanding and will sustain such strong growth in the next few years.

No less than the World Bank (WB) reported that the local economy will continue to demonstrate vigorous performance to be propelled by the services sector.

Ndiame Diop, WB country director for Brunei, Malaysia, the Philippines and Thailand, said growth will be mainly driven by two factors — a healthy labor market and declining inflation.

As for the labor market, the country’s unemployment rate in October this year fell to its lowest, while employment rose to its highest since April 2005.

Government statistics show that the 4.2-percent unemployment rate during the month was down from the 4.5 percent recorded in the same month last year.

The number of unemployed went down to 2.09 million from 2.24 million in October last year. The country’s employment rate was estimated at 95.8 percent, also the highest recorded since April 2005. The number of employed Filipinos went up to 47.80 million from last year’s 47.06 million.

On the other hand, the country’s headline inflation further eased to 4.1 percent in November this year, the lowest recorded since the 4 percent in March 2022.

The headline inflation last month was significantly lower than the 8 percent recorded in November last year and the 4.9 percent seen in October this year.

More importantly, food inflation – a key concern of the government — slowed to 5.8 percent, the lowest recorded since the 5.2 percent in May 2022. This is due to the deflation in vegetables (-2 percent from 11.9 percent) and lower inflation of fish, meat, sugar, bread and other cereals, and fruits.

NEDA Secretary Arsenio Balisacan is hopeful conditions will continue to improve given the thrust of the Marcos Administration to encourage trade and investment and reinvigorate job generation.

“We can make the labor market more inclusive with the entry of more investments, especially those that bring in new and better technology,” Balisacan said.

Such new investments could now be more available for the country as the government reopens its door for peace negotiations with the communist rebels – a move that will boost investor confidence.

All the key drivers of growth could play in full swing if there is peace in the country.

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