“It’s not that the Philippines did not develop and grow well. It grew very well and developed very well but your neighbor countries did it much faster. That’s the difference,” Hansl said. “It’s the speed. It’s the phase of growth and income growth specifically, that is the difference.”
Hansl said economic growth is not just about having a strong leadership but looking at the “whole package” and “not just for the sake of growth.”“How you grow depends on how that growth is shared. And if you have a larger middle class, if you have it distributed more equally, you grow faster. It’s a fact. It’s evidence-based. And that’s what we’ve tried to advise governments when we work with them to look at growth, it’s important. So macroeconomic management should really focus on policies that support growth,” she said.
“We have all images in mind what makes growth works. So a little red tape, a lot of infrastructure, all of it, but think also how to make it more inclusive so you can grow not just the next five or 10 years but the next 50 years,” she added.
Hansl recommended that policies for inclusive growth should address varying constraints faced by different economic classes.
“The Philippines is slowly becoming a middle-class country, where a variety of economic classes live together side-by-side: the extreme poor and the super rich,” she said, pointing out that it’s not only the middle class that drives consumption, but also investment.
“What I observed in many countries, the biggest challenge is not shifting from becoming low, middle, and high, but the biggest challenge is to become a middle class society,” she said.
According to Hansl, investors will only come “if there is openness in many sectors.”
“Because if I want as an investor to increase my global value chain in the country, I don’t want to do it for just one thing. I think much broader if I want to have to think of a long-term investment. I want to see pieces of my value chain,” Hansl said.
“And that restrictiveness… is a big problem for me because if I mean business outsourcing center, it’s easy to come in. But if I have the highest services professionals to come in and grow a business here, it’s really difficult in the Philippines. So these are the kind of things that hold these developments perhaps back in the Philippines although you have better assets,” she added.
In the Philippines, strategies for inclusive growth are laid out in the Philippine Development Plan 2017-2022.