Elusive Inclusive Growth: The Manufacturing Resurgence Program, MSMEs, the Conditional Cash Transfer Scheme, and Neoliberalism in the Philippines

Abstract

The Philippine government has policies and programs with the potential of significantly contributing to inclusive growth such as the proposed Manufacturing Resurgence Plan, and the program for micro, small, and medium enterprises, (MSMEs) of the Department of Trade and Industry (DTI) and the Small Business Corporation (SBCorp). However, the 2014 Manufacturing Resurgence Plan (MRP) was approved in snail-paced fashion and only began to take-off (if at all) in the waning days of the Aquino administration while its implementing agency, the DTI, including programs for MSMEs and government agencies like SBCorp, are starved of policy support and resources. On the other hand, there has been massive budgetary support for Pantawid Pamilya, the country’s conditional cash transfer (CCT) program, despites its thus far underwhelming development outcomes.
I argue that the country’s policy behavior in relation to these programs is best understood by an examination of the country’s state tradition embedded in its institutional framework as articulated in the various medium-term development strategies in the post-Marcos era. In particular, a neoliberal state tradition that explicitly means state retreat in important economic areas, and a call to defer to the private sector in this regard has been operationalized almost in doctrinaire fashion as the case of the Manufacturing Resurgence Plan and government support for MSMEs demonstrate.
However as high levels of poverty and inequality are logical development outcomes of such a strategy, the neoliberal state tradition has outlined an accompanying (residual type of) social policy that mitigates the worst consequences for its casualties, among others. In this sense, the Pantawid Pamilya plays this important role, and helps explain the massive budgetary support it enjoys. That it also feeds the clientelistic interests of politicians add to its allure.
The elusive search for inclusive growth by Philippine policymakers has largely become a Sisyphean exercise, ideologically hamstrung by a limited neoliberal policy template that prevents the state from actively intervening to promote its domestic industries, including MSMEs.

Date of Award	30 Aug 2016
Original language	English
Awarding Institution	City University of Hong Kong
Supervisor	Mark Richard THOMPSON (Supervisor)