PHILIPPINES IS POOR, ACCORDING TO IMF
[PHOTO
- Hating-Kapatid (Filipino for "sharing of siblings) By:
Benson Galguerra]
MANILA, DECEMBER
12, 2011 (STANDARD) by Roderick T. dela Cruz - WEAK government
spending and political uncertainty are just some of the reasons why the
Philippines has been outperformed by most of its Asian neighbors, a study
sponsored by the International Monetary Fund showed.
The 25-page working paper, The Determinants of Economic Growth in the
Philippines: A New Look, compared the Philippines to 23 emerging markets for the
period 1965–2008 to analyze the factors behind per-capita GDP growth in the
Philippines.
A previous study noted that in the 1950s, the Philippines had the second
highest per capita GDP in Asia. Today, its Southeast Asian neighbors Malaysia,
Indonesia, Thailand, and Vietnam are described as high performing economies that
are targetting first world statuses, while the Philippines was operating on a
low-growth trajectory.
"The Philippines' mediocre performance in a number of indicators—particularly
relative to its Asian counterparts—illuminates some of the existing pieces of
the Philippine growth puzzle," Willa Boots Tolo, author of the report and now a
bank officer at the Philippines' Bangko Sentral, said.
Among the factors blamed for the country's weak economic performance were
weak agricultural productivity, high government debt, low public, private, and
foreign investment, weak research and development spending, low spending on
education, lackluster tourism sector, relatively high income inequality, high
corruption, strong population growth, more episodes of financial crisis, and
political uncertainty.
It suggested that the Philippines lacked a sustained period of relatively
strong economic reforms.
Tolo said that, in order to catch up with its East Asian counterparts, the
Philippines would need to maintain macroeconomic stability, expand its fiscal
space, and redirect public spending to agriculture, infrastructure, and research
and development.
"Expansion of the fiscal space and thus scaling up spending on public
investment requires raising tax revenue through both administrative and
selective tax policy measures. This would include strengthening tax
administration, reform in excise taxes, rationalization of fiscal incentives,
and addressing exemptions in value-added taxation," she said.
The study said better irrigation, access to fertilizers, farm-to-market
roads, and storage facilities could support development in the agricultural
sector.
The government's focus on public-private partnerships for traditional and
non-traditional infrastructure investments would also maximize the returns to
development, while strengthening the focus of education on the sciences in all
levels would encourage future researchers and scientists who would be
instrumental in nation building.
Chief News Editor: Sol Jose Vanzi
© Copyright, 2011 by PHILIPPINE HEADLINE NEWS ONLINE
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