TOKYO, Japan – The Philippines, a laggard economy compared
with its Southeast Asian neighbors, can grow faster in the medium term at more
than five percent annually, International Monetary Fund (IMF) officials said.
In a briefing here, they said
higher state revenues and increasing the spending on infrastructure will pave
the way for more domestic growth.
“Certainly we see the potential
for the Philippines to raise its growth rate well above five percent over the
medium term,” said Anoop Singh, director of the Asia and Pacific Department of
the IMF.
“I think they are trying to build
infrastructure financing and the focus is on domestic demand, but in a way that
is focused on infrastructure, to raise potential growth,” Singh added.
In the World Economic Outlook
(WEO) released during the IMF-World Bank Annual Meetings here, the Philippine
economy is seen to post a 4.8-percent uptick for 2012 and 2013.
The IMF maintained the 2012
forecast but it cut the 2013 growth outlook from 4.9 percent.
In the first half of 2012, the
Philippines’ gross domestic product climbed 6.1 percent due to firm domestic
demand and increased public spending. It is above the government’s target of
five to six-percent growth this year.
For his part, Bangko Sentral ng
Pilipinas (BSP) Governor Amando Tetangco Jr. said they will maintain monetary
price stability, which will be beneficial for more growth.
“We see that the inflation rate
this year and next year will be well below, in fact closer to the lower end of
the target range [of three to five percent],” Tetangco said.
The BSP sees continuous robust
consumption and acceleration in government spending, providing a push to
economic growth, he said.
The Philippines has suffered from
investment constraints due to fiscal difficulties, said Masahiko Takeda, deputy
director for Asia and Pacific Department of the IMF.
However, the time is ripe for the
country to increase infrastructure spending “to lay the foundation for
long-lasting domestic investment-led growth.”
In 2010, the government launched
the Public-Private partnership (PPP), its flagship economic program focusing on
infrastructure works like the construction and expansion of toll roads, port
terminals, schools buildings and airports.
Two projects have been awarded so
far: the $46.6-million Daang Hari-South Luzon Expressway Link Road Project and
the P16-billion PPP for School Infrastructure Project.
Singh said the Philippines is
seeking revenue increases to ensure that spending on infrastructure can rise in
a sustainable way.
So far, the Philippines is a
laggard in the Association of Southeast Asian Nations-5 (ASEAN-5) bloc that
includes Indonesia, Malaysia, Thailand and Vietnam.
IMF said Indonesia will grow the
fastest this year and the next at six percent and 6.3 percent, respectively.
Malaysia’s economy is seen to grow the slowest, at 4.4 percent for 2012 and 4.7
percent for 2013.
“Growth in Asia has slowed but
Asia remains a growth leader,” Singh said.
Singh added that Asia has room
for a strong policy response if risks of downside risks like worsening exports
materialize.
ASEAN-5 will expand by 5.4
percent this year and 5.8 percent next year, IMF said. This compares with the
5.4 percent (2012) and 6.2 percent (2013) in WEO last April.
Neil Jerome C. Morales
Business & Investment Opportunities
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