Thursday, 08 March 2012 13:05
The International Monetary Fund (IMF) expects a 4.2 percent expansion of the Philippine economy this year due in part to the fiscal stimulus measures, monetary accommodation, and remittances.
In a video presentation posted on the IMF website, Article IV Mission Chief for the Philippines Vivek Arora said projection on the domestic economy “is generally a positive outlook in the sense that growth slowed down in 2011 because of fiscal contraction and because of the global headwinds.”
He said fiscal and monetary measures put in place will boost domestic demand this year and counter the contraction in exports.
The multilateral lender forecast a 4.2 percent growth, as measured by gross domestic product(GDP), from last year’s 3.7 percent
“And then going forward we expect that the Philippines will regain its potential growth rate. What we estimate to be the potential growth is about five percent over the medium term,” Arora said.
Arora also cited that government’s fiscal consolidation bid with the goal to reduce debt to GDP ratio to 2.5 percent of GDP this year and then to two percent of GDP starting next year.
He said efforts to put in more inclusive growth was underway through increase of funding for social expenditures and infrastructure.
For the government to achieve this goal, Arora said there was a need to raise revenues through improved tax administration and collection as well as higher collection from excise tax, fiscal incentives and value added taxes.
Arora said the government’s bid to ensure a more inclusive growth was the focus of IMF’s Article IV consultation on the Philippines this.
He said ensuring that more inclusive growth could be achieved through strengthening primarily of the growth and its pace as well as ensuring that beneficiaries of higher growth would increase.
He said the economy needed to attract more investments through stronger infrastructure and public-private partnership as well as more focus and funding on social safety nets, human capital, and infrastructure.
“It also involves a set of mutually reinforcing policies to make sure that more people benefit from growth than what was done so in the past including through structural measures to improve rural developments and efforts of that,” he said.
by: Joann Santiago-PNA
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