Monday, 11 July 2011 10:25
Prospects of the Philippine economy in 2011 remains favorable, the World Bank’s Philippines Quarterly Update (PQU) indicated in its June 2011 report.
This as “investments, private consumption and the services sector are expected to strengthen,” it added, while it challenged the Philippine government to sustain the momentum of reform “for achieving inclusive or broad-based growth that benefits the poor.”
With the regular PQU released the other day, World Bank Senior Economist Eric Le Borgne said, “prospects on the supply side remain favorable with manufacturing and construction projected to benefit from the end of the trade disruption linked to Japan’s post-disaster reconstruction, as well as the solid growth forecast for the business process outsourcing.”
This as “increasing mineral prices will provide incentive to fast track investment and increase production in the mining sector.”
Le Borgne of the WB also explained in the PQU that the strong performance of the services sector in the first quarter is expected to remain robust throughout the year “while the agriculture sector is projected to continue being a net contributor to growth.”
“Phl GDP Growth Forecast”
The PQU bared its forecast of 5.0 percent gross domestic product growth rate in the country for 2011 and a hike to 5.4 percent in 2012, while the WB further says that the GDP growth “could potentially be higher as the strong focus and early gains of the Aquino administration in tackling corruption and improving the investment climate could boost domestic investment.”
The PQU of the WB also says that net exports are projected to recover as Philippine workers and companies contribute to the reconstruction of Japan from the earthquake-tsunami-nuclear event that boosts export of goods and services (including labor exports) to that country.
Strong wage growth and employment among relatively well paid and formal sectors like the Business Process Outsourcing will buoy private consumption, the PQU added.
According to World Bank Country Director Bert Hofman as quoted by the PQU report, the country’s recent performance “indicates that the country’s economy has already stabilized since the global financial crisis, with more robust and less variable growth,” citing, “prior to the global recession that started in 2008, the country was perceived to have a weak fiscal position, making it vulnerable to shocks and volatility.”
“The November 2010 upgrading of the country’s sovereign foreign currency rating by Standard and Poor’s and a similar upgrade by Moody’s this June are testaments to this significant improvement,” added Mr. Hofman, even challenging the country “to ensure that growth is more inclusive or one that all citizens participate in and benefit from.”
This requires, Hofman said, ‘enhancing the income-earning opportunities of the poor as well as assist households to participate in markets by enhancing their human capital’.
WB urges greater efforts in improving access to education, health, and social protection services, particularly among the poorest populations and in the poorest regions.
“Important Reforms Showing Good Signs”
The WB acknowledges that the Aquino government’s first year “has taken important reforms towards achieving inclusive growth that included improving the transparency of the public sector budget and of public financial management to improve governance and launching an ambitious public-private partnership program to address infrastructure bottlenecks as well as help foster the development of inclusive sectors such as tourism.
WB cites that regional airport development combined with partial ‘open sky’ agreements “would enable international tourists to reach tourism hot spots in the Philippines directly, thus generating jobs for the poor as well as business opportunities from micro and small enterprises.” While, in terms of boosting and protecting human capital of the poor and vulnerable, the WB hails the government’s “reshuffl(ing) of social protection resources away from wasteful and ineffective programs, towards the well-targeted conditional cash transfer program.
By end-2011 the Pantawid Pamilyang Pilipino Program is budgeted to cover 60 percent of the poor.
Last Monday’s meeting with a hundred beneficiary-leaders of the 4Ps all over the country in Malacanang with Pres. Aquino III, signified the government’s continuing tact of “investing on the poor”.
By Artemio A. Dumlao
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