Study: Philippines needs to step up for sustained, inclusive growth-A A +A
Sunday, March 10, 2013
ALTHOUGH the Philippines registered a surprisingly robust growth in 2012, the country will need to do more to ensure that growth is sustained and inclusive, according to the latest study on the health of the country's economy by a group of local and foreign investors in the Philippines.
Despite the global trade slowdown, the Philippines posted an impressive higher-than-expected growth of 6.6 percent last year, the highest among the Association of Southeast Asian Nations (Asean)-6 economies.
Still, the country is "growing too slow" and needs to move its economy to a "higher level of growth and job creation," stress the authors of the Arangkada Philippines Second Anniversary Assessment, released in February 2013.
The publication outlines several recommendations to the Philippine government to help facilitate economic growth in the country and ensure that progress is sustained for the long term.
Among these is to double the annual GDP growth rate to nine percent through a clear long-term industry policy. "The Philippine Development Plan (PDP) continues to target seven percent to eight percent growth in order for it to be inclusive," the study says.
The assessment also seeks high priority for job creation in the private sector. The country's unemployment rate of seven percent can be cut by accelerating the growth of the manufacturing and tourism sectors. It will also help to reform the long underperforming agribusiness sector, which has the potential to provide millions of new jobs, the study adds.
Foreign direct investments should reach over US$7 billion a year in three to four years' time, the study says. With a net FDI of just $2 billion in 2012, the Philippines continues to receive much lower inflows than most of its Asean neighbors.
The paper also suggests that the state give attention to stimulating export growth to enable exporters to reach the annual export target of $100 billion in five to six years. It notes that shipments were hit last year by continued weak demand from major traditional markets and the cooling down of China's economy.
Its other recommendations include giving adequate funds to boost the flagging international promotions campaign, channeling remittances into productive investments, increasing efficiencies in government spending and tax collection, and organizing a special group of experts to recommend to the President or his Cabinet key reforms to make the economy grow by at least nine percent.
The Arangkada Philippines Second Anniversary Assessment reflects the results of discussions among nearly 300 Filipino and foreign investors over a six-month span. It is a joint project of the Joint Foreign Chambers of the Philippines and the United States Agency for International Development. (PR)
Published in the Sun.Star Davao newspaper on March 11, 2013.