By Lawrence Agcaoili (The Philippine Star) Updated December 10, 2011
12:00 AM Comments (2)
MANILA, Philippines - A study commissioned by multilateral lender
International Monetary Fund (IMF) showed that the Philippines continued
to lag behind its neighboring countries in the Asia Pacific Region in
terms of economic growth due to political uncertainty, weak economic
performance, high government debt, low investments, and weak government
spending.
The study showed that the ranking of the Philippines in terms of real
gross domestic product (GDP) growth dropped to its lowest level of 22nd
for the period 2005 to 2008 from 15th in 1965 to 1969.
The highest ranking of the Philippines between 1965 and 2008 was 12th
from 1995 to 1999.
Willa Boots Tolo, author of the report and presently a bank officer at
the Bangko Sentral ng Pilipinas (BSP), stated in the paper that the
Philippines placed second in terms of highest per capita GDP in Asia way
back in the 1950s but has now been overtaken by Malaysia at 16th,
Indonesia at 10th, Thailand at 15th, and Vietnam at 7th place.
The ranking was led by China, India, Mongolia, Argentina, and Uruguay.
Tolo said the factors blamed that contributed to the weak economic
performance of the Philippines included 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.
She pointed out that the Philippines also lacked a sustained period of
improvement in the key growth determinants indicating that a strong and
persistent period of economic reforms has been absent.
"The Philippines' mediocre performance in a number of
indicators-particularly relative to its Asian couterparts-illuminates
some of the existing pieces of the Philippine growth puzzle," she said.
In order to catch up with its East Asian counterparts, she explained
that the Philippines 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 added.
According to her, development in the agricultural sector could be
supported by better irrigation, access to fertilizers, farm-to-market
roads, and storage facilities.
The paper said the Philippine government should focus on public-private
partnership (PPP) scheme launched by the Aquino administration for
traditional and nontraditional infrastructure investments that is
beneficial for maximizing the returns to development.
It added that the government should also strengthen its focus of
education on the sciences in all levels would encourage future
researchers and scientists who would be instrumental in nation building.
Latest data from the National Statistical Coordination Board (NSCB)
showed that the GDP growth of the Philippines slackened to 3.2 percent
in the third quarter from 7.3 percent in the same quarter last year due
to weak global trade and underspending by the Aquino government bringing
the GDP expansion to 3.6 percent from January to September this year.
Economic managers led by Socioeconomic Planning Secretary Cayetano
Paderanga said it would be difficult for the government to meet the
revised GDP growth of 4.5 percent to 5.5 percent set by the
Cabinet-level Development Budget Coordination Committee (DBCC).
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