Asian Development Bank says Philippines can grow 7-8%Posted on October 20th, 2011 under Biz Progress
The Asian Development Bank said the Philippines should aspire to post an economic growth of 7 to 8 percent a year, stressing that the country has the resources needed to achieve the goal.
According to an ADB economist, the country simply has to resolve administrative and regulatory factors that hinder the entry of more businesses so that more investments will come in, thus accelerating growth.
“The country should not be satisfied with a 4- to 5-percent growth; aspiring for a 7- to 8-percent growth is good because that range is what is needed to reduce poverty,” ADB assistant chief economist Joseph Ernest Zveglich Jr. said Wednesday in an interview following the CEO Forum organized by Punongbayan & Araullo.
The Aquino administration originally aimed for the economy to grow by 7 to 8 percent every year during the duration of its term, but recently cut the target on grounds it may be too ambitious at this time.
Earlier this year, the economic team set a 2011 growth target of 5 to 6 percent. This month, the team reduced the range to 4.5 to 5.5 percent, taking into account the adverse effects of a weak global economy.
For next year, the team set the growth target at 5 to 6 percent, giving up on the 7- to 8-percent goal for the meantime due to challenges confronting the economy.
Zveglich said, however, that there is reason to support a higher growth target since required resources are available, such as a skilled and educated workforce, as well as natural resources.
Achieving the goal would require the determined effort on the part of the administration to improve the business climate.
The ADB economist said that the Philippines could, for instance, streamline the procedures in setting up businesses to encourage more entrepreneurs to set up shop.
Zveglich also said regulations should be consistent to spur investment growth, which will lead to economic growth.
In the first half, the Philippines grew by 4 percent, slowing down from the over 8 percent registered in the same period last year.
Officials said that while the average growth of 4 to 5 percent over the past decade was decent, that pace of growth does not allow the benefits of economic expansion to trickle down to the masses.
Economists say that this is why poverty incidence in the country is still high at 26 percent even if the Philippines has grown consistently over the past decade and has avoided recessions that other countries experienced.
(Story courtesy of Michael V. Remo of Philippine Daily Inquirer)