Mixed reports on RP reforms<\/p>\n
MANILA (AFP): U.S. investment house Goldman Sachs praised
\nrecent Philippine economic reforms, even as a World Bank report
\nwarned the country against complacency, according to reports
\nobtained here yesterday.<\/p>\n
Goldman Sachs, in their assessment of Asian economies, said
\nthe passage last month of a key excise tax on cigarettes and beer
\n\"should prolong capital inflows, needed to finance growth.\"<\/p>\n
The report said passage of the key tax reform, despite strong
\nopposition from affected sectors, was \"an important coup\" for
\nPresident Fidel Ramos and would \"enhance the country's reputation
\nas a nascent Asian tiger.\"<\/p>\n
The report also said the passage of the excise tax would pave
\nthe way for other tax reforms next year.<\/p>\n
However, the World Bank, in a study entitled, \"Philippines:
\nstrengthening economic resilience,\" warned \"authorities need to
\nbe wary of a situation in which undue reliance is placed on
\nsurging remittances and capital inflows.\"<\/p>\n
This was a reference to the huge remittances from the four
\nmillion Filipinos working overseas, as well as the foreign loans
\nand large portfolio investments that were coming in.<\/p>\n
The World Bank said \"the pace of expansion (of these inflows)
\nover the medium term is unlikely to be sustained,\" and warned
\nthat the Philippines would have to watch its trade deficit more
\nclosely.<\/p>\n
The Philippine trade deficit hit US$10.09 billion in the first
\n10 months of this year, up 17.6 percent from the same period last
\nyear.<\/p>\n
The World Bank also warned of the expansion in credit, saying
\nif sustained it could lead to higher inflation, a balance of
\npayments deficit and would also affect banks' management of their
\nloan portfolios.<\/p>\n
It suggested tighter monetary policies, stronger guidelines on
\nforeign currency deposit units and possible taxation of foreign
\nborrowings to address this.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/mixed-reports-on-rp-reforms-1447893297",
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