RP must complete reform process: IMF<\/p>\n
MANILA (Reuter): The Philippines' continued economic recovery
\ndepends on the completion of vital reforms as well as "blood,
\nsweat and tears", the International Monetary Fund's (IMF) local
\nrepresentative said yesterday.<\/p>\n
Howard Handy, leaving the Philippines shortly after a two-year
\nstint here, told a news conference the recovery program had so
\nfar been very successful.<\/p>\n
But he added: "We are all convinced that the success of the
\nPhilippine program and the sustainability of the recent recovery
\nreally hinges on the full implementation on a timely basis of the
\nreforms the government has already put on the table."<\/p>\n
These include reforms to end widespread tax evasion and to
\nexpand the number of taxpayers, currently only a fraction of the
\nworkforce.<\/p>\n
They also include tariff reductions and the full
\nliberalization of the energy sector.<\/p>\n
"It's not enough to just talk the growth rate up. You've got
\nto get the elements for growth securely in place. Those elements
\ninvolve blood, sweat and tears," Handy said.<\/p>\n
He said the proceeds of privatization had so far helped the
\ngovernment over the initial phases of its reforms, which include
\nthe liberalization of foreign exchange, banking and
\ntelecommunications.<\/p>\n
But selling off state enterprises could not go on for ever and
\nconcrete reforms have to be in place, he said.<\/p>\n
"We are buying time with the privatization for the
\nimplementation of long-lasting tax and expenditure reforms. That
\ntime is precious. It must not be wasted," he said.<\/p>\n
Handy said a sharp increase in annual inflation in September
\nwas caused by an unexpected rice price rise and did not reflect
\nlaxity in monetary policy.<\/p>\n
The government, however, would probably not be able to meet
\nits 6.5 to 7.5 percent full year inflation target although he
\nsaid the final result would still be below double figures.<\/p>\n
Philippine annual inflation rose sharply to 11.8 percent in
\nSeptember from 8.4 percent the previous month, mainly because of
\na rice shortage.<\/p>\n
Handy said gross national product growth would remain strong
\nat around six percent in 1995 and the current account deficit
\nwould continue to decline.<\/p>\n
He said the overall balance of payments surplus would be
\naround $1.5 billion by year end against $1.1 billion last year.<\/p>\n
And he said prospects were good for the Philippines, long
\ndependent on foreign assistance to keep its economy afloat, to be
\nable to "exit" from its current IMF program when it expires in
\n1997.<\/p>\n
The IMF program involves some $684 million in loans, not all
\nof which will be taken up, according to government officials.<\/p>",
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