RP's economy recovery still fragile<\/p>\n
MANILA (AFP): The Philippines looks well on the way to
\nsustained economic recovery, but this could still be derailed if
\nthe government uses the breathing space as a reason to postpone
\nkey reforms, an International Monetary Fund (IMF) official said
\nyesterday.<\/p>\n
\"We must not lose sight of the fact that despite the progress
\nand the good performance to date, there is still an unfinished
\nagenda of reforms on the table relating to the government's
\nmedium-term program,\" said the IMF resident representative to
\nManila, Howard Handy.<\/p>\n
\"Indeed, some of the key impediments to growth in the past
\nstill persist,\" he told an economic forum here.<\/p>\n
The Philippine gross national product (GNP) grew by 5.1
\npercent last year, the Central Bank said. Officials say Manila
\nhas gotten over its boom-and-bust cycle of periodic high growths
\nwhich are later torpedoed by high inflation or balance of payment
\ncrises.<\/p>\n
\"One of the critical weaknesses that has undermined the growth
\nperformance and potential of the Philippines has been its
\nchronically low saving and investment rates,\" which averaged
\nbetween 17 and 20 percent of GNP over the five years ended 1993,
\nHandy said.<\/p>\n
These have remained well below the levels of other fast-
\ngrowing economies and roughly 15 percentage points below the
\nSoutheast Asian average, he added.<\/p>\n
He said that despite the improvement in the budget balance,
\nuntil programmed reforms in revenues and expenditures were in
\nplace \"the budget will remain vulnerable.\"<\/p>\n
He cited the domestic oil industry which remains highly
\nregulated and the huge financial problems of state corporations
\nlike the National Power Corp.<\/p>\n
\"The countries that have achieved high rates of growth over an
\nextended period -- in Asia and elsewhere -- are those that have
\nwon the war against inflation,\" by reining in budget and monetary
\ngrowth, Handy said.<\/p>\n
This was \"all the more important now that international
\ninvestors and financiers are looking at emerging markets with a
\nmore critical eye,\" he said.<\/p>\n
Handy cited Manila's professed commitment to a \"strong and
\ncomprehensive program\" of reform that stresses a stable macro-
\neconomic environment, structural policies that will enhance
\ngrowth, and a liberal trade and exchange regime.<\/p>\n
\"The foundations of many of the ingredients of sustainable
\ngrowth are already well established in the Philippines,\" the IMF
\nofficial said.<\/p>\n
But he said this strong performance \"must not be viewed as a
\nchance to postpone reforms but as a golden opportunity to set
\nthem firmly in place.\"<\/p>\n
The Philippines obtained a US$650 million IMF loan last year
\nthat requires it to meet key economic targets for the loan
\ntrenches to be disbursed.<\/p>\n
However finance officials have recently floated the
\npossibility of getting out of the IMF program.<\/p>\n
Handy said that provided \"the momentum of reform is kept up,\"
\nManila's GNP growth target of between six and 6.5 percent this
\nyear \"looks feasible and attainable.\"<\/p>\n
He said the inflation target of 6.5 percent and the reduction
\nof the external current account deficit to near four percent of
\nGNP \"appear realistic.\"<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rps-economy-recovery-still-fragile-1447893297",
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"sponsor_url": "https:\/\/okusiassociates.com"
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