IMF foresees economic recovery for RP
IMF foresees economic recovery for RP
MANILA (AFP): The International Monetary Fund (IMF) said Tuesday it expects the Philippine economy to pick up this year but only if it pushes through with crucial reforms, particularly on its fiscal sector.
"We share the authorities' view that the recent rebound in confidence, coupled with peso stability and lower interest rates, will suport a pickup in economic activity this year," said Markus Rodlauer, head of an IMF delegation visiting here.
But he warned that this would depend on both external developments and implementation of government plans, many requiring the approval of Congress.
"A lot of work lies ahead," particularly in the area of boosting revenues in order to control the budget deficit and still having enough money to spend on much-needed infrastructure projects and education, the IMF official said.
The fund praised the government's plans to overhaul tax administration and praised the Central Bank of the Philippines for its exchange rate management, calling it "a pillar of strength" for the economy.
It cited reforms that the government had to implement as a priority, including a power sector liberalization that still remains stalled in Congress, tax legislation which will allow the development of capital markets and strengthened supervision of banks.
Rodlauer also called for stronger anti-money laundering practices and the passage of a new insolvency law.
Manila forfeited the last tranche of a 1.4 million-dollar IMF loan last year after the government missed its budget deficit target.
The government has not obtained a new IMF program, but is voluntarily submitting to scrutiny by the IMF over the next two years to improve its credit profile.
Economic growth in late-2000 and early-2001 slowed sharply as the then-president Joseph Estrada become entangled in a massive corruption scandal.
However investor confidence has improved since Estrada was toppled in a popular uprising in January which saw Gloria Arroyo, an economist, installed as president.
Arroyo has imposed a number of austerity measures aimed at curbing the projected record 225 billion-peso (4.5 billion- dollar) deficit this year to a more manageable 145 billion pesos.