WHILE the Philippines can look forward to good economic prospects through the rest of 2016 and beyond, poor infrastructure and”anemic” foreign investment pose challenges to higher economic growth, according to an expert from the International Monetary Fund.
Dr. Shanaka Jayanath Peiris, IMF resident representative to the Philippines, stressed the point during his address to The Manila Times’ third business forum at the New World Manila on Tuesday.
Peiris’ speech, “Sustaining Philippines growth takeoff: Opportunities and challenges,” provided a snapshot of the Philippine economy in the context of the current global situation, and suggested the country is well-positioned to take advantage of its stability, which is underpinned by a sound banking system, manageable government debt, a young, skilled workforce, and strong consumption.
Challenges posed by a “rebalancing” of the Chinese economy, some global slowing in developed and commodity-exporting economies, and tightening of oil-producing economies in the Middle East are muted by the Philippines’ comparative stability, Peiris said, but in order to maintain growth over the longer term, a number of key issues need to addressed.
Peiris identified infrastructure and attracting investment as the biggest obstacles to stable growth, pointing out that the Philippines lags the region and in fact most of the rest of the world in these key areas.
In addition to opening more areas of the economy to investment, Peiris stressed that improving agricultural production, implementing “comprehensive” tax reform, including raising more revenue for the government, and diversifying access to financing for businesses and households should be priorities for the next administration in order to make the most of the country’s economic gains.