Gov’t needs to make PH more business-friendly
Reforms instituted by the Aquino administration have already taken deep root and would likely continue to bear fruit well past 2016, the Asian Development Bank (ADB) said.
A change in leadership next year would do little, senior officials predicted, to reverse the gains made over the past five years, particularly in the areas of infrastructure, social welfare and education.
Focus should then be on pursuing additional changes that would make the country more business-friendly, which would help attract fresh investments that lead to higher job creation and economic growth felt by a broader base.
“The next administration will want their own policy direction, but if we break it down to basics, it’s hard to imagine a future administration not wanting to improve employment,” said Richard Bolt, ADB’s country director for the Philippines.
Since 2010, President Aquino’s government has succeeded in increasing the state’s infrastructure pipeline, despite implementation delays. A clear plan has now been laid out for the construction of new roads, bridges and airports, among others, either by the government itself or through public-private partnerships (PPP).
In education, annual spending has increased exponentially and the recent shift to a K-12 format for basic schooling, putting the Philippines at par with its neighbors, was a welcome development, Bolt said.
The recent passage of the Competition Law would help break down barriers to entry for several industries while the new Cabotage Law would bring down the cost of transporting goods around the archipelago, the official added.
Another landmark program is the government’s conditional cash transfer (CCT) scheme, which the ADB funds and which rewards families for keeping children in school and making them attend regular health checkups. “These are more than just cash handouts,” Bolt said of the CCT.
The country’s next president should focus on further bringing down the cost of doing business. The education system should also be designed to produce graduates that Philippine industries needed, Bolt pointed out.
In a report on Tuesday, the Manila-based multilateral lender slashed its 2015 growth forecast for the Philippine economy following the country’s lackluster performance in the first half.
In a report, the ADB said it saw gross domestic product (GDP) expanding by 6 percent in 2015. This was down from a July forecast of a growth of 6.4 percent. The growth forecast for next year of 6.3 percent was kept.
“After a slow start to the year, we are now seeing a pickup in fiscal spending,” Bolt said.
Soft global conditions dampened demand for the country’s exports in the first half, keeping economic growth at 5.3 percent. Government spending also fell short of state targets, dragging down overall growth numbers.
ADB’s forecast falls short of the government’s full-year target for the year of at least 7 percent. Meanwhile, the rest of the Asia-Pacific region is expected to grow by 5.8 percent.
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