‘Infra spending must be 5% of GDP’
Foreign business groups in the country are urging President Aquino to boost infrastructure spending and implement critical measures on the final stretch of his term to ensure inclusive growth.
In achieving this inclusive growth, John D. Forbes, senior advisor at the American Chamber of Commerce, said the Aquino administration must be able to attain an infrastructure spending target equivalent to “5 percent of the country’s GDP; assure Philippine inclusion in advanced economic agreements with the Asia Pacific economies and the European Union; and revive labor-intensive manufacturing, improve agricultural productivity, and enable responsible mining in order to create more and better jobs.”
Higher levels of growth “are possible if infrastructure is improved faster and reforms are strengthened and enhanced to support agribusiness, manufacturing, and mining,” Forbes said. “In order for foreign investment to double or triple, there should be stronger efforts to reduce business costs and reform labor policy.”
But he noted that the Philippines would not become a high middle-income economy under one administration.
“A generation or two with sustained good governance will be required. In the near term, however, the 10 to 15 years that it takes to accomplish large infrastructure projects and to pass major reform laws should be greatly reduced. Less study and talk and more action are needed to sustain and increase high growth in a country with such a large and growing population,” Forbes said.
Henry Schumacher, ECCP vice president for external affairs, also pointed out that the Aquino administration must ensure the government’s commitment to long-term stability of rules and regulations, contracts and investment incentives.
There is too much “focus on revenue generation and too little focus on why foreign investors are not investing here. The issues of long-term commitment, no midstream changes, honoring contracts, delivering on incentives promised investors have to get higher priority,” Schumacher said.
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