Poverty incidence in PH seen to decline sharply
Poverty in the Philippines may fall sharply in the next two years if the government can sustain efforts that lead to higher growth and more jobs, the World Bank said in a new report.
The Philippine economy will grow by a faster rate this year and the next, the World Bank said, beating all other major Southeast Asian markets.
The country’s economic engines will be fueled by higher government spending, and revenue from migrant remittances and business process outsourcing (BPO) receipts.
“Philippine growth is still one of the fastest among the major economies in the East Asia region, trailing only China,” the multilateral lender said in its East Asia and Pacific economic update.
“Strong remittances, falling oil prices, and upbeat consumer and business sentiments indicate stronger growth in 2015,” the bank said.
For 2015 and 2016, growth is expected to clock in at 6.5 percent, faster than 2014’s 6.1 percent.
The projection for 2015 is slightly lower than the World Bank’s previous forecast late last year, a cut that was in line with the outlook for the rest of the region.
Meanwhile, the rest of Asia is expected to grow by 6.7 percent, slower than 2014’s 6.9 percent.
As a result of sustained economic performance, poverty levels in the Philippines are expected to decline by nearly a third to 10.9 percent by 2017 from 2012’s 15.4 percent.
People who earn less than $1.25 a day are considered poor by the World Bank.
In the near-term, the World Bank said the Philippine government should focus on sticking to the planned spending program in its budget.
Meanwhile, election spending in 2016 will provide a boost to consumer demand, helping keep growth levels up.
“Historically, first half domestic demand growth is around 2.4 percentage points higher in an election year compared to a non-election year,” the Bank pointed out.
The more long-term goal of eradicating poverty will need structural reforms that lead to higher investments in infrastructure, health and education.
Enhancing competition by breaking up monopolies and the simplification of regulations to promote job creation will also be key. The World Bank likewise urged the creation of policies for protecting property rights to encourage more investments.
“In the near-term, attention is needed in raising revenues equitably and efficiently to finance the much needed investment in physical and human capital,” the World Bank said. “Attention is also needed in expanding the scope and ensuring the impact of the universal health coverage and conditional cash transfer programs,” it added.
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