PH growth said to hinge on Aquino’s successor
THE PHILIPPINES will need a president who will continue to pursue reforms that were started under the Aquino and Arroyo administrations to speed up the pace of the economy’s growth and significantly reduce poverty levels, according to Capital Economics, a think tank.
Five years into his term, President Aquino proved that a leader with integrity could make a difference in boosting the country’s economic prospects, Capital Economics said.
But all the gains the country has made since 2010 may be reversed if a subpar leader rises to the presidency.
“Past experience suggests there are no guarantees the Philippines will elect a clean president who has the country’s best interests at heart,” the firm said in a report released over the weekend. “Just as Aquino quickly improved the Philippines’ image with global investors, the wrong sort of president could sour it.”
The think tank gave credit to “much-maligned” former President Gloria Macapagal-Arroyo, under whose watch many of the reforms that now benefit the economy were started.
The country’s performance started to improve during the 2000s under the presidency of Macapagal-Arroyo, when growth averaged around 4.5 percent. This marked a big improvement from the figures of the 1980s and 1990s—decades that were marred by economic crisis and “incompetent” policymaking.
Macapagal-Arroyo, the report said, did much of the hard work in repairing the country’s public finances.
“Nevertheless, the performance under Aquino has been even more impressive,” Capital Economics said, noting that gross domestic product (GDP) grew by an average of 6.3 percent a year under the current administration.
Government debt continues to fall under Aquino, and just as encouragingly, he is starting to use part of the money that has been saved on interest payments to address some of the longstanding constraints on growth, notably infrastructure.
Capital spending increased from just 2.2 percent of GDP in 2012 to 3.5 percent last year, and there are plans to increase it to 5.1 percent of GDP in 2016.
“Aquino will leave the country in better shape than it has been in for a long time,” Capital Economics said.
But for the economy to start hitting the 8-percent growth rate, the next president would need to push reforms further, it added.
