Attaining peace and development in Mindanao is key to sustaining the country’s overall growth and, while the solution is mainly political, the right economic growth could pave the way for a solution, according to the World Bank.
Officials at World Bank’s Manila office yesterday said the Philippine economy was seen to continue posting strong growth in the next two years, riding on improved global demand for Philippine exports, robust domestic consumption and expected higher government investments in infrastructure.
The multilateral lender has, however, scaled down its growth projection for the Philippines for 2017 to 6.6 percent from its earlier forecast of 6.8 percent.
It also cut its growth forecast for the Philippines for 2018 and 2019 to 6.7 percent from its original projection of 6.9 percent and 6.8 percent, respectively.
In its Philippines Economic Update (PEU) released yesterday, the bank said that in the long term, unlocking the potential of Mindanao was key to reducing poverty and achieving inclusive growth in the country.
Birgit Hansl, World Bank’s lead economist for the Philippines, said in a briefing that an increase in public spending on infrastructure was expected to boost investment growth.
“Higher investment growth could push the country’s growth rate toward the upper end of the government’s target of 6.5 to 7.5 percent of GDP (gross domestic product), but this is contingent on the public infrastructure program gaining full traction,” Hansl said.
Based on the 82-page PEU report, the World Bank said reducing poverty and delivering on the government’s new Strategic Framework for Mindanao Peace and Development would demand a new form of engagement in the region.
“To address the goal of a peaceful, cohesive, secure and inclusively developed Mindanao, the framework calls for five linked strategic outcomes: resilient communities built; effective governance promoted; inclusive economic growth and jobs ensured; security environment stabilized, and the consensus for peace strengthened,” it said.
According to the World Bank’s proposed strategy for regional development in Mindanao, the three main components are raising agricultural productivity and improving connectivity of the farms to the markets; boosting human development through greater investments in health, education and skills, and building effective institutions in conflict-affected areas for better service delivery.
“The central policy challenge for Mindanao and the rest of the country is how to accelerate inclusive growth, to create more and better jobs and reduce poverty,” said Mara K. Warwick, World Bank country director for the Philippines, in a statement.
“This task is more challenging in Mindanao, because of the long-standing armed conflict,” Warwick said. “While the government and other sectors of society are addressing the key drivers of conflict, programs that create jobs can strengthen the process of peace-building.”