Fiscal authorities yesterday described as “laughable” the claim of the International Institute of Management Development in its 2018 World Competitiveness Report that the country’s public finances are worsening.
In a statement, Finance Undersecretary Gil Beltran also assailed the report which, he said, contained allegations that were “not backed up by actual data.”
Last week, the 2018 IMD World Competitiveness Report showed the Philippines falling nine notches to rank 50th in a sample of 63 economies. The IMD statement said the fall in the country’s ratings was due to “a decline in tourism and employment, the worsening public finances and a surge in concerns about the education system.”
Beltran, who’s is also the finance department’s chief economist, pointed out that, while IMD said tourism and employment had declined, the number of employed persons in the country rose 6.1 percent in January 2018 and unemployment rate dropped to 5.3 percent—the lowest since the country started compiling unemployment statistics.
“Also, international tourist arrivals to the Philippines rose by 16.1 percent to 1.4 million visitors for January-February 2018 compared to its level in the same period last year,” he said. “In 2017, Philippine tourists reached an all-time high of 6.6 million.”
“The claim that the state of public finance is worsening is simply laughable,” Beltran said. “The statement by the IMD reflects gross research incompetence.”
He pointed to third party assessments by credit rating agencies and the International monetary Fund which continued to hold positive views of the country’s fiscal program.
“If the state of our public finance was really deteriorating, credit rating agencies would have taken notice and have downgraded us accordingly. But no, we’re still investment grade,” he said. “Furthermore, the IMF has even supported our increasing the fiscal deficit headroom from 2 percent to 3 percent to accommodate our ambitious infrastructure program.”
The Finance official said the IMD failed to distinguish between short-term adjustments and long-term prospects and has mistaken the former for loss in competitiveness.
“Nevertheless, the dip in ranking is still a wake up call, notwithstanding its being a false alarm in some respects,” he said.—DAXIM L. LUCAS