Higher, new taxes needed for PH growth, WB says

The World Bank has urged the Philippines to improve management of public finances and raise some taxes, saying it needs additional resources to beef up its capability to take advantage of new growth opportunities in the post-crisis era.

In its latest report on East Asia and the Pacific, the World Bank said the Philippines, together with a few other developing economies in the region, has to invest in technology, projects and programs that will boost domestic productivity.

Higher productivity, in turn, will help the country service growing needs for various goods from other developing economies.

As the United States and the eurozone continue to post anemic growth rates in the wake of the 2009 global recession, the World Bank said the Philippines and its neighbors can boost growth by intensifying intra-regional trade.

The World Bank said developing East Asian countries must take advantage of the “global rebalancing” that is now happening following the economic crisis.

Economists define “rebalancing” as the move of economies to shift from being export-oriented to boosting income through domestic sources. This is in response to the still anemic demand from the US and Europe.

The rebalancing by China and a few other countries is a growth opportunity for countries like the Philippines, the World Bank said.

China, in particular, is seen to require more imported goods needed to boost domestic production, and neighboring countries like the Philippines may take advantage of this by selling more intermediate goods to China and other developing countries.