‘RP needs higher growth track to reduce poverty’

The Philippines needs to invest more on infrastructure to raise economic growth to a higher level and make headway in reducing widespread poverty, Economic Planning Secretary Romulo Neri said yesterday.

After tax reforms put the government’s fiscal situation in order, "the next step now is to bring in more investments," he said.

The government needs funds to build highways, farm-to-market roads, water supply networks, irrigation facilities, classrooms, and health centers, he said.

"It is vital to ensure the resources for such infrastructure as they directly lift families out of poverty," he added.

Building highways "leads to private real estate investment, which in turn feeds construction, the cement industry, iron and steel, utilities. Jobs created in one sector are multiplied into others."

The World Bank estimates about 41.9 percent of the Philippine population of about 85 million lives on $2 a day or less.

The government puts the poverty level at a much lower 24.7 percent of the population as of 2003, compared to 44 percent in 1985, using a different yardstick.

Neri said poverty incidence would have fallen much faster if growth rates were at five percent or greater and did not go on a boom-bust cycle.

He said globalization is having a more profound effect on Philippine economic growth, with overseas-based Filipinos sending home a record $10.7 billion in salary remittances last year.

Exports are growing at 16.2 percent so far this year, while revenues from call centers are estimated to rise by 60 percent and tourist arrivals are at an all-time high, he said.

"All these inflows from abroad have pushed growth into a higher trajectory," he added.

After decades of boom-bust cycles, Manila is showing signs of resilience with a five-percent gross domestic product (GDP) growth in 2005 and 5.6 percent expansion in the first half of 2006 despite high oil prices, higher inflation, a 12-percent consumption tax and political conflict, he said. – AFP