IMF says Phl should focus on key structural reforms

MANILA, Philippines - The International Monetary Fund (IMF) said the country should keep its focus on key structural reforms and continuity even after a new administration takes office in 2016 to sustain the gains it has achieved in the past years.

IMF Resident Representative to the Philippines Shanaka Jayanath Peiris said the strong economic growth the country has been seeing in the last two years was an offshoot of the various reforms instituted by the current and past administrations.

To further grow the economy, Peiris said the country should “focus on continuity, focus on what kind of structural reforms can drive investments.”

This should be done in order to take advantage of its young population through fostering an environment conducive to attract more investments to create more jobs, he said.

“The Philippines has the youngest population in Asia and that alone is a huge opportunity… But demographic dividend without creating jobs won’t mean high growth and won’t mean better income,” Peiris said.

So far, the government has laid a solid foundation to enable a better environment for growth through strong macroeconomic fundamentals.

Peiris said the decline of the credit to GDP (gross domestic product) to below 40 percent in the first quarter, the relatively low inflation which averaged 4.4 percent as of September, and the strong six-percent growth in the first half gives the country the cushion to take on more measures to accelerate economic growth.

“With our young population and with our macro stability, we have the ability to grow faster,” Peiris said.

The Philippines expanded by 7.2 percent last year, sustaining the already faster-than-expected 6.8 percent in 2012.

The government hopes to grow the economy by 6.5 to 7.5 percent this year and further accelerate this to 7.5 to 8.5 percent by 2016.

“The story of the Philippines has improved in the last 10 years and something very striking is that growth has been domestic-led,” Peiris said.

However, he said the country still lags behind other economies in Asia in terms of investments, infrastructure, and even in competitiveness.