ADB cites Phl's economic potential

MANILA, Philippines - Asian Development Bank president Haruhiko Kuroda cited yesterday the Philippine economy’s strong potential despite current political developments, including the impeachment of Chief Justice Renato Corona.

“I would like to refrain from making any comment on political or domestic political issues in any member countries because ADB is a non-political institution. Having said that, as I said, the potential of the Philippines’ economy is very strong and in the coming years and decades, the Philippine economy can maintain and even accelerate economic growth,” Kuroda told a press briefing in Malacañang after a meeting with President Aquino and Finance Secretary Cesar Purisima.

He said the Philippines has vast human resources and substantial natural resources and various institutions, including a very developed higher education system.

He said that among the 10 members of the Association of Southeast Asian Nations (Asean), besides Singapore and Malaysia that have high-income with quite a well-developed higher education system, the Philippines probably has the most developed and the best higher education system although it requires further improvement in the coming years.

Kuroda, who also discussed with Aquino the ongoing preparations for the 45th annual ADB meeting here on May 2 to 5, also predicted a five percent growth rate for the Philippines this year and six to seven percent in the coming years.

“Philippine economy is, in some sense, a quite balanced economy,” he said.

“Exports, yes, is important but the Philippine economy is not excessively dependent on exports – particularly exports to US and Europe. Then it has a very strong services sector – not just the outsourcing sector but also financial sector, distribution sector and so on and so forth including real estate sector. And then, the Philippines has annually slightly more than 10 percent of GDP (gross domestic product) accumulated (from) remittances which continue to increase in a very robust way. So we expect that Philippine economy will continue to grow not just depending on one item but on multiple items – exports, consumption, investments and so on and so forth – and that would probably continue,” Kuroda said.

He said in order to accelerate the economic growth the Philippines must have more and better infrastructure and better governance.

“And ADB is cooperating with the government of Philippines to improve governance and to improve infrastructure particularly because infrastructure is the basis of sustained economic growth in the transport, energy, water, telecommunications – there are many sub-sectors of the infrastructure sector – and the Philippines must have better and more infrastructure in order to accelerate economic growth; in order to accelerate poverty reduction in the coming years,” Kuroda said.

He said the Philippines suffered a slowdown of exports last year as the country’s major export item was electronic goods that was affected by the earthquake in Japan and the flooding problems in Thailand.

“Both of them disrupted Southeast Asian supply chain of electronics goods and machineries. That affected the Philippine economy through slowing down of exports. Also, the European situation deteriorated and that affected the Filipino export directly and indirectly. Last year, the Philippines’ economy grew slightly less than four percent. But this year, we expect around five percent growth in the Philippines and in medium to long-run, the Philippine economy can grow six to seven percent,” Kuroda said.