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Boosted spending can expand Philippine economy, says WB

epa05371425 Filipino laborers operate at a construction site in Pasay city, south of Manila, Philippines, 17 June 2016. According to the World Bank'd latest study, higher investments in skills and education, and flexible labor rules can help reduce poverty among workers in the Philippines. The report said that in the last decade, the Philippine economy has been growing at an average of 5.3 percent, while the working population and jobs have been growing at an average of 1.8 percent and 1.9 percent, respectively. Labor productivity has also been growing at 3.4 percent a year. However, the growth of real wages or wages adjusted for changes in prices of goods and services has yet to catch up with the rising productivity. As a result, many workers remain poor.  EPA/FRANCIS R. MALASIG

 

MANILA / AP

The Philippine economy may grow faster than expected if public infrastructure spending is increased as planned, the World Bank (WB) said on Monday.
If that happened, the country’s economic growth may exceed the earlier forecasts of 6.4 percent this year and 6.2 percent in the next two years, the bank said.
It also noted some businesses might be cautious given uncertainty over the ultimate direction of macroeconomic policy under President Rodrigo Duterte’s administration.
“Many reforms are being unveiled, specifically on tax policy and administration, the tracking of government spending, security of land tenure, ease of doing business and restrictions on foreign participation,” World Bank lead economist Brigit Hansl said.
“But as policy details are still being discussed, some businesses might remain cautious,” Hansl said, adding that the completion of a new Philippine development plan this year will provide more clarity on the Duterte administration’s development priorities.
A bank report said that next year, 40 percent of planned government spending on infrastructure would be for roads, railways, seaports and airports — spending that can boost industrial activities, real
estate, construction and tourism.
Domestic consumption will also continue to prop up the economy, according to Hansl.

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