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Publication(Washington, DC, 2007-05) World BankMajor fiscal adjustment during 2005-06, aided by abundant global liquidity, has turned around market sentiment on the Philippines. Stocks, the peso and reserves have all risen significantly, as have foreign direct investment and portfolio inflows, while interest costs and spreads for government borrowing have fallen along with inflation. Real GDP grew by 5.4 percent in 2006 and real GNP by 6.2 percent, marking the first time that three consecutive years of growth of 5 or more percent was recorded since the 1970s. Strong growth in business process outsourcing, electronics exports and remittance-driven consumption served as important props for higher growth. This paper includes the following headings: recent economic developments; how robust is present growth; invigorating growth, enhancing its impact; and maximizing the benefits of growth for the poor.
Publication(Washington, DC, 2005-04) World BankAfter reviewing the more promising recent developments, this report examines the nature of growth and development in the Philippines from a longer-term perspective and the factors that may have inhibited performance. It concludes that political instability has undermined the beneficial impact of the reforms implemented, and that such instability itself has been rooted in governance failures. Moreover, weaknesses in public institutions and corruption have also directly undermined a range of development objectives. Reconstructing the social contract in the Philippines is a challenge. Key pillars of this strategy discussed in the report include: reducing fiscal vulnerabilities; improving the climate for private investment; and improving public sector performance and governance. The interdependence of these elements as part of a strategy to rebuild the social contract is discussed and the report elaborates on improving the delivery of basic services.
Publication(Washington, DC, 2003-10-16) World BankThe Philippines has achieved reasonable economic growth of about 4 percent per annum over the past two years, in spite of adverse global developments, sporadic conflict in Mindanao, political uncertainty and investor concerns regarding fiscal sustainability. The economy has been particularly resilient in view of concerns regarding fiscal management and the limited recovery in investment since the 1997 Asian financial crisis. The persistent low levels of investment - below 20 percent of GNP compared with about 23 percent in the early to mid 1990s - raises concerns about future growth. In recent years it has been consumption rather than investment that has underpinned growth, and this cannot continue indefinitely. Sustained geographically dispersed economic growth and relatively stable prices have resulted in a decline in poverty. Both the public and private sector will need to contribute for the Philippines to more fully achieve its development objectives. Three issues are central to improved public sector performance - fiscal management, off-budget losses and contingent liabilities, and governance. Mindful of the Philippines' relatively poor competitiveness and that growth, employment creation and poverty reduction depend critically on private sector performance, this update focuses on three key investment issues - infrastructure, the financial sector, and competition.
Publication(Washington, DC, 2002-02-22) World BankThe Philippines regained a modest growth rate of 3.5 percent per annum for 1999-2001, but has not yet managed to reduce the incidence of poverty from its 1996 level. The Medium Term Philippine Development (MTPDP) growth targets of over 5 percent per year are attainable, but only if the key building blocks for sustained growth - an environment conducive to increased investment and productivity within both private and public sectors - are firmly in place. And it must complement this higher growth with increased equity to achieve the desired rapid reduction in poverty. The report identifies priority issues in five critical areas: 1) continue to strengthen fiscal management; 2) improve governance and public sector functioning; 3) strengthen private sector development; 4) strengthen and deepen the financial sector; 5) empower and protect the poor. None of these five areas is sufficient by itself to achieve the desired growth with equity. But they are each necessary and together they form an integrated set of initiatives.