Forum cites problems weighing down growth

CEBU CITY—Sustainable fiscal reforms, regulatory capture and low investment rates were among the issues and concerns raised during Thursday’s opening plenary for the fourth Philippine Development Forum (PDF) held in this city.

These particular problems, noted members of the donor community and business sector, are tying up the country’s ability to achieve a broader growth track, but which nonetheless can be addressed by stronger political will.

“The meeting [is being held] in the context of a more positive macroeconomic and fiscal environment… [but] the full picture is more complex and there are challenges that lie ahead. Further improvements in tax collection are necessary to sustain the momentum of fiscal reforms,” said Joachim von Amsberg, World Bank’s Philippine country director, in his opening speech for the two-day event.

“Despite some of the fiscal improvements and reasonable growth rates, the investment rate remains very low at under 15 percent. This is extraordinarily low and raises the question of sustainability of growth. Related, there are questions why growth has not created more employment and more income, and therefore, more rapid poverty reduction. With increased resources to spend, the quality of public spending and effective measures to reduce corruption also gain importance,” Amsberg said.

Former Socioeconomic Planning Secretary Cielito F. Habito in a telephone interview with BusinessMirror confirmed donor institutions and bilaterals were mostly concerned about the sustainability of fiscal reforms and of the weak investment climate.

These organizations indicated there is still so much progress to be had, he added. “They, however, did not directly tie future development support to these changes,” Habito said.

Speaking of changes, Donald G. Dee of the Philippine Chamber of Commerce and Industry told reporters at the event’s sidelines that two of the business sector’s main concerns nowadays are energy costs and regulatory capture. –Rommer Balaba, Manila Times