RP needs to grow by 7% to reduce poverty

MANILA, Philippines – The World Bank said the Philippines would need to grow between six and seven percent on a sustained basis to help arrest its rising poverty incidence.

According to World Bank country director Bert Hofman, the Philippines must attract more foreign direct investments, which are seen to rise now that the global economy is recovering from the financial turmoil.

At the height of the financial crisis, the Philippines fared better than its neighbors, even managing to avoid a recession. But now that the global economy is on the mend, other Southeast Asian countries are expected to grow faster than the Philippines.

Hofman said the Philippines could lag behind its neighbors in the area of investments.

“There is a lack of opportunities for investments…. The government should make more room for the entry of private sector investments,” Hofman told members of the business community in a recent conference.

He said the Philippines would need more investments to enable it to attain growth levels that, in turn, would lead to poverty reduction.

Hofman said growth of at least 6 or 7 percent would allow economic benefits to trickle down to the poor.

According to the latest data from the National Statistical Coordination Board, 33 percent of the country’s population live below the poverty line.

Economists said the percentage of poor Filipinos would have likely increased because of the ill effects of the global economic crunch, which led to layoffs in the electronics manufacturing sector.

Personal consumption accounts for about 70 percent of the Philippine economy, while investments account for only 15 percent.

Hofman said this showed that there was still a lot of room for the country to attract investments.

For this year, the government expects the Philippines to grow between 0.8 and 1.8 percent. –Michelle Remo, Philippine Daily Inquirer