Social indicators remain weak — WB

While bright spots are evident in the economy, social indicators for the Philippines remain weak underlined by the hunger incidence that reached record highs late last year, the World Bank (WB) said in a report on East Asia released yesterday.

In its “East Asia and Pacific Economic Update-Emerging Stronger from the Crisis,” the WB said amid some bright spots, social indicators remain weak, reflecting the series of natural and man-made crises that have hit the country.

It added the hunger incidence that reached record highs in late 2009, particularly badly affected Manila.

“This partly resulted from the long-lasting hardship that typhoon ‘Ondoy’ brought to the poor in the capital region. Both unemployment and underemployment remain elevated and the labor force participation rate is increasing rapidly as households seek additional income given the pressure on real wages,” it said.

WB country economist Karl Kendrick Chua said creating a strong revenue base is crucial to ensuring inclusive growth.

“With the additional resources, the government can spend more on growth enhancing items such as education and infrastructure,” he said.

Chua added that more robust reforms to improve the country’s overall competitiveness and investment climate should enable the Philippines to post rapid growth and realize its rich potential.

“This can be done by addressing inadequate infrastructure and weak contestability of markets that have led to a high cost of doing business. Improving MSMEs access to finance would also be instrumental in generating more inclusive growth as MSMEs are key to job creation,” he said.

It noted, however, that deployment of overseas foreign workers (OFW) remained strong despite rapidly rising global unemployment, reflecting the Filipino workers’ attractiveness in the global labor market, as evident in the sea-faring industry.

The WB said real gross domestic product (GDP) growth is projected to reach 3.5 percent in 2010 and accelerate moderately to 3.8 percent in 2011.

“The upward revision from our previous forecast reflects a stronger global outlook, larger than expected OFW deployment in 2009 leading to an upward revision in our remittance projections, and a looser fiscal stance in 2010 than earlier anticipated,” it added.

Real GDP grew 0.9 percent in 2009, but contracted by a similar amount on per capita basis. –Daily Tribune