Focus urged on ‘growing better’

MARKET PLAYERS yesterday called on the government to ensure that the country’s growth momentum is sustained by focusing not just on achieving a faster pace but also on “growing better.”

We’re in the Asian century and the Philippines is in front. In the last 10 years, it has grown by only 4.5% a year, and now it is growing at 6% a year. The challenge is to bring it to 7% in next 10 years,” International Monetary Fund (IMF) Asia-Pacific Director Anoop Singh said at the Philippine Investment Forum.

The government has already taken the first step by keeping the economy stable amid the global crisis, Mr. Singh said. However, the Philippines should not fall into the so-called “GDP trap” by resting on its laurels.

Gross domestic product (GDP) grew by a better-than-expected 6.6% in 2012, beating the government’s 5-6% target and outpacing most of Southeast Asia.

Investments — both public and private, and foreign and domestic — must be encouraged by opening up the economy and making it more globalized, Mr. Singh said.

“Investment, especially foreign direct investment, is the driver of competition, innovation and growth,” he added.

Institutional reforms should also be embedded to ensure social inclusion. “Among those are spending on education and health to make the labor force more productive and get them higher wages. These are fundamental policies, and the government is moving toward it, but social spending is still significantly less here than in the region,” the IMF official said.

These two strategies are closely intertwined, said Lena Teoh, Credit Suisse Asia-Pacific chief investment officer. The economy, she noted, is locked in an oligopoly with key businesses owned by just a few families, leaving little room for others to grow. The wealth disparity has widened further, worsened by the fast pace of economic growth.

“We should liberalize the economy in that aspect. The government should encourage entrepreneurs, small businesses and foreign investments so that they can list publicly, issue bonds, get credit and flourish,” Ms. Teoh said.

In the next five to 10 years, both urged, the Philippines should address the factors that have held it back for years: investments and per capita income. Market players said these changes were necessary before investors could take advantage of the “many opportunities” highlighted by President Benigno S. C. Aquino III in his keynote speech.

Mr. Aquino talked up the priority industries of his administration — agriculture, tourism and infrastructure — and their investment opportunities.

In particular, the government is planning to improve farm-to-market roads, irrigation systems and support services in the agriculture sector. It is also eyeing the export of 100 metric tons of high-quality rice this year.

With domestic and foreign tourism booming in the country, meanwhile, an additional 37,000 rooms need to be constructed by 2016.

Lastly, the government sees ports, airports and road networks as the core of infrastructure development, and two major public-private partnership projects are expected to be rolled out soon: the Cavite-Laguna Expressway and the North Luzon-South Luzon Expressway link.

“The investments that you will bring into our country will redound to tens of thousands of jobs for our countrymen — men and women who will be able to put food on their tables, send their children to school, and meet the needs and wants of their families,” Mr. Aquino said. – See more at: http://www.bworldonline.com/content.php?section=TopStory&title=Focus-urged-on-%E2%80%98growing-better%E2%80%99&id=67169#sthash.TtyD5XLA.dpuf