MANILA, Philippines >> The Philippines’ top economic official said today the government aims to sustain growth at a rate high enough to nearly halve poverty by 2015.
Nearly 28 percent of the country’s 97 million people live below the poverty line and the government’s aim is to reduce that to 16.6 percent within the next two years.
Socioeconomic Planning Secretary Arsenio Balisacan said the government is sticking to its forecast for economic growth of 6-7 percent this year despite the surprising 7.8 percent leap in GDP in the first quarter. He said forecasts need to be conservative because of uncertain economic outlooks for Europe, China and the U.S.
The Philippine economy has grown faster than 7 percent for three straight quarters. It is projected to grow between 6.5 percent and 7.5 percent next year and 7-8 percent in 2015. Forecasts for 2016 are being reviewed, but Balisacan said 7-8 percent growth is a “reasonable assumption.”
Balisacan said the government would double down on its efforts to lift more Filipinos out of poverty in the remaining three years of President Benigno Aquino III’s term. He said officials will focus on creating quality jobs, addressing the backlog in housing, and will continue to run a program that gives cash directly to poor families as long as children stay in school and see a doctor.
Balisacan said infrastructure bottlenecks and the high cost of doing business that have stymied investment will be addressed, with infrastructure spending to be ramped up to 5 percent of gross domestic product by 2016 from 2.5 percent last year.
He cited a study by the Japan International Cooperation Agency that shows Manila’s traffic gridlock causes economic losses of 2.4 billion pesos ($56 million) a day.
He also said the economy is being diversified from high dependence on consumption and services to one with stronger manufacturing, exports, investments, tourism and more jobs.
Laws that hamper investment, including those governing inter-island shipping, land use and fiscal incentives to business may need to be reviewed to ensure they still make economic sense, he said.
Compared with Indonesia, which attracted nearly $20 billion in foreign investment last year, the Philippines managed only $2.8 billion, not far from $2.2 billion for Myanmar, a pariah state until recently. Thailand wooed more than 22 million visitors last year, the Philippines received 4.3 million.
Balisacan also blamed low foreign investment on the country’s past three decades of boom and bust development.