Con­cern for the poor de­spite strong growth

The Myanmar Times - - International Business -

THE Philip­pine econ­omy ex­panded 7 per­cent in the sec­ond quar­ter, of­fi­cial data showed, but Pres­i­dent Rodrigo Duterte’s new gov­ern­ment said ma­jor changes were needed to fix one of Asia’s big­gest rich-poor di­vides.

The April-to-June pe­riod cov­ered the fi­nal months of Benigno Aquino’s ad­min­is­tra­tion, cap­ping six years of stel­lar growth that helped boost the Philip­pines’ credit rat­ings and end its rep­u­ta­tion as one of the re­gion’s eco­nomic lag­gards.

How­ever, Mr Duterte won a land­slide elec­tion vic­tory partly on his rail­ings against the na­tion’s elite who have soaked up much of the ben­e­fits of the growth, while leav­ing onequar­ter of the na­tion’s 100 mil­lion peo­ple liv­ing be­low the poverty line.

Mr Duterte’s eco­nomic chiefs cred­ited the 7pc growth on an an­nu­alised ba­sis in the sec­ond quar­ter, the fastest in three years, to Aquino’s “sound marco-eco­nomic, fis­cal and mon­e­tary poli­cies”, but em­pha­sised the poor were con­tin­u­ing to be left be­hind.

“We need to sus­tain that re­bal­anc­ing to­ward in­vest­ment-driven growth – in­vest­ment that will lead to more in­clu­sive, poverty-re­duc­ing, in­equal­ity-re­duc­ing growth,” Eco­nomic Plan­ning Sec­re­tary Ernesto Per­nia said.

Mr Per­nia said the Duterte ad­min­is­tra­tion was par­tic­u­larly con­cerned about the farm­ing and fish­eries sec­tor, which ac­counts for about 10 mil­lion work­ers and their fam­i­lies.

“Know­ing that the ma­jor­ity of poor Filipinos rely on this sec­tor for their liveli­hood, this ad­min­is­tra­tion will pri­ori­tise agri­cul­tural de­vel­op­ment,” he said.

The sec­tor de­clined 2.1pc from April-June, the fifth con­sec­u­tive quar­ter of de­clines.

Fi­nance Sec­re­tary Carlos Dominguez said Mr Aquino’s ad­min­is­tra­tion had helped set the foun­da­tions for even stronger over­all growth, set­ting a tar­get of at least 7pc for the sec­ond half of this year and 6.5-7.5pc in 2017.

“Our strong macro-eco­nomic fun­da­men­tals will buf­fer the Philip­pine econ­omy from ex­ter­nal shocks,” Mr Dominguez said.

The gov­ern­ment is aim­ing to cut the poverty rate from 26pc cur­rently to 17pc when Mr Duterte steps down in 2022.

Mr Dominguez said this would be­gin with a stim­u­lus pro­gram fo­cused on in­fra­struc­ture, ed­u­ca­tion and health. The gov­ern­ment last week un­veiled its 2017 bud­get, an­nounc­ing an over­all in­crease of 11.6pc in spend­ing. Ed­u­ca­tion was one of the big­gest win­ners, with a 31pc rise. –

Photo: EPA

The World Bank says higher in­vest­ments in skills and ed­u­ca­tion, and flex­i­ble labour rules, can help re­duce poverty among work­ers in the Philip­pines.

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