Here is a reality check assessment from the Asian Development Bank on the country at the time when the current administration has two years left to make the best of what the country could be.
From BusinessWorld Philippines
August 04, 2014
ADB tags long-term development challenges for the Philippines
CONTINUING POVERTY, a small manufacturing sector, and low investments are problems the Philippines must solve in order to achieve sustained growth, the Asian Development Bank (ADB) said.
In its new publication ASEAN 2030: Towards a Borderless Economic Community, the bank looked at long-term development issues for members of the Association of Southeast Asian Nations (ASEAN). The region is expected to merge into one economic community in 2015.
“The Philippine economy is characterized by a relatively small, manufacturing sector, low investment, and the presence of several imbalances,” the ADB said.
“Uneven productivity across sectors, huge output gaps between large corporations and SMEs (small and medium enterprises) and unbalanced geographical distribution of income all need to be corrected to achieve sustained growth in the long run.”
The lender noted that the country’s high poverty incidence and the concentration of wealth in the hands of a select few pose challenges to the effective implementation of inclusive growth strategies.
“Prospects for environmental sustainability have worsened in recent years due to progressive deforestation and increasing urban pollution,” it said.
The ADB added, however, that the country can count on its wealth of natural resources and labor force to spur its growth. “On the other hand, the country can not only count on the large availability of natural resources, but also on a well-educated labor force, English language proficiency, and a vibrant service sector.”
The country can also count on its “encouraging” macroeconomic stability record in the recent years, it said.
In order to improve the country’s investment climate, the ADB recommends that the country streamline regulations and reduce the time needed for opening and closing businesses.
Strengthening the rule of law and police force modernization would also would also help, it added.
Local firms must also be encouraged to shift to higher value-added products in order to strengthen the industrial base. To strengthen the economic structure, the ADB recommends that a comprehensive and integrated infrastructure program that emphasizes cooperation between national and local governments be introduced. — BCPB
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