IMF keeps 6% PH growth forecast

  • Page Views 1606
  • The International Monetary Fund (IMF) at the conclusion of its 2016 Article IV Consultation Mission to the Philippines said it still sees the economy growing by 6 percent this year, but needs a new medium-term strategy to boost growth even further.

    “The Philippine economy has performed well, but there is scope to do even better. Real GDP [gross domestic product] regained strength from a slowdown in mid-2015 to record a robust 6.9 percent in the first quarter of 2016, in line with our 6 percent year-on-year growth forecast for 2016 as a whole,” Chikahisa Sumi, IMF mission chief, said in a press conference on Tuesday.

    Sumi stressed that the continued solid growth in 2016, despite the external headwinds, is due in part to fiscal stimulus and supportive monetary conditions.

    The IMF, however, said that even with strong economic growth and improved governance, there is still a need to ensure that the benefits reach the broader population.

    Sumi noted that infrastructure quality and social indicators in the country are still below those of the Philippines’ peers.

    “The unemployment rate has fallen to a decade’s low of 5.3 percent, but significant underemployment and poverty remains,” he said.

    10-point agenda
    The IMF said President Rodrigo Duterte’s 10-point reform agenda would anchor policy formulation and structural transformation over the medium-term.

    Sumi said given the large infrastructure and social needs and ample fiscal space, the multilateral supported raising the national government budget deficit to 3 percent of GDP over the medium term, consistent with a broadly stable debt-to-GDP ratio.

    “We would moreover encourage a comprehensive and equitable tax reform package that raises substantial additional revenue to finance higher productive spending that would crowd in private investment,” he said.

    Over the medium term, IMF noted that a higher revenue and productive spending scenario of about 3 percent of GDP, with the expeditious implementation of the 10-point reform agenda, raised the IMF’s baseline growth outlook of about 6 percent to 7 percent to a 7 percent to 8 percent range.

    “This additional effort scenario would make the Philippines one of the fastest growing (if not the fastest) economies in the world and help reduce poverty toward the government’s ambitious target,” Sumi said.

    IMF said key elements of this medium term strategy could include:

    • A comprehensive tax reform package that simplifies the personal income tax (PIT) rate structure, indexes tax brackets for inflation, and eliminates the exemptions could be progressive while raising the relatively low revenue ratio through offsetting higher excises on fuel, rationalization of value-added tax exemptions, and excises on sweetened beverages. The package could also include simplifying and reducing the corporate income tax (CIT) rate structure while at the same time rationalizing tax incentives;
    • Enhanced infrastructure investment, including in areas that have not benefited from such investment in the past, should help create jobs and make growth more inclusive.
    • Structural reforms such as liberalizing foreign investment and land use will help catalyze the effects of higher government spending; and
    • Enhanced competition in the crucial transport, logistics, and telecoms sectors should be achieved through steadfast implementation of the competition law and avoiding regulation that unduly discourages new entrants. (M. Caraballo, MT)

    Share

    New Posts Recently publish post More

    • 13 February 2020
      1 week ago No comment

      Surrey Libraries Supports Freedom to Read Week February 23 – 29, 2020

      Surrey, BC – If you thought banned books were a thing of the past, you’d be mistaken. Just this year, several books in Surrey Libraries’ collection have been challenged. For example, Thrown Off the Ice by notable Canadian author, Taylor Fitzpatrick, was challenged for its LGBTQ2+ content. When a ...

    • 13 February 2020
      1 week ago No comment

      ABS-CBN shutdown may lead into another ‘crony capitalist era’

      MANILA – If the Philippine government’s move to shut down broadcast network ABS-CBN succeeds, the country “may be at the beginning of another crony capitalist era that’s even darker than the Marcos dictatorship,” a democracy watchdog said Wednesday. “The removal of ABS-CBN’s franchise will have direct implications on thousands ...

    • 13 February 2020
      1 week ago No comment

      Pacquiao signs with PSM, eyes McGregor as next foe

      REIGNING World Boxing Association (WBA) welterweight champion Manny Pacquiao has signed up with Paradigm Sports Management (PSM) as his new promotion firm. Pacquiao’s special assistant Jayke Joson and legal adviser Brando Viernesto confirmed this to The Manila Times on Wednesday morning, saying that the eight-division world titleholder wanted to ...

    • 13 February 2020
      1 week ago No comment

      R.P. ends military pact with U.S.

      The government of the Republic of the Philippines has announced the termination of a key military agreement with the United States. Philippine President Rodrigo Duterte said on February 11, 2020 that the country is ending its Visiting Forces Agreement or VFA with the U.S. For his part, U.S. President ...

    • 12 February 2020
      1 week ago No comment

      ¡Viva Viva! announces billion-peso investment in movies for 2020

      ¡Viva Viva! And that’s far as The T-Zone will go in writing Spanish for today except to say that there is no other fitting title and lead for this story than the said tautology. A week ago today, the T-Zone attended back to back events for what is now ...

    %d bloggers like this: