MANILA, Philippines - The Aquino administration needs a lot of catching up to do to achieve its plan of inclusive growth or a seven percent economic growth yearly until 2016, the think-tank of the House of Representatives said in a report.
In its analysis of the 2011 economic growth titled “Strengthening the Philippine Economy” the Congressional Policy and Budget Research Department (CPBRD) said that for the government to meet its target to reduce poverty incidence to 16.6 percent in 2015 from 26.5 percent in 2009, it must work double time to stimulate the economy.
“In times of slowdown, the government has an important role in stimulating economic activities. In other words, the government can mitigate an economic slowdown especially when it is not constrained by resources. It should also be emphasized that strong macroeconomic fundamentals are not enough to sustain economic growth,” CPBRD said in its report.
As such, CPBRD said that to enable the government to make the much-needed investment in physical and social infrastructure, it must increase its revenue effort.
The House think-tank recommended the passage of the Fiscal Responsibility Act, a law which in essence would ensure that revenue sources are created for every act or measure that would translate to revenue losses for the government; the Restructuring of Sin Taxes which would raise sin taxes on alcohol and cigarettes; and finally the amendment of the Customs Code.
The CPBRD also urged the government to accelerate infrastructure development.
“When infrastructure projects are delayed, the productive capacity of the economy is affected. The country cannot afford to further postpone infrastructure improvement given the concerns raised over the state of its infrastructure in various competitiveness rankings,” the CPBRD said.
It noted in particular that the government’s public-private partnership (PPP) program for infrastructure needs to be fast tracked.
“The government must come up with a definite timetable for their bidding and implementation at the soonest possible time,” the think-tank said.
The government is aiming for a five percent to six percent economic growth this year from the 3.7 percent recorded in 2011. - By Iris C. Gonzales