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By Michelle Remo
Philippine Daily Inquirer
First Posted 22:09:00 08/16/2010

Filed Under: Economy and Business and Finance, business

Most Read

 E ENRY of the new administration, with its development agenda, has raised hopes for higher and faster
economic growth, but estimates showed the Philippines will likely continue lagging behind its Southeast Asian
neighbors over the medium term.

According to simulations by the Bangko Sentral ng Pilipinas (Central Bank of the Philippines), a 10-percent annual
growth rate, which economists said was ambitious yet feasible, was needed for the Philippines to reach the 2009 per
capita income of Indonesia by 2015.

At this pace of yearly growth, the Philippines would only hit the 2009 per capita income level of hailand by 2028, and
of Malaysia by 2038.

he BSP said these schedules would be true only if said neighboring countries would maintain, and not speed up,
their current growth rates.

his means the Philippines should no longer be contented with an average growth rate of between 4 and 5 percent,
as posted in the past years, if it aims to improve its competitiveness vis-a-vis its neighbors, said BSP Deputy
Governor Diwa Guinigundo.

Guinigundo told reporters that an aggressive drive to corner foreign investments was necessary, lest the Philippines
would remain the laggard in the region over the long term.

Data from the central bank showed that as of 2009, the Philippines¶ per capita income was only 0.85 percent of
Indonesia¶s, 0.44 percent of hailand¶s, and 0.26 percent of Malaysia¶s.

By 2015, if the Philippine economy would grow by 10 percent a year, the country¶s per capita income would be 0.98
percent of that of Indonesia, 0.54 percent of that of hailand, and 0.33 percent of that of Malaysia, assuming the 2009
figures posted by these countries would not change.

According to estimates by the International Monetary Fund, per capita income of the Philippines in 2009 stood at
$1,746, compared to Indonesia¶s $2,329, hailand¶s $3,940, and Malaysia¶s $6,897.

he Aquino administration has embarked on a more aggressive economic development plan, under which the
Philippines is expected to grow by at least 7 percent yearly starting 2011.

he new economic team said the goal would be achieved partly through improving tax collection and inviting more
private sector firms to invest in public infrastructure projects.

Central bank officials, however, said a growth of at least 10 percent a year would be the minimum feasible rate
necessary if the Philippines wanted to catch up with its neighbors over the medium term.

BSP Governor Amando etangco Jr., in the meantime, stressed the need for the country to corner more foreign direct
investments. Given the limited resources of the government to pump-prime the economy, he said, investments should
increase substantially to create more jobs and stimulate growth.
Clariz Angelique Reyles

BSAC4

I always believed that the Philippines has all the potential for economic growth evidenced by
our rich natural resources and great man power. I could not help but blame the past administrations and
those corrupt officials for not handling these resources well and worse, for stealing people͛s money. If
only they have done their jobs well and in good faith as much as possible, our country could have been
one of the most progressive in Asia. To think, countries like, Indonesia, Malaysia, and Thailand are as
poor as we are then, but now, they were able to survive and be progressive. We are left behind and it͛s
hard to accept because we know that we could have done better.

Today, the new administration led by President Aquino is faced with the challenge to make a
change. He has promised to stop corruption and though that problem must be really eliminated, I hope
that he also focus his attention to the economic needs of our country. He has embarked a more
aggressive economic development plan and I agree with that. I think it would be more helpful if we go
beyond our limits though it could be more risky. The thing is we should always aim high and try to reach
that goal.

Like what the new economic team said, the government must improve tax collections and invite
more investors. During the first weeks of Aquino administration, investigations on tax evaders and
smugglers were already started. It is indeed a good way of improving collection but I hope it is not a
͚ningas cogon͛ project because we cannot set aside the idea that maybe the new cabinet members are
just trying to deceive the public by playing good in our eyes. However, I haven͛t heard much of the steps
taken by the President in attracting more investors. This is one of the most important things that should
be done because investments can create jobs and jobs can create money that people can use to buy.

Our growth as a country is way too far from our neighbors in Southeast Asia but I guess what is
important right now is not being on top but at least just being able to grow. We are as if starting from
scratch with too few tools to use but nonetheless, we can see developments in the past quarter and it is
a good sign. It only means that our country remains resilient. If things remain this way and if we will
continue to improve, I guess being number one in Asia won͛t be an ambitious dream anymore.