Philippines Quarterly Update, September 2010 : Stepping Up Reforms to Sustain Growth
The Philippine economy recovered strongly from the global recession owing to a combination of transitory and permanent, as well as global and idiosyncratic factors. Similar to its regional peers, the recovery was partly driven by the rebound in glo...
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Format: | Report |
Language: | English en_US |
Published: |
Washington, DC
2017
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Online Access: | http://documents.worldbank.org/curated/en/826201468296122807/Philippines-quarterly-update-stepping-up-reforms-to-sustain-growth http://hdl.handle.net/10986/27764 |
Summary: | The Philippine economy recovered
strongly from the global recession owing to a combination of
transitory and permanent, as well as global and
idiosyncratic factors. Similar to its regional peers, the
recovery was partly driven by the rebound in global trade
and domestic consumption linked to sharp increases in
consumer confidence. In the Philippines, growth was also
spurred by two domestic and temporary factors-continued
fiscal policy easing and election-related spending-and a
structural one, namely the acceleration in global
outsourcing which benefited the country's business
process outsourcing sector and associated sectors such as
construction. The economy is projected to grow by 6.2
percent in 2010 and by 5 percent in 2011, with large but
broadly balanced risks. While inflation expectations are
under control, the prospects of large short-term capital
inflows partly linked to renewed quantitative easing by key
G7 central banks are complicating monetary policy at a time
when the economy no longer needs accommodative monetary
policy. The first budget of the Aquino government could be a
turning point for the Philippines in the public finance
area. The 2011 budget changes current dynamics in two
critical areas: the (structural and cyclical) fiscal policy
stance and the quality of public finances. This "reform
budget" renews the fiscal consolidation effort-albeit
modestly and contains significant reform measures aimed at
improving spending efficiency, transparency and
accountability of the budget. For the 2011 budget to indeed
turn the country away from a weak fiscal position,
inconsistent spending efficiency, and significant gaps in
public expenditure and financial accountability, efforts
initiated in this budget will have to both be sustained over
time and expanded. Strengthening revenue
mobilization-through a modern tax system with efficiency and
equity at its core-would enable future budgets to scale up
spending needed to generate inclusive growth. |
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