IMF lauds PH growth amid global slowdown

MANILA, Philippines - The Philippines faces bright economic prospects despite the global slowdown, visiting International Monetary Fund (IMF) Managing Director Christine Lagarde said yesterday.

“You will be interested to know that this year, 2012, at a very difficult time because of the financial crisis in other parts of the world, the Philippines is probably the only country of which we have increased the growth forecast as opposed to other places in the world where we decreased our forecast,” Lagarde said in a press briefing. The Philippines was the last leg of the IMF chief’s Asian tour.

Malacañang had to cancel her scheduled courtesy call yesterday because President Aquino was down with flu. Vice President Jejomar Binay received her instead at his office at the Coconut Palace in Pasay City.

In yesterday’s press briefing, Lagarde said the IMF now sees the Philippine economy growing “in excess of five percent” this year and “in the range of five percent” next year or higher than the 4.8 percent forecast for both years under the institution’s latest World Economic Outlook released last month.

The success of governments in providing jobs and livelihood to citizens depends on economic growth.

The IMF’s upgraded forecast, as bared by Lagarde, meets the lower-end of the Aquino administration’s five-to six percent growth target for this year. As of first semester however, the local economy has already breached the target at 6.1 percent.

Lagarde also congratulated the country’s economic managers for their “excellent economic stewardship” which had enabled the local economy to post an average of five percent growth over the past decade.

She also cited the “excellent policy mix” employed by the Department of Finance, which is in charge of raising state revenues, and by the Bangko Sentral ng Pilipinas, which sees to it that prices of basic goods and services remain stable.

She acknowledged, however, that much remains to be done to ensure that growth is inclusive, maintaining that about 42 percent of the population can still be considered “poor” as they live with less than $2 a day or roughly P80.

“All the efforts including the cash transfer program under your stewardship are trying to reduce the inequalities that clearly hamper sustainable growth in the long term,” she said, referring to the P1,200 conditional cash allowance for poor families. 

Lagarde also expressed support for the “sin tax” bill, certified as urgent last Thursday by President Aquino.

The measure, which she called a “great progress for the revenue collection of the country,” would be voted upon on Monday at the Senate. It aims to raise up to P45 billion from adjusted tobacco and liquor taxes.

“So, let’s hope that this bill would be voted on Monday and that tax collections would result from this piece of legislation,” she added. The Philippines had already settled all its IMF debts in 2006.

“The IMF is very pleased for the historical partnership that we have had, particularly pleased that it has taken in the form of a creditor relationship and one where clearly we will be doing everything we can to support with technical assistance the effort of Philippine authorities to expand growth throughout the country,” she said.

Lagarde’s Asian tour was meant to draw insights from the region’s policymakers to help the institution solve the four-year-old debt crisis in Europe. Asia itself had to deal with a financial crisis in 1997.

In her meeting with Binay, Lagarde also expressed her gratitude for the country’s $1-billion contribution to the IMF last June.

“The contribution helped ensure global and regional financial stability amid the crisis in Europe,” a statement from the Office of the Vice President quoted Lagarde as telling Binay.

She also told Binay that the country’s change in status from being a borrower to a creditor nation is “a big shift.”

“To see your country come up with a contribution on World Bank loans at a time when the economic crisis is not here but in Europe in particular was real,” Lagarde said.

“It was not so much the money, it was the signal that you gave,” she pointed out.

Lagarde said it was now the European countries that have become the borrowers, with Ireland, Portugal and Greece being the IMF’s largest beneficiaries.

For his part, Binay expressed hope that Europe would soon overcome its financial crisis.

source: http://ph.news.yahoo.com/imf-lauds-phl-growth-amid-global-slowdown-160409766.html