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THE
Philippines’ approach to inflation “is quite
impressive.” This accolade is from the World Bank (WB),
which said the Bangko Sentral ng Pilipinas (BSP) has
done a good job at managing the economy, deftly avoiding
cost-push inflation no matter an externally driven peso
liquidity surge.
World
Bank chief economist Vikram Nehru added the result bodes
well for continued gross domestic product (GDP) growth
this year, albeit at a slower pace of 5.9 percent to 6.1
percent next year compared with last year’s 30-year high
of 7.3 percent.
Nehru,
speaking on a teleconference Tuesday, said the
Philippines was not immune, however, to elevated prices
of food and oil-related items that is true worldwide,
but that its monetary authorities are doing a superb job
at controlling money-supply levels strongly pushed up by
overseas remittances. “So there was no demand-pull
pressure on inflation on top of cost-push factors.”
Failure
would have been rewarded with inflation more virulent
than actual average of 2.8 percent last year given
target inflation averaging 4 percent or 5 percent.
BSP
Governor Amando Tetangco Jr. expected inflation to trend
up in the first half before tapering down on the second,
but the latest view is for inflation to trend up longer
than originally seen because of elevated oil and
food-price increases worldwide.
But in
spite of that, inflation this year is seen to range no
higher than the target 5-percent ceiling, according to
Tetangco.
WB chief
economist in the Philippines Vera Songwe noted that the
Philippines experienced a prolonged period of
disinvestment after leading the region in infrastructure
buildup in the 1980s, but has lagged ever since.
“The
region’s average is 5 percent of GDP, while the
Philippines had only between 2.3 percent up to 2.5
percent of GDP [afterward],” continued Songwe.
Infrastructure is a key element to sustaining growth,
one that progressively reduces poverty, according to
Songwe, so that the Philippines particularly needs to
invest more in transport-related areas like roads and
airlines, as is also stated in the bank’s World
Competitiveness Report.
The WB
also lauded
Manila for creating “fiscal space” that makes possible the
allocation of more resources for the services sector and
infrastructure.
Meanwhile, Senate Minority Leader Aquilino Pimentel Jr.
debunked President Arroyo’s claim that the 7.3-percent
economic growth is proof of reduced corruption in her
administration.
“The
7.3-percent growth is a statistical number. It’s no
proof, as every citizen knows that corruption is not
proliferating in the country,” Pimentel pointed out.
Moreover, the senator stressed that statistics do not
necessarily add up to solving poverty or satisfying the
people.
“What is
important is if the ordinary man on the street has
enough to buy rice for his table, to build a roof over
his head or clothes for his back,” Pimentel said. “It is
clear that such is not the case for the masses of the
people.”
Perhaps,
Pimentel added, “there is growth for the pockets of the
powerful but not for the powerless.” |
