World Bank hails Philippines as next Asian "miracle" - 4 Powerful Corrupts Lawmakers Jailed

COMFORTER IN CHIEF World Bank president Jim Yong Kim fields questions from the media during the Daylight Dialogue in the Palace while the embattled President listens during the “The Good Governance Challenge” session. Kim says the Philippines “is a global model in fighting corruption,” according to Agence France-Presse. GRIG MONTEGRANDE

World Bank hails PH as next Asian miracle

 

MANILA, Philippines–President Aquino on Tuesday received profuse praise from visiting World Bank president Jim Yong Kim, who declared that the Philippines would be the next Asian “miracle.”

 

Kim, who was in Manila for a two-day visit, also announced that the World Bank was providing $119 million for the construction of new roads, bridges and irrigation systems in Muslim Mindanao in support of efforts to promote peace and economic development in the region.

 

During the open forum at the Daylight Dialogue in Malacañang, Kim recalled that the World Bank had downgraded its “overall global [economic] growth forecast from 3.2 percent to 2.8 percent.”

 

But the World Bank did not do so for the Philippine economy, where the forecast remained “around 6.4 percent with a lot of upside going into the future.

 

“So I will just say again maintain these reforms, continue on the path that you’re on, and I think the future is very bright for the Philippines,” Kim said.

 

Foundation for future

 

Kim later offered a toast during a luncheon in the Palace, saying to President Aquino that “each of those things you’re doing are not only the right thing to do but they’re laying the foundations for your economic growth in the future.”

 

“And we are absolutely certain that the impact of your administration will be felt far beyond the six years that you have as President,” Kim said.

 

He said President Aquino should take much of the credit for the Philippine turnaround.

 

“Can the Philippines be the next Asian miracle? [After] coming here, I think there is no question that is the case,” Kim said.

 

Antigraft campaign

 

Kim heaped praise on Aquino’s antigraft campaign, which has seen the President’s predecessor and three sitting senators charged with corruption, as well as the impeachment of a Chief Justice.

 

“Among the most important things you can do is tackle corruption and . . . that is one of the things that the [Aquino] government is doing frankly better than any government in the world,” Kim said.

 

“Around the world, the spread of information technology is converging with grassroots movements for transparency, accountability and citizen empowerment,” he said.

 

Under Aquino’s leadership, he said, “the Philippines is absolutely at the forefront of this transformation.”

 

Kim said the Philippines, where one quarter of the roughly 100 million people live in deep poverty, had huge potential.

 

He cited the country’s strong macroeconomic fundamentals, prudent monetary policies and young workforce.

 

Kim’s strong endorsement was a timely boost for Aquino, with two polls released this week showing the President’s public support dropping to record lows amid deep controversy over an economic stimulus program.

 

The Supreme Court on July 1 ruled the Disbursement Acceleration Program (DAP) was unconstitutional, with 13 justices handing down a unanimous decision that Aquino should not have bypassed Congress in spending P167 billion.

 

Aquino on Monday said the government would appeal the Supreme Court ruling.

 

Aid for Mindanao

 

Kim announced fresh World Bank aid financing for Muslim Mindanao at a news conference at the World Bank office in Taguig City.

 

Muslim Mindanao remains one of the poorest regions in the Philippines, with development held back by four decades of conflict between separatist rebels and government forces.

 

“We’ll support the peace process in conflict-affected areas,” said Kim, who is here for a two-day visit.

 

Kim noted that the poverty rate in conflict-affected areas in Mindanao was at 50 percent, or more than twice the national average.

 

He said the $119 million in aid financing would be made available to the government to bankroll the construction of new farm-to-market roads, bridges, communal irrigation systems and potable water projects in the Autonomous Region in Muslim Mindanao (ARMM, which will be expanded under a peace agreement signed in March between the government and the Moro Islamic Liberation Front (MILF), the largest rebel group in the region.

 

The government and the MILF are seeking the enforcement of the agreement, which grants broad autonomy to the expanded Muslim region, by next January.

 

The fresh World Bank financing is part of the Philippine Rural Development Project (PRDP) that Kim himself announced this week during a visit to Leyte province.

 

Under the PRDP, the government would receive $508 million in concessional loans from the World Bank to raise rural incomes across the country.

 

The PRDP will be presented to the World Bank’s board of executive directors next month.

 

Robust investments

 

On top of the new aid, the International Finance Corp. (IFC), the World Bank’s private investment arm, is also working on projects that will generate 6,000 new jobs in Mindanao.

 

Kim said the bank remained confident of the Philippines’ prospects, citing robust investments by the Aquino administration in areas such as education and healthcare over the last four years.

 

“Spending on health and education has doubled. This is extremely important,” Kim said, noting that the full impact of the investments would continue to be felt for decades to come.–Inquirer With a report from AFP

Read more from Channel News Asia, and ARAB News

 

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Japan's Credit agency raises again Philippines credit rating to "Stable"

MANILA, Philippines - The Philippines received another credit-rating upgrade, this time from Japan-based R&I, in recognition of the reforms put in place by the Aquino administration that had paved the way for the country’s economic boom.

R&I announced Wednesday it raised the Philippines’ long-term foreign currency issuer rating by a notch from the minimum investment grade of BBB- to BBB due to a consistent rise in per-capita income in the country following substantial investments in infrastructure.

The rating was assigned a “stable” outlook, which means it is unlikely to change within a year.

At the same time, R&I maintained the country’s short-term debt rating at a-2, which indicates high certainty that short-term financial obligations would be paid.

“The Philippines’ economy continues to show strong growth, thanks to brisk investment coupled with private consumption driven by remittances from overseas Filipinos. This should allow for relatively high growth and raise per-capita income levels steadily,” R & I said in a report, adding that this would allow for a relatively high growth and steady increase per capita income.

Per-capita income in the Philippines has been modest compared with those of more advanced neighbors, but the country is catching up in this area. From $3,684 in 2009, per capita income in the country (using current prices and purchasing power parity) increased to $4,649 last year.

R&I likewise cited the country’s healthy fiscal situation, which should result in increased public spending. “Savings in interest payments, thanks to fiscal consolidation, help the government to finance infrastructure projects. Budget execution is also expected to accelerate,” it said.

The Philippines has set a ₱404.3 billion budget for public infrastructure spending this year, 40 percent higher than the 2013 figure.

R&I also said the rollout of more projects under the Public-Private Partnership (PPP) program would help boost more job-generating investments and sustain the rise in incomes.

Earlier this year, the government awarded contracts for two PPP projects, namely the ₱P1.72-billion automated fare collection and single ticketing system for the MRT and the LRT, and the P17.5-billion Mactan Cebu International Airport expansion project. This brings to seven the total number, and to ₱62.6 billion the aggregate cost, of the PPP projects awarded so far.

Aside from this, R&I recognized the country’s sound macroeconomic fundamentals, including ample foreign-exchange reserves, improving manageability of government debt, improving tax collections and within-target inflation R&I, however, expressed concern over who will succeed President Aquino when he steps down from office in 2016.

“There is risk that the next government will not be as reform-minded as the Aquino administration. However, pressures from growing international relationships, such as the establishment of the ASEAN Economic Community in 2015, along with public expectation for sustained reform initiatives, should deter the post-Aquino government from going backwards,” R&I said.

Meanwhile, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. welcomed the upgrade, saying this validates soundness of existing policies.

“The latest development on the country’s credit standing is a recognition of a host of favorable macroeconomic indicators, particularly an inflation outlook that is conducive for business and the stability of the financial system amidst a difficult operating environment,” Tetangco said.

“The upgrade is an expression of confidence, in part, on the ability of the Monetary Authority to implement appropriate and timely measures that ward off threats to the economic stability we are enjoying. The BSP will continue to craft policies that will help maintain this stability,” he added.

Finance Secretary Cesar Purisima likewise affirmed the focus on sustainability of favorable trends for the economy.

“Reforms that this government has started to institutionalize help ensure that the positive momentum will not falter,” Purisima said.

“On the fiscal front, administrative and policy reforms implemented by the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) will make it easier in the future to keep the growth trend in public revenues,” he said.

Budget Secretary Florencio Butch Abad said the latest credit upgrade only confirms that “the Philippines is poised to become one of Asia’s major commercial hubs. The country has never been more ready to expand its market to accommodate local and foreign investments.”

“When investors bring their business into the country because of our lower risk profile, we can look forward to implementing more public works and creating broader job opportunities for our growing workforce,” Abad said.

“A key component of achieving investment grade is ensuring the stability and the reach of our economic expansion. Crucial to our economic development, of course, is the facilitation of robust and efficient spending. While we are now addressing challenges in the public expenditure process, we have no doubt that government spending will continue to spur the country’s growth, especially as the budget provides greater support for the Administration’s socio-economic programs,” Abad said. – PhilSTAR With Kathleen Martin

 

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