MANILA-- The country’s economic growth rate could fall to 3 percent a year if problems, such as its weak manufacturing sector and low investment inflows, persist.
In the report, titled “Asean 2030: Toward a Borderless Economic Community,” the Asian Development Bank Institute (ADBI) said the Philippines must work to address these problems to attain local output, measured as the gross domestic product (GDP), of 6.1 percent a year, equal to around $663 billion by 2030.
Doing this will enable the country to attain per-capita GDP aspiration of around $5,308 by 2030, from $2,123 in 2010. This represents a 2.5- times increase in per-capita GDP.
“The Philippine economy is characterized by a relatively small manufacturing sector, low investment and the presence of several imbalances. Uneven productivity across sectors, huge output gaps between large corporations and SMEs [small and
medium enterprises], and unbalanced geographical distribution of income all need to be corrected to achieve sustained growth in the long run,” the ADBI said.
“Poverty incidence in the country is among the highest in Southeast Asia, with income concentrated in a small share of the population—creating serious challenges to following an effective inclusive growth
strategy. Moreover, prospects for environmental sustainability have worsened in recent years due to progressive deforestation and increasing urban pollution,” it added.
Under the Medium-Term Development Plan from 2011 to 2016, the Philippines aims to attain an average annual GDP growth of around 7.2 percent to 7.7 percent during the period.
ADBI said the country’s macroeconomic blueprint also aims to equalize access to development opportunities and creating effective development support systems. The Philippines, ADBI said, could achieve these targets, as well as its 2013 macroeconomic aspirations rest on the country’s competitive work force and its services sector.
“The country can not only count on the large availability of natural resources, but also on a well-educated labor force, English language proficiency and a vibrant service sector. There has also been an encouraging record of macroeconomic stability in recent years,” ADBI said.
“These factors support the country’s ability to fulfill its 2030 per-capita GDP growth aspirations.”
ADBI said Asean member-countries have posted impressive economic growth despite the Asian Financial Crisis in 1997-1998. During 1991-2010, Asean’s aggregate GDP grew at a yearly average of 5.8 percent.
The report stated that the aspiration GDP growth target calculated for Asean from 2011 to 2030 average 6.4 percent a year.However, if Asean member-countries fail to make reforms in problem areas like reviving the manufacturing sector for the Philippines, the region could only post an annual growth of 2.9 percent until 2030.
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