MANILA – Ten years ago, the Philippines struggled with macro instability characterized by unsustainable debt, fiscal deficits, and high inflation.
But today, the Philippines has turned it around dramatically, according to World Bank senior economist Dr. Karl Kendrick Chua.
“Today, if you ask any investor, the macro instability is nowhere near where it was before…I will say that if you add the good macroeconomics, a government that people trust, people being in a dynamic region in the world, so it’s really a bright spot for the Philippines going forward,” Chua told ANC’s “On The Money.”
Chua cited low inflation rate, improved efficiency of tax collection, and healthy foreign exchange as the key drivers for the growth.
He said because of the growth, the Philippines can now set aside stability issues and instead focus on what will take the country to “shared prosperity.”
To achieve shared prosperity, Chua said government needs to implement four key reforms:
Invest more in infrastructure, health, and education
Simplify regulations for ease of micro and small businesses set-up
Enhance competition for better quality at a lower price
Protect property rights
Chua said in the short-term, government can focus on improving infrastructure because it helps boost productivity.
“We can improve productivity significantly if we invest in roads, in skyways, in public transport system,” he said.
Chua also said simplifying regulations for startup businesses is also important in achieving shared prosperity, noting that the Philippines is lagging behind its neighbors in this aspect.
In the Philippines, it takes 16 steps, 10 agencies, 34 days, and 17 percent of per capita income to set up a business while in other countries like Malaysia, it only takes 3 steps, 6 days, and 7 percent of per capita income.
Chua added that Filipinos should also do their part in contributing to shared prosperity by developing themselves through lifelong education.
“It starts by providing better public schools so you can learn to think critically. But when you start working, you shouldn’t stop learning. You learn new things, new languages, and new skills relevant to your profession,” he said.
Being more vocal in relevant national and social issues and proposing solutions are other ways for Filipinos to help achieve shared prosperity.
“I think we should not only complain but we should be part of public debates and think about solutions,” Chua said.
The World Bank economist said that the Philippines has been experiencing 3 percent growth since its independence in 1940s and 6 percent growth in the past 10 years
This is better than Africa, Latin America and South Asia. But not in East Asia where countries like Korea, Taiwan, Thailand, and Malaysia have been growing by 7 percent for the past 3 decades.
“The Philippines is doing well, but then we could do much better,” said Chua.