THE International Monetary Fund has challenged the new administration to continue the Philippines’ poverty reduction and structural reform programs to maintain its economic gains, an official said Sunday.
Washington-based Chargé d’Affaires Patrick Chuasoto praised the report that says the outlook for the Philippine economy remains favorable despite “external headwinds.”
“The Philippine economy has performed well during the past several years and the strong macro fundamentals provide a solid foundation to meet the remaining challenges,” the report says.
[And] the new administration has an opportunity to put the economy on a higher and more equitable growth path while reaping the dividends from its young and growing population.”
The IMF also says it is revising its real GDP growth forecast for the Philippines to 6.4 percent in 2016 and 6.7 percent in 2017.
The IMF’s executive directors confirmed the appraisal of the IMF staff report. They say the gains are due to the Philippine Authorities’ aim to accelerate poverty reduction and their priorities for structural reforms for the past seven years.
“The focus on financial deepening and inclusion are essential elements of the authorities’ inclusive growth strategy,” the IMF’s executive directors said.
“Economic growth is supported by robust domestic demand and is broadly in line with potential, while the outlook for inflation is well within the target band set by authorities,” the report says.
“The external position is sound and fiscal policy is prudent, with a low and declining debt-to-GDP ratio.”
But the IMF says poverty and inequality continue to be a challenge for the Philippine authorities.
The Fund called on the Duterte administration to address infrastructure development to promote private investment and job creation.
The Fund also recommended that the new administration focus its fiscal policy on infrastructure and human capital, maintain the current monetary policy stance, continue its close watch over the financial system and any emerging systemic risks, and adopt structural reforms on foreign direct investment and competition.