MANILA: Reforms implemented and currently being undertaken by the Aquino administration is one of the reasons behind the country’s robust economic growth, UK-based Barclays said.
“With President (Aquino) remaining in power until 2016, we expect positive momentum on fiscal consolidation and an improvement in the business environment to continue supporting overall investment in the economy,” Barclays said in its Emerging Markets Quarterly report.
“We expect Aquino to use his political capital to further advance Mindanao peace process, though this will not be easy. We also expect some progress on reform of the mining sector but major changes are likely to be challenging,” the bank added.
The push for the tax incentives rationalization bill has also been noted, as this will recoup revenues for the government.
At the same time, Barclays cited the government’s efforts in improving the business environment in the country such as raising its competitiveness ranking in the World Economic Forum’s survey.
“President Aquino remains committed to addressing corruption, and the latest focus is on greater transparency and accountability for the Priority Development Assistance Fund (pork barrel),” Barclays further said.
Aiming to secure peace in Mindanao also benefits the country although achieving this is seen to be challenging. Barclays has noted the ongoing conflict in Zamboanga which has already killed civilians, soldiers and policemen.
“The Philippines remains our preferred macro story in the region — a favourable growth/inflation trade-off, a political environment conducive to reform, solid central bank credibility, strong external finances and sovereign rating on a positive trajectory,” Barclays pointed out.
The bank recently raised its forecast for Philippine economic growth to 7.2 percent this year, higher than the government’s target of 6-7 percent expansion.
The Philippine economy has expanded 7.5 percent in the second quarter, the fastest in Southeast Asia and at par with China’s growth.
THE PHILIPPINE STAR
