FEF offers policy recommendations | The Manila Times
THE Economic Freedom Foundation (EFF) has provided the Marcos Administration with policy recommendations that will ensure the Philippines’ sustained economic growth in the face of rising inflation and a depreciating local currency.
Romeo Bernardo, vice president of the FEF, told a press conference held by the organization on Friday that the Philippines must be able to stimulate more investment in order to achieve at least 6-7% growth. economic as consumption-driven domestic production cannot be relied upon in the current context of widespread job losses, high inflation and global recession.
He added that some actions needed to encourage the country’s economic recovery do not necessarily require structural reforms.
Bernardo gave the simple example of increasing the number of people receiving a Covid-19 vaccine booster or opening schools to allow full face-to-face classes.
“So there are things that can be done that are more immediate than structural reforms,” he noted.
For his part, former Deputy Governor of Bangko Sentral ng Pilipinas Diwa Guinigundo said that the structural reforms and institution-building policies that the Philippines undertook, implemented and are still pursuing from the mid-1990s to the present day have increased the resilience of the economy in all countries. ongoing economic shocks.
“Yes, there are short-term shocks, and I think we are able to overcome and survive all these short-term shocks because the base is strong enough,” he said.
However, Guinigundo said the government, especially economic managers, must closely monitor the situation of the country’s unpaid debts and external obligations, which have now ballooned to 12.5 trillion pesos and $109 billion, respectively.
He added that paying off these debts shrinks the fiscal space available to the government and requires more tax collection, which is why it is essential that he examines the imposition of new taxes that are more progressive than regressive.
“So it is important that we have fiscal space.
If not, where is the growth coming from? You need money. So either you tax more or you borrow more,” the former central banker stressed, warning that borrowing more will affect the Philippines’ debt service capacity and accelerate the debt-to-gross domestic product ratio.
“If you continue to maintain this, you will have problems with credit rating agencies, then the cost of borrowing in international capital markets will come down and that will be a problem.”
On the other hand, investment, which is an area where the Philippines lags behind its neighbors, is one of the drivers of economic growth, said national economic scientist Raul Fabella meanwhile.
“So what do we do in these difficult circumstances? Well, I have to say that we need PPP (public-private partnership) even more this time around,” he added.
Fabella also said the country needed to reopen sectors, especially agriculture, and ease the mining industry.