March 30, 2006
National (as of 2:13 PM)
World Bank: RP growth fails to feed the hungry
The Philippines is expected to grow faster this year compared to 2005 and the fiscal outlook looks promising, but more people consider themselves impoverished and hungry, the World Bank said on Thursday.
The country is expected to grow 5.3 percent in 2006 and 5.6 percent in 2007 compared to 5.1 percent last year due to rising consumption fuelled by strong remittances from Filipinos working overseas, the World Bank said in a twice-yearly review.
But the bank said despite two years of economic growth, surveys showed that 17 percent of the population reported hunger compared to 12 percent last year and over 49 percent considered themselves impoverished compared to 48 percent in 2005.
"Recent surveys indicate that more Filipinos are suffering from hunger ... suggesting that the positive growth performance in the last two years is not perceived to have been widely shared," the World Bank said.
The Philippines is one of Asia's biggest importers of rice, its main food staple, due to its rapidly rising population and poor local farming infrastructure.
Analysts estimate the Philippine economy needs to grow 7 to 8 percent per year to cut poverty significantly among its 85 million people. The population of the Philippines, a largely Roman Catholic country, is growing at around 2 million a year.
The economy's 6 percent expansion in 2004 was the strongest in 15 years with gross domestic product having grown by an average of around 3.5 percent from 1987 to 2004.
Improved state finances are needed to spur growth and the World Bank said the fiscal outlook for 2006 looked promising provided the government succeeds in collecting an additional P68 billion ($1.33 billion) this year from a higher sales tax.
In February, the country's budget deficit was P25 billion, well inside a target of P27.2 billion.
The Philippines, Asia's most-active issuer of sovereign debt after Japan, hopes to cut its budget deficit this year to P125 billion, or 2.1 percent of GDP, from last year's P146.5 billion, or 2.8 percent of GDP. Reuters