World Bank says RP needs to move up the value chain

Over at BusinessWorld:

along with other countries in the East Asian region, needs to reinvent itself and move up the value chain to achieve rapid growth, the World Bank states in a new book.

In The Day After Tomorrow: A Handbook on the Future of Economic Policy in the Developing World launched yesterday, the Washington-based institution said implementation of key reforms would allow countries in the region to go back to the high growth rates achieved over the past three decades.

It noted that expected lower growth in the United States, Japan and Europe — due to high public debt burdens, continued rehabilitation of bank balance sheets, increased risk aversion and policy uncertainty about proposed financial reforms — meant developing countries would face slower export growth, costlier international finance and a difficult trading environment.

“The most important question confronting East Asian policymakers is whether, despite these conditions, their economies can resume the rapid growth rates they achieved over the past three decades. We believe the answer is ‘yes’ — but it depends on key structural reforms in countries and at the regional level,” the World Bank said.

The Philippines’ current fiscal position is the clear and present danger in the short term. Arrest the leak, stabilize tax collection then slowly curb corruption is really the predominant goal. At least in the Philippine setting. Yes there is global slowdown, but that’s more opportunity, a chance for the Philippines to reform its economy and jump on when the trend starts to go up again.

Cocoy Dayao

Cocoy is the Chief Technology Officer of Lab Rats Technica, a Digital Consulting company that specialises in DevOps, iOS, and Web Apps, E-Commerce sites, Cybersecurity and Social Media consulting. He is a technology enthusiast, political junkie and social observer who enjoys a good cup of coffee, comic books, and tweets as @cocoy on twitter.

Cocoy is also the Managing Director and Editor-in-Chief of the ProPinoy Project.

Cocoy considers himself to be Liberal.

  • RR

    Tax Collection in the Philippines is on a growth path. The 85% behind PNoy will speak through their taxes next. As PNoy, Secs Purisima, Abad and Sen Drilon pave the way to eliminate corrupt officials, more and more taxes will pour in. Quite logical and very realistic predictions, right? Except a footnote: Why is San Miguel less than forthright in disclosures? Danding Cojuanco of Martial Law. Right again. And dont leave out that money-laundering Metro Pacific now into media, utilities, communications. But God will bring down the wicked. This is not logic, but faith.

  • UP nn grad

    Corruption in corporate-boardrooms (in connivance by government officials) is mentioned in a separate blogpost here on ProPinoy-dot NET. A report says that Pilipinas is country with lowest FDI (foreign direct investment) and “madalas umuulan” is not the reason.

    Corporate governance faulted
    Submitted by admin on Friday, 24 September 2010

    Corporate governance faulted
    RP ranked last in list of 11 Asian countries
    BusinessWorld Online

    THE PHILIPPINES has been placed at the bottom of a list of 11 Asian countries in terms of corporate governance, with a Hong Kong-based brokerage and a regional nonprofit group highlighting weakened domestic securities law enforcement. The CG Watch 2010 report by the Asian Corporate Governance Association and CLSA Asia-Pacific Markets castigated Philippine regulators, noting that firms such as …conglomerate San Miguel Corp. were allowed get away with depriving minority shareholders of preemptive rights through changes to bylaws.

    San Miguel was also rapped for inadequate disclosures and “less impressive” reporting practices compared with “better blue chips” Ayala Corp., the SM group, and Philippine Long Distance Telephone Co. (PLDT).

    The report also found “loose conditions” for the appointment of independent directors supposed to look out for small shareholders, …. The regional practice is to appoint at least three independent directors while Philippine firms only have two at the most, the report added.

    Foreign investors seem to have “thrown in the towel” … the report claimed … the Philippines has the lowest level of foreign direct investments among the 11 markets.

    The country, tagged with India and South Korea as the region’s “worst performers,” fared poorly in all corporate governance (CG) indicators except in the adoption of tougher accounting rules.

    The Philippines landed at the bottom of three of the five categories: CG rules and practices, enforcement, and “corporate governance culture.”

    “There is little evidence that ….

    “This survey proves that the international investment community can easily see through the rhetoric,” Mr. Moreno added.

    The CLSA report said that in other markets, large capitalization companies lead reforms in good corporate governance. “But in the Philippines, some seem to be regressing rather than improving.”

  • OFW in Maryland

    I agree with Mark-Borders. And President Noynoy Aquino knows this, too — stopping corruption is Noynoy’s reason for existence. Walang corrupt, walang mahirap, his campaign slogan went.

    He wasn’t just mouthing nonsense words a few months ago, was he?

  • Cocoy, I’m curious how you concluded from article by Louella D. Desiderio; “Arrest the leak, stabilize tax collection then slowly curb corruption is really the predominant goal.” That’s not what was said in the article. In fact there article implied that “medium-term reforms were vital to ensure the momentum of recovery.”, the article went on to say; “Further economic integration, the bank said, can be pushed via lowering the cost of logistics and simplifying behind-the-border procedures and rules, lowering barriers to investment and promoting trade in services.

    “Such reforms will increase predictability, reduce the cost of doing business, lower export and import delays, remove uncertainty surrounding unofficial payments, and discourage favoritism in administrative decision making,” the bank said.”

    This clearly indicates that it is corruption that needs to be stopped quickly for the Philippines to rapidly improve the economic growth rate. The article does not imply that corruption should be slowly curbed as you stated. I encourage you to re-read that article, while you and others start understanding the real problems facing the Philippines. This countries primary problem which is decreasing any chance at a decent economic growth rate is corruption. Corruption at so many levels of the government.

    I beg everyone to keep their sight set on the most important fix for this economy. Corruption!!!

    • Hi Mark-Borders,

      I was actually disagreeing with the article when I wrote down, “arrest the leak…” arrest the leak = national treasury is leaking money due to inefficiencies and corruption. my apologies for not being too clear.