The World Bank said Monday the Philippines needs to grow 6.5 percent annually over the next 22 years to achieve its vision of becoming a prosperous middle-class economy free of poverty.
World Bank senior economist for the Philippines Rong Qian said in a news briefing in Makati City that such growth would be faster than the average expansion of 5.3 percent since 2000.
“To achieve its long-term vision of becoming a prosperous middle-class country free of poverty by 2040, the Philippines will need to triple its income per capita in the next two decades,” Qian said.
Qian said sustaining a higher productivity growth would be the key for the Philippines to achieve its vision of becoming a prosperous country.
Qian cited the bank’s latest report titled ‘Growth and Productivity in the Philippines: Winning the Future’ which showed that the more efficiently the country could use its resources, the better chances it would have to generate high-paying jobs and reduce poverty.
The report said productivity growth was particularly important for the agriculture sector where many poor families derived their incomes.
World Bank country director for Brunei, Malaysia, the Philippines and Thailand Mara Warwick said the Philippines’ ability to sustain its current high growth rate would depend primarily on how the country could accelerate investment in improving its physical infrastructure and how it could make better use of capital, labor and technology to increase productivity.
“In the long run, a persistently booming economy will require constant boosts in productivity,” Warwick said.
The Philippines introduced reforms in the late 1980s and 1990s that transformed the country into one of the top performers in East Asia.
It has been growing at an average of over 6 percent since 2010, and income per capita nearly doubled between 2000 and 2017.
Warwick said the Philippines was clearly in a better position now to speed up reforms to achieve its development goals.
The economy grew by 6.7 percent last year, on higher fiscal spending, robust domestic demand and investments. This year, the government projected a 7 percent to 8 percent expansion on the back of higher spending particularly on the ‘Build, Build, Build’ program of the Duterte administration, sustained domestic demand and investments.