Economy and asset reform: The good news and the bad

Categories: Business Updates

Date Posted: 28 Jul 2014

The Aquino administration may have aligned their gears right after the economy grew by a faster-than-expected 7.8% in the first quarter, continuing the strong 6.8% expansion in end-2012, although this did not prevent unemployment from going up and poverty incidence rates from not improving.

President Benigno Aquino III has remained true to his promises in his previous State of the Nation Addresses that the government will target key industries with potential for growth: tourism, agriculture and manufacturing.

The government likewise has seen an increase in investments being readied to increase power supply in the country, with Ayala Corp., First Philippine Holdings, and Aboitiz Equity Ventures among those eyeing the energy sector.

The tax bureau has also tried to close gaps between collections and spending with an aggressive drive against tax evaders with the agency regularly filing cases against those found erring.

Shoring up more revenues has helped the government develop infrastructure and other projects, contributing to the growth of the economy.

But even with Aquino’s promise of promoting entrepreneurship in the country and lowering the cost of setting up shop, the Philippines slipped two notches in World Bank and IFC’s Doing Business Survey. The country ranked 138 out of 185, down from its previous 136th position.

Also, despite the strong economic growth, the jobless rate stood at 7.5% in April, the highest in three years. The National Statistics Office said there were 3.09 million unemployed in April, up from 2.89 million in January.

At the same time, the poverty incidence rate of 27.9% in July 2012 was unchanged from 2006 and 2009, the statistics agency also reported.

Meanwhile, the promised transfer of Hacienda Luisita assets to farmer-beneficiaries remains to be seen as the process has been hit by setbacks, most recently by the problem of which accounting firm to handle the audit of financial records of the sugar estate firm.

The Aquino government has also yet to meet its target of distributing over 1 million hectares of land under the Comprehensive Agrarian Reform Program Extension with Reforms or CARPER. The Department of Agrarian Reform said the delay is due to the long process of digitizing land titles set for distribution.
Written by: Kathleen Martin


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