ADB sees positive GDP growth for RP

MANILA, July 10 (PNA) -- The Asian Development Bank on Thursday sees no recession for the Philippines because of the moderate growth in overseas Filipino workers' (OFWs) remittances and improvement in business confidence.

Neeraj Jain, ADB's country director for the Philippines, told reporters that the Philippine economy is expected to maintain a positive growth in 2009.

Jain said the continuing remittance growth, recent improvement in business confidence and turnaround key exports are positive signals for a positive growth.

"We don't see any contraction in [OFW] remittances," Jain added.

In the first four months of the year, OFW remittances grew 2.6 percent to $ 5.5 billion.

The World Bank projected the economy, as measured by gross domestic product (GDP), to contract by 0.5 percent this year from an earlier forecast of 1.9 percent.

The Development Budget and Coordinating Committee projected a 0.8 percent to 1.8 percent this year from an earlier estimate of 3.1 percent to 4.1 percent.

In the first quarter, the economy grew 0.4 percent from 3.9 percent in the same period last year.

"The Philippines has situated in the global economic environment which worsen since March ... but we are seing some positive development for the Philippine economy," he said.

The ADB executive added that for the economy to move to a sustained high growth, greater public spending is needed in infrastructure and social services.

Jain said the Philippine economy should grow between 7 percent and 8 percent over 10 to 12 years to reduce poverty significantly.

"To move this kind of path, you have to invest more in both private and public infrastructure and social services," he said.

Thus, Jain said urgent attention is needed to enhance taxes such as excise tax reforms, rationalization of fiscal incentives and simplification of net income taxation for individuals in business.

Jain also said that the country's public debt to GDP has been declining, but it still remains high, relative to other countries in the region.

"Public debts has declined in all countries that were affected by the Asian financial crisis since 1998, but in other neighboring countries it has been declining faster than the Philippines," he said.