Maniolas

MANILA, Philippines – Improved economic freedom in the Philippines should be sustained to boost investments in the next five years and promote prosperity, an analyst for global think tank Heritage Foundation said on Monday. 

“We are really impressed by well intended good policies. But it’s not easy to make good policy economic reform: it takes time, it takes energy and dedication,” senior analyst Anthony Kim told reporters in a roundtable discussion.

“Reforms will attract and generate more opportunities for average people of the Philippines but it will take some time so it’s time to wait and just move forward,” he added.

The Washington-based agency publishes yearly a global index measuring economic freedoms in 157 countries, including the Philippines. In its latest edition released last March, the country improved 10 notches to 97th place. 

Economic freedom, Kim said, involves measuring individual and country liberties, good policies and promotion of free enterprise as a tool to achieve economic growth and prosperity across the population.

For the Philippines, Kim noted that the country’s “resilient and dynamic” economic story was hedged on a “committed” government to pursue “real, practical policy solutions” that cover taxation and the business environment, among others.

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While Kim refrained from discussing specific reforms that need to be undertaken or continued, the official noted that “healthy discussions” on lifting the 40-percent foreign ownership cap on certain industries should be continued.

“It is not (however) a hindrance to economic freedom,” he clarified.

In addition, “effective and practical regulations” to trim permits and days in setting up businesses would be helpful. Continuously keeping government debt in check should also contribute.

“You have to safeguard against complacency. (You should) always have this sense of self-doubt. The momentum is here and you have to develop that,” Kim said.  

The Philippines was Asia’s fastest growing economy in the first quarter of the year. It expanded 7.8 percent during the period, on the back of strong domestic demand driven partly by contained three-percent inflation. 

“Your current government has an idea what’s kind of future they want to grow. From now to 2016, they need to remain committed to these reform agenda,” Kim pointed out.

“As long as they remain committed, I think we’ll see this kind of positive momentum will be there. It is my observation and my sense that the current administration is looking at medium and long term,” he explained.

Kim welcomed the results of the senatorial elections that showed the “people trust the government.” Nine of the 12 new senators that will take over in July were part of the administration slate.

“There’s a strong correlation between economic freedom and prosperity. What we find is as long as you advance your economic freedom… the rate of economic growth is much higher,” he said.