In an interview, ADB president Haruhiko Kuroda said the Philippines faces two major challenges in the face of growing calls for regional economic integration.
The first challenge is how to integrate and unite a country that is physically divided among 7,100 islands.
Kuroda said that challenge requires significant investments in infrastructure, especially in sea and airports, as well as highways and arterial roads.
"How can the country develop its economy when it can not connect and integrate to speed up economic activity?" he said.
The second challenge, which is basically fiscal in nature, has three major components: control in expenditures, increase in revenues and increase in investments.
The Philippines must also improve the investment climate, both for domestic as well as foreign investors, Kuroda stressed.
He said the country’s judicial system is among the challenges the country faces in terms of governance.
"The third concern is governance, particularly the judicial system," the ADB head said after a forum sponsored by the Gov. Jose B. Fernandez Jr. Center for Banking and Finance of the Asian Institute of Management (AIM).
Kuroda urged the National Government to address the two major concerns and three major fiscal issues to remain competitive.
He said the ADB had already forecast the country’s gross domestic product (GDP) growth at five percent in the face of high global prices of oil. The country, as with several Asian nations, are net importers of oil products.
"The economic fundamentals of the Philippines are good, it (economy) is doing well," the ADB president stressed.
In the face of calls for regional integration, the country is challenged to catch up with its neighbors to assist in speeding up the process of economic prosperity not only in the Asean subregion but also in the Asia Pacific region.
In the same forum, the ADB president also called for coordinated efforts at the regional level to combat the spread of communicable diseases, such as the Avian flu, promote environmental sustainability, and manage natural disasters such as tsunami and earthqquakes.
Other calls centered on intensifying cross-border infrastructure building and the associated coordination of laws, rules and regulations, across the region. He also called for further trade integration and strenthening of the Asean economic surviellance mechanism, making the Asian financial system resilient through the reforming the regional banking system and local currency bond market, and promoting a regional exchange rate arrangement for the region.