"The Philippines is not reaching its full potential and may be facing the risk of falling further behind the rest of its Asian neighbors," warned managing director Juan Jose Daboub.
He cited the rapid growth of China and India but also noted that Vietnam, which once lagged behind the Philippines, had shown remarkable success, cutting in half the number of its poor in just over a decade.
Daboub said this was happening in a "closed society (with) no political freedom but economic freedom has started to pick up," thanks to market reforms.
In contrast, the Philippines, with an open democracy, free press, well-educated population and active private and civil sector, was still struggling to bring more of its population out of poverty.
He noted that a previous joint World Bank-Asian Development Bank survey found the two major obstacles to more investment in the Philippines were macro-economic instability and corruption.
Daboub said the Philippines was showing improvement with the passage of key fiscal reforms that were reducing the budget deficit, allowing more money to go to investment, social services and education.
He said the success of China and India showed the Philippines could also enjoy rapid growth, citing the country’s open society, active private sector, lively civil society groups and high levels of literacy and skilled labor force.
"These conditions are fertile ground for good economic policies to grow and flourish," he said.
Among the measures he suggested was to reduce the size of the state, saying this would also reduced the chance of misuse of funds while raising the activity of the private sector and civil society.
He also said it was up to the government and the people of the Philippines to improve governance, increase transparency and the accountability of state institutions. – AFP