Poverty level in RP remains high, says IMF’s De Rato
Poverty in the
IMF managing director Rodrigo de Rato, who is in the
“In both emerging and developing economies, absolute poverty remains stubbornly high. The National Statistical Coordination Board estimated that 30 percent of people still lived in poverty in the
Nevertheless, he cited the government’s efforts to address inequality.
“In several of these areas, the
He urged countries including the
He also urged the government to increase investment in education and technology and in infrastructure.
“Governments can take direct aim at inequality by replacing non-targeted tax exemptions and subsidies, for example for petroleum products and electricity, with targeted social assistance,” De Rato said.
The IMF expects the Philippine economy to grow by close to six percent this year and in 2008, lower than the government’s official projections.
The multilateral lender said the government needs to step up its tax collection efficiency and raise more revenues in order for the economy to grow.
The IMF’s projection is lower than the government’s gross domestic product growth forecast of 6.1 to 6.7 percent for 2007 and 6.2 to 6.8 percent next year.
“We expect the
The IMF took into account risks that the
De Rato said that the situation in the global oil market, the potential instability from capital inflows and the danger against a backlash against globalization pose threats to growth.
“There are considerable vulnerabilities on the supply side, with respect to both production and refining, and a supply shock could be much more damaging to global growth,” the IMF chief said on the global oil market.
With respect to the risks from financial globalization, De Rato said not many countries realize such dangers.
“There are also risks associated with financial globalization, and I am concerned that these are still not fully appreciated.
Rato said the trouble in the
De Rato also pointed out the backlash of globalization and that gains associated with it have been distributed quite unequally.
Speaking later to reporters, De Rato said that on the fiscal side, the government needs to improve tax collection efficiency if it wants to achieve its goal of balancing the budget by 2008.
“More work needs to be done if the authorities are going to realize and materialize their fiscal plan. There is a need to raise more revenues and step up tax collection efficiency,” he said.
On the monetary side, the IMF executive said the Bangko Sentral ng Pilipinas has been very successfully in containing inflation despite external shocks.
At the same time, he urged monetary authorities to continue strengthening the banking sector by encouraging more mergers and consolidation in the industry.
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