"Development prospects have improved since the last (donors’ meeting) in 2000 – brought about by political stabilization and a determined new team which focused on key priorities," World Bank country director Robert Vance Pulley said.
Mrs. Arroyo, an economist who turns 55 next month, stressed in her weekly radio talk show earlier yesterday that "we are in less trouble than our critics say."
She had come to power in a popular revolt that toppled the Joseph Estrada presidency in January 2001. Estrada, a popular former movie star, is now on trial for plunder, or massive corruption.
Speaking at a meeting of representatives of the Philippines’ bilateral and multilateral aid donors in this former US military base, Pulley praised the Arroyo administration for having "delivered good economic results in its first year – despite the unfavorable global environment."
He cited the "better than expected" gross domestic product (GDP) growth of 3.4 percent last year, "falling inflation, interest rates at historic lows, currency stabilization, passage of long-awaited structural reforms in the energy sector and essentially meeting the 2001 (budget) deficit target."
The Philippine economy expanded 3.4 percent last year despite recessions in the United States and Japan, its two main trading partners, and security operations against Muslim separatists and kidnappers allied to the al-Qaeda terror network.
However, the population is growing at a rapid 2.4 percent clip, eroding the GDP advance.
Pulley said the Philippines’ P147-billion-peso calendar 2001 budget deficit, just two billion pesos above target, was "a first milestone on the path to fiscal consolidation by 2006."
Pulley said "improved policy credibility and management helped earn the Philippines continued reasonable access to external markets," and that with these, "there is reason to believe that the Philippines now has a greater opportunity for renewed poverty reduction."
Mrs. Arroyo has put poverty reduction at the top of her agenda. As of calendar 2000, 39.4 percent of the population, or more than 31 million Filipinos, lived on less than P40 a day.
"Translating improving economic performance into sustained poverty reduction will be the ultimate yardstick by which the (donor) community and government’s joint efforts are measured," Pulley said.
Manila’s remaining challenges include "mobilizing public revenues needed to fund development priorities, strengthening the financial sector, increasing investment and job creation, improving peace and order" as well as efforts to "reduce corruption."
In her radio broadcast, Mrs. Arroyo revealed she was ticked off by criticism from neighbors, particularly Singapore leaders who she did not name.