Pacman in no hurry to name next rival

MANILA (AFP) - The Philippine government needs to boost economic output growth to at least seven percent if it is to make an impact on the country's sprawling poverty, the Asian Development Bank said Thursday.

The lender's country director Tom Crouch said the Philippines had an "atmosphere of greater promise than we have seen for while" with the peso at seven-year highs against the dollar, stock prices at record high levels, and US firm Texas Instruments having just announced a billion-dollar investment.

He credited President Gloria Arroyo's "prudent management of the economy," particularly the passage of key tax reforms that led to a "fiscal consolidation success story" for the renewed investor interest in Manila, long a laggard in Asia in terms of foreign direct investment flows.

"The size of the fiscal deficit is the principal proxy for what investors see as the Philippines' willingness, capacity, commitment to economic reforms, sound economic management, and moves to address long-standing issues like governance, investment climate, and poverty," Crouch said.

However, he said Manila still faced many problems with the country's gross domestic product stuck at below 6.0 percent and with many Filipinos living in poverty.

"Succeeding steps will be no easier as (the) Philippines moves towards 7-8 percent annual GDP growth to make more rapid progress on poverty reduction, and to deliver on its broad socio-economic agenda," he added.

Crouch's comments, released by the Manila-based ADB Thursday, were delivered during a closed-door meeting with senior Philippine economic managers on Wednesday.