Aquinomics: Hopes up, infra down

Aquinomics: Hopes up, infra down

by UA&P News Desk on July 1, 2011 - 11:11 am

From the Philippine Daily Inquirer, by Riza Olchondra

One year into the Aquino administration, much improvement is needed to support investor confidence like speeding up public-private partnership (PPP) projects and achieve government targets, economists said.

The Aquino administration inspired business confidence, resulting in increased private investment, according to five economists interviewed separately by the Inquirer.

But the economists said public spending and timely interventions must support business confidence or it would not translate into widespread economic gains.

Cielito F. Habito, a former socioeconomic planning secretary, said on the sidelines of a recent Inquirer forum that “Aquinomics” seemed good enough in the first three months of 2011 using an annualized quarter-on-quarter gross domestic product (GDP) growth as yardstick.

GDP rose 1.9 percent in the first three months of the year from 0.5 percent and 0.3 percent in the two preceding quarters.

An annualized quarter-on-quarter comparison takes away the so-called base effect from the first quarter of 2010, which Habito said was “warped” by election spending.

Using a year-on-year comparison, the first quarter GDP growth, however, slowed to 4.9 percent from 8.4 percent in the first quarter of 2010.

Habito attributed the good quarter-on-quarter GDP performance to aggressive private investment, which he said was fueled by investor confidence in Mr. Aquino and his administration’s drive for corruption-free and inclusive growth.

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Concrete interventions

The challenge lies in translating good ideas in the Philippine Development Plan into concrete interventions and measurable outputs, such as tax policy and industrial policy, Llanto said.

Cid Terosa, an economist from the University of Asia and the Pacific, said it was too early to tell if the country was better off than a year ago.

Terosa said the economy and economic management had been “good” so far, but from a scale of 1 to 10, he gave the Aquino administration a score of 7.

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