Posted at 05/30/2013 10:54 PM | Updated as of 05/30/2013 10:54 PM
MANILA, Philippines - The Aquino administration should create more and better jobs by fast-tracking reforms, the World Bank said.
The international lending institution, in its May 2013 economic update on the country, said while the Philippine economy performed better than expected in 2012, it must focus its attention on generating higher, sustained, and more inclusive growth that creates jobs and reduces poverty.
"With almost 10 million unemployed or underemployed Filipinos as of end-2012, around 1.1 million 5 potential entrants to the labor market each year, and poverty incidence that hardly declined between 2009 and 2012, the country faces the enormous challenge of providing good jobs to 14.4 million Filipinos through 2016," the World Bank said.
It said a sustained GDP growth of above 5 percent will be able to provide good jobs to around 2.2 million Filipinos between 2013 and 2016.
The World Bank predicted that for 2013, the Philippines' economic growth will be around 6.2 percent and will be driven by domestic demand. "As in previous years, private consumption will provide the primary basis for growth."
However, by 2016, such economic growth pace will still leave around 12.4 million Filipinos who will have no other option but to work abroad, work in the informal sector, or create jobs for themselves, it warned.
The Philippine economy grew by an "impressive" 7.8% in the first quarter on higher consumption, manufacturing and government spending, according to the National Statistical Coordination Board (NSCB) said Thursday.
However, the highest GDP growth rate recorded in the Aquino administration was during an election period, which is usually marked by higher spending and consumption.
"There is no silver bullet for creating more and better jobs, as it is linked to resolving deep-seated, structural issues in the economy. Only a comprehensive reform agenda implemented across sectors can foster a business environment conducive to private sector job creation," the World Bank said.
It added that the Aquino administration, which is enjoying political stability and popularity, should fast-track ongoing reforms to help create more and better jobs.
"Several reforms have successfully started, notably in public financial management, anti-corruption, and social service delivery. With further structural reforms, especially in areas which will have more impact on the lives of the poor, the government can put the country on the irreversible path of inclusive growth and meet the jobs challenge," it added.
"To better sustain these reform efforts and to increase their chances of success, the government will need to invest more in health, education, and infrastructure," the bank said.
The bank identified the areas that it believes deserve the highest priority.
These are simplifying business rules and regulations to encourage growth; enhancing competition; giving priority to sectors with the greatest potential in creating jobs; and securing property rights for rural and urban dwellers.
Amid the pressure on the Aquino government to prioritize a freedom of information law to promote transparency, the World Bank also urged the Philippine government to promote open data and open government policies as part of public financial management reforms.