World Bank finds Philippines' macroeconomic policies "sound"

A regional official of the World Bank on Friday described the Philippines' macroeconomic policies as "sound," commending in particular the government plan to expand its poverty intervention program that directly gives cash assistance to poor families.

Axel van Trotsenburg, World Bank vice president for East Asia and Pacific, said proof of the government's successful implementation of its macroeconomic policies, "including keeping good control of public indebtedness," is the market's positive reaction and the investment grade ratings the country received from two credit ratings agencies.

"If you look at the growth numbers like last year, it was 6.8 percent, and this year's first quarter of 7.8 percent, these are very respectable growth rates in an international environment that is complicated...this is a positive number that with a strong growth, you have a chance to create a lot more employment," van Trotsenburg said in a press conference that ended his six-day Philippine visit.

The Philippine government has attributed its impressive economic performance to good governance, sound spending, particularly on infrastructure, and strong domestic consumption.

Van Trotsenburg, who arrived in the country Monday and will leave Saturday, traveled to Mindanao, met with Muslim rebel leader Murad Ebrahim, inspected an informal settlers' community in Manila and meet with President Benigno Aquino.

He said, however, that despite the country's good economic performance, the Philippines needs to work harder to reduce poverty, create good-paying jobs and provide adequate housing.

The World Bank, he said, remains committed to support the Philippines towards these objectives, and proof of this was the transfer Friday of a $300 million-loan.

The Philippines' poverty rate was 27.9 percent last year and the unemployment rate was 7.5 percent in April this year.

"Poverty alleviation is a long-term effort. Poverty reduction is tough, and poverty reduction requires long-term commitment," van Trotsenburg said, adding the World Bank approves of the Philippines' intention to expand its conditional cash transfer program that covers more than three million poor families.

On ongoing peace talks between the government and the Moro Islamic Liberation Front, he said, "We at the bank think very firmly that peace is the future and long-term development will bring long-term benefits to the population," as well as a "real chance of good education, good health to children in Mindanao and subsequently the option to have jobs."