IMF prescribes more reforms for PHL to sustain growth

The Philippines needs to keep pursuing prudent policies and reforms toward resilience, faster growth, and poverty reduction, the International Monetary Fund noted in a report Friday. Risks remain real in the face of global uncertainties and capital inflows, and in relation to increasing bank exposure to certain sectors and overstretched asset prices, the multilateral lender said. The report reflected on the conclusion of 2013 Article IV Consultation with the Philippines on March 29 but was released by the fund on Friday. “Careful deployment of macroprudential measures will be key to managing inflows and risks of asset price bubbles,” the IMF Executive Board noted in the report. The fund said the broader policy toolkit used by Philippine authorities over monetary controls and the preservation of macrofinancial stability was a welcome development, but noted the participation in the foreign exchange market remains limited to ironing out excessive volatility. It called for an exchange rate in line with fundamentals. The authorities should stay focused on strengthening the fiscal position over the medium term. “Efforts to improve tax administration and compliance, broaden the tax base, and reduce exemptions will be necessary to generate budgetary space for infrastructure and social spending,” the fund said. “Recent increases in alcohol and tobacco excises are welcome steps in this direction,” it added. However, the IMF said more reforms are needed to increase investments and improve infrastructure to support the growth momentum. — VS, GMA News