PHL econ growth in '12 steady at 4.2%, rising to over 5% onwards

Anticipating strong domestic demand from improved government spending and still-robust consumer power, the International Monetary Fund (IMF) kept its 4.2 percent 2011 growth forecast then charted 5 percent for 2012 and beyond.   “We expect the fiscal stimulus that has been put in place, the monetary accommodation that is underway, and robust remittances will allow domestic demand to pick up in 2012 and the pickup in domestic demand will offset downtrend from net exports,” IMF mission chief for the Philippines Vivek Arora said via video conference from Washington DC.   Economic planners in the Cabinet-level Development Budget Coordination Committee earlier cast a 5 to 6 percent expansion of the economy.   “The growth outlook for the Philippines is a generally positive outlook in the sense that growth slowed down in 2011 because of fiscal contraction and because of headwinds,” Arora said.   Last December, Arora said "moderately stronger" growth of 4.2 percent will result from "improving the alignment of funds and sharper accountability" in the Aquino administration spending of the P1.8-trillion 2012 national budget.   He said the "quality" of the fiscal outlays will be more effective "once the new budget processes are in place."   The IMF official said he ascertained from administration officials that among the budget reforms involves clarity because "when funds are assigned, there is a program of work."   "The authorities' emphasis on strengthening tax compliance is appropriate and the Fund continues to support these efforts with technical assistance. In addition, it will be important to reform excises, rationalize fiscal incentives, and broaden the tax base," the IMF also said.   Pending in Congress are bills seeking to flatten the tiers of excise tax rates and index them to inflation. The Department of Finance and Bureau of Internal Revenue have also targeted the self-employed and professionals for improved taxation compliance. — ELR, GMA News