Beneficiaries of growth

Despite the disaster in the stock market and the continuing increases in fuel prices, the Asian Development Bank is projecting modest economic growth of 3.8 percent for the Philippines this year. The government is more bullish, with the National Economic and Development Authority forecasting growth of 4 to 5 percent in the gross domestic product. The government cited increasing consumption, good revenue collection, single-digit inflation, low interest rates and renewed lending in the banking sector. Economic managers expect private companies to expand this year and foreign direct investments to grow, with agriculture continuing its performance that propelled the economy's growth in 1999.

It's just the start of the year, however. Rising world crude oil prices and US interest rates are expected to fuel inflation and push up domestic interest rates. The ADB is also prodding the government to speed up additional reforms in the banking sector as well as measures to improve the handling of corporate insolvencies.

The government also needs to raise counterpart funds for foreign-funded projects, and improve the utilization of official development assistance. Then there is a stock exchange to put in order. No matter what Malacañang says, the scandal in the stock market will adversely affect the entry of long-term investments. This scandal must be decisively addressed as soon as possible if the government wants to restore confidence in the market and compete with its neighbors for investments.

These problems may be properly addressed and the government's growth forecasts for the year may be accurate. Then the administration will have to deal with the biggest problem, which is making the fruits of economic growth trickle down to the masses. Fidel Ramos, even at the economy's peak during his presidency, admitted that this was his biggest frustration. In this administration, critics have noted that the rich are getting richer and the poor, poorer. The best way to refute this criticism is by showing that the masses are sharing the benefits of growth.