“All these steps are intended to attract foreign investors into the country,” Economics Professor Leonardo A. Lanzona said in a Viber message. “The crucial question is whether we have instituted enough reforms to make the country attractive.”
“Unless these questions are addressed, capital will increase, but eventually diminishing returns will emerge. Capital formation is necessary, but it will not be sufMr. Lanzona said there is some uncertainty surrounding the government’s 7-9% growth target this year, because many micro, small and medium enterprises were rendered “no longer viable” by the pandemic.
“Second, we need to have a policy of skill development and employment creation. This will ensure that benefits of the reforms will reach the poor.”“The structural reforms initiated by this government has to create better and more efficient enterprises to replace this,” Mr. Lanzona added. “But without the reforms I indicated, this objective will not be reached.”
In addition, he also said that the 10-point policy agenda, which is the government’s approach to reviving the economy, centers on accelerating the vaccination program, reducing restrictions on foreign and domestic travel, and fast-tracking digitalization.The growth outlook is also clouded because of external factors, another Ateneo economist said.
“At the same time, higher prices are exerting upward pressure on wages,” Mr. Peña-Reyes said. “The Bangko Sentral ng Pilipinas has no recourse but to eventually follow suit. Higher interest rates will affect the recovery efforts of many small and medium enterprises that will have to pay more for loans.”