The International Monetary Fund (IMF) expects the Philippines to post double-digit economic growth amid a steady improvement in public investment efficiency over the next 15 years.
In a report, IMF economist Takuji Komatsuzaki said the improvement in public investment efficiency generates substantial additional benefits particularly through higher gross domestic product (GDP) growth.
“Assuming half of the inefficiency is eliminated in five years, the increase in real GDP after 15 years is nine percent to 11 percent,” Komatsuzaki said.
The IMF considered two scenarios in the working paper including a permanent increase in public investment by two percent of GDP financed by borrowing as well as the same increase in public investment financed by higher taxes.
“All scenarios exhibited sustained gains in output because improving public infrastructure leads to gains in productivity, which crowds in private investment,” Komatsuzaki said.
Source: http://www.philstar.com/business/2016/03/02/1558449/philippines-capable-double-digit-growth-imf
