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These four big problems are holding us back.
“The Millenium Challenge Corp. (MCC) — a US government aid agency funding government projects in the Philippines — has identified four obstacles to the country’s attaining sustainable growth. It is undertaking a ’cause analysis’ on how to address these concerns to ensure a strong finish next year for the local projects it is funding under a USD$434-million ‘compact’ with the Philippine government,” reports Jeannette I. Andrade in Philippine Daily Inquirer.
The following are the four challenges to Philippine growth based on an economic constraints analysis that MCC conducted:
1. Government implementation capacity — Bureaucratic red tape affects the government’s ability to operate efficiently.
2. The high cost of transport logistics — Geography and the environment have challenged transportation provisions and logistics.
3. The high cost of electricity — Electricity rates in the Philippines is the highest among developing countries in the same status and bracket.
4. Land and market failures — The markets for goods which are competitive are difficult to create when they are not accessible.
The report recalled: “The five-year MCC compact with the Philippines, signed in September 2010 and implemented in May 2011, involves a grant of some $434 million for three projects: the Revenue Administration Reform Project (RARP); the Kapit-Bisig Laban sa Kahirapan-Comprehensive and Integrated Delivery of Social Services (Kalahi-CIDSS); and the secondary national road development project.”
The report went on to explained that “the USD$54.4-million RARP addresses the need to raise tax revenues, reduce tax evasion and improve revenue collection, while the USD$120-million Kalahi-CIDSS aims to uplift poor communities through the provision of infrastructure and services.” Meanwhile, “the USD$214.4-million secondary national roads development project is designed to reduce transportation costs through the rehabilitation of 222 kilometers of roads between the provinces of Samar and Eastern Samar.”
Fatema Z. Sumar — the MCC department of compact operations regional deputy vice president for Europe, Asia-Pacific and Latin America — said, “We are in a very strong position here in the Philippines, under this compact, to finish on track and to finish on time (closeout date is May 25, 2016). We have less than a year to go… we are seeing strong performance in each of the three project areas where we are operating throughout the country.”
Sumer added, “Now that we have identified [the problem areas], our teams are undertaking a cause analysis that will come away with a deeper understanding of what are the drivers within each of those areas that are impeding broader economic growth.”
