Manila: A senior World Bank official yesterday lauded the Philippines for its fiscal reforms but said it needs to do more to strengthen its fight against corruption.
Juan Jose Daboub, one of the bank's managing directors, said corruption remains a major hindrance to foreign investment and the government needs to be more transparent in the use of public funds. Daboub is here on a four-day visit.
"Now that the Philippines is implementing several reforms for macroeconomic and fiscal stability, there is the breathing space for addressing some of the difficult structural issues of governance, including more effective and transparent collection of taxes and better quality of public spending," Juan Jose Daboub said.
The government's move to expand the base of its value-added tax and increase the rate to 12 percent from 10 per cent has boosted public revenue and put the country on target to achieve a balanced budget by 2008.
But a recent World Bank report ranked the Philippines 126th out of 175 countries in terms of investor-friendliness.
Vietnam, for instance, which 15 years ago was a relatively closed society with an underdeveloped economy, was 104th.
"It seems very clear that there is real urgency if the Philippines is to gain a larger share of the investments now coming into southeast Asia," Juan Jose Daboub said.
He said the World Bank plans to intensify its efforts against corruption, an issue that will be addressed at length during next week's annual meeting in Singapore.
Possible measures include suspending World Bank programs or demanding repayment of grants in extreme cases, he said. Daboub said the world lender has investigated over 2,000 cases of alleged fraud and corruption globally over the past five years, resulted in the blacklisting of more than 300 companies and individuals.
Juan Jose Daboub added that no Philippine company or individual has appeared on the World Bank's blacklist.