The Philippines is one of the good examples of countries taking a path of development from an agricultural economy to one that is largely supported by services, the Asian Development Bank (ADB) country director for the Philippines said Wednesday.
The traditional path is to move from agriculture to industries and then to services, Neeraj Jain said at a briefing.
“This is happening amid the revolution in telecommunications in the Philippines, and experts are now raising the question of whether economies like these are conducive to growth that is inclusive or employment-friendly,” he said.
The ADB official said the Philippine financial market would need to develop long-term instruments to help government efforts in promoting investments in infrastructure.
He said improved infrastructure would help efforts in the Philippines to move up to higher value-added activities, particularly in the manufacturing and services sectors.
Better infrastructure, for example, can help in the push for the business process outsourcing sector to develop service offerings other than voice-based call centers, Jain said.
He said longer-term loans had to be made available for undertakings such as public-private partnership (PPP) projects.
Funding for PPP
“Banks are now providing (loans) that mature in 10 or 12 years,” he said, adding that longer tenors will provide a greater boost to infrastructure projects.
The ADB announced last month funding support for the PPP initiative “to help sustain the positive reform momentum.”
Australia, through the Australian Agency for International Development, has set aside $15 million for the project development and monitoring facility (PDMF) that the ADB administers. The amount was on top of the $7 million provided to the facility last year.
Jain said the additional fund would mean that the PDMF would be able to support the preparation of more PPP projects than what was previously expected as doable.
With the additional fund, it is estimated that at least 12 PPP projects would be implemented or ready by 2016, more than twice the government target of five projects by the end of 2013.