By Mynardo Macaraig

MANILA, July 28, 2010 (AFP) – The new Philippine government said Wednesday it was aiming to achieve sustained economic growth of up to eight percent annually as investor confidence grew and red tape was cut.

Economic Planning Secretary Cayetano Paderanga told reporters that streamlined business procedures and more transparent investment measures would help bring in the money needed to speed up growth.

“We will work on what we need to do in order to obtain a growth rate... somewhere around seven to eight percent by 2011,” Paderanga said.

The target of President Benigno Aquino’s government, which took office a month ago, is up from average annual growth of 5.1 percent seen during the nine years of his predecessor, Gloria Arroyo.

Paderanga said Aquino’s government aimed to make important structural changes to the economy to ensure growth was sustained at seven-to-eight percent, while stamping out graft in the private and public sector.

He said a top priority was making the Philippines more attractive for investors and multilateral agencies, and this would be done by eradicating corruption and cutting red tape.

“We are hoping that with the new administration, we can get more credibility so that domestic and also foreign investors will start looking at our country,” Paderanga said.

The government is particularly looking for investment in large infrastructure investments in areas such as power, transport, water and irrigation and waste management, according to Paderanga.

In his “State of the Nation” speech to Congress on Monday, Aquino said he wanted to develop public-private partnerships where private capital would help finance big projects such as a new rail line through the main island of Luzon.

Aquino said private investment was desperately needed because Arroyo’s government had bled the nation’s coffers nearly dry through misrule and corruption.

Aquino said the budget deficit in the first half of the year had ballooned out to 196.7 billion pesos (4.23 billion dollars) due to over-spending and poor revenue collection under Arroyo.

Analysts agreed that the Philippines could achieve economic growth of up to eight percent, particularly after a surprisingly strong start to 2010 with growth of 7.3 percent in the first quarter.

“We have sufficient domestic savings and, if foreign investment comes in, that will provide the additional booster,” said Victor Abola, economics professor at the Manila-based University of Asia and the Pacific.

Jose Vistan of AB Capital Securities agreed the growth targets could be met, but only if investor confidence improved.

“We need a lot of capital. It will take a lot of hard work. We have to prove ourselves first as an ideal investor destination,” he told AFP.

Abola and Vistan also said that, despite Aquino’s criticisms of Arroyo, she had left him strong economic fundamentals to build upon.

“Gloria Arroyo has been demonised by the media but... the reality is that we are in the best position economically (since the 1980s),” Abola said.

Even Paderanga acknowledged that the Philippines savings and investment rates were rising thanks to stable inflation and interest rates, providing a crucial platform for increasing growth. ■