MANILA, April 7: The Philippines must concentrate on attracting more investment to combat the entrenched problem of unemployment if it wants to sustain its economic growth, the World Bank warned.

In its latest East Asia and Pacific Update report, the World Bank noted that the Philippines had achieved “unprecedented success in fiscal policy in a difficult political environment,” posting growth of more than five per cent annually in the past three years.

This is the first time this Southeast Asian archipelago has enjoyed such growth rates since the 1970s, the Bank added, also citing success in controlling inflation.

However, it warned that despite such growth, “unemployment has remained steady in excess of 10 per cent in the Philippines and underemployment has grown to 22.7 per cent from 17.6 per cent two years ago.

“Increasing investment will be key to job creation. In the Philippines, overall investment has been stagnant in real terms and has declined as a share of (total output) to below 15 per cent. Firms have also been facing big competitive pressures in world markets, not least from China's booming economy,” the report said.

“A strong focus on strengthening the investment climate and improving labour force skills will thus be important for the Philippines,” the World Bank added.

The bank said if the Philippines showed the same determination to improve its investment climate as it did its fiscal position, then “higher growth would be more likely and its impact on job generation and poverty reduction would be more beneficial.” —AFP