MANILA, Philippines – The World Bank says many developing countries have been hurt by a wave of effects from Europe’s debt crisis and there is need to put in place programs to cushion their impact on the poor.
The bank’s president, Robert Zoellick, told reporters Wednesday that in many developing countries, stock markets have gone down, bond spreads have gone up and exports have dropped since August. He says exports have slowed even in the Philippines, whose economy has been growing well.
Zoellick made the comments during a visit to a slum community in metropolitan Manila’s Pasay city, where he talked to beneficiaries of an anti-poverty program supported by the World Bank. He will meet Thursday with President Benigno Aquino III to discuss government reforms to fight corruption and poverty.
He said he will also take up with Aquino other issues that will secure growth for the future, including the country’s infrastructure needs, creating better jobs, and preparedness to deal with natural disasters. Asia bounced back relatively quickly from the last global recession that was sparked by the 2008 financial crisis, helped in part by China’s massive stimulus spending.
But some economists say the region is not as well placed to respond to a new slowdown because inflation is high and a lot of fiscal ammunition has already been spent fighting the last crisis.
Zoellick said the Conditional Cash Transfer Program, which gives up to 1,400 pesos ($32) a month to poor families on condition their children regularly go to school and get health checkups, “is how you protect people, whatever the source of difficulty that occurs.”
The program was introduced in the Philippines in 2007 after its success in other countries like Mexico and Brazil. It was expanded in March 2008 to respond to the food and fuel price shocks and global financial crisis. The government said the program has covered some 2.2 million poor households across the country out of 5.2 million poor families that qualify.