THE Department of Finance (DOF) has assured members of the regional financial community that the Philippine economy remains strong, with the growth momentum being sustained by the government’s policy and infrastructure reforms.
Finance Secretary Carlos G. Dominguez III said the Philippines remains “on course” toward the government’s medium-term goals of reducing poverty and achieving inclusive growth, driven by stronger investor confidence arising from the rollout of its “Build, Build, Build” (BBB) infrastructure projects and the initial gains from the Comprehensive Tax Reform Program (CTRP).
“The Philippine economy is strong. This year, we will again be among the top performers in the region. The momentum is being sustained by policy and infrastructure reforms. Firm and decisive political leadership pushes forward these reforms,” Dominguez said during the Philippine Economic Briefing held at the Bangko Sentral ng Pilipinas (BSP) headquarters on Tuesday.
The finance chief added that the most remarkable aspect of the country’s economic performance so far this year is its turn into an increasingly investment-led growth, following a 27.4-percent jump in capital formation as President Duterte’s BBB initiative continued to gain momentum.
Confidence in fiscal management has been reinforced further by the successful passage into law of the first package of the CTRP, and this, he said, has led to a 21-percent increase in total revenue collections over the past seven months, while putting more money into the pockets of 99 percent of Filipino taxpayers via hefty cuts in their personal income tax (PIT) payments.
He added that the adept management of the country’s fiscal affairs has also been recognized both by way of improved credit rating outlooks, as well as by the tight spreads given the foreign-denominated bonds that had been floated the past few months, namely, the Panda bond in China and the samurai bond in Japan.
“With these reforms and with the infrastructure program, we expect our economy to create more jobs, improve productivity in all sectors and remove roadblocks to clear the way for more rapid economic expansion,” he added.
Dominguez said the bigger foreign direct investment (FDI) inflows and the successful bond floats overseas following the implementation of CTRP’s first package, the Tax Reform for Acceleration and Inclusion (TRAIN) Law, “dispel concerns that our tax reform is scaring investors away.”
“Our growth performance for the first semester of this year was below expectation, hampered by elevated inflation and supply issues. Like the rest of economies in the world, the Philippines is not exempted from challenges. But what differentiates our economy from many is the decisiveness, the extent, and the pace by which we are implementing policy and infrastructure reforms. We remain one of the best performing economies in the region and our outlook is strong,” he said.
Dominguez further explained that the government also remains on course toward its goals for the medium term and beyond: in line with reducing the country’s poverty incidence from 21.6 percent in 2015 to just 14 percent by 2022; to make growth more inclusive by addressing the infrastructure deficiencies that stymie productivity; and to induce more investments to open up more jobs for the next generation of Filipinos.