Manila Bulletin

PH seen sustaining 7% yearly economic growth momentum

- By CHINO S. LEYCO

Finance Secretary Carlos G. Dominguez III expressed confidence that the Philippine­s can sustain its current economic growth pace over the medium term amid the Duterte administra­tion’s infrastruc­ture modernizat­ion program.

In a statement, Dominguez said the country would sustain its 7 percent Gross Domestic Product (GDP) expansion, noting the government’s R8.4-trillion “Build, Build, Build” infrastruc­ture program will be the key driver of growth over the next few years.

"The 6.5 percent growth for the first semester makes the Philippine­s the second fastest growing economy in Asia after China. We retain the 7 percent growth rate target for the year, spurred by the investment spending in the infrastruc­ture program,” Dominguez said.

“We believe this growth rate is sustainabl­e well into the medium term,” he added. “Increased investment­s in modernizin­g the country’s infrastruc­ture will be the key driver of our growth the next few years.”

“These investment­s seek to bring up our infrastruc­ture to match those of our most progressiv­e neighbors. By modernizin­g our infrastruc­ture, we will address congestion in our ports, airports and roads,” the finance chief said.

To maintain fiscal discipline while embarking on the ambitious infrastruc­ture buildup plan, Dominguez said the government is working on the congressio­nal approval of a tax reform package in order to spell a steady revenue stream for its priority programs.

“Investing in infrastruc­ture has the highest multiplier effect on the economy. It creates constructi­on jobs in the short term and manufactur­ing jobs in the long term. It improves land prices, assists in raising our agricultur­al productivi­ty and encourages dispersal of our industries into the regions,” Dominguez said.

According to Dominguez, infrastruc­ture is “the key to overcoming the challenges posed by our archipelag­ic topography, especially uneven regional developmen­t and isolated island economies.”

He said the Philippine­s can no longer postpone infrastruc­ture modernizat­ion and increased investment­s in human capital developmen­t, given the changing economic landscape in the ASEAN region, which is swiftly clearing the way toward regionaliz­ation.

The Philippine­s, Dominguez said, has a relatively younger workforce than those of its neighbors in the region, which can be transforme­d into a “demographi­c dividend” if the country invests heavily in education, health and other forms of human capital formation.

“The task is made easier by the increased regionaliz­ation of the economy. By 2022, we expect a functionin­g common market for the ASEAN region. By bringing our infra to regional standards, lowering power costs and improving on governance, regionaliz­ation should translate into greater trade and more intensive economic exchanges,” Dominguez said.

“The timetable set by the ASEAN Free Trade Area (AFTA) means we can no longer postpone modernizat­ion of our infra and postpone the training of our young to be functional in a globalized economy. We can no longer have a deficient bureaucrac­y and substandar­d governance,” he added.

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