7% GDP growth sustainable over the medium term

FINANCE Secretary Carlos Dominguez III has expressed confidence that the Philippines can sustain a 7 percent gross domestic product (GDP) growth rate over the medium term, fueled by an infrastructure modernization program under the Duterte administration that will supercharge the economy, disperse industries to the countryside, and create jobs for the country’s young and talented workforce.

Dominguez said the government’s P8.4-trillion “Build, Build, Build” infra program will be the key driver of the country’s growth over the next few years, with investments increasing to about 7 percent of GDP, higher than the average in the Association of Southeast Asian Nations (Asean) region.

"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. We believe this growth rate is sustainable well into the medium term,” Dominguez said at a recent business forum.

“Increased investments in modernizing the country’s infrastructure will be the key driver of our growth the next few years,” he said.

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

To maintain fiscal discipline while embarking on this infra buildup plan, he 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 investment 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 archipelagic topography, especially uneven regional development and isolated island economies.” DOF