PH economic officials lure US capital experts
Top Philippine government economic officials recently trumpeted in Washington DC the country’s resilience to external headwinds and its capacity to sustain robust economic growth.
The delegation, led by Finance Secretary Carlos G. Dominguez III and Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno, promoted the Philippines’ profile before a high-level audience at the “Philippine Day Forum” in the US capital.
Around 150 key executives from top US banking, investment, and financial companies were present at the event themed, “Powering Progress through Transformative Reforms.”
“Today, the Philippines is one of the fastest growing economies in the world. Reaching this milestone... is attributable to many years of hard work — especially in building a strong fiscal position and a bureaucracy honed to the task of catalyzing growth,” Dominguez said.
While the Philippines is ranked as among the best performing economies globally, Dominguez noted the “growth is not the final goal of all our efforts.”
“We seek a more dynamic and competitive economy to bring down poverty rates and create more opportunities for our people. The economic team stands by its goal of bringing down poverty incidence from 21.6 percent in 2015 to just 14 percent by the end of President Duterte’s term,” Dominguez said.
For his part, Diokno said that they are prepared to face the three great challenges—growth divergence, policy fragmentation, and technological disruption.
“For the Central Bank, it is a matter of careful commitment and timely action. The economy itself is fundamentally solid. Overall macro-economic conditions provide sound basis for cautious optimism,” Diokno emphasized. Victoria Kwakwa, World Bank’s Vice President for East Asia and Pacific, meanwhile, echoed the same message on the country’s resilience.
“The Philippines has the potential to become the next East Asian success story, and that its vision to become a prosperous, resilient, middle-class society free of poverty by 2040, is an achievable goal – but one that will require continued reform and investment to open the economy, overcome infrastructure backlog, invest in human capital, and build the resilience of the nation, especially as the threat of climate change increases,” Kwakwa said.
At the Forum, Assistant Secretary Tony Lambino also showcased the government’s comprehensive tax reform program, stating it, “is the first time that we are doing tax reform on our own terms – to reduce poverty and inequality, and not for deficit or debt reduction.”
In January 2018, the first package of the Comprehensive Tax Reform Program of the administration took effect, addressing the long-standing need to update the outdated personal income tax system, among others.
On one hand, the law slashed personal income tax rates to make these competitive with regional peers. On the other, it raised excise taxes on fuel and automobile, and imposed excise tax on sugary drinks, thereby raising additional revenues for the government on a net basis, among other
provisions.
The additional revenues help ensure that the government’s “Build, Build, Build” program, the country’s most ambitious infrastructure development agenda to date, is fiscally sustainable.
The Duterte administration expects more tax reforms to be implemented, with proposed bills on other packages already
in Congress for deliberation.
Among these is a bill seeking to slash the corporate income tax rate to boost the country’s competitiveness in attracting foreign direct investments, while rationalizing fiscal incentives to ensure that tax perks are properly targeted, performance-based, time-bound, and transparent. (CSL)