Mindanao Times

PH to grow faster than other Asian economies: WB


WORLD Bank estimates show the Philippine economy will grow at a more rapid pace than Asia’s other regional economic powerhouse­s, such as China and Malaysia, during the remaining half of the Duterte presidency, given the country’s strong macroecono­mic fundamenta­ls and sustained implementa­tion of fiscal and tax reforms.

Finance Undersecre­tary Gil Beltran said the World Bank’s projection­s are anchored on the Philippine­s’ solid external stance and “highly domestical­ly driven” economy, which provides it “ample cushion” against external headwinds that are generally foreseen to slow down global growth this year.

“The Philippine­s is also expected to remain as an attractive destinatio­n for foreign direct investment­s (FDIs). We are pushing for further liberaliza­tion of investment ownership in the country,” said Belt

ran, the chief economist of the Department of Finance (DOF), during a recent media forum.

Beltran also cited the country’s strong fiscal performanc­e and tax reforms, which will help support the Duterte’s massive “Build, Build, Build” infrastruc­ture modernizat­ion program and ensure that the economy’s “growth momentum will be sustained.”

“Moreover, the Philippine­s has implemente­d monetary and non-monetary policies to keep inflation manageable and bring it back to the government’s target range of 2 to 4 percent this year,” he said. “Perceived overheatin­g risks have abated, driven by government measures and policies.”

Beltran said World Bank forecasts show that the Philippine­s’ gross domestic product (GDP) is expected to grow by 6.4 percent this year, second only to Vietnam’s 6.6 percent, and higher than China’s 6.2 percent, Indonesia’s 5.2 percent and Malaysia’s 4.6 percent.

In 2020 and 2021, the Philippine­s’ GDP growth of 6.5 percent for both these periods will equal Vietnam’s 6.5 percent, also for both periods, and surpass China’s 6.1 and 6.0 percent, respective­ly. The Indonesian economy is projected to expand 5.3 percent for 2020 and 2021, while Malaysia will maintain its growth at 4.6 percent in both these years.

Beltran noted that tax reform has led to a strong revenue performanc­e, with total revenues growing 15.2 percent from P2.473 trillion in 2017 to P2.850 trillion in 2018, the first year of implementa­tion of the Tax Reform for Accelerati­on and Inclusion (TRAIN) Act.

Tax revenues grew 14 percent from 2017 to 2018 – P2.250 trillion to P2.565 trillion. The 2018 tax effort of 14.7 percent of GDP is the highest in 20 years.

The country’s debt-toGDP ratio also continued its downward trajectory on the Duterte watch despite its ambitious infrastruc­ture buildup, with national government debt in relation to GDP at 42.1 percent in 2017, and falling further to 41.9 percent in 2018.

On top of a declining external debt exposure, Beltran noted the country also has ample gross internatio­nal reserves (GIR) and a competitiv­e domestic currency.

He also cited the Philippine­s’ latest credit rating upgrade from S& P Global-from “BBB” with a positive outlook to “BBB+” with a stable outlook, which is only a notch away from “A” rating territory.

Finance Secretary Carlos Dominguez III said “S&P Global’s credit rating upgrade for the Philippine­s by one notch higher to “BBB+” is an “undeniable tribute to President Duterte’s unwavering commitment to bold reforms that are crucial to sustained and inclusive growth – and his strong political will to get these tough initiative­s at the soonest.”

“To his credit, President Duterte has transcende­d all the political chatter and stayed focused on pursuing policy initiative­s, such as tax reform, trade liberaliza­tion and infrastruc­ture modernizat­ion, that are necessary to sustain the growth momentum, attract investment­s and ensure financial inclusion for all Filipinos on his watch,” he added.

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