‘No lost decade under GMA’
The economic and fiscal reforms instituted by former President and now Pampanga Rep. Gloria Macapagal-Arroyo continues to benefit the country and help protect it from external challenges, a former finance chief said yesterday.
Former finance secretary Margarito
Teves was commenting on President Aquino’s repeated assertions that Arroyo’s term from 2001 to 2010 was “a lost decade” for the country’s economy.
Teves, who has been cited as “Asia’s Best Finance Minister” during his stint in government, said the Arroyo administration had laid the foundation which resulted in the Philippines’ credit rating upgrades which started during her term and shortly after she stepped down from office.
“Data show that contrary to President Aquino’s reference to the Arroyo administration as a ‘lost decade,’ the Arroyo administration and Department of Finance had initiated several positive reforms that are benefiting the Philippine economy until today,” he pointed out.
Teves noted that Arroyo’s prudent management of the national government debt and the passage of legislation in support of financial market development like the reformed value added tax have contributed to the strong fiscal performance of the country, which resulted in credit outlook upgrades from negative to stable during the Arroyo administration and positive shortly after July 2010.
He said that Fitch’s upgrade in March 2013 noted that it was Arroyo’s “improvements in fiscal management…that made general government debt dynamics more resilient to shocks.”
Teves recounted that the Arroyo administration’s strong focus on tax reforms also paved the way for increased tax collection revenue, generating the highest revenues by any single measure adopted under any administration.
Arroyo’s Strong Republic Nautical Highway also improved connectivity in the country by integrating land and sea modes of transportation. Indonesia later followed the SRNH model.
Teves stressed that President Aquino should give credit to Arroyo and members of her finance team by acknowledging their contributions in building a stronger economy.
“I believe it would be fair to give credit to former President Arroyo and our colleagues at the Department of Finance for the hard work they have done from 2005 to 2010 and acknowledge the contributions of the previous administration in building the foundations of a stronger economy,” Teves said.
When asked to assess the Aquino administration, Teves said he is commending the administration for sustaining the economic growth that was initiated during Arroyo’s term. But he noted that the growth is still not inclusive.
He said the Aquino administration and the next administration must raise infrastructure spending to five percent of GDP from the present three percent and focus investments on infrastructure bottlenecks that increase the cost of doing business.
He added that the Aquino administration must also modernize the agricultural sector; simplify the application process to build and operate power plants; create a stable regulatory environment which honors contracts with investors; address inconsistencies between increased tax collection and distortionary tax regime; and improve access to basic financial services such as credit, savings, payment of transfer remittances and insurance.
“The economy needs to grow more in order to enlarge the economic pie and ensure that 100 million Filipinos partake of it. Our economy needs to grow eight percent consistently over two decades to achieve an increase in per capita income that will bring us closer to Thailand and Malaysia,” he said.
Earlier, executives from the business process outsourcing industry in the country credited Arroyo for being responsible for the massive growth of the sector that has employed hundreds of thousands of workers.