Economic managers concerned about PH growth sustainability—DOF exec

By: Ben O. de Vera – @inquirerdotnet, Philippine Daily Inquirer / January 06, 2017

Pushing through with proposals to slap a two-year ban on farm land conversion as well as hiking the Social Security System’s (SSS) pension benefits without raising members’ contributions will “undermine” the economic growth momentum that the country currently enjoys, a high-ranking Department of Finance (DOF) official said on Friday.

Finance Assistant Secretary Paola Alvarez—daughter of House Speaker and PDP-Laban Party stalwart Pantaleon Alvarez—came to the defense of the economic managers who are opposing the Department of Agrarian Reform’s (DAR) proposal to impose a moratorium on converting agriculture land into other uses and also warned that the SSS could go bankrupt if Congress pushes for the P2,000 pension hike.

“All policy recommendations to President (Rodrigo) Duterte by Finance Secretary Carlos G. Dominguez III and the other economic managers are anchored on sustaining high growth and enabling all sectors across all regions to benefit from it in the form of more jobs, higher incomes and better living standards,” said Alvarez, who is also the DOF’s spokesperson.

“Our economic managers are working on the premise that the Duterte government needs more, not less, funds to finance President Duterte’s 10-point socioeconomic reform agenda for high—and inclusive—growth. To pander to short-term populist initiatives will be a disservice to the President and the overwhelming majority who have given him the electoral mandate to effect real change on his watch,” Alvarez said.

“The big picture is that the Duterte brand of social reforms is anchored on sustaining high growth and enabling all sectors across all regions to benefit from it. This is the basis of all policy recommendations to President Duterte by Secretary Dominguez and the other economic managers,” Alvarez added.

“To transform the Philippines into an upper middle-income economy by 2022, we need to invest big in infrastructure, human capital and social protection—to a level equivalent to a 3-percent budget deficit. Hence, the need to generate a lot more funds to bankroll these pro-poor and pro-growth programs,” said Alvarez.

“The government certainly cannot do so if the President’s economic team were to support populist proposals willy-nilly just to earn political ‘pogi’ points for the Duterte administration—oblivious to their disastrous impact on revenue generation for the social reform agenda on high and inclusive growth,” she added.

In the case of the proposed SSS pension hike, Alvarez said it will be unwise to use taxpayers’ money to keep the pension fund afloat and divert money that could otherwise be used to fund the pro-poor and pro-growth programs.

“It would actually be anti-poor if the economic managers were to suggest to the President for all taxpayers, including wage earners and other low-income workers, to pay for the pension hike of some two million private employee-pensioners,” Alvarez pointed out.

For the economic managers, only with a corresponding increase in members’ and employers’ contributions should President Duterte give his go-signal to the proposal in Congress to implement a P2,000 across-the-board increase in the state-run SSS’s monthly pension.

Specifically, the heads of the DOF, the Department of Budget and Management (DBM) as well as the National Economic and Development Authority (Neda) pitched an increase in members’ contributions to 17 percent in four tranches of 1.5 percentage point each until 2020 from 11 percent at present.

As for the proposal to implement a moratorium on farm land conversion, the DOF, DBM, Neda, the Department of Trade and Industry as well as the Housing and Urban Development Coordinating Council had opposed the DAR-shepherded draft EO as they claimed such “can have adverse impacts on agriculture sector revitalization, meeting the housing backlog, accelerating infrastructure development, and other economic activities which are currently on expansionary mode.”

The five agencies had hence instead urged expansion of agriculture-based processing as well as manufacturing not only for the domestic market but also for export to make food affordable, increase farmers’ incomes and also generate more export revenues. RAM

Read more: https://business.inquirer.net/222519/economic-managers-concerned-ph-growth-sustainability-dof-exec#ixzz4VFUmfxKH
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