DOF chief: Duterte gov’t to usher in ‘irreversible’ economic achievements

By: Ben O. de Vera, Philippine Daily Inquirer, Aug 23, 2017

The head of the economic team is confident that the economic reforms being introduced by the Duterte administration will bring about “irreversible achievements” that will benefit more Filipinos.

“I assure you: this is an exciting economic story, and it has just begun. Stay with us as we stay the course. We will deliver the change that matters,” Finance Secretary Carlos G. Dominguez III said in a statement Wednesday.

For Dominguez, the 6.5-percent gross domestic product (GDP) growth posted in the second quarter “demonstrates well we are on the way to building a dynamic, investments-led and inclusive economy.”

The Philippines’ economic expansion during the April to June period remained among the fastest in the region. For 2017, the government targets 6.5-7.5 percent GDP growth.

Ultimately, the strong growth rates must redound to an economy where “the incidence of poverty is significantly reduced, incomes have improved and domestic consumption is strong,” Dominguez said.

The Duterte administration aims to slash the poverty rate to 14 percent by 2022 from 21.6 percent in 2015.

“We expect even more impressive numbers in the succeeding quarters as private investments begin moving and as the infrastructure program gathers steam,” Dominguez added, referring to the “Build, Build, Build” program.

Under “Build, Build, Build”, the Duterte administation plans to usher in a “golden age of infrastructure” by spending a total of up to P9 billion on hard infrastructure until 2022.

Dominguez nonetheless assured that the ambitious infrastructure program “will not come at the sacrifice of fiscal discipline.”

“It will not be a reckless growth that incurs unsustainable debt and causes inflation to spike. We have set clear quantifiable targets against which our performance might be measured,” Dominguez said.

As domestic interest rates remain relatively low, the Duterte administration wanted to finance its programmed wider budget deficit equivalent to 3 percent of GDP in the next six years through a borrowing mix of 80-percent local and 20-percent external.

As for the government target of 7-8 percent GDP growth from 2018 to 2022, Dominguez said it will be achieved “on the basis of strong domestic demand and reliable remittance and investment inflows” while keeping inflation at 3 percent or below.

“The country invested much over the past three decades working down the national debt, improving revenue flows and containing the budget deficit to achieve today’s strong fiscal position, which came at the expense of postponing capital investments and the expansion of social services,” Dominguez noted.

Given such “sacrifice,” the Finance chief said “now is the time to catch up and modernize our economic base.”

“Now is the time to deliver the benefits of increased social spending for our people. Now is the time for our economy to break out from slow growth and begin performing as the region’s dynamo,” Dominguez added.

“Observe the other indicators of economic performance: the reduction of involuntary hunger incidence, decreased unemployment and underemployment rates, strong agricultural output and exports, greater investment inflows. These are transparent numbers. We aim to show improvement in all of these year after year,” according to Dominguez.