The administration of President Duterte is redoubling its efforts to expand the economy at a much faster rate in its remaining quarter to recover the opportunities lost for high and inclusive growth in the two-year pandemic, Finance Secretary Carlos Dominguez III has said.
Armed with the passage and implementation of its hard-won reforms, the Duterte administration “will continue working till the last hour of our mandate to contribute all that we can to our strong economic resurgence,” Dominguez told a virtual gathering of Rotarians.
“The reward for all the work we do now is a better future for the next generation of Filipinos,” Dominguez said in his recorded video message on Friday, March 25, during the first day of the virtual Rotary International District 3870 Conference.
Dominguez said conditions for the Philippines’ post-pandemic rapid growth have never been better, owing largely to how President Duterte exercised strong political will to push game-changing reforms that that had gotten stuck in the legislative mill for decades, and how the entire nation worked together to overcome the challenges of the pandemic-induced global health and economic crises.
“The election season will not be an issue. We have a long history of orderly and peaceful transfers of power. We will transition to the next administration a comprehensive fiscal consolidation plan to bring the country back to its high growth trajectory,” Dominguez said.
With the pandemic now subsiding and the COVID-19 vaccination program proceeding at a quick pace, Dominguez said the country is well on its way to a strong recovery from the pandemic that broke out in March 2020.
“Our risk management strategy culminated in a full-year growth of 5.6 percent in 2021, exceeding target and market expectations. This year, we expect our economy to grow by 7 to 9 percent,” he said.
In 2021, revenue collection was already 5 percent higher than in 2020, while total merchandise trade and remittances were also above the pre-pandemic levels, which all signal a return to robust economic activity, Dominguez said.
Dominguez said he expects to fully bring back revenue collection to pre-pandemic levels this year.
Moreover, the Duterte administration marked its final full year with foreign direct investments (FDIs) reaching a record-high of US$10.5 billion as it continues to gain ground in reducing unemployment, Dominguez said.
The only glitch to this bullish outlook, Dominguez said, is the ongoing Russia-Ukraine crisis, which has magnified the dislocations created by the country’s two-year battle with the pandemic.
He said the Philippines, like all other nations, will most likely experience elevated inflation levels because of the impact of the crisis on oil and commodity prices.
“The Duterte administration is closely observing the developments and it is doing its utmost to mitigate the impact of oil and food price increases on our people. Our priority is to support the vulnerable sectors of our society from the ill effects of inflationary pressures brought about by the conflict,” Dominguez said.
The support will be in the form of cash grants for the bottom 50 percent of the population, fuel subsidies for the public transportation sector, and fuel discounts for small farmers and fisherfolk, Dominguez said.
He renewed his call for all countries to do everything within their power to use all available diplomatic channels to help resolve the conflict in a peaceful manner at the soonest possible time to shorten its global impact.
Dominguez said that while the pandemic disrupted “what could have been the Philippines’ spectacular path to high and inclusive growth,” the government was confident that this setback was only temporary because of the reforms that the Duterte administration had put in place to ensure fiscal stability.
He said revenue collections dropped by an annual average of 21 percent against the pre-pandemic targets in 2020 and 2021; spending rose by P717 billion to fund the government’s pandemic response; the budget deficit ballooned by 100 percent against pre-pandemic levels; and average annual borrowings increased to about P2.5 trillion, all because of the economic shock triggered by COVID-19.
“All of these could have been worse had we not prepared our economy and our people for this difficult period. When President Duterte assumed office in 2016, he laid out a bold zero-to-ten point socio-economic agenda and we have so far delivered 90 percent of this ambitious program,” Dominguez said,
“Many reform measures that sat on the shelves for decades for lack of political will were finally passed and implemented,” he added.
Dominguez said these reforms include lowering both personal and corporate income tax rates as part of the administration’s comprehensive tax reform program (CTRP); improving the fiscal incentives system; and raising excise taxes on ‘sin’ products thrice to help fund the Universal Health Care (UHC) Program.
He also cited President Duterte’s signature program “Build, Build, Build” funded by revenues and the strong support of the Philippines’ development partners; stabilizing the supply and price of rice through the Rice Tariffication Law (RTL) that was finally achieved after more than 30 years of failed attempts under previous administrations; and implementing the long-dormant Real Estate Investment Trust (REIT) Act, which has become a powerful financial instrument for both property developers and small investors.
The Financial Institutions Strategic Transfer (FIST) Act, which ensured the stability of the financial system amid the pandemic-spawned crisis; and the recent signing into law of the amendments to the Retail Trade Liberalization Act (RTLA), Foreign Investments Act (FIA), and Public Service Act (PSA) to further liberalize the economy and bring in more high-value foreign investments, were also passed and implemented during the Duterte administration, Dominguez said.
“I was asked to give an inspirational talk before you today. And to my mind, nothing could be more inspiring than the way our people and our nation have responded to the global health crisis that has brought almost all economies around the world to a near-standstill. Over the past two years of the pandemic, we worked together hand in hand to surmount the challenges of this unprecedented crisis,” Dominguez said. (DOF)
