Key officials of the Department of Finance (DOF) are attending the annual spring meetings of the World Bank this month in Washington DC to discuss with global investors, credit rating agencies and representatives of other countries the bright economic prospects for the Philippines under the Duterte administration.
DOF Undersecretary and chief economist Gil Beltran will join Secretary Ernesto Pernia of the National Economic and Development Authority (NEDA), Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. and NEDA deputy director general Rolando Tungpalan in discussing with credit rating agencies the Duterte administration’s plans to sustain the robust pace of the Philippines’ growth via a massive public investment program focused on infrastructure and human capital development.
The Philippine Statistics Authority reported that GDP growth reached 6.9 percent in 2016. Pernia has said he expected the GDP to have grown by 7 percent during the first quarter of this year.
National Treasurer Rosalia de Leon is also set to attend the World Bank Government Bond Market Conference and Technical Workshop on April 24-28, also in Washington DC to discuss with global investors and senior country officials major issues regarding emerging local bond markets.
Finance Assistant Secretary and DOF spokesperson Paola Alvarez will also join the Philippine delegation to the World Bank meetings scheduled on April 20-24.
According to the NEDA, it estimates the Duterte administration’s unprecedented infrastructure buildup, unveiled during the first “DuterteNomics” forum held in Manila last week, to create 106,824 jobs in 2017; 823,696 jobs in 2018; around 1.12 million in 2019; 1.23 million in 2020; 1.399 million in 2021; and 1.705 million by 2022.
“Dutertenomics,” is President Duterte’s economic strategy to dramatically raise funds–in large part through his proposed tax reform program–and spend big on infrastructure, human capital formation and social protection to sustain the growth momentum, attract investments and create jobs, achieve economic inclusion and transform the Philippines into a high middle-income country by 2022, by which time poverty incidence will have been reduced to 14 percent.
If “DuterteNomics” is sustained over the medium term, the government envisions the Philippines to be a high-income economy in one generation or by 2040.
Last year, the International Monetary Fund (IMF) gave its nod to the Duterte administration’s comprehensive tax reform program (CTRP) for being “net revenue positive with due attention paid to equity.”
The World Bank, meanwhile, said the CTRP proposals can become “game changers” that could improve transparency, monitoring and efficiency in tax administration, which could in turn further expand the tax base.
In a recent statement, Fitch Ratings affirmed the Philippines’ investment grade sovereign credit rating at ‘BBB-’ along with a positive outlook on this rating.
Recognizing the country’s sustained growth momentum, Fitch has projected the domestic economy to grow by 6.8 percent this year and 6.7 percent in 2018, or within the government’s growth target range for the next two years, driven in part by an increased spending on infrastructure.
Fitch noted that “macroeconomic performance has remained strong” and “domestic political stability has been maintained” even as the Duterte administration has pursued its campaign against the illegal drug trade.
Finance Secretary Carlos Dominguez III said “Fitch Rating’s latest affirmation of its positive outlook on the Philippines only means that the political chatter emanating from certain quarters has failed to dent the country’s sustained-growth narrative resulting from its strong economic performance, continued political stability and aggressive infrastructure and human capital investments under the Duterte presidency.”
Dominguez said that, ‘To maintain broad policy continuity, the Duterte administration will continue to pursue its 10-point socioeconomic agenda on high—and inclusive—growth, with a focus on closing the infrastructure gap, improving the ease of doing business to attract more investments, and attacking poverty by spending big on human capital formation.”
“Given the positive outlook of Fitch Ratings and other institutions,” he added “the government has more reason to highlight on the country’s growth story by moving ahead on such policy reforms as its Comprehensive Tax Reform Program to ensure the financial sustainability of its ambitious program to eradicate poverty and transform the Philippines into a high-income economy in one generation.”
