Finance Secretary Carlos Dominguez III has assured the public that the government is on track to achieving its targets for high growth and economic inclusion as it continues to enjoy a sound fiscal position notwithstanding massive investments in its centerpiece “Build, Build, Build” infrastructure program.

According to Dominguez, the higher revenue take from excise taxes, which is a result of the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Law, is expected to go up further with the succeeding packages of the Comprehensive Tax Reform Program (CTRP) that the DOF is pushing in the Congress.

He said the shift from quantitative restrictions (QR) on rice to tariffs on imports will also give an extra boost to government revenues and, more importantly, pull down the retail cost of this staple primarily for the benefit of low-income families.

“All in all, we remain in a good fiscal position notwithstanding the massive investments the ‘Build, Build, Build’ program entails. We are well on our way to achieving all our growth and economic inclusion targets,” Dominguez said.

“Our optimism is supported by our prudence,” Dominguez added. “The future looks well.”

Dominguez said an even more aggressive spending from hereon on the “Build, Build, Build” program and other poverty-reduction initiatives would let the Duterte Administration hit its target of a GDP (Gross Domestic Product) expansion of 7 percent or better and a reduced poverty-incidence rate of 14 percent over the medium term.

“President Duterte’s commitment to attaining an investment-led and inclusive economy via a massive public spending strategy would usher in what the Asian Development Bank (ADB) has forecast to be the ‘golden age’ of the​ Philippines’ economic growth​,” said Dominguez, following today’s announcement by the Philippine Statistical Authority (PSA) of a GDP growth of 6.8 percent in the year’s first quarter.

The PSA said in its report that the industry sector recorded the fastest growth at 7.9 percent, while the services sector expanded 7.0 percent and agriculture. 1.5 percent.

According to the PSA, the services sector had the highest contribution to GDP growth with 4.0 percentage points, followed by industry with 2.7 percentage points and agriculture with 0.1 percentage points.

Socioeconomic Planning Secretary Ernesto Pernia noted that this quarter’s GDP growth was the 10th straight quarter of economic expansion at above 6.5 percent.

“With President Duterte’s foreign policy recalibration, which has enabled the government to secure ODA (official development assistance) from our friends in the region plus grants and concessional loans from multilateral institutions; above-target performance by our revenue agencies as a result of the TRAIN (Tax Reform for Acceleration and Inclusion) Law; and investment-grade credit ratings responsible for successful bond floats here and abroad, the government now enjoys a large headroom for high—and inclusive–growth,” Dominguez said.

Dominguez said that for the first quarter of this year, revenues reached P619.8 billion, representing a 16 percent year-on-year increase and is also 16 percent above the January-March target.

The BIR collected P423.1 billion, which is 14 percent higher than the collected amount in the first quarter last year and 17 percent higher than programmed collections, he said.

“Our revenue collection from excise taxes introduced under TRAIN exceeded expectation. We believe it will continue doing so,” Dominguez said.

The 2018 first-quarter receipts of the Bureau of Customs, meanwhile, amounted to P129.8 billion, representing a 25 percent hike from the collections for the first quarter of the previous year.

Dominguez said non-tax revenues during the first quarter grew by 17 percent to P61.4 billion over the same period last year, while the Bureau of the Treasury collected P22.8 billion, or 1 percent lower than last year’s collections as a result of the contraction of its managed funds.

“We expect an average of 15.1 percent growth in revenues from 2018 to 2022. From 14.2 percent in 2017, we expect our tax effort to increase to 16.6 percent of GDP by 2022,” Dominguez said.

National government spending, on the other hand, expanded by 30 percent year-on-year to total P313 billion in March, Dominguez said.

“For the second straight month, disbursements outpaced revenues. We registered a P162.2 billion deficit in the first three months of the year. While significantly higher than the deficit recorded for the same period last year, our deficit falls within the programmed 3 percent of GDP,” he said.

Dominguez said additional revenues will be provided by the CTRP’s succeeding packages, supplemented by an additional motor vehicle user charge now being considered by a technical working group at the House of Representatives, the removal of the value-added tax (VAT) exemptions on domestic coal and on gaming, the proposal in the Congress for a sharper increase in sin taxes, and the shift from quantitative restrictions on rice to tariffs.

He noted that the government’s unprecedented investments in physical and human infrastructure would supercharge the economy; attract more investments, create a lot more jobs, especially for our young workforce; and liberate millions of Filipinos from poverty—which are in keeping with President Duterte’s electoral mandate.

The “Build, Build, Build” program is now in full swing, he bared, with 75 big-ticket infrastructure projects worth $170 billion and designed to reverse regional underdevelopment and income inequality by creating growth corridors all over the country.

-oOo-