Finance Secretary Carlos Dominguez III has said in a business forum in the United States that the Philippines has managed to implement bold reforms over the past three years because President Duterte not only enjoys broad and deep popular support but also has the strong political will to push such game-changing initiatives.

Dominguez said that in the first half of the Duterte presidency, it has proven its steadfast resolve and capability to shepherd tough reforms, including through the Congress, and to carry out big-ticket infrastructure projects on time and within the targeted budget deficit ceiling.

“We are very fortunate to have a President whose latest approval rating is 79 percent. We have a President who has a large fund of political capital, and he knows that by using his political capital, it actually increases it rather than brings it down. That is the most fundamental factor we have,” said Dominguez during a recent business forum in Washington D.C. when asked how the Duterte administration had managed to put in place politically difficult reforms in its first three years in office.

These reforms include, among others, the first package of the Duterte administration’s tax reform program, which slashed personal income tax (PIT) rates for the benefit of 99 percent of individual taxpayers while adjusting excise taxes on fuel, automobiles, mining and non-essential products; a new law further strengthening the central bank, a national ID system, adoption of digital technologies and new platforms to improve governance and improve the ease of doing business, and a law liberalizing rice trade in order to pull down the cost of this staple food.

Dominguez also pointed to the fact that the government carried out such reforms absent of a crisis and without any external influence compelling it to implement them.

“We have a very tough President, and one popular enough to face down entrenched interests. That’s number one,” Dominguez said.

In the latest survey done by the independent polling firm Social Weather Stations (SWS), President Duterte’s net satisfaction rating went up from plus-60 in December 2018 to plus-66 in the first quarter of 2019, which is within the “very good” range. The survey found 79 percent of adult Filipinos satisfied with the President’s performance, and only 13 percent dissatisfied and 8 percent undecided.

Yet another key factor, Dominguez said, is again, President Duterte, whose broad experience in governance, having managed one of the Philippines’ largest cities—Davao—as its mayor for 20 years.

“He (Duterte) cleaned up that city from being one of the worst cities with a very high crime rate, and he knows what it takes and he knows what it takes fiscally as well,” Dominguez said.

Among the reforms implemented on the Duterte watch, rice tariffication will not only bring down the cost of the Filipino’s food staple and push down inflation, but would also “greatly add to the flexibility of our economy, and open the door to dramatic changes in our agriculture” sector, Dominguez said.

Tax reform, meanwhile, has cut PIT rates for most individual taxpayers, and, in turn, increased their spending power as indicated by “rising demand and improved profitability of domestic enterprises across the board,” Dominguez noted.

Moreover, this tax reform law attained 108 percent of its revenue target in its first year of implementation and improved revenue flows for the government, with the Philippines’ tax effort now at 14.7 percent of GDP—“the best number we have achieved in two decades,” he said.

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