Tax reforms, infrastructure, economic diplomacy for 7% RP economic growth

Despite continuing controversies in the political arena — all a part of a vibrant Philippine democracy — and with legislators in both houses of Congress conducting telenovela-like public hearings supposedly “in aid of legislation,” many business people among big companies and SMEs are still bullish on the Philippines’ robust growth momentum.

A growth forecast of 6.5 to 7 percent Philippine economic growth for 2017 is forecast and even higher than 7 percent for 2018, as long as proposed bold tax reforms are passed this year, many new infrastructure projects begin implementation and we continue independent foreign policy reforms to benefit our economy — this, according to former Finance Secretary Dr. Bobby de Ocampo and Employers Confederation of the Philippines (ECOP) president Ambassador Donald G. Dee.

BDO and SM Group leader Teresita “Tessie” Sy Coson recently said: “Our underlying economy has been conducive to business activities. There is more optimism as the growth of the Philippine economy continues, which gives us reason to further expand and grow our business. Our group, SM, is upbeat in our expansion in the Philippines. Our company, SM, looks forward to more growth in the years to come with this government.”

In a recent interview with CNBC, Ayala Group CEO Jaime Augusto Zobel de Ayala also expressed confidence in the Philippines’ strong economic growth prospects due to the government’s decisive and comprehensive plans for many new infrastructure projects. He also cited the strong consumer spending and the continued increase of foreign exchange remittances by millions of overseas Filipino workers (OFWs).

Asia’s new Silk Road is like 1950s US interstate highway boom

De Ocampo prefers to describe our independent foreign policy as “the maturing of the Philippines’ diplomacy,” guided by the pragmatic imperatives of our national interests, which he hopes can make the Philippines benefit from China’s Belt and Road Initiative, the so-called New Silk Road. He compares the initiative to America’s 1950s interstate highway construction boom, which helped North America become prosperous; he foresees China’s Belt and Road Initiative connecting Asia to Central Asia, Moscow and southern Europe as a catalyst for a transcontinental economic boom. 

De Ocampo and Dee made the comments to media and guests at the Pandesal Forum held at Kamuning Bakery Café, Quezon City, expressing the optimism of many business people but complaining about “too much political noise by politicians” as unnecessary and distracting. Ambassador Dee also expressed concern that the cost of living in the Philippines is higher now than it is in Thailand and Vietnam, a challenge all sectors of the Philippines should work to improve.

Support for Charter change on economic provisions

Both De Ocampo and Dee expressed support for Charter change on economic provisions to make the Philippines more globally competitive and enticing to foreign investors, but Dee urged more careful study on details of the political aspects of federalism proposals.

Dr. De Ocampo said the planned infrastructure projects will help ensure sustainability and inclusiveness to speed up Philippine economic growth, while Ambassador Dee urged politicians and other sectors “not to lose focus” on the positive economic growth story of the Philippines, so as to avoid “sending wrong signals to the world about our true situation.” The ambassador urged Philippine legislators to “stop wasting time” and support important socio-economic reforms. Dee said to politicos: “Let us be constructive or shut up.”

Philippine Veterans Bank chairman and Makati Business Club co-vice chairman Dr. De Ocampo said by fast-tracking the tax reform bill and new infrastructure projects, “Philippine economic growth can accelerate next year 2018 to 7 percent or higher, and this shall continue in the coming years.”  De Ocampo said many businessmen are bullish about the Philippines’ many infrastructure projects, including new bridges, highways, a proposed subway, trains and MRT lines, and further airport construction.

Ignore the shocking words, focus on Duterte ‘being a doer’

De Ocampo cautioned local and foreign investors that they shouldn’t be shocked by the unorthodox language of President Duterte but “appreciate his being more a doer than a talker, his leadership style can best be described as that of action-orientedness and authenticity.” He said that, as Finance Secretary under President Fidel V. Ramos in 1995, the government tasked him to issue a memo to move international flights to Clark Air Base as an alternative new airport, but it took so many years; yet now President Duterte is doing it with expansion plans for Clark airport terminal starting this year.

Also an original chairman of the MRT firm, De Ocampo said he is very impressed with the Duterte government’s plan for expanding MRT with new trains and his bold political will to build Metro Manila’s first-ever subway system, to be signed this year.

De Ocampo said the Senate proposes a tax reform bill that can net P130 billion in new revenues for government, while the Department of Finance has proposed a tax reform bill to raise P160 billion. He expects a compromise can be reached for an amount somewhere in the middle of both proposals. 

Educated in Ateneo de Manila University, University of Michigan and London School of Economics, Dr. Bobby De Ocampo is now chairman of Philippine Veterans Bank, co-vice chairman of Makati Business Club and past president of the Asian Institute of Management (AIM). Educated in De La Salle University, Ambassador Donald Dee is now also honorary chairman and chief operating officers of the Philippine Chamber of Commerce & Industry (PCCI), chairman of Confederation of Garment Exporters of the Philippines (CONGEP) and vice chairman of Philippine Exporters Confederation.

Also present at the discussion was National Security Council Deputy Director-General Admiral Damian Carlos, who said President Duterte hopes to end all insurgencies by the New People’s Army (NPA), the Muslim rebels of Moro Islamic Liberation Front (MILF) and Moro National Liberation Front (MNLF) by the end of his term and conclude peace agreements with these groups.

Admiral Carlos described the national security situation of the Philippines now as “robust and good, thus conducive to sustained economic development, investments and growth.”

Can the pacification of Marawi City be over before Christmas? Can we as a society rehabilitate and totally rebuild this once economically vibrant city to jumpstart not only the revival of resource-rich but troubled Mindanao region, but also as an inspiring symbol of Philippine economic renaissance so that we can woo more foreign investors and tourists?

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