Headlines Skinning Left, pagematch: , sectionmatch: 1
Headlines ( Leaderboard Top ), pagematch: 1, sectionmatch: 1

Philippines is Asia’s rising tiger – World Bank

DAVAO CITY, Philippines – The Philippines is now the “rising tiger” of Asia as the government’s economic initiatives and political reforms have begun to bear fruit, the World Bank said yesterday.

“The Philippines is no longer the sick man of East Asia, but the rising tiger. There is macroeconomic stability, and the fiscal situation of the government is sound and improving. The fight against corruption is being waged with determination and it is paying off. Transparency is improving everywhere in the Philippines,” Motoo Konishi, WB country director for the Philippines, said at the closing of the 2013 Philippine Development Forum at the Marco Polo Hotel here.

Konishi said foreign funding agencies are convinced of the government’s sincere commitment to good governance and that such sincerity has attracted investments and paved the way for inclusive growth in the coming years.

“The objective of putting the country irreversibly onto a path of inclusive growth – growth that creates jobs and reduces poverty is within reach,” the WB official said. “We have noted the hard-fought battles over key reforms. We have seen the improvements in the budget: better prioritization, better execution, better monitoring and more transparency,” he pointed out.

“We welcome the scaling up of expenditures on health, education and social protection. We are seeing infrastructure spending going up and becoming more strategic and efficient,” Konishi added.

Speaking in the same forum, President Aquino voiced his wish for stronger partnership between the country and funding institutions.

Headlines ( Article MRec ), pagematch: 1, sectionmatch: 1

“It is my hope that the partnerships that have been forged here, together with the practices of collaboration and of open dialogue, extend beyond this day - that you continue to embody the spirit of cooperation and service, and become an inspiration to others,” Aquino said in a speech before some 300 delegates to the forum.

“In this way, we will be able to realize fully the commitments we made to each other and the Filipino people, and walk along the straight path together to the fulfillment of our dreams for the Philippines,” he said.

He said the country is now in a better position to utilize official development assistance from foreign development partners.

“The continued presence of the country’s development partners is a sign of confidence. The Philippines Development Forum represents the very best of the ideals behind public-private partnerships,” he said.

The President said that through the PDF, “we affirm the necessity of positive participation: not merely to point out the problems, but more importantly, to become part of the solution.”

“When different sectors bring their areas of expertise to the table, when we set aside pettiness and parochialism in favor of service - that is when we can put the puzzle pieces together and build an even stronger Philippines,” Aquino said.

“Today, change is tangible - from the thousands of new classrooms, to the new businesses setting up shop, to the tourists who continue to flock our shores. But this is only the tip of the iceberg: a sea change is also taking place in our mindsets. Instead of knee-jerk solutions, we are thinking things through to find the best possible answers,” he said. “Instead of apathy, a strong demand for justice. Instead of passivity, a newfound determination and optimism that positive change can be won for the country. Our people have seen how we all have worked to empower them: they know what true dedication to service can achieve - and they will demand nothing less in the future.”

Aquino said, “2016 represents a deadline of which I must always be mindful: the time I will have to give up the privilege of serving my country as its president.”

Mindanao priority

The President also announced his administration’s greater emphasis on Mindanao development.

“The Filipinos have always known Mindanao to be the Land of Promise, because of its great potential for growth and development. Unfortunately, for the longest time, this potential remains untapped and its promise unfulfilled. This history is precisely why the development of Mindanao is a priority for our administration,” he said.

For his part, Finance Secretary Cesar Purisima said, “the breakthrough in the peace process has become an impetus to greater investments not only in the Bangsamoro but also in the entire Mindanao.”

He was referring to the signing of a framework peace deal between the government and the Moro Islamic Liberation Front.

“The potential of Mindanao for agriculture and tourism, among other industries, has long been recognized and will soon be realized,” Purisima said.

“When government, civil society, business and development partners work together, we can deliver better results through synergy. Now we must work harder to accelerate and entrench reforms so that we can ensure the irreversibility of good governance,” he added.

He also said the Philippines is “back in the limelight” because of its “remarkable and impressive performance in 2012 - a stellar and resilient economic growth, a robust fiscal position and a renewed trust in our institutions.”

He said that in the next three years, the administration would focus on creating an environment conducive to growing business and creating jobs, particularly in the agriculture and tourism sectors. Purisima said this should involve trimming the cost of doing business as well as streamlining regulatory processes.

For Socioeconomic Planning Secretary Arsenio Balisacan, new legislation may have to be considered to help the administration achieve its development goals.

“To support this, Congress needs to enact critical laws such as the National Land Use Code, the Cabotage Law. These would have country-wide impacts, but more so in Mindanao, which is recognized as the food basket of the country and where inclusive growth would make the greatest difference in people’s lives,” he said.

Raising revenues

Purisima, meanwhile, said that while government earnings have improved, there’s still much to be done in boosting revenue collection.

“For the third quarter 2012, our revenue effort is about 14.7 percent of Gross Domestic Product with a tax effort of 13.1 percent. This is an improvement already of over one to one and a half percent since we took over. But we want to bring this number up to 16 percent tax effort by the end of the term of President Aquino and 18 percent on revenue wide basis,” Purisima said in his speech.

He said they would give greater attention to personal income taxation, estate taxes, as well as collection from the Bureau of Customs.

“First, on personal income taxation. We plan to increase what we collect in individual income taxes from self-employed Filipinos from about P12 billion to hopefully P300 billion by the end term of President Aquino. This looks like a very big job but when you analyze what the average payment per tax payer is in this sector, it’s only about P7,000 which puts their total income at about the same level as minimum wage earners,” he said.

“If we’re able to increase to P200,000, that should build our collection to P300 billion. That alone is about three percent of GDP,” Purisima added.

Furthermore, estate taxes collected in the past 10 years stood only at P800 million to P1 billion.

“I believe that this is too low and our goal is to increase it to P50 billion annually by the end of the term of President Aquino. Again, a big job but you consider the fact that asset prices in the country have increased dramatically in the past 10 years,” he said.

“I think there is basis to be a bit optimistic that we can hit this goal if we work together not only with BIR  (Bureau of Internal Revenue) but with civil society who should help us improve our information gathering,” he said.

“I know of several Filipinos who passed away the past 36 months alone who should have paid over a billion just on their estate,” he said.

He also cited the need for the BOC to improve its collection efforts.

He said the agency’s collection effort declined from 2.9 percent in 2010 to 2.7 percent in 2011. “In 2012, it’s up a bit, 2.8 percent. It’s true we’ve been reducing our tariff rates and that will continue to reduce. Our level of importation also increased and the value of those importation is also increasing as well as the fact that we have a 12 percent VAT (value added tax),” the finance chief said.

Purisima said the government is looking into establishing a minimum value for each container of export products. 

“We’re looking at a value of about 1.5 million for 20-foot container. If we do that and we’re able to collect, then that means we’ll collect at least P300,000 per container. On the assumption that there are at least two million containers going into the country subject to VAT and duties, that’s P600 million. That’s why we really would like to invest in the information system of Customs, as well as the Department of Finance,” he added.

He also said the government is currently reconciling the country’s trade data with its trade partners.

“Normally, the exports to us of our trade partners are much more than our imports from them. For example, in the case of China, total trade - which is imports plus exports in their books - is about $32 billion. In our books, it’s about $16 billion,” he said.

“We’d like to work with the World Bank, the IMF and other bilateral partners to reconcile these numbers. And I’m sure that if we’re able to reconcile these numbers, we’ll be able to set this benchmark then we’ll have a good chance in improving Customs performance,” he added.

Headlines ( Article MRec ), pagematch: 1, sectionmatch: 1
  • Follow Us:
Healines Skinning Right, pagematch: , sectionmatch: 1