DOF bares economic priorities for next 3 years

MANILA, Philippines — The Department of Finance (DOF) has outlined five major economic policies that will be prioritized by the Duterte administration in the second half of its term to further propel economic growth and provide opportunities for Filipinos.

In a press briefing, Finance Secretary Carlos Dominguez said the government will continue to pursue five economic programs in line with its goal of achieving high, long-term gross domestic product (GDP) growth and poverty reduction.

“Going forward, we have five major economic priorities,” Dominguez said following the pre-State of the Nation Address (SONA) Forum yesterday.

“All these will help us ensure further GDP growth, lower poverty and provide more opportunities to all Filipinos. They will also complete the President’s promise in the zero to 10-point socioeconomic agenda,” he said.

The first among these policies, he said, is to accelerate the implementation of the Build Build Build infrastructure program.

“We have, for the first time in history, exceeded five percent of GDP spending on infrastructure and we are on track to achieving seven percent of GDP in three years’ time. This is consistent with achieving an eight percent GDP growth,” he said.

Secondly, the finance chief said the government also wants to pursue the passage of the remaining packages under the Comprehensive Tax Reform Program (CTRP) to ensure sustainable financing for its infrastructure and human capital development programs.

Among the tax reform packages yet to be passed by Congress include Package 2, which aims to lower the corporate income tax and modernize the fiscal incentives system; Package 3, which seeks reforms in the property valuation system; and Package 4, which rationalizes capital income taxation.

The DOF is also looking forward to the approval of the remaining provisions under Package 1B – the motor vehicle user charge, lifting of bank secrecy and automatic exchange of information – and Package 2 Plus – particularly, the increase in alcohol excise tax.

Dominguez expressed “very high” confidence that the 18th Congress would support the remaining tax measures as the result of the recent election has proven wrong the stigma that lawmakers who back tax measures would lose support from the public.

“The confidence level is very high. You have to remember, the last time the government attempted a tax reform was in 2001 when former president Gloria Arroyo and Sen. Ralph Recto increased the value added tax rate from 10 to 12 percent. As a result of that, Sen. Recto lost the next election,” Dominguez said.

“But in this election, all those who supported the tax reform won,” he added, citing in particular Sen. Juan Edgardo Angara, who used to be chairman of the Senate ways and means committee.

Thirdly, Dominguez said the administration also seeks to pursue economic reforms that would increase foreign direct investments and jobs.

These include the amendment of the Public Service Act, and the liberalization of retail trade.

The fourth priority cited by Dominguez is the improvement in the implementation of existing reforms, such as the National ID System, Ease of Doing Business Law, Universal Health Care Program, and Rice Tariffication Act.

“Fifth and finally is to improve the productivity of agriculture, including distribution of individual titles to land reform beneficiaries,” Dominguez said.

In his speech during the Pre-SONA Forum, Dominguez said President Duterte has met expectations and kept his campaign promise of reforms towards the goal of sustaining high growth and alleviating poverty.

He said the economy grew an average of 6.5 percent during the first 11 quarters of the Duterte administration, while poverty incidence declined to 21 percent in the first half of 2018 from 27.6 percent in the first half of 2015.

Dominguez said the Philippine economy is expected to perform even better in the years ahead, powered by the rapid modernization of the country’s infrastructure and further reforms in its policy for inclusive growth.