The economic managers of the incoming administration of President-elect Rodrigo Duterte vowed to transform the national economy that will bring not only social peace but also communities that will nurture the Filipino people in the next six years.
Incoming Finance Secretary Carlos Dominguez said this can be pursued through accomplishing the 10-point socio-economic program of the Duterte administration that were presented to the business sector during the first day of the two-day Economic Forum dubbed: “Sulong Pilipinas” at the SMX Convention Center in Davao City on Monday (June 20).
To push the 10-point agenda, which emphasizes the need to maintain accelerated economic growth broadly shared by the Filipino people, Dominguez said the new administration will move away from the chronic underspending seen the past few years. This means investing on infrastructure from modernizing ports to improving logistical spine to ensuring reliable and cheap power for all the islands, and investing more heavily in building up the nation’s human capital that include more extensive budgetary outlays for education and public health.
Dominguez pointed to investing projects in rural areas seeing to it that regions outside of the mega Manila will be given a fair treatment in fulfilling big ticket and small and medium projects. He said the new administration will jump-start building infrastructure outside of mega Manila to push rural development agenda.
Under the current situation, Dominguez bared that 80 percent of projects lodged with the Public Private Partnership Center are located in and around Metro Manila.
He said there needs to be pro-active action from the local government units to push projects.
“We have to encourage the local governments to invest. There must be a paradigm shift,” he said.
Dominguez said they also need to generate more job opportunities in the countryside by modernizing agriculture and encouraging agribusinesses to generate higher value added products.
“Farming should no longer be the poverty trap it has been for generations,” he said.
Speaking before an estimated 300 participants from business sector nationwide, Dominguez also laid down what to expect under the new administration such as a review of the tax system by initially updating the income tax brackets and eventually to lowering corporate and individual tax rates.
“We wish to see our workers having more disposable income to do as they wish. Our corporate tax rates will be adjusted to be competitive with the rest of the region to make our economy more competitive for investments. We hope to broaden the tax base even more to compensate for lower rates,” he said.
He said there are some suggestions for raising the VAT rates to offset reduction of individual and corporate tax levels.
“We submit this matter for your consideration and suggestions,” Dominguez assured the business leaders.
The review of tax system is part of the new administration of push forward a bureaucratic reform.
“With these, we hope to improve on the ease of doing business. More important, we want a bureaucracy that is most responsive to the needs of our citizens,” he added.
Dominguez was positive the country’s economy can move to a higher growth plane by embarking on a bolder pump-priming plan that will initially involve allowing more headroom for deficit spending.
He said that data shows the government has enough liquidity in the domestic market to support public borrowing, emphasizing that a more aggressive spending plan will help relieve domestic banking system of excess liquidity problems.
“The Duterte administration comes to office at a propitious time in our economic history. Both interest and inflation rates are at their lowest ever. Oil prices, a major factor influencing inflation trends, are moderate. They are likely to hold at roughly the same levels for some time,” he said.
Dominguez assured of a truly inclusive growth with the people expecting them to deliver only peace and order.
“The public mandate is clear. We want a society that multiplies opportunities for its citizens. We want a community that is caring. We want a leadership that looks after the vulnerable,” he said.
While the macroeconomic numbers are good with an expectation to sustain the economy’s robust growth well into the medium term, Dominguez stressed the people did not vote for change last May 9 for the macroeconomic numbers.
“They voted for change because the good macroeconomic numbers did not translate into a good life for all. We need new metrics to understand how economic expansion could be made more meaningful for the majority of Filipinos,” he said.
Dominguez said it is not enough to say the economy is growing.
“We have to develop measures that will show us how that economic growth converts into a more livable life for our people,” he added.
Dominguez pointed out the comparatively high growth did not sufficiently disperse economic opportunity nor substantially reduce poverty. It kept income levels tight for the small middle class and pushed the rural poor to even greater misery.
“This pattern of high growth fueled by widening income disparity is unsustainable. It has produced great disillusionment among the people. It has made our national economy seem harsh to those who work hard and earn so little,” he said.
Dominguez said the dialogue with the business sector was important to help them – the economic managers refine the reforms the new administration proposes.
“Let me assure you that the new administration will be guided by what is best for the nation. We seek your counsel as stakeholders in this nation’s progress, as we will the counsel of other stakeholders: those who own nothing in their name but whose capacity for hope rests precariously on the opportunities public policy is able to create,” he told the participating business leaders coming from different business chambers.
Dominguez said the economic agenda of the incoming Duterte administration should reassure the public that the new leadership will basically continue the macro-economic policies that brought “our economy to a higher growth plane in the last decade.” (PNA)