MANILA -- Finance Secretary Carlos Dominguez III said Friday that Filipinos have reason to remain confident in the Philippines’ growth story, given that economic indicators point to a positive direction as the Duterte administration continues to “do the right things at the right time.”
Dominguez said the government is well on its way to providing the inclusive development that the people have long aspired for now that the economy is on course to be among the region’s growth leaders.
Global developments such as increased protectionism and oil price swings could pose numerous challenges ahead to the country’s economic resurgence, he said, but the long-elusive inclusive growth and higher incomes that Filipinos deserve are "still within reach as the government will relentlessly push reforms to modernize all sectors of the economy with the same vigor that the Duterte presidency has demonstrated over the past two years."
While inflation was slightly elevated during the year’s first half, averaging around 4.3 percent, Dominguez said this is understandable for a fast-growing economy, and is expected to return within the target range set by the Development Budget Coordination Committee (DBCC) of 4.0 to 4.5 percent within the year with the likely consolidation of the peso’s exchange rate, easing of oil prices in the world market and stabilization of rice supply.
Dominguez said economies like the Philippines that are expanding at a fast pace tend to put pressure on supply, especially with a tax reform law--Tax Reform for Acceleration and Inclusion (TRAIN)--that has now increased the purchasing power of Filipino consumers.
Along with an inflation uptick brought about by rising demand, Dominguez said the massive importation of capital goods needed for the “Build, Build, Build” program has also increased the trade deficit and weakened the peso, while the rice situation pushed prices of the grain to abnormal levels.
“None of these factors are permanent infirmities,” Dominguez said at the “Tatak ng Pag-Unlad” Pre-State-of-the- Nation Address (SONA) Forum of the Cabinet’s Economic Development Cluster that was held at the Philippine International Convention Center (PICC) this morning.
“But without the tax reform and the infrastructure program that it is funding, we will continue to suffer from high cost of production and transportation,” he added. “With the tax reform and better infrastructure, the road to higher productivity, and thus lower and stable inflation is within reach.”
He said the bill that will liberalize rice imports by shifting trading from quantitative restrictions to tariffs is now in the final stages of legislation and when implemented into law would ensure adequate supplies of the grain, and thus normalize retail prices.
Moreover, the speedier implementation of the unconditional cash transfer (UCT) program for the poorest Filipino families will help ease inflation's impact, which will be further improved with the implementation of a national ID system, Dominguez said. (DOF PR)
