ADB sees PH sustaining high growth
The Duterte administration is on the right track with its ambitious “Build, Build, Build” infrastructure program and comprehensive tax reform, both of which are expected to sustain the Philippines’ growth momentum, according to the Asian Development Bank.
In its Asian Development Outlook 2017 update report released yesterday, the Manila-based multilateral lender kept its gross domestic product (GDP) growth forecasts for the Philippines of 6.5 percent for 2017 and 6.7 percent for 2018.
In July, the ADB’s Asian Development Outlook supplement report jacked up to 6.5 percent from 6.4 percent previously its Philippine GDP growth projection for 2017.
The ADB’s forecast for this year was within the government’s 6.5-7.5 percent target range.
While the ADB also raised to 6.7 percent its growth forecast for 2018 from 6.6 percent previously, the projection for next year was below the government’s target of 7-8 percent.
“The country’s infrastructure and social programs and tax reforms are being implemented on schedule. These policies and reform priorities will become fiscal pushes to growth,” ADB country director for the Philippines Richard Bolt told a press conference.
“Consumer and business upbeat sentiments signify that robust consumption and investment will continue. With accommodative fiscal and monetary policy in addition to flexible exchange rate, stable remittances and improving exports, the economy is likely to be resilient to external shocks,” Bolt added.
For Bolt, the government is already on the right track and the current reforms and programs will need to be continued to be implemented.
In a separate statement, Bolt said the concerted effort by the Philippine government to improve public project implementation was bearing fruit as public investment programs help drive continued economic expansion.
“A strong focus on infrastructure investment and implementation of tax reform will see the country continue its growth momentum through 2018,” according to Bolt.
The ADB said the first of five packages under the comprehensive tax reform program that would slash personal income tax rates while slapping new or additional taxes on consumption would boost domestic demand.
The Department of Finance had said that the first tax reform package was on track for passage by yearend so that it could be implemented in January next year.
According to the ADB, “further progress in the ’Build, Build, Build’ program and advancing comprehensive tax reforms will be vital to sustain strong growth.”
Under “Build, Build, Build,” the government will roll out 75 flagship, “game-changing” infrastructure projects to be started and finished within President Duterte’s term, in line with plans to spend a total of up to P9 trillion on hard and modern infrastructure until 2022.