The honeymoon period has started for Rodrigo Duterte, the unorthodox Davao City mayor who is bound to be the next CEO of the land, with economic and business leaders optimistic that the newly unveiled economic agenda would allow the country to remain in the sweet spot.
“The initial announcement of [Duterte’s] eight-point [economic] program promises a continuity of the resilient economic growth that we have seen,” BSP Deputy Governor Diwa Guinigundo told reporters Monday.
“From our monetary policy perspective, the general public can expect continued consistency of monetary policy with price stability, financial stability and, of course, balanced and sustainable economic growth. This will also be supportive of the new administration’s emphasis on the need to achieve 7 to 8 percent economic growth for 2016 and beyond. It’s a big challenge, but I think it’s doable,” Guinigundo said.
“We are very upbeat. I think the incoming President and his team are going to inherit a government that’s in very good financial position and an economy which is probably the envy of other economies in the world. We are very positive,” Aboitiz Equity Ventures president Erramon Aboitiz said in a briefing Monday.
Aboitiz said his group, which is in the power, banking, food, real estate, cement and infrastructure businesses, was well-positioned across all sectors.
Last week, businessman Carlos Dominguez, who is expected to be part of Duterte’s economic team, disclosed the economic priorities in the next six years, namely accelerating infrastructure spending; addressing land administration and management; attracting foreign direct investment (FDI) flows; expanding and improving the conditional cash transfer program; improving government revenue collection efforts; making tax administration more progressive; modernizing the agriculture sector, and strengthening the basic education system.
“I think the eight-point program translates to more growth, because it says there that macroeconomic policies will be continued and will impact on [government] spending,” Guinigundo said. He added that Duterte’s economic blueprint would also translate to more jobs, citing that the incoming administration wants to attract more FDI by enhancing the country’s competitiveness.
The Aboitiz group, for its part, is hoping to get the biggest percentage of growth from its fledgling infrastructure business, given that this was coming from a low base. Aboitiz noted that the government’s plan to boost infrastructure spending to 5 percent of gross domestic product was likely to stimulate more investments and new projects. “As you all know, we are bursting in our seams in all infrastructure sectors. Our airports are full, our trains are full, our roads are full, I think there’s going to be a lot of investment in this sector.”
Kingson Sian, president of Alliance Global Group Inc., said Duterte’s economic agenda has been welcomed by the market.
“You don’t need rocket science to know that this country needs agriculture, infrastructure, tourism. Those are the strengths of the economy,” Sian said, noting that AGI—given its big presence in tourism—would benefit from such growth.
“What I even like is it’s about time that Mindanao gets the attention that it needs. It’s good for the country. That’s what’s exciting about this new administration—focus on areas that were less focused on before,” he said.
Meanwhile, the Foundation for Economic Freedom said it was looking forward to the reforms that the next President had promised to undertake, particularly in removing the foreign ownership restrictions in the Constitution and improving competition in key sectors of the economy.
“We support his proposed measures that will improve the investment climate in the country, by improving peace and order, cutting bureaucratic red tape, reforming the tax system and vastly improving infrastructure,” FEF said.
“Finally, we applaud his reaching out to his political rivals. National unity is vital in solving our problems of widespread poverty, national security, and peace and order,” the group said.