Don’t get distracted with “noise.”
This was Finance Secretary Carlos G. Dominguez III’s appeal to officials of debt watcher Moody’s Investors Service, whom the head of the economic team assured that President Duterte remains “fully engaged” in the 10-point socioeconomic agenda aimed at significantly reducing poverty.
“If you talk about the political noise, yes, there is. It’s inevitable for someone who’s shaking up the tree. It’s inevitable because of the personality of the President and people not used to this type of governance. But he’s fully engaged in [the administration’s] economic agenda,” Dominguez told officials belonging to Moody’s sovereign risk group in a recent meeting.
President Duterte’s recent controversial remarks against US President Barack Obama, the European Union and the United Nations have been making markets jittery, hence being partly blamed for the depreciating peso as well as increasing outflow of “hot money” during the past few weeks.
In a statement Friday, the Department of Finance said Dominguez assured Moody’s that the Duterte administration “would carry out its inclusive growth agenda while building on the economic gains of the past administrations and exercising fiscal responsibility.”
The Philippines enjoys from Moody’s an investment-grade credit rating of “Baa2” with a stable outlook.
Dominguez met with the following Moody’s officials: vice president and senior credit officer Christian de Guzman, managing director Atsi Sheth, and associate analyst Matthew Circosta, the DOF said.
According to the DOF, Dominguez informed Moody’s of the government’s plan to overhaul the tax system and introduce sweeping reforms not only in tax policy but also in administration.
Dominguez noted that the first package of the proposed tax policy reform program was submitted for Congress’ consideration last month, as he had promised, and just less than 90 days into the Duterte administration.
The Finance chief reiterated that the proposal “aims to ease the tax burden on wage earners and the middle class as well as protect the country’s vulnerable sectors, while raising enough revenues to accelerate spending on infrastructure, human capital, social protection and agricultural modernization.”
Tax reform forms part of the 10-point socioeconomic agenda, which Dominguez pointed out was already being worked on by economic managers even before the President was sworn into office on June 30.
Following consultations with the business and civil society sectors to firm up the agenda, President Duterte plans to “hold consultations with mayors, governors and other local chief executives to basically hear what they want, and to tell them what we want,” Dominguez said.
“And what we want is no corruption and no crime,” according to the Finance chief.
Ultimately, the Duterte administration wants to slash poverty incidence to 17 percent by 2022 from 26 percent at present, but this cannot be done “unless the President also focuses on his two other priority goals, which are to transform the country into a law-abiding society by eliminating crime and corruption, and ensure lasting peace within the country and with its neighbors,” Dominguez said.
The government would also reduce poverty through massive infrastructure, human capital and social protection investments, he said.