For the country’s economic managers and World Bank officials, the Philippine economy remains resilient with the country en route to becoming prosperous by 2040, the government’s Investor Relations Office (IRO) said.
“Today, the Philippines is one of the fastest-growing economies in the world. Reaching this milestone is attributable to many years of hard work—especially in building a strong fiscal position and a bureaucracy honed to the task of catalyzing growth,” the IRO quoted Finance Secretary Carlos Dominguez III as saying during the Philippine Day Forum held on the sidelines of last week’s spring meetings of the multilateral lenders International Monetary Fund and World Bank.
“While we rank as among the best-performing economies in this dynamic part of the world, growth is not the final goal of all our efforts. We seek a more dynamic and competitive economy to bring down poverty rates and create more opportunities for our people,” Dominguez said.
For Bangko Sentral ng Pilipinas Governor Benjamin Diokno, “We are prepared to face the three great challenges—growth divergence, policy fragmentation and technological disruption.”
“For the central bank, it is a matter of careful commitment and timely action. The economy itself is fundamentally solid. Overall macroeconomic conditions provide sound basis for cautious optimism,” Diokno added.
Given solid macro fundamentals coupled with sustained reforms, the economic team expressed confidence that the Philippines will remain resilient to external headwinds and can keep economic growth strong, the IRO said.
The Philippines was also poised to move up to upper middle income status this year or earlier than the government’s target of achieving it by 2022, it added.
As such, World Bank vice president for East Asia and Pacific Victoria Kwakwa said that “the Philippines has the potential to become the next East Asian success story.”
Kwakwa said the country’s Ambisyon Natin 2040 vision to “become a prosperous, resilient, middle-class society free of poverty by 2040 is an achievable goal.”
However, Kwakwa said poverty reduction “will require continued reform and investment to open the economy, overcome infrastructure backlog, invest in human capital and build the resilience of the nation, especially as the threat of climate change increases.”
Among the reforms already put in place by the Duterte are the comprehensive tax reform program, which made the tax system equitable to taxpayers and, at the same time, raising more revenues to finance the government’s priority programs and projects, including the ambitious “Build, Build, Build” infrastructure program, the IRO said.
“The Duterte administration expects more game changing tax reforms to be implemented, with proposed bills on other packages already in Congress for deliberation. Among these is a bill seeking to slash the corporate income tax rate to boost the country’s competitiveness in attracting foreign direct investments, while rationalizing fiscal incentives to ensure that tax perks are properly targeted, performance-based, time-bound and transparent. In addition, there are also bills seeking to fix the real property tax system and to put in place a more equitable system of taxing financial instruments,” according to the IRO.