Gov’t on track to achieve growth goals

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 Filipinos have long aspired for now that the economy is among the region’s growth leaders.

Global developments such as increased protectionism and oil price swings could pose as threats 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 4.3 percent, Dominguez said this was understandable for a fast-growing economy and expected to return within the target set by the Development Budget Coordination Committee (DBCC) of 4.0 to 4.5 percent within the year with the anticipated 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 expand at a fast pace tend to put pressure on supply, especially with a tax reform law—the Tax Reform for Acceleration and Inclusion (TRAIN)–that has 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 also increased the trade deficit and weakened the peso even as 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-SONA Forum of the Cabinet’s Economic Development Cluster held at the Philippine International Convention Center (PICC) yesterday.

“But without the tax reform and the infrastructure program 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 liberalizing rice imports by shifting trading from quantitative restrictions to tariff is now in the final stages of legislation. When implemented into law, such would ensure adequate supply of the grain and normalize retail prices.