PH economy under Pres. Duterte seen to grow faster than other Asian powerhouses

PH economy under Pres. Duterte seen to grow faster than other Asian powerhouses

The World Bank(WB) takes notice of the strong macroeconomics fundamentals of the country under the Duterte administration.

The prompt implementation of Duterte’s economic managers as regards the fiscal and tax reforms will come big along the way.

All of this has been taken into account by the WB and estimates the Philippine economy will grow at a more rapid pace than Asia’s other regional economic powerhouses, such as China and Malaysia, during the remaining half of the Duterte presidency

(photo credit to owner)

Finance Undersecretary and chief economist of the Department of Finance (DOF)Gil Beltran said the World Bank’s projections are anchored on the Philippines’ solid external stance and “highly domestically driven” economy, which provides it “ample cushion” against external headwinds that are generally foreseen to slow down global growth this year.

“The Philippines is also expected to remain as an attractive destination for foreign direct investments (FDIs). We are pushing for further liberalization of investment ownership in the country,” said Beltran.
Beltran also cites the country’s strong fiscal performance and tax reforms, which will help support the Duterte’s massive infrastructure dream in Build Build Build and ensure that the economy’s “growth momentum will be sustained.”

“Moreover, the Philippines has implemented monetary and non-monetary policies to keep inflation manageable and bring it back to the government’s target range of 2 to 4 percent this year,” he said. “Perceived overheating risks have abated, driven by government measures and policies.”
Beltran explains that the World Bank forecasts show that the Philippines’ gross domestic product (GDP) is expected to grow by 6.4 percent this year, second only to Vietnam’s 6.6 percent, and higher than China’s 6.2 percent, Indonesia’s 5.2 percent and Malaysia’s 4.6 percent.

In 2020 and 2021, the Philippines’ GDP growth of 6.5 percent for both these periods will equal Vietnam’s 6.5 percent, also for both periods, and surpass China’s 6.1 and 6.0 percent, respectively. The Indonesian economy is projected to expand 5.3 percent for 2020 and 2021, while Malaysia will maintain its growth at 4.6 percent in both these years.

The first year of implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law, has led to a strong revenue performance, with total revenues growing 15.2 percent from PHP2.473 trillion in 2017 to P2.850 trillion in 2018

Tax revenues under the Duterte administration grew 14 percent from 2017 to 2018 — PHP2.250 trillion to PHP2.565 trillion. The 2018 tax effort of 14.7 percent of GDP is the highest in 20 years.

Under Duterte’s economic team, the country’s debt-to-GDP ratio also continues its downward trajectorydespite the Build Build Build projects , with national government debt in relation to GDP at 42.1 percent in 2017, and falling further to 41.9 percent in 2018.

Beltran takes note that the Philippines has ample gross international reserves (GIR) and a competitive domestic currency.

And lastly, Beltran highlights the country’s latest credit rating upgrade from S& P Global — from “BBB” with a positive outlook to “BBB+” with a stable outlook, which is only a notch away from “A” rating territory.

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Report from PTV4

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