The government has identified four primary concerns that will affect the country’s economic stability beyond 2022.
Carlos Dominguez, secretary of the Department of Finance (DOF) said the current administration is ready to assist the new presidency during the transition period next year to address the following: prudent debt management in relation to growing the economy above six percent per year; inflation caused by global shortages; pandemic-induced inequalities; and climate change.
Dominguez said after going through a difficult episode amid the coronavirus disease 2019 (COVID-19) pandemic, the Philippines is poised for a strong recovery towards a more inclusive economy.
He said on top of ensuring fiscal prudence, the Duterte administration also introduced policy reforms to build a business-friendly environment, among them, the reduction of red tape; the digital transformation of public agencies; implementation of a National ID system; infrastructure modernization; and a rationalized corporate income tax and fiscal incentives policy through the Corporate Recovery and Tax Incentives for Enterprises Law.
The remaining period of the current administration’s term will be focused on rapidly modernizing governance; accelerating the rollout of the “Build, Build, Build” infrastructure program; and continuing with the market-friendly reforms attractive to investments, Dominguez said.
“The Duterte administration will also ensure that the next presidency will be ably assisted during the transition period in addressing four key issues that will impact the Philippines’ economic stability. These include ways on how to prudently manage the debt we have accumulated and grow our gross domestic product (GDP) at a rate higher than six percent per annum as we have done. We need to deal with the issue of inflation brought about by shortages around the world,” Dominguez said in a virtual forum yesterday.
“We need to manage the inequalities exacerbated by the COVID-19 pandemic — both within the country and among countries. And finally, we need to address climate change without stretching the fiscal space of the country,” he added.
Meanwhile, Dominguez said the worst of the pandemic has passed and that the country is on its way to a strong rebound as it scales up its COVID-19 vaccination program to cover 100 percent of the adult population and persons aged 12 to 17 years old.
“We have strengthened our public health system and we will continue to do so in the coming years. Our people have woven health protocols into their daily lives,” he said.
“As we relax restrictions on movement, our domestic economy appears to be responding with strength. After so many challenging months, the numbers are now all in our favor,” he added.
He cited the Philippines’ increasing foreign direct investments, growing remittance inflows from overseas Filipino workers, more-than-enough international reserves despite the sharp spike in oil prices, stable exchange rate and rising revenue collections as indicators of an economy on the way to a strong recovery.
Dominguez also cited the country’s solid fiscal position under the Duterte administration — as reflected in its sustainable debt-to-GDP ratio, high credit ratings, successful bond issuances amid the pandemic, to name a few — as the other factor that will ensure the country’s strong economic rebound.
