The economic team has cited the government’s limited fiscal space as one of its key concerns, although it noted it is now working on the reforms that will address this roadblock.
Asked during the Philippine Economic Briefing (PEB) in Singapore yesterday about their “biggest worry” right now in terms of their respective departments, Budget Secretary Amenah Pangandaman pointed to fiscal space as a challenge.
“Maybe from the budget department, one of the risks really is the fiscal space,” Pangandaman said.
“That’s why we have budget reforms and fiscal reforms that we’re trying to work now with the legislature to be able to have that space and spend more for our economic and social expenditures,” she added.
Finance Secretary Benjamin Diokno also responded by identifying the issues being addressed to open up the government’s fiscal space.
“The military (and uniformed personnel) pension (reform) system, we call it an elephant in the room. Previous administrations don’t want to talk about this, but we are addressing it now. We are almost sure that we have the solution, and that will open up a lot of fiscal space that she was talking about,” the finance chief said.
“We are also talking about rightsizing the bureaucracy, and together with that, digitalization. Again, that will open up a lot of space on the fiscal side. So that’s why I said, I don’t worry about it, I sleep well at night, because we’re solving the problems,” he added.
“One of the reasons why we are aggressively pushing for PPPs (public private partnerships) is that there’s a lot of monies there that are supposed to be used for public infrastructure, but if these can now be implemented by private sector, then that limited resource could be used to support other priority areas, particularly in the social sector, like social protection, health, education and so on,” National Economic and Development Authority Secretary Arsenio Balisacan, for his part, said.
Meanwhile, Diokno pointed out that many sectors of the Philippine economy have been opened up to full foreign ownership.
“So private sector who wants to come into the Philippines and invest in these areas? You are welcome,” Diokno said.
“At the same time, if you want to invest in the (proposed) Maharlika fund, that’s another avenue for investment. And I mentioned 194 ready-to-implement projects. When I joined the previous administration, and when we came in, there were no ready-to-implement projects. So, we have to develop the projects ourselves. Now there are 194 with the feasibility study, some with detailed engineering, and that’s ready to go. So, if you want to come in, you can also invest in those projects,” he added.
The PEB, this time attended by Singapore-based business leaders, bankers and investors, serves as an avenue for economic leaders to discuss investment opportunities in the Philippines.
“Some estimates show that the growth potential of the economy is 6 percent, but what we are doing is to boost that up by building human capital, building infrastructure, reforming our institutions, so that we can grow at 6.5 to 8 percent a year. And if we do that, our estimates suggest that by 2040, we could achieve the level of income and development that South Korea had achieved when it entered the first world,” Balisacan said.
