The Build, Build, Build program, the enactment of the law that clears the way to the long-sought return of the coco levy funds to the country’s 2.5 million coconut farmers, and the series of tax reforms are among the lasting legacies of the Duterte administration on the economic front, the country’s finance chief said.
Carlos Dominguez, Department of Finance (DOF) secretary, said these initiatives plus other key economic accomplishments under the term of President Duterte marked the country’s turn towards more inclusive growth and prosperity.
The DOF pointed out thatseveral of the game-changing reforms carried out by President Duterte had languished in the congressional shelves for decades and were only enacted into law during his term.
These include the Rice Tariffication Law, which was implemented after more than 30 years of failed attempts by previous administrations, and the comprehensive tax reform program (CTRP) that lowered tax rates both for individuals and corporations, Dominguez said.
He added that the positive impact of these measures can be seen in the economy’s growth of over 6 percent annually before COVID-19 struck in 2020, and in the country’s financial strength that enabled it to weather the worse of the pandemic-induced global crisis.
“The next administration will inherit many hard-won reforms. They will assume the office with the basic groundwork for rapid and inclusive growth already in place. President Duterte’s final legacy is a confident and hopeful Filipino people earnestly looking to a future of sustained progress,” said Dominguez, who presented the achievements of the Economic Development Sector during the Duterte Legacy Summit held at the Philippine International Convention Center.
Dominguez noted the reforms put in place on the Duterte watch that have bolstered the country’s ability to recover and rebuild from the pandemic.
The enactment of the Corporate Recovery and Tax Incentives for Enterprises Act, which lowered corporate income taxes and redesigned the fiscal incentives system, and the amendments to the Retail Trade Liberalization Act, Public Service Act and Foreign Investments Act will bring in the high-value investments that the country needs to upskill the country’s workforce and further modernize the economy, he said.
With a stable fiscal position and investment-grade credit ratings, he said the Duterte presidency was able to move quickly in mobilizing a total of P3 trillion in financing for the country’s COVID-19 response, which funded the country’s largest social protection program in history totaling P250 billion, and enabled the government to successfully negotiate funding to procure vaccines.
Dominguez said despite the increased borrowings to procure vaccines and provide relief to vulnerable sectors while maintaining economic investments, the country’s debt level remains sustainable.
“Throughout the crisis, our historic high credit ratings were maintained amidst downgrades among our peers globally. This is a testament to our excellent record of prudent spending and fiscal discipline,” he added.
The Tax Reform for Acceleration and Inclusion law and the other enacted packages of the CTRP enabled the government to raise P575.8 billion in incremental revenues during the first four years of their implementation.
“Through bold tax reforms and better tax administration, we were able to raise our revenue effort to a two-decade high and our debt-to-GDP (gross domestic product) ratio to a historic low,” Dominguez said.
This has resulted in high credit ratings for the country, which not only brought down borrowing costs and allowed bond issuances with very tight spreads, but also benefited private borrowers through low interest rates, Dominguez said.
