Finance Secretary Carlos Dominguez expects a “pretty good” economic performance in the second quarter, citing better employment figures during the period.
“From what we’ve seen in May, where our unemployment numbers have dropped, our underemployment (figures) have dropped, and the fact that we have created about 2.5 million new jobs over the last year seems to be good science for us. It will be pretty good,” Dominguez said in an interview with Bloomberg TV yesterday.
The government will announce the second quarter economic figures on August 10.
The Development Budget Coordination Committee projects full- year growth to be at six to seven percent.
In the same interview, Dominguez said the debt-to-gross domestic product ratio, which stands at 60.4 percent, may have peaked.
“We don’t see that increasing much beyond that amount, we think that’s about the peak,” Dominguez said.
He said the borrowing plans will be roughly the same for this year as it was last year, which is basically 75:25, in favor of domestic borrowings.
“We are keeping ourselves open to financing from domestic or international sources and essentially it’s going to be about the same amounts,” he added.
Dominguez also said there’s room to reduce the reserve requirement ratio which is still “quite high” at 12 percent.
“The Monetary Board has acted properly and up to now, they have done quite a bit of their share. And we just want you to know that we still have a lot more to go before us, and this is because our reserve requirements are still quite high at 12 percent,” Dominguez said.
“And there’s certainly room in the future if necessary, to release more liquidity into the market through a reduction in the reserve requirement and that will certainly put downward pressure on interest rates,” he added.
Meanwhile, Dominguez reiterated the pandemic is going to be around for some time and that the government has acted in a way that is “fiscally responsible.”
“We want to make sure that we have enough resources to tackle any problems in the future, such as surges in the pandemic. We also want to make sure that we have enough money to protect our citizens, and that is providing them with enough vaccines,” he said.
“So far, we have received for the first half of the year until July 21, close to 30 million doses. We expect 70 million doses or around that amount in the third quarter, and another 55 million doses in the last quarter of the year. That’s certainly enough to vaccinate 100 percent of our adult population. So, that is our primary method of fighting this — vaccine.
Of course, as there are surges, we will institute lockdowns in specific areas where the surges occurred,” he added.
In a separate virtual event, Dominguez has assured the next administration the Duterte presidency will continue to push for reforms and assist it in addressing any possible fiscal and economic risks that the country may face in the post-pandemic.
He said the Duterte administration will continue to work with Congress in passing laws that aim to further liberalize the economy, institute additional reforms in the tax system, and deepen the Philippines’ capital markets.
On the part of the national government, it will continue its ongoing digital reforms in the revenue agencies to ensure that they match the efficiencies of the best comparable institutions worldwide, Dominguez said.
To ensure the economy’s long-term recovery and attract more foreign investments, Dominguez reiterated his call for the Congress to pass the amendments to the Foreign Investments Act, Public Service Act and the Retail Trade Liberalization Act.
“We get nothing from a closed-minded attitude towards foreign investments. With the continued globalization of supply chains, we either liberalize at a quicker pace or risk getting left behind,” Dominguez said during the virtual general membership meeting of the Financial Executives Institute of the Philippines. (Angela Celis)
