By CHINO S. LEYCO
The Philippine economy has become more inclusive as income growth of individuals considered poor has outpaced the overall average, an indication that the government is on track to hit its poverty incidence target by 2022.
Finance Secretary Carlos G. Dominguez III
Finance Secretary Carlos G. Dominguez III said that 5.9 million Filipinos have already been lifted from poverty since 2016 that resulted in the decline of the country’s poverty incidence from 23.3 percent in 2015 to 16.6 percent in 2018.
Dominguez particularly cited that for the lowest 30 percent of the population, their per-capita income grew by 32 percent, outpacing the 20.9 percent nationwide overall average.
In comparison, he said the richest 20 percent of the population grew their per-capita income by only 18 percent during this period.
“Clearly, the growth we are experiencing is not only rapid. It is also inclusive,” Dominguez said in a statement.
For this reason, Dominguez expressed confidence of bringing the poverty incidence to below 14 percent by the end of President Rodrigo R. Duterte’s term.
The finance chief said the reduction in the number of poor individuals was fuelled by the “game-changing reforms” that made the country's economic expansion not only rapid but also inclusive for all law-abiding Filipinos.
Dominguez cited that the national government’s debt load dropped to 41.5 percent of gross domestic product (GDP) last year from 44.7 percent in 2015 due to revenue collection efficiency and the tax reform measures.
The government’s tax effort, likewise, jumped to 15.1 percent of GDP last year, the strongest performance in 22 years. It was also higher compared to 13.6 percent in 2015.
Spending on infrastructure also grew by 42 percent last year compared to 2015, while dividend collections from state-owned corporations reached a record ₱69 billion in 2019, he said.
Following the reforms, Dominguez said that international credit rating agencies have recognized the Philippines achievements by awarding higher investment grade status.
The Standard and Poor’s and Rating and Investment Information, Inc. upgraded the Philippines’ credit rating upgrade to "BBB+".
Fitch Ratings also revised its outlook on the country’s BBB credit rating from “stable” to “positive,” signaling a potential upgrade of the score within the next few months.
“The upgrades create even better conditions for businesses in the country. These developments signal approval of the fiscal discipline that has characterized the policies of the Duterte administration,” Dominguez said.
“We are aiming to achieve an 'A' rating before the end of President Duterte’s term in 2022,” he added.
He pointed out that higher credit ratings benefit not only the government and private investors but ordinary Filipinos as well, because banks would eventually be able to lend money to them at lower interest rates.
“This will translate into larger investments, as well as more jobs and a better quality of life for Filipino families,” Dominguez said.