Despite being behind other regional economies in terms of recovery from the malaise of the global pandemic, the government’s chief economic manager assured that the country can bounce back stronger due to sound economic fundamentals.
Finance Secretary Carlos G. Dominguez III said on Tuesday, June 15, that they remained optimistic of the Philippines’ strong recovery, driven by the government’s recent structural and tax reforms.
“We might appear to be behind our neighbors for now, but our recovery will be stronger because of our sound fundamentals,” Dominguez said in his pre-recorded speech at the virtual forum organized by the Economic Journalists Association of the Philippines (EJAP).
Dominguez said the COVID-19 vaccination program, which “has been rolling out quite well .... gives us hope that we can now fully reopen our economy.”
He also noted that the country did not suffer the kind of fiscal downturn that typically accompanies an economic crisis even with the massive expenditures that the government incurred during the global economic and health crises.
Dominguez pointed out that when the pandemic-induced crisis hit the country last year, the government “did not have to go back to the drawing board in order to plan for the country’s economic recovery” because “much of the spadework was done” over the last five years.
“Clearly, we avoided a lot of trouble. All the strengths that became evident when the challenges were greatest are not due to a stroke of good fortune. This was not luck. This was readiness,” Dominguez said.
“They are the results of many years of fiscal discipline, forward-looking policy reforms, and continuing improvement in our administrative systems—especially through the adoption of new digital technologies,” he added.
Even while battling the pandemic, Dominguez also said the government did not let up on the completion of its reform agenda.
He said the economic team quickly pushed the passage in the Congress of the Financial Institutions Strategic Transfer Act (FIST) Law, which now allows banks to efficiently offload their bad loans and non-performing assets (NPAs).
Dominguez said they also lobbied the congressional approval of its tax reform proposals, such as Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act that lowered the corporate income tax (CIT) rates.
CREATE also opens the way for the government to rationalize the tax incentives system to ensure that fiscal and non-fiscal incentives are tightly targeted, performance-based, transparent, and time-bound, he said.
Alongside these reforms, Dominguez said infrastructure investments under President Duterte's signature program "Build, Build, Build" will proceed at full speed to drive up economic activity and create jobs.