THE international business community was assured that high—and inclusive—growth anchored on massive investments in infrastructure and human capital is on track despite the “disruption” caused by the Marawi conflict, the Depart of Finance said Thursday.
The government is going ahead to reshape the Philippine economy to attract investment, create jobs and attack poverty, Finance Secretary Carlos Dominguez 3rd said.
The administration had to deal decisively with the armed assault in Marawi to prevent extremist forces from making Mindanao their “main theater” for terrorism in the region, the Cabinet official noted.
“This event is not expected to be a continuing disruption. None of the major projects planned for Mindanao has been delayed. The general economic program is intact. Over the next few weeks, sustained action by our security forces is expected to substantially eliminate the threat posed by extremists,” Dominguez told members of the global business community gathered at the Hong Kong Chinese Enterprises Association and the Bank of China Forum on Wednesday in Hong Kong.
President Rodrigo Duterte declared martial law in Mindanao on May 23, as government authorities and extremist battled it out in Marawi City, the capital of Lanao del Sur.
“The battle for Marawi is a decisive one. Had government failed to respond firmly, the extremists might have succeeded at establishing a rallying point for the stray bandit factions in the area. The defeat of the militants is a costly one for them. Whatever terrorists designs there might have been for Southeast Asia, the main theater can no longer be Mindanao,” Dominguez said.
Citing the Philippine Constitution, Dominguez pointed out that “the imposition of martial law can last for only 60 days. Beyond that, an explicit authority from the Congress is required. President Duterte has indicated he will lift martial law as soon as peace is restored.”
The government has initiated talks with the Moro National Liberation Front (MNLF) and the Moro Islamic Liberation Front (MILF) to help attain lasting peace in Mindanao, the DoF noted.
Alongside an infrastructure development program requiring some $170 billion or about P8.4 trillion over the next five years, Dominguez said the government also plans to spend big on education, health and other forms of human capital formation “to build a solid fiscal buffer to keep the economy strong amidst global uncertainties.”
The Philippine demographic sweet spot provides a distinct advantage of having a young, workforce in a region where several mature economies are experiencing rapid population aging.
“Over the past few years, the Philippines emerged as an increasingly important node of growth for the global economy. We are seeking to sustain a growth rate of at least 7 percent through the medium-term. That growth level will be driven, to a large extent, by the massive infrastructure modernization program,” Dominguez said.
To provide an “ample and recurrent” revenue stream to fund the high and inclusive growth agenda, he said the Duterte administration has introduced a Comprehensive Tax Reform Program (CTRP), starting with a first package that was approved by the House of Representatives.
“We hope to get this through our Senate and passed into law before the year ends. Enactment of this package will send a strong signal to the investment community that this government means business,” Dominguez said.