The Philippines cannot sustain its growth momentum unless the government transforms the economy into a truly inclusive one, in which ordinary Filipinos make market decisions and help shape economic development, the Department of Finance (DoF) said.
However, where the Philippines stands in its stage of development, market information and other issues related to the economy are exchanged only within a narrow section of the population, Finance Secretary Carlos Dominguez 3rd said in a speech before the Economic Journalists Association of the Philippines (EJAP) late Monday.
It shows that the Philippines is “an exclusive, rather than an inclusive one,” he said.
“This situation cannot persist for too long. Unless our economy becomes truly inclusive, with ordinary folk making market decisions and shaping economic development, we cannot sustain high-growth momentum,” he said.
He cited the “magnified role” of economic journalists in emerging economies like the Philippines to make the economy “inclusive” for ordinary people who rely on the news, not only to get the facts straight but also to widen their financial and economic literacy.
“You, the economic journalists, are the evangelists of modern economic thinking. We can push the reforms only as far as our citizens grasp the strategic significance of what we are trying to do,” he said.
It is no longer surprising to see cab drivers in Singapore scanning the stock market pages of newspapers and analyzing the performance of listed companies while waiting for fare as they too invest in the stock market, Dominguez said, citing an example of an inclusive economy,
“In these advanced economies, the capital markets are as deep-rooted as the economy is inclusive. Regardless of what their day jobs are, ordinary citizens help drive up the savings and investment rates by participating in financial products. The man-on-the-street is involved in market decisions that make the economy what it is,” he said.
The reforms being implemented and pushed by the Duterte administration are meant not only to sustain a high growth rate of 7 percent and reduce poverty by 14 percent in 2022, but also widen the base of economic decision-making in the country to include ordinary folk, the Finance chief said.
“Closing the infra gap and raising the capacity of our human capital requires a stronger revenue base for government. We need to invest well over a trillion pesos in new infrastructure over the medium-term. We need to upgrade our educational and health systems. We need programs that will produce well over a million new jobs a year to absorb the many young workers soon entering the workforce,” he said.
“Either we do all these or we end up with millions of alienated and discontented young Filipinos kept disenfranchised by mediocre economic performance,” he added.
The DoF has submitted for congressional approval the first package of its proposed Comprehensive Tax Reform Program (CTRP) to raise funds for its economic programs.
Widening the revenue base via the CTRP, Dominguez said, will enable the government to decisively attack chronic poverty by upgrading the country’s logistics backbone to attract investment inflows and grow tourism and other competitive industries, and modernizing the agriculture sector, which has dragged down rapid growth because of its weaknesses.
“For many decades, our neighbors invested 5 percent of their GDP in infra. Hobbled by poor revenue systems and, for a while, a heavy debt service load, we invested only half the regional average. We see the consequences of that in our dilapidated ports and airports, congested road systems and the pitiful state of mass transport. This is no way to grow a modern economy,” Dominguez said.