Davao City: President-elect Rodrigo Duterte’s team for the first time bared details of an expanded economic agenda that will overhaul policies to translate high growth figures into better living standards for the majority of Filipinos, while crime-busters work harder to make homes and businesses in the country safer.
Incoming Finance Secretary Carlos Dominguez told participants of an Economic Forum held here that the new government will pursue an environment that will be good for business by leveling the playing field, carrying out investor-friendly initiatives, ridding the bureaucracy of graft and inertia, and freeing government agencies from “regulatory capture.”
Duterte had said in his previous eight-point economic agenda that reforms would involve sweeping reforms ranging from a sharp boost to public spending on human and physical capital to tougher law enforcement.
The incoming President was not present on the first day of the forum but is expected to attend the concluding session today (Tuesday).
Dominguez said in the Forum held in consultation with the business sector that industries and companies will also have to do their part by delivering on a new public-private partnership under the new regime.
“Over the next six years, we should transform the national economy in ways that will bring not only social peace but also communities that nurture our people,” he said.
“This will require accomplishing the goals outlined in the 10-point program,” he added, referring to the expanded economic agenda.
Dominguez said the incoming Duterte presidency will carry on the sound macroeconomic policies that have allowed the economy to grow under the current administration, but will overhaul the policies and systems that have barred an overwhelming majority of Filipinos from partaking of such benefits.
The new Finance secretary said the incoming administration will move away from the chronic underspending seen in the past few years, by investing in building infrastructure that is necessary to make the Philippines a 21st century economy: “from modernizing our ports to improving our logistical spine to ensuring reliable and cheap power for all the islands.”
He expressed hope that with the two-day dialogue and workshop, the public and private sectors could jointly start refining the reforms that would be put in place over the next six years.
Dominguez said the tasks of the DOF in the incoming administration rest on the following prepositions: raising the money government requires to operate and invest in social goods such as infrastructure, health facilities and quality educational institutions; ensuring the sustainability of the government’s financial affairs; and playing a key role in making the country’s economic growth more inclusive.
“This can be achieved by: rethinking our investments incentives; reconfiguring our taxation system to build a robust middle class; and, reinventing our trade and tariff policies so that we may take advantage of free trade without sacrificing the development of our industries,” he said.
Dominguez also said the new administration will review the tax system, initially to update the income tax brackets and eventually to lowering corporate and individual tax rates.
The new administration will also push forward the development of rural areas to generate more job opportunities in the countryside, which will involve modernizing agriculture and encouraging agribusinesses to generate higher value added products.
“The new administration will push forward with the challenging task of bureaucratic reform. With these, we hope to improve on the ease of doing business. More important, we want a bureaucracy that is most responsive to the needs of our citizens,” he added.
Rebalancing the economy
Incoming economic Secretary Ernesto Pernia said poverty- and inequality-reducing economic growth entails a major rebalancing of the economy.
Citing an example, Pernia said that between 2006 and 2012, poverty eased by just more than 1 percentage point.
“The number of poor people has been increasing. In the first quarter of 2014, poverty incidence was recorded at 26.2 percent. That is about 26 million poor Filipinos,” he said.
The Duterte administration aims to reduce poverty incidence to between 15 percent and 16 percent in the next six years, which means a reduction by between 1.25-percentage points and 1.5-percentage points every year.
Besides disbursing the infrastructure budget in the right places, where the poor dominate the local population, the new administration will also strengthen the implementation of the Responsible Parenthood and Reproductive Health Law to enable especially poor couples to make informed choices on financial and family planning.
To achieve its poverty-reduction goal, the Philippines should transform its economy into an investment- and exports-driven one from being consumption-led, Pernia said.
The Duterte administration will also have to focus on the development of manufacturing and agricultural sectors to generate more jobs for the poor, he added.