Time for an economic breakout



The 30th Asean Summit will culminate tomorrow, Saturday, with the 10 member state leaders expected to converge at the Philippine International Convention Center in the morning, followed by a retreat at the Coconut Palace in the afternoon, and capped by a gala event at the Sofitel Philippine Plaza in the evening.

Ahead of the summit, Presidential Communications Secretary Martin Andanar and Finance Secretary Carlos Dominguez hosted a pair of Dutertenomics Forums at the Conrad Manila. Executive Secretary Salvador Medialdea welcomed the participants to both forums.

Dominguez reportedly said, “The Philippine economy, with the decisive leadership of Rodrigo Duterte, is now ready for an economic breakout that will increase the pace of growth, intensify inclusion, and reduce poverty.”
Dutertenomics is the administration’s development strategy to dramatically raise funds mostly through the proposed Comprehensive Tax Reform Program (CTRP), and to spend big on infrastructure, human capital formation, and social protection.

At the second forum on April 25, captains of industry representing the country’s largest conglomerates were in attendance, led by SM Investments’ Tessie Sy-Coson, Ayala Corporation’s Jaime Augusto Zobel de Ayala, LT Group’s Michael Tan, Aboitiz Energy Ventures’ Sandro and Danel Aboitiz, Megaworld’s Kevin Tan and Double Dragon’s Injap Sia.

In an apparent show of support for the government’s “Build! Build! Build!” agenda, the next-generation taipans witnessed the presentations of the Secretaries of Trade and Industry, Energy, Budget and Management,
Transportation, Public Works and Highways, as well as sub-Cabinet officials from the National Economic and Development Authority and the Bases Conversion and Development Authority.

Trillions of pesos in investments are required for this so-called “Golden Age of Infrastructure” to ensure that the next generation of Filipinos would get out of the poverty trap and the cycle of low growth.

At the same time, the country’s health care and educational systems need to be upgraded, while income tax rates must be lowered to sharpen the Philippines’ global competitiveness and sustain the economy’s growth momentum.

Between 2015 and 2040, the Philippine population will be in a period known as the demographic sweet spot, wherein more than 50 percent of a country’s citizens become part of the work force. This is in contrast with mature Asian economies such as Taiwan and South Korea, whose populations are beginning to age.

With this demographic dividend, Dominguez pointed out that the Philippines is now enjoying a “Cinderella moment,” when it is highly capable of shifting from consumption-led to investment-led growth that creates jobs and more economic opportunities for Filipinos.

If this strategy is sustained over the medium term, the Philippines will become a high-income economy in one generation. That is why the country’s economic managers have been pushing for passage of the CTRP bill through Congress as an indispensable component of the road map toward a vibrant future for our people.

“We have completed our fiscal consolidation. Our credit ratings attest to that,” the Finance chief said. “The debt burden is no longer a drag on our economic growth. We are now actively seeking investments not only to rebuild our depleted manufacturing sector but also to capitalize our agriculture to make it more efficient.”

He believes now is the time to move decisively in carrying out this “grand effort” given the convergence of positive factors conducive to inclusive high growth—a young and vigorous labor force, low interest rates, excess liquidity, benign oil prices, investment-grade credit ratings, and strong support from neighboring countries such as China, Japan, and the Asean.

The opinions expressed here are the views of the writer and do not necessarily reflect the views and opinions of FINEX. The author is chief financial officer (CFO) of the Asian Center for Legal Excellence and serves as co-chairman of the FINEX Media Affairs Committee.


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