PHL’S DEPARTMENT OF FINANCE (DOF) MAINTAINS AMBITIOUS GDP GROWTH TARGET AMID INFRASTRUCTURE PROJECTS
The wide-ranging economic impact of the Tax Reform for Acceleration and Inclusion (TRAIN) 1 package was among the many topics discussed recently at an interview given by Department of Finance (DoF) Secretary, Carlos G. Dominguez, to representatives of Oxford Business Group (OBG).
Dominguez highlighted that TRAIN 1 had attained 108.1% of its revenue target in 2018, enabling the government to increase public infrastructure investment.
“By 2020, the DOF aims to have all tax reform packages in place, including the reduction of the corporate income tax from 30% to 20% and the reduction in the number of capital income tax rates from 80 to 42,” he added. “Even though the 5.6% GDP growth in the first quarter was lower than expected, now the national budget for 2019 has been enacted, the DOF continues to expect GDP growth to surpass 6% by the end of the year.”
Large-scale infrastructure development is a priority for the current administration under the umbrella of its flagship Build, Build, Build program, which includes 75 priority projects. Although concern has been raised in some quarters about over-reliance on Official Development Assistance (ODAs), Secretary Dominguez outlined how the country has maintained a balanced source of financing.
According to the DOF data, China and Japan have each committed $9bn in ODA, while South Korea has pledged $1bn.
“With the tax reform programme creating a robust flow of revenue, we now have the means to invest in upgrading our logistics backbone,” stated Dominguez. “These commitments complement the financial support received from multilaterals, such as the World Bank and the Asian Development Bank”.
Furthermore, the secretary said that DoF have taken great care to ensure that the economic returns on major projects far outweigh the costs of financing, and that they have a diverse pool of project funding.
OBG’s representatives in the Philippines interviewed DoF Secretary Carlos G. Dominguez as part of the research for The Report: Philippines 2019, the group’s forthcoming publication on the country’s economic development and investment opportunities.
The report will be a vital guide to the many facets of the country, including its macroeconomics, infrastructure, banking and other sectoral developments.