The World Bank expects the Philippine economy to grow at a more rapid pace than Asia’s other regional economic powerhouses, such as China and Malaysia, in the second half of the Duterte administration.
This is based on the country’s strong macroeconomic fundamentals and sustained implementation of fiscal and tax reforms, the Department of Finance (DOF) said in a statement on Wednesday. Finance Undersecretary Gil Beltran said WB expected the Philippines’ gross domestic product (GDP) to grow by 6.4 percent this year, second only to Vietnam’s 6.6 percent and better than China’s 6.2 percent, Indonesia’s 5.2 percent and Malaysia’s 4.6 percent.
In 2020 and 2021, the Philippines’ GDP growth of 6.5 percent would keep it at pace with Vietnam’s 6.5 percent and ahead of China’s 6.1 percent and 6.0 percent growth during the same period. The Indonesian economy is projected to expand 5.3 percent for 2020 and 2021, while Malaysia will maintain its growth at 4.6 percent in both years.
Beltran said: “The Philippines is expected to remain as an attractive destination for foreign direct investments (FDIs). We are pushing for further liberalization of investment ownership in the country.”
Beltran cited the country’s strong fiscal performance and tax reforms,which would support the Duterte’s massive “Build, Build, Build” infrastructure modernization program and ensure that the economy’s “growth momentum will be sustained.”
“Moreover, the Philippines has implemented monetary and non-monetary policies to keep inflation manageable and bring it back to the government’s target range of 2 to 4 percent this year,” he said. “Perceived overheating risks have abated, driven by government measures and policies.”
Beltran said the tax reform has led to a strong revenue performance, with total revenues growing 15.2 percent from P2.473 trillion in 2017to P2.850 trillion in 2018, the first year of implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law.
Tax revenues grew 14 percent from 2017 to 2018 — P2.250 trillion to P2.565 trillion. The 2018 tax effort of 14.7 percent of GDP is the highest in 20 years.
ALSO READ: Forbes: Duterte's 'Build, Build, Build' Gives PH Bright Future 🇵🇭
The country’s debt-to-GDP ratio also continued to shrink despite the ambitious infrastructure buildup, with national government debt in relation to GDP at 42.1 percent in 2017, and falling further to 41.9 percent in 2018.
On top of a declining external debt exposure, Beltran said the country has ample gross international reserves (GIR) and a competitive domestic currency.
He also cited the Philippines’ latest credit rating upgrade from S&P Global — from “BBB” with a positive outlook to “BBB+” with a stable outlook, which is only a notch away from “A” rating territory.
ALSO READ: Forbes: Duterte's Philippines is the 10th Fastest Growing Economy In The World
Found this article interesting? Share it with your friends! 👍🏼
This article first appeared on Bilyonaryo.
No comments:
Post a Comment