Photo: Philippine Finance Secretary Carlos Dominguez (DOF)
President Duterte's centerpiece program “Build, Build, Build” will provide the Philippines the stimulus it needs to keep creating jobs and opening new investment opportunities despite the global economic slowdown, Finance Secretary Carlos Dominguez III has assured foreign investors. Dominguez painted a picture of this positive economic outlook for the country as he invited Singaporean investors to consider investing in “Build, Build, Build” and other related businesses that would open up as a result of this ambitious infrastructure modernization program.
He also informed a visiting delegation from the Singapore Business Federation (SBF) that the Philippines expects to hit upper middle-income country status next year on the strength of its stable macroeconomic fundamentals and game-changing reforms enacted over the first three years of the Duterte administration, such as the Tax Reform for Acceleration and Inclusion (TRAIN) Law.
“I think we have proven that we can chew gum and walk across the room at the same time. We can do reform and we can deliver in the field. We have done significant reforms in taxation, and we are moving forward with that,” Dominguez said in his meeting with SBF members at the Department of Finance (DOF) office in Manila on Monday morning, Sept. 9.
The Duterte administration, he said “delivered in the field” as it was able to increase spending on infrastructure from a mere 2.5 percent of the country’s GDP in the last 50 years, to 5 percent of GDP in 2018. Dominguez said "Build, Build, Build" will create jobs and boost domestic consumption, thereby shielding the domestic economy from the global growth slowdown, the adverse effects of the ongoing US-China trade war and other risks to the government’s efforts to sustain the Philippines’ high growth rate. “The Philippine economy continues to demonstrate strength, stability and resilience in adverse conditions. We hope to sustain our growth, relying on strong domestic demand to offset the general slowdown,” Dominguez said.
“Private sector participation is not only in our country’s 'Build, Build, Build' program, but also in investments that would open up as a result of our infrastructure modernization, and we think that the Singaporean investors should take a close look at that,” he added. Led by its chairman, Teo Siong Seng, the SBF met with Dominguez and other DOF officials to know more about the business climate in the country and explore investment opportunities here. The SBF represents 25,800 companies based in Singapore.
“Even as the global economic outlook deteriorates further, we are confident that the economic stimulus provided by our infrastructure program will continue to create new jobs and be very beneficial for businesses in the sense that it will lower your logistics costs in the Philippines,” Dominguez said.
Another key advantage that the Philippines has which Dominguez said makes him “even more confident’ of the economy’s stable outlook is its young and well-educated workforce with a median age of 24 years old. This is in sharp contrast to the aging populations of the region’s more mature industrialized countries and some ASEAN economies, such as Singapore, which can team up with the Philippines as “demographic partners” so that they can complement each other economic strengths, Dominguez said.
He said the robust revenue flows from the TRAIN Law has enabled the Philippines not only to support its “Build, Build, Build” program but to dramatically increase spending as well on programs to develop the country’s human capital. These programs on human capital development include free tuition in tertiary public education and cash transfers for the country’s most disadvantaged families, Dominguez said. Another CTRP package, which aims to increase excise taxes on “sin” products such as cigarettes and alcoholic beverages, will help fund the universal health care (UHC) program, he added.
Dominguez cited some of the factors that make the Philippines a prime investment destination: ·
A strong fiscal position as proven by the recent upgrade by Standard & Poor (S&P)'s of the Philippine’s credit rating from "BBB" to "BBB Plus," the highest ever achieved by the country and which is only a notch away from the single “A” grade;
· Sufficient gross international reserves (GIR) at over $US86 billion;
· Enactment of the Rice Tariffication Law (RTL), which will keep rice prices down while transforming agriculture into a main driver of economic growth;
· The passage of the Ease of Doing Business (EODB) law and a national ID system to address investors concerns on red tape; and
· Digitalization of the government’s frontline services, including tax collection and payment systems. Also at the meeting were Finance Undersecretaries Gil Beltran and Karl Kendrick Chua, and Philippine Ambassador to Singapore Joseph Del Mar Yap. Guillermo Luchangco, chairman, Philippines-Singapore Business Council; George Barcelon, chairman, Philippine Chamber of Commerce and Industry (PCCI); Alegria Sibal Limjoco, president, PCCI; and Sergio Ortiz Luis, Jr., president, Philippine Exporters Confederation (PhilExport), were among the Filipino business leaders present at the meeting.
The SBF delegation included Loh Chin Hua, Chief Executive Officer, Keppel Corporation Limited; Anthony Ong, Group CEO, Adera Global Pte Ltd; Bonnie Wong, Chief Operating Officer, Creative Eateries Pte Ltd; Poh Kay Leong, Group Deputy CEO, Poh Tiong Choon Logistics Limited; Ku Kay Mok, Managing Partner, Gobi Management Pte Ltd; Yap Su Ming Audrey, Managing Partner, Yusarn Audrey; and David Chia, Assistant Secretary, Council Member, Singapore Industrial Automation Association; Lee Kah Lup, Vice President, Singapore Technologies Engineering Ltd; Eddy Jetjirawat, Managing Director, Temasek International Pte Ltd; Federico Donato, Director, Credit Suisse (Singapore) Limited; Lim Lay Yew, Director, Esco Micro Pte Ltd; Ricardo Sentosa, Director, Venuerific Pte Ltd; Leo Jorge Mauricio, Senior Associate Director, DP Architects Pte Ltd; and Jimmy Ng, General Manager, Cold Chain Services, YCH Group Pte Ltd.