Confidence in Sustained PHL High Growth Remains Strong — DOF

The latest positive developments reflecting the bullish outlook of investors, international institutions and foreign governments on the Philippine economy are telling marks that beyond the political noise, confidence remains high on the capability of the Duterte administration to deliver on its commitment of inclusive growth through its “transformative” 10-point socioeconomic agenda, Department of Finance (DOF) spokesperson Paola Alvarez said.

Assistant Secretary Alvarez said these positive developments include the recent successful auction by the Bureau of Treasury (BTr) of PHP100 billion-worth of Retail Treasury Bonds (RTBs), the expressions of support from other countries and international institutions for the administration’s 10-point socioeconomic agenda, and the upbeat outlook of the business community on the economy.

“If one were to ignore the political noise generated by certain groups, one could clearly hear the voices of continued optimism over President Duterte’s commitment to bring real change through the implementation of transformative reforms not only in the economy but on the peace and order front as well,” Alvarez said.

She said the recent issue of PHP100 billion worth of RTBs, even when the auction commenced just days after the bombing of the Roxas night market in Davao City, highlights the strong confidence of investors in the Duterte administration’s capability to sustain the high growth—and even transform it into an inclusive one—via the President’s 10-point socioeconomic agenda.

“The BTr announced earlier that its fundraising exercise of auctioning the first set of RTBs on the Duterte watch aims to supplement the funds for the government’s planned infrastructure buildup and increased spending on human capital and social protection for the poor. The overwhelming success of the RTBs proves the high credibility of the Duterte administration in delivering these commitments,” Alvarez said.

Alvarez said another positive development was Standard & Poor’s recent announcement maintaining the Philippines’ investment grade of “BBB” with a “stable” outlook. S&P cited the economy’s strong fundamentals and prudent economic management that point to the sustainability of the country’s economic gains.

Citing the statement made by the Investor Relations Office (IRO) of the Bangko Sentral ng Pilipinas (BSP), Alvarez said a rating within the investment-grade scale is a “seal of good housekeeping” that marks the ability of a country to pay its financial obligations given a variety of factors that include favorable economic conditions.

S&P cited the country’s “young,” “educated,” and “flexible” workforce, rising investments and stable financial system as among the bases for its projections that per-capita income in the Philippines would rise by 4.4 percent to USD3,000 this year, and growth would accelerate to 4.6 percent from 2017-2019.

Finance Secretary Carlos Dominguez III has welcomed S&P’s “good news” on the economy, which, he said, “gives the new government greater resolve to transform the economy into a truly inclusive one by pursuing, among others, a tax reform plan that seeks to generate enough revenues to grow the middle class, energize the corporate sector, and raise investments in human capital and social protection to drastically reduce poverty incidence.”

In his meetings with foreign ambassadors from Spain, China, and the European Union as well as with leaders of international institutions such as the Japan International Cooperation Agency and the World Bank, Dominguez received expressions of support for the Duterte administration’s 10-point socioeconomic agenda.

The 10-point agenda aims to: continue the sound macroeconomic policies of President Duterte’s predecessors; introduce a tax reform package that will ensure both fairness as well as broad participation; improve the ease of doing business through more efficient and responsive governance; invest massively in new infrastructure to close the gap between what the country needs and what it doesn’t have; focus on rural development to assure that our agricultural sector will be an engine for wealth-creating rather than the poverty-trap it has been; reform the land administration system to free up land as a component of our nation’s capital base; increase investments in human capital; increase support for science, technology and the arts; consolidate social protection programs; and, expand reproductive health services.

Both foreign and local business organizations also remain bullish on the economy under the Duterte administration, Alvarez said.

These include the Philippine Chamber of Commerce and Industry (PCCI), Philippine Exporters Confederation Inc. (Philexport), and the Management Association of the Philippines.

George Barcelon, PCCI president, said it is “business as usual” despite the government’s strong campaign against narco-trafficking and illegal drugs.

Sergio Ortiz-Luis Jr., who is Philexport president, even dared critics to name one or two (investors) who have closed shop here or changed their mind about doing business in the Philippines amid the current political noise.

Other PCCI executives, such as its chairman, Benedicto Yujuico and Francis Chua, the group’s chairman emeritus, have attested to the growing interest of foreign investors in the Philippines despite the negative reports from some sectors on the government’s campaign against crime and illegal drugs.

Perry Pe, MAP president, has expressed support for President Duterte’s recent declarations to ensure law and order following the Davao City bombing.

John Forbes, senior advisor at the American Chamber of Commerce of the Philippines, said it was within the constitutional authority of the President to carry out measures to ensure the security of Filipinos.

Barcelon and Ortiz-Luis also expressed their support for the President’s drive against crime and terrorism.

Meanwhile, a 2016 Philippine CEO Survey Report recently unveiled by the MAP and Isla Lipana & Co./PwC Philippines showed that 78 percent of CEOs and business leaders polled believe that gross domestic product growth would either hit or exceed this year’s forecast of six to seven percent, while 80 percent expect the same for next year’s GDP growth forecast. (PNA) FPV/DOF-PR/EBP