MANILA—Finance Secretary Carlos Dominguez III on Monday expressed confidence that the country can easily achieve a seven percent economic growth and sustain it in the medium term.
Dominguez, in his speech at the start of the hearing by the House committee on Ways and Means on the proposed comprehensive tax reform program (CTRP), stressed the importance of the proposed CTRP to enable the government ensure more inclusive growth and elevate the Philippines to a high middle-income status by 2022.
He said additional revenues from the tax reform proposals would further bolster domestic economic growth that was driven by low interest rate environment and sustained improvement of macroeconomic fundamentals and fiscal position.
” With sufficient public spending on direly needed infrastructure, we could easily achieve a seven percent growth rate and sustain that well into the medium term,” he said.
If this goal is achieved, a high middle income status is achievable in six years, which Dominguez said was what some economists dub as a “Cinderella moment” for the country.
Another factor that needs to be focused on is the future of the youth given that the economy is now experiencing its demographic sweet spot.
”We need to invest in their (youth)skills and ensure they are globally competitive. We likewise need to ensure they find meaningful employment in an inclusive economy or face an alienated and disgruntled generation. If we fail to provide quality education and then fail to provide ample job opportunities, the next generation of Filipinos will condemn us,” he said.
The Finance chief said there was a strong need to address the country’s infrastructure gap to make the country more competitive.
He said the country’s tax system “is direly in need of reform” because it has one of the highest rates in the region.
”Unjustly high tax rates are nearly an invitation for evasion. By lowering tax rates to the regional environment, we hope to attract even more investments to sustain a higher growth rate,” he said.
Dominguez said revenue generating measures being proposed right now were eyed to bring in additional Php 800 billion and this “ will go a long way in assisting the projected Php 1 trillion annual expenditure for infrastructure.”
”This will enable us to turn challenge into opportunity: seizing the economy’s Cinderella moment and using the demographic sweet spot to propel our economy forward,” he said.
Dominguez said the CTRP would also help the government bring down poverty rate to around 14 percent by 2022 from the end-2015’s 21.6 percent.
”This is our economy’s golden moment. If we fail to seize it, the conjuncture of opportunities will pass us and we will betray our people. We cannot afford to lose because of indecision or because we failed to act boldly. We will condemn our nation to the vicious cycle of high inflation, high interest rates and inhospitable business conditions that we endured before,” he added.
Members of the Cabinet came in full force to support the tax reform proposals.
Other Cabinet Secretaries who attended the hearing are Budget and Management Secretary Benjamin Diokno, National Economic and Development Authority (NEDA) chief Ernesto Pernia, Trade and Industry Secretary Ramon Lopez, Transportation Secretary Arthur Tugade, Public Works and Highways Secretary Mark Villar, and Education Secretary Leonor Briones.
Also present during the hearing were Health Undersecretary Dr. Lilibeth David, Social Welfare and Development Undersecretary Noel Leyco, Transportation Undersecretary Garry de Guzman, Budget and Management Undersecretary Laura Pascua and Education Undersecretary Annalyn Sevilla.