MANILA–Tycoons of Philippine business led by Jaime Zobel de Ayala of the Ayala Group and Tessie Sy Coson of SM Investments Corp. took part Tuesday night in the second ‘DuterteNomics’ Forum in an apparent show of support for the unprecedented “Build, Build, Build” agenda of the Duterte administration.
Besides Zobel and Coson, the event was also attended by Danel and Sandro Aboitiz of Aboitiz Equity Ventures, Edgar Injap Sia II of Double Dragon Properties Corp.; Kevin Tan of Megaworld Corp.; and Michael Tan of the LT Group Inc.
Like the first one held last week also at the Conrad Manila Hotel in Pasay City, the second forum on Tuesday was organized by the Presidential Communications Operations Office (PCOO), Department of Finance (DOF) and the Center for Strategy, Enterprise, and Intelligence (CenSEI).
At the forum, Finance Secretary Carlos Dominguez said the government requires an “audacious” economic strategy that would enable the Philippines to catch up with its more vibrant neighbors by 2022 and transform its status into high-income economy in one generation.
Dominguez said that fortunately, the Philippines has “a leader capable of much audacity,” and with the “vision and intense love for country” who will carry out this ambitious, yet necessary agenda that would free Filipinos from the poverty trap that they find themselves in today.
“The Philippine economy, with the decisive leadership of Rodrigo Duterte, is now ready for an economic breakout that will increase the pace of growth, intensify inclusion and reduce poverty,” he said on Tuesday at the second “DuterteNomics” Forum in Manila organized by Malacanang.
“Fortunately, we have a leader capable of much audacity. We have a leader of vision and intense love of country. All the favorable factors are present. It is time for the breakout,” he said.
Dominguez said President Duterte’s economic strategy includes an infrastructure buildup that will entail trillions of pesos in investments that are necessary to help ensure that the next generation of Filipinos no longer remain “in the same poverty trap we found ourselves in.”
Dominguez said this is why the Duterte administration’s reform agenda focuses on accelerating spending on infrastructure and on human capital by upgrading the country’s educational and health care systems, along with its goal to lower income tax rates to sharpen the Philippines’ global competitiveness.
“Dutertenomics,” is President Duterte’s economic strategy to dramatically raise funds–in large part through his proposed Comprehensive Tax Reform Program (CTRP)–and spend big on infrastructure, human capital formation and social protection.
This strategy will enable the government to sustain the Philippines’ growth momentum, attract investments and create jobs, achieve economic inclusion and transform the Philippines into a high middle-income country by 2022, by which time poverty incidence will have been reduced to 14 percent.
If “DuterteNomics” is sustained over the medium term, the government envisions the Philippines to be a high-income economy in one generation or by 2040.
Dominguez said the Philippines is also looking forward “to what has been called a ‘demographic sweet spot.’
“As the populations of some of the more mature economies in Asia begin to age, we are looking forward to the entry of millions of young Filipinos into the workforce. We must invest in them and make them globally competitive. We must prepare the economy to provide meaningful jobs for them or else risk building an alienated and discontented generation,” he said at the forum .
Describing this “demographic sweet spot” as both a “challenge and an opportunity,” Dominguez said this advantage “is a test of our ability to govern and chart the nation’s future,” and requires “reshaping our country’s economic development beginning at this time.”
Dominguez said President Duterte’s CTRP now pending in the Congress is an indispensable component to charting a vibrant future for Filipinos.
“It is an audacious strategy that seeks to lift our country to upper middle-income status by 2022 and high-income status by 2040,” he said.
“The CTRP, therefore, is the key link in the grand effort to break out from the cycle of low growth and build a dynamic and inclusive economy for our people,” Dominguez said. “It is a pro-active and pro-poor measure that supports the expansionary fiscal posture of the present administration.”
Dominguez pointed out that after being saddled with a debt burden and the Asian financial crisis for many years, the country is now enjoying a “Cinderella moment” when it is already highly capable of shifting the source of growth to an “investment-led” one that creates jobs and opens more economic opportunities for Filipinos.
Said Dominguez: “We have completed our fiscal consolidation. Our credit ratings attest to that. The debt burden is no longer a drag on our economic growth. We can now reshape our economic development so that it is investment-led. This, in turn, will open the door to a truly inclusive economy. An investment-led growth pattern creates jobs and opens more economic opportunities for our people.”
“We are now actively seeking investments not only to rebuild our depleted manufacturing sector but also to capitalize our agriculture to make it more efficient,” he said.
Dominguez said now is the time to move decisively in carrying out this “grand effort,” given the convergence of positive factors that are conducive to high and inclusive growth, such as the economy’s low-interest rate regime, excess liquidity, benign oil prices, investment-grade credit rating, a young, vigorous work force and the strong support of countries like Japan and China.
Besides Dominguez, the other participants at the forum tackled how “Dutertenomics” would usher in the country’s “Golden Age of Infrastructure.”
They included Executive Secretary Salvador Medialdea; Secretaries Benjamin Diokno of the Department of Budget and Management (DBM), Mark Villar of the Department of Public Works and Highways (DPWH), Ramon Lopez of the Department of Trade and Industry; Alfonso Cusi of the Department of Energy (DOE), Arthur Tugade of the Department of Transportation (DOTr) and Martin Andanar of the Presidential Communications Operations Office (PCCO); president and CEO Vivencio Dizon of the Bases Conversion and Development Authority (BCDA) and Undersecretary Adoracion Navarro of the the National Economic and Development Authority (NEDA).
Dominguez said at the forum that to begin rebuilding the Philippines’ competitiveness, he said the government must start by filling the infrastructure backlog and realigning the country’s income tax rates.
“Realigning income tax rates, however, will bring down revenues even as we improve tax administration and broaden the tax base. This means we have to introduce new revenue measures that will not only compensate for lower tax rates but also fund the massive infra program,” he added.