THE Department of Finance (DOF) remains optimistic that the economy will grow faster in the year’s second half on the back of larger investment inflows and exports, higher infrastructure expenditures, and an improved revenue effort, which posted a first-semester performance in 2018 that is the highest in the country’s tax history.
According to Finance Secretary Carlos Dominguez III, the economic numbers for the second semester of 2018 remain “very promising” and that the year’s second quarter GDP growth of 6.0 percent was a mere “exception that does not indicate a medium-term trend.” Dominguez said at a weekly news forum that the inflation rate, which reached 5.7 percent in July but actually eased to 0.5 percent on a month-on-month basis, is expected to go down to the original forecast range of 4.0 to 4.5 percent (based on Development Budget Coordination Committee projections) by the end of the year.
“Domestic demand remains robust. Investment flows grew in the first half of this year. Our exports of goods and services recovered to a double-digit growth of 13 percent in the second quarter from 6.5 percent in the previous quarter,” Dominguez said.
In terms of expenditure, the government’s effort improved to 19.47 percent, which is the highest first semester expenditure effort since 2003, he noted.
Dominguez said in the first half of the year, the government’s revenue effort also improved by 1.47 percentage points to 17.12 percent, which is the highest first semester revenue effort achieved since 1946.
The tax effort of 15.23 percent is also the country’s highest first semester tax effort, said Dominguez in pointing out that this accomplishment is the result of the Tax Reform for Acceleration and Inclusion Act (TRAIN) and tax administration improvements in the Bureaus of Internal Revenue and of Customs.
“Our tax effort is now at par with the best-managed economies in the region. It is a tax effort we can very well sustain, especially with the subsequent packages of the comprehensive tax reform program (CTRP) now being deliberated [by the Congress],” Dominguez said.
In seeking public support for the rest of the CTRP packages, Dominguez said that “once completed,” they “will ensure a healthy revenue flow, a more efficient investments-led economy, and a more inclusive growth process.” “We will finally have a modern revenue system fit to support a strong emergent economy,” he said. PR