FINANCE Secretary Carlos Dominguez III has said 2019 has been a year of “great achievements” for the Department of Finance (DOF) ranging from revenue and dividend collections to the pursuit in Congress of the remaining packages of the comprehensive tax reform program (CTRP) that will help the government fund its priority programs on infrastructure and human capital development.
“The reforms we seek to achieve will require resilience, endurance and persistence. I ask you to remain firm in the tasks we have to accomplish, especially next year as we push for the remaining packages of the tax reform program,” he said.
Among the DOF’s accomplishments in 2019 that Dominguez cited were the passage of the tobacco tax reform bill, the increased revenues from taxes and cash dividends remitted by government owned- and -controlled corporations (GOCCs), the progress in the remaining CTRP packages sent to Congress, and the highly concessional loan financing sealed for projects under President Duterte’s signature “Build, Build, Build” program.
He also mentioned among the DOF’s accomplishments the credit rating upgrade of “BBB plus,” and the successful offshore issuance of bonds with tight spreads over the benchmarks, along with the collection of taxes from errant Philippine online gaming operators (Pogo) service providers and their foreign employees.
“All the hard work we put in to reform our policies and build an inclusive economy have resulted in a palpable improvement in the lives of our people,” Dominguez said.
The finance chief said the Duterte administration is well on track in achieving what had seemed at first as an ambitious goal of bringing poverty incidence to 14 percent by 2022 down from 23.3 percent in 2015, as evidenced by official data showing that 5.9 million Filipinos were lifted out of poverty in three years. This means poverty incidence dropped to 16.6 percent in 2018 from the previous rate in 2015.
Quoting Alexander the Great, who had built an empire that stretched from Greece to India, Dominguez said: “There is nothing impossible to him who will try.” Citing an example, Dominguez said the Duterte presidency was able to finally pass the Rice Tariffication Law (RTL) after three decades of other administrations trying to do so.
The RTL has reduced the price of rice for over 100 million Filipino consumers and will boost the productivity of palay farmers through the establishment of the annual P10 billion Rice Competitiveness Enhancement Fund (RCEF) mandated under the law.
To be sourced from rice import tariff collections, this annual P10 billion RCEF will go to providing local palay growers with farm machinery and other equipment, high-yield seeds, cheap and easy credit, and skills training on farm mechanization and other modern technologies.
He also pointed out that the Duterte administration embarked on tax reform without being compelled by a looming fiscal crisis, and significantly increased investments in infrastructure from a mere 2.5 percent of the Gross Domestic Product (GDP) for over 50 years, to above five percent of GDP with dramatic results.
By 2022, Dominguez said, the government will be investing seven percent of GDP in modernizing the country’s logistics backbone, which will enable the Philippines to catch up with the rest of the region and further sharpen its global competitiveness.
Taking a page from Sun Tzu’s “Art of War,” Dominguez quoted the Chinese philosopher and general in saying: “Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win.”
“We are all warriors for reform. The sage tells us we must be smart to win. We must prepare well and move decisively. I encourage you to continuously build yourselves and sharpen your weapons for the war we have before us. After the holiday break, we will return to the battlefield with refreshed spirits and renewed vigor to win the war for reforms,” Dominguez said. “And I trust we will win by combining sound analysis, compelling strategies, and savvy execution. Let us aim for victory after victory.” (PR)