THE shift of source for economic expansion from consumption to investments needs an additional P1 trillion per year on top of the current P1.3 trillion expected to be spent by the government in 2016, the Department of Finance (DOF) said.
DOF spokesperson Paola Alvarez, in a press statement released Sunday, September 18, said the additional funding projected should be focused in massive investments in people and in infrastructure.
“We should focus our spending on infrastructure, research and development, health, education, lifelong training for our labor force and social protection for the poorest of the poor,” Alvarez said.
The additional P1 trillion funding requirement would be sourced from the implementation of a fairer, simpler and more efficient tax system with low rates and a broad base that aims to promote investments, create jobs and reduce poverty.
Institutionalization of tax administration reforms at the Bureau of Customs and Bureau of Internal Revenue is also what the government should look into.
Alvarez added budget reforms should also be carried out to improve spending, ensure transparency and generate savings efficiently.
“President Duterte’s promise of real change (tunay na pagbabago) envisions a society where all Filipinos enjoy inclusive growth, improved public services, safe, healthy and peaceful communities, more money in their pockets, and more comfortable lives,” she said.
In line with the Duterte administration’s 10-point socioeconomic agenda, the government’s vision in the medium term is to reduce the poverty rate from today’s 26 percent to 17 percent of the population by 2022, along with attaining high-middle income status for many of its citizens.
This agenda is meant to make the Philippines a law-abiding country, be at peace with its neighbors and domestic insurgent groups, and on the par with its more economically vibrant Asian economies, Alvarez said.
“With the reforms put in place by the Duterte administration, it hopes that by 2040, or one generation from now, extreme poverty in the country would be a thing of the past, with inclusive economic and political institutions offering equal opportunities for everyone and the country attaining high-income status,” Alvarez said.
She added to realize this vision, the Philippines needs to sustain its Gross Domestic Product growth rate of at least 7 percent every year for the next two decades and shift the source of economic expansion from consumption to investments. (ASP)