GDP grows 7%, Philippine economy continues strong performance

Dominguez says Duterte admin to build on momentum

GDP grows 7%, Philippine economy continues strong performance

- in News

Finance Secretary Carlos Dominguez III today said last quarter’s Gross Domestic Product (GDP) growth of 7 percent will enable the new government to keep its growth targets on track for the rest of the year and in 2017.

Dominguez said that with the growth momentum of the Philippine economy remaining strong, the Duterte administration would build on previous efforts to effectively implement its 10-point socioeconomic agenda, which focuses on sustaining this upward growth trajectory and, more importantly, making its gains felt by all Filipinos.

The finance chief noted that the 2nd quarter growth rate is the highest for quarterly and semestral growth since 2014.

“The numbers are good for the Duterte government to hit its growth targets of at least 7 percent this year’s second semester and 6.5 to 7.5 percent in 2017,” Dominguez said in response to this morning’s official release of the second-quarter GDP data by the National Economic and Development Authority (NEDA).

Dominguez acknowledged the “good policies of both the Aquino and Arroyo administrations to sustain the country’s strong macroeconomic fundamentals that made this growth possible.”

“We aim to sustain and even boost this strong growth momentum by accelerating spending on infrastructure and investing heavily in human capital, along with overhauling the tax system and rationalizing fiscal incentives to further stimulate the economy,” Dominguez said.

“But we still have a big task ahead of us to lower the poverty rate that have been stuck at 26% of our population,” he added.

Besides investments in infrastructure and education, Dominguez said the government will also fully implement the Reproductive Health Law to realize the government’s goal of reducing the poverty rate from the current 26% to 17% by the time President Duterte steps down in 2022.

“We expect to continue this growth trajectory but with a difference from the previous admin because we will be reducing poverty rates,” Dominguez said.

Data released by the NEDA showed that with the second quarter GDP growth at 7 percent, the GDP grew by an average of 6.9 percent in the year’s first semester.

Dominguez said that to make growth truly inclusive, the Duterte administration would invest heavily in developing the country’s human resources, to empower poor families to be active contributors in developing the economy.

According to the finance secretary, “Mr. Duterte has put in place a 10-point socioeconomic agenda on inclusive growth at the start of his presidency to fulfill his electoral mandate to spread peace and prosperity to all sectors across all regions.”

“But for Government to do that, it must first sustain the growth momentum by way of a stimulus program anchored on accelerated spending on infrastructure, human capital and social protection,” Dominguez said.

“This is borne out by the national budget program that we have just submitted to Congress,” he said, “as well as the comprehensive tax program that we are now harmonizing with lawmakers for submission to the Legislature in September.”

Data released by NEDA also show that the economy grew by an average of 6.2 percent in the past six years.

According to the World Bank’s 2016 Global Economic Prospects report, Philippine economic prospects remain among the most robust in the region despite the doldrums in the West and risks of a slowing Chinese economy.

Along with the World Bank, the Asian Development Bank and the International Monetary Fund all point to Philippine economic growth of above 6 percent, higher than the average growth forecast for the ASEAN-5.

“Our strong macro-economic fundamentals will buffer the Philippine economy from external shocks,” Dominguez said.

“We are pushing personal and corporate income tax cuts to boost private consumption and further energize the economy, but are at the same time eyeing higher oil excise duties plus fewer Value Added Tax (VAT) exemptions, rationalizing other fiscal incentives, enhancing collection by revenue-earning agencies, and improving the ease of doing business, so Government can attract more investments and raise enough revenues to fund the President’s stimulus program,” Dominguez said.

“But our planned investment acceleration to foster growth and disperse income will be matched by fiscal prudence as we set deficit spending to three percent of GDP,” he added.

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