by: Sidney Liquigan
Wednesday, March 21, 2018 | Outsourcing News |
In February 22, Department of Finance (DOF) Secretary Carlos G. Dominguez III said in a speech before the United States-Philippines Society (USPS) members that the department expects the Philippines' GDP to grow faster in 2018 and 2019, mainly driven by the current government's tax reform programs, as well as the efficiency in public spending and major infrastructure projects, as reported by Manila Bulletin.
"We are confident the revenue reforms, sustained fiscal discipline, better spending efficiency and massive investments in infrastructure will enable us to escalate growth to between seven and eight percent in the near term," Dominguez said. In 2017, the Philippines' GDP growth was at 6.7%.
Dominguez also added that the projected growth pace will contribute to bringing down the country's poverty incidence from 21.6% in 2015 to 14% by 2022.
Confirming that the current rapid economic growth is not an unusual occurrence, Dominguez noted that the Philippines' GDP growth in 2017 capped 76 consecutive quarters (19 years) of uninterrupted growth. He also added that the country's economy has maintained a growth rate of 6% or above for 11 quarters now.
In the speech, Dominguez also talked about the inflation caused by the recently implemented TRAIN Law. In January, inflation was at its highest (at 4%) in three years. However, he assured that this will be temporary.
"We estimate that it will remain within the two to four percent threshold set by our monetary authorities. The recent uptick in inflation is due largely to the spike in international crude oil prices as well as the efficiency of BIR tax collections," Dominguez said.
As for the country's external sector, Dominguez said that it continues to be our economy's source of strength, driven by a strong BPO sector.
"Our healthy external payments position, marked by adequate foreign exchange reserves, declining external debt ratio and backed by sustained flows of remittances and revenues from the Business Process Outsourcing sector give investors comfort about the Philippines' resilience to future external shocks," Dominguez noted.
Further, tourism also plays a big role in the faster economic growth. For 2018, Dominguez said that DOF expects tourist arrivals to exceed 2017's 6.6 million by a significant number. He also added that a large portion of the tourists is expected to come from China.