The head of one of the Philippines’ leading business empires has lauded the Duterte administration for taking the unusually “bold step” of pushing tax reform and embarking on an ambitious infrastructure program at a time when the economy is in a “position of strength” to handle challenges.
Jaime Augusto Zobel de Ayala, who currently sits as chairman of Ayala Corp. and its other vast business interests, said that such “boldness” on the part of the government “augurs well for a country that has tremendous potential to move up to a far greater degree than we have within the ASEAN (Association of Southeast Asian Nations) context.”
“I have to say that I’m impressed by the boldness that our government is showing. We are a nation that has gotten used to incremental steps forward. But as you can see from the dialogue that we had today, there is a sense of boldness in the way people are looking to the future. That is something that you generally see more in the private sector than the public sector,” said Zobel de Ayala at a recent economic forum in Singapore that was also attended by the Philippines’ economic managers.
He noted that “throughout our history as a country, there have been periods of time when we felt insecure, during periods of high debt and when our economy was weak. I’ve always argued that thinking ‘bold steps’, whether you are in the private sector or the public sector, are important psychological states of mind to be in when you want to succeed in a much bigger way.”
Zobel de Ayala and other Philippine tycoons have expressed their support to the Duterte administration’s “Build, Build, Build” program that involves spending between P8 trillion and P9 trillion over the next five years to close the country’s infrastructure gap.
Finance Secretary Carlos Dominguez has said the government requires an “audacious” economic strategy that would enable the Philippines to significantly reduce the poverty rate to 14 percent by 2022 and transform the country into an upper middle income-economy by that time.
This strategy will enable the government to sustain the Philippines’ growth momentum, attract investments and create jobs, and achieve economic inclusion, he said.
Dominguez said President Duterte’s tax reform package now pending in the Congress is an indispensable component to charting this vibrant future for Filipinos.
He pointed out that after being saddled with a debt burden and the Asian financial crisis for many years, the country is now enjoying a “Cinderella moment” when it is already highly capable of shifting the source of growth to an “investment-led” one that creates jobs and opens more economic opportunities for Filipinos.
Dominguez said tax reform will serve as the fiscal buffer that would enable the government to pursue its expansionary economic policy anchored on an ambitious “Build, Build, Build” program consisting of some 75 major flagship projects that would either be completed or started over the next five years.
The first package of this tax reform program—the Tax Reform for Acceleration and Inclusion Act–is meant to provide the government with sufficient funds to maintain fiscal discipline while it invests heavily not only in infrastructure, but also in programs to expand access to social services such as health and education, Dominguez said.
“Of these flagship projects, 18 have been approved by the NEDA Board. When the shovels hit the ground, expect an economic growth spurt,” he said.