“It’s the Philippines’ Year”

Once Asia’s poor man, the Philippines is gearing up for a banner year in 2017 with hundreds of millions earmarked for infrastructure construction and bold promises from its outspoken leader.

In its Dec. issue, the American edition of Fortune magazine reported, “It’s the Philippines’ Year.”

According to the article, “President Rodrigo Duterte’s penchant for vigilantism and anti-Americanism is worrying. But (the)… economy is hitting its stride.  Economists expect Philippine GDP to grow 6.2 percent next year. One clue to a looming boom:  An analysis by IBM Watson of some 700,000 global news sources found a high concentration of mentions of infrastructure investment linked to the country.”

Philippine Budget Secretary Dr. Benjamin Diokno announced recently: “We are reforming and opening up the Philippine economy.

“Local and foreign investors are welcome to be part of the fastest-growing economy of the Philippines in the fastest-growing region in the world, which is Asia. We are undertaking massive new infrastructure projects to modernize the economy.”

Secretary Diokno predicted a new “golden age of infrastructures” for the Philippines under the Duterte administration in the coming six years, with a projected record-high budget of P8.2 trillion to P9 trillion.

He said…

• The Philippine government is expected to register an 8 percent annual economic growth by year 2022.

• that Manila has already approved 18 massive public infrastructure projects.

• that the Duterte administration plans to build a new 600-kilometer train system from Tutuban in downtown Manila through Albay to Sorsogon province in the Bicol region, with estimated construction costs of US$250 million to $300 million to be completed in four to five years.

• Infrastructure construction projects will be undertaken by the Duterte administration 24/7. Duterte described it as “non-stop and full-speed.”

• The infrastructure budget for 2017 will be P861 billion.

The Duterte administration is planning to reduce the personal income tax rate from 32 percent to 25 percent, and to increase the number of people who will enjoy tax exemptions. Diokno said, “President Duterte is the first president of the country to submit a tax reform policy within only a few months in office.”

Trade and Industry Undersecretary for consumer protection Atty. Teodoro “Ted” Pascua said that, in the first quarter of 2017, the Duterte administration will make P1 billion available for lending to micro-entrepreneurs.

He said the goal of this fund is to ease the pressure of high-interest “5-6” lenders on the country’s smallest traders. Pascua said this micro-lending fund might grow to P6 billion by 2018.

Among the major Asian countries, the Philippines was one of the fastest growing economies with an average GDP growth of seven percent in the first nine months, surpassing China’s 6.7 percent, but behind India’s 7.4 percent.

The strong economic growth of the Philippines is seen to continue even as the global economy enters 2017 with uncertainties arising from key challenges, including change in political leadership and the anticipated rise of interest rates in the US, the continuing process of “Brexit,” and slowdown in China and other major economies.

The country’s buffers, particularly fiscal and monetary space, would help provide resilience to the domestic economy, officials said.

Officials said inflation is seen to slightly inch up from the estimate of below two percent this year to around the midpoint of the official target band by next year.

“Price stability would be supported by rising investments, which boost the economy’s productive capacity and, therefore, the supply of goods and services. Rising investments are evidenced partly by increasing imports of capital goods, intermediate goods, and raw materials,” said National Economic and Development Authority Undersecretary Rosemarie Edillon.

“We see certain growth opportunities beginning next year,” Edillon said.

She pointed out the progress of economic integration of the Asean region, a market of about 600 million people, which could spur Philippine exports.

Edillon likewise cited the administration’s infrastructure agenda, which is expected to go full swing in 2017, the first year that the government will operate under a Duterte-administration budget.

Leave a comment
FACEBOOK TWITTER