Metro Manila (CNN Philippines, January 23) — Finance Secretary Carlos Dominguez on Tuesday said the administration has made progress in achieving its socioeconomic goals, but admitted encountering headwinds which the economic team quickly addressed.
“Well, I think we have made a lot of headway in achieving our 10-point economic program. And it has continued to put us among the top performers in the world for economic growth. However, since May of last year, we have had quite a bit of headwind,” Dominguez said in an exclusive interview with CNN Philippines.
Introduced in the early part of President Rodrigo Duterte’s term in 2016, the 10-point agenda include initiatives primarily aimed at maintaining the sound fiscal, monetary and trade policies of the previous administrations.
Dominguez asserted that the country’s economic team, which he leads, had “reacted very fast” to economic headwinds.
Inflation — the continues increase in the prices of commodities — consistently rose in the first nine months of 2018 before tapering off in November and December, while the peso struggled against the green.
Dominguez attributed last year’s economic slowdown to different factors, including the trade war between China and the United States, increasing prices of oil in the global market, and the subpar performance of the local farm sector.
“First of all, the threat of trade war actually happened, and that has put a lot of uncertainty into the economic growth of the world. And because of that, when there’s uncertainty, the normal reaction of banks is to increase interest rates because the risks are higher. So we have had to deal with that issue,” he said.
“Oil prices, therefore, also have sky-rocketed totally unexpectedly. And locally also, we hit a bad spot, particularly in agriculture. You know, for the first three quarters of last year, agriculture grew only by the half of 1 percent. And considering that our population is growing around 1.7 percent a year, agriculture should grow at least 1.7 percent or let’s say 2 percent a year, which is much lower than what industry and services are doing over 2 percent,” he added.
Dominguez touted the economic team’s move to address people’s clamor on the implementation of the Tax Reform for Acceleration and Inclusion Act (TRAIN).
“In the case of the tax reform law, we predicted that prices would rise by anywhere from one half of 1 percent to seven-tenth of 1 percent. And you must take a look at the first package of the tax reform law completely. We just did an analysis of that, as required by law, and the biggest number that comes out in the tax reform package is the fact that we have reduced personal income taxes of employees and citizens by a total of ₱12 billion a month. And that has worked well,” he explained.
Dominguez credited the previous two administrations for the country’s “a lot easier” financial management.
“The last two administrations actually implemented very good economic policies. And that set us on the path of implementing what we need to do,” he said, referring to the leaderships of former Presidents, Gloria Macapagal-Arroyo who now serves as House Speaker, and Benigno Aquino III.
