MANILA, Philippines – The country’s gains from its strengthened ties with China, Japan and Russia could cushion the impact of possible protectionist policies in the US, the Finance chief said.
In his speech during a recent Business forum, Finance Secretary Carlos Dominguez III said uncertainties brought about by US President Donald Trump’s protectionist pronouncements have been dampened by President Duterte’s move to shift the country’s foreign policy.
“Many fear a sharp rise in protectionism should Trump translate his rhetoric to actual trade policies. Protectionist policies will dampen trade and probably have an adverse impact on our BPO sector, our economy’s second highest dollar-earner,” he said.
“Fortunately, the Duterte administration early on decided to rebalance our foreign policy,” Dominguez said.
The Finance chief cited the close to P1 trillion total trade, investment and development assistance the country acquired from China, as well as the President’s visit to Russia this year, which is expected to strengthen trade and investment ties between the two countries.
“All these gains should more than offset whatever protectionist policies the Trump administration might decide to institute,” he said.
Dominguez said the country is on its way to achieving its goals that are included in the 10-point economic agenda, especially with the help of China.
In 2016, the Philippines’ economy grew at 6.8 percent, just shy of reaching the seven percent growth target. Dominguez expressed confidence the target would be hit this year with the increase in investments and better spending on infrastructure.
“Although we are now one of the fastest growing economies in Asia, adept monetary policies kept the inflation rate benign. Combined with our investment-grade credit rating, the cost of money, looks like, will remain low. This should encourage more private investments in the economy,” he said.
The Duterte administration is also continuously pushing for institutional and economic reforms not only to sustain the growth momentum, but also to make the economy more inclusive, Dominguez said.
The DOF, in particular, is implementing tax administration reforms at the Bureau of Customs and the Bureau of Internal Revenue and proposing a Comprehensive Tax Reform Program (CTRP), which aims to simplify the country’s tax system.