Joseph: Philippines needs to diversify to attain “financial inclusion”

CEBU, Philippines — The Philippines should attain an investment-led economy to make it more inclusive, a Cebu business leader said.

Cebu Business Club president Gordon Alan Joseph said that if the Philippines wants to attain a "developed country", it has to diversify into economic drivers that provide more jobs to its people.

"It is worthy to note that the Philippines will never reach developed economy status by relying on its service and consumer spending sectors only," Joseph told The FREEMAN.

Citing the robust growth of the Philippine economy in the first quarter, the businessman noted the significant growth in investments and the country's manufacturing sector.

Philippine Statistics Authority data earlier showed the industry sector, where manufacturing belongs, recorded the fastest growth at 7.9 percent, while the services sector expanded 7 percent and agriculture 1.5 percent.

"It's good to see manufacturing and investments once again showing the highest growth figures," the CBC official said.

He pointed out manufacturing sector in particular provides more jobs than other sectors.

"This indicates that there is demand for goods and likely growth in quality employment as workers move into regular employment in the sector," Joseph asserted.

The current administration is ambitiously seeking to attain an investment-led and inclusive economy through a massive public spending strategy that would usher in what the Asian Development Bank (ADB) has forecast to be the ‘golden age’ of the “Philippines’ economic growth”.

Philippine GDP (gross domestic product) growth hit 6.8 percent in the first three months of 2018.

In a statement Thursday, the Department of Finance cited President Duterte’s foreign policy recalibration, which has enabled the government to secure ODA (official development assistance) from its allies in the region plus grants and concessional loans from multilateral institutions; above-target performance by its revenue agencies as a result of the TRAIN (Tax Reform for Acceleration and Inclusion) Law; and investment-grade credit ratings responsible for successful bond floats here and abroad as factors to achieve an inclusive growth.

The government had bared its “Build, Build, Build” program with 75 big-ticket infrastructure projects worth $170 billion and designed to reverse regional underdevelopment and income inequality by creating growth corridors all over the country.

Finance chief Carlos Dominguez III also said revenue collections would go up further with the succeeding packages of the Comprehensive Tax Reform Program (CTRP), which the Congress is expected to act on this year.

Aside from the unprecedented infrastructure spending, economic experts have also traced the high GDP growth in the first quarter to strong domestic consumption, which is apparently a result of households’ bigger disposable income arising from the hefty personal income tax (PIT) cuts under the TRAIN Law.

The DOF said that consumers now enjoy a cash windfall of about P10 billion combined each month as a result of the TRAIN’s income tax reductions, which benefit 99 percent of taxpayers.