The tax reform law that has returned some P111 billion back to the pockets of 99 percent of wage earners and the shift to rice tariffication that will slash retail prices of this staple are among the recent game-changing initiatives that best illustrate the Duterte administration’s resolve to carry out the bold reforms and sound economic policies embodied in its 10-point socioeconomic agenda, Finance Secretary Carlos Dominguez III has said.
The Tax Reform for Acceleration and Inclusion (TRAIN) Act, whose passage in the Congress was celebrated during the anniversary of the Department of Finance (DOF) in 2018, was again cited by Dominguez as the agency marked its 122nd anniversary this year for achieving 108 percent of its revenue target in the first year of its implementation.
Dominguez said TRAIN, which he described as “a great success,” also broadened the tax base and returned the equivalent of a 14thmonth pay to 99 percent of the country’s salaried workers, or a total of about P111 billion in 2018.
He said this cash bonanza from the TRAIN is reflected in the spike in consumer demand that has helped invigorate domestic economic activity.
The shift from quantitative restrictions (QRs) to tariffs on rice imports is another “proud” accomplishment of the DOF that Dominguez has cited during its 122nd anniversary celebration, given that it took more than 30 years under various administrations to get the Congress to approve this reform.
Liberalizing rice imports, he said, will not only make quality rice more affordable and accessible to Filipino families, but will also lower the country’s inflation rate, revolutionize the agriculture sector and help farmers become more productive and competitive in the global economy.
“The TRAIN Law and the rice tariffication law are such game-changing reforms–more so the other landmark initiatives this government has decisively undertaken such as the establishment of a Bangsamoro Autonomous Region for Muslim Mindanao; increasing investments in infrastructure modernization; the introduction of a national ID system; improvements in ease of doing business; massive commitments to strengthening our human capital and the passage of a law providing universal healthcare,” Dominguez said in his speech before DOF officials and employees during the Department’s anniversary celebration on Monday (May 6).
Tax reform and rice tariffication proved to be challenging, he said, considering that the former required “working the political headwinds and surmounting the vested interests” and the latter was “a politically difficult reform to pass.”
Dominguez credited the hard work of DOF officials and employees, as well as it attached agencies, for accomplishing these reforms.
“For 122 years, this agency has been at the forefront of providing the means for government to be effective in playing a positive role for our people’s welfare and development,” Dominguez said. “As we kick off our weeklong commemoration, I thank you all for your contributions to meaningful change and fiscal responsibility toward a flourishing economy and a more comfortable life for law-abiding Filipinos.”
“It is always an honor working with the excellent men and women of the DOF. I can say that this is a world-class agency capable of setting tough benchmarks for the rest of the government,” he added.
Aside from these achievements, Dominguez said the DOF is marking its anniversary this year with yet another piece of good news: S & P Global’s upgrade on the Philippines’ credit rating from “BBB” to “BBB+”, which is the best rating that the country has thus far achieved.
Dominguez said the upgrade puts the Philippines above countries like Italy, Portugal and Indonesia; on par with Peru, Thailand and Mexico; and just a notch below countries like Spain and Malaysia.
“What makes this upgrade even more significant is that it comes in the midst of confident borrowing and aggressive spending to rapidly modernize our infrastructure and improve social services. Notwithstanding higher spending, we have been able to reduce our debt as a percentage of GDP and, overall, maintain fiscal discipline,” Dominguez said.
The upgrade, he said, is a global recognition of President Duterte’s unwavering commitment to bold reforms and sound economic policies as embodied in his 10-point socioeconomic agenda as well as his political will to get tough initiatives done at the soonest possible time.
“I also credit this to the patriotism, the professionalism and the dedication of all the men and women who work in the DOF and its attached agencies,” Dominguez said, as he called on his fellow workers in the Department to set their sights on the next goal of achieving the coveted “A” rating “in the next few years.”
“With the gains of the past few years, we can be bolder in our vision and more audacious in our programs. We remain optimistic that the goals this administration set out three years ago will be eminently achievable,” Dominguez said.
He also called on the DOF to continue working hard to see through the congressional approval of the remaining packages under the comprehensive tax reform program (CTRP), citing the positive results of the TRAIN law as the best argument for the completion of the entire CTRP.
Dominguez said the DOF will continue with its “fast and sure approach” in securing concessional financing support for the Duterte administration’s “Build, Build, Build” infrastructure projects.
“We are confident, as more and more projects become shovel-ready, the immense multiplier effects of infrastructure investments will provide a strong stimulus to our economic expansion,” he said.