122nd DOF Anniversary
How time passes when we are hard at work and reaping the fruits of our labor.
Last year, when we marked the 121st anniversary of the Department of Finance, we celebrated the passage of the first tranche of the comprehensive tax reform program. Modernizing our tax system is always challenging. It requires working the political headwinds and surmounting the vested interests.
The passage of the TRAIN law was a great success. We broadened the tax base and returned about 111 billion pesos—the equivalent of a 14th month pay—to the pockets of 99 percent of our wageworkers. That reflected in a spike in consumer demand that helped boost the domestic economy.
Our main revenue agencies responded very well to the tax reform law. We have overperformed on our targets. In its first year of implementation, TRAIN achieved 108 percent of its revenue target. This demonstrates the revenue sustainability that is crucial to strengthening our fiscal position.
We are also particularly proud of the passage early this year of the rice tariffication law. This was, understandably a politically difficult reform measure to pass. This was finally achieved under the current government after more than thirty years of attempting to do so under various administrations. I started it in the 1980’s, and I failed then. I said I wouldn’t fail this time. The liberalization of rice trading will make quality rice more affordable and accessible to Filipino families, lower the country’s inflation rate, and revolutionize our agriculture sector as well as help our farmers become more competitive and productive.
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; and massive commitments to strengthening our human capital and the passage of a law providing universal healthcare.
The results of the last three years have clearly demonstrated our resolve and success.
This year, we mark the 122nd anniversary of the Department with more good news. Standard and Poor’s granted us a credit rating upgrade of BBB plus. This is the best rating the country ever achieved. The upgrade puts the Philippines above countries like Italy, Portugal and Indonesia and just a notch below countries like Spain and Malaysia. This also puts us at par with countries like Mexico, Peru and Thailand.
The credit rating upgrade is an undeniable recognition of President Duterte’s unwavering commitment to bold reforms and sound economic policies as embodied in the 10-point socioeconomic agenda of the administration as well as his political will to get these 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.
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.
The next few years will be even more crucial, as we hope to build on the government’s achievements and realize a truly inclusive and progressive economy. We will continue to work hard to see through the passage of the succeeding packages of the comprehensive tax reform program. The positive results of the TRAIN law provide the best arguments for completing the tax reform program.
We will also continue with our fast and sure approach in securing concessional financing support for our Build, Build, Build 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.
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.
In the wake of the most recent credit rating upgrade, we set out on the next goal: the achievement, finally, of an “A” rating in the next few years.
To achieve that, the DOF must work even harder. 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.
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.
Happy anniversary to all!