Finance Secretary Carlos Dominguez III has assured the public that the Duterte administration will exercise fiscal prudence and responsibility to ensure that its unmatched public investments in infrastructure would create a lot more jobs and business opportunities, which, in turn, would sustain the country’s growth momentum and accelerate poverty reduction.
Dominguez said the government will only resort to financing its ambitious infrastructure buildup through borrowings –and mostly from local sources–if the “economy can grow to finance its debts.”
“This administration is responsible enough to put money where it is required so there can be more businesses in the areas where the infrastructure will be built,” Dominguez said.
Dominguez said the Duterte administration is bent on having its Comprehensive Tax Reform Program (CTRP) approved in the Congress so that it could help raise enough revenues to bankroll the government’s ambitious plan to modernize the country’s infrastructure backbone so the Philippines could catch up with its more vibrant Southeast Asian neighbors.
The first package of the CTRP, Dominguez said, would serve as the “cornerstone” of the funding for the government’s “build, build, build” program.
He likewise pointed out that the government will take advantage of the excess liquidity in the domestic market by borrowing 80 percent from banks and other financial institutions here, while tapping only 20 percent of its loans from overseas lenders.
“We will invest wisely and gain from the investments we have made to pay for the country’s debts,” Dominguez said in response to concerns that the government might fall into a “debt trap” in implementing its infra program.
The Duterte administration is planning to spend P 8.4 trillion over the next five years to close the country’s infrastructure gap that has for decades blunted its global competitiveness as an investment destination.
Dominguez said this economic strategy will not only strengthen the country’s poor infrastructure backbone, but would also create more jobs, “which means more people paying taxes.”
“With good infra, real estate values will go up, so more property taxes can also be collected. More opportunities for businesses also means more revenues for the government,” Dominguez said. “That’s Economics 102.”