DOF SECRETARY CARLOS DOMINGUEZ III: This chart came out about two weeks ago and The Economist ranks the Philippines number six out of 66. So we are in the top 10 percent in the world in economic resiliency. So we are also the best in Southeast Asia in terms of financial strength.
The assessment shows that the country continues to enjoy the confidence of the international community which go a long way in boost — boosting our recovery efforts.
The President’s conservative economic policies and pursuit of economic reforms such as tax reform have kept the country’s financial position strong because we have strengthened our revenue flows from TRAIN followed by the sin tax adjustments, we have been able to slowly bring down our debt to 39.6% of GDP. This used to be 70%, so we are less than 40% already.
This approach of saving for rainy day has given us ample fiscal space to borrow money for programs to defeat the COVID-19 and revive the economy. We achieved the credit rating of BBB+, the highest in our country’s history which signals that the world thinks that we are very worthy borrower.
The credibility allows us to borrow more cheaply and from a broader range of sources. Rice tariffication has also continued to keep inflation low and stable. Inflation in April further eased to 2.2%, well within the low end of our target of two to four percent.
We have to do many things in order to revive the economy and I would like to propose the following priorities: Number one, after we are confident that — that we can — that we are in control of the death rate and infection, we should restart and accelerate the Build, Build, Build Program subject to compliance of minimum health standards.
The infrastructure remains to be the best driver of economic growth because it has the best multiplier effects in terms employment and shared prosperity. We should also hire contract — contact tracers en masse to boost our efforts to stop transmission and defeat COVID-19 while providing jobs.
You know we lost about 1.2 — 1.5 million jobs. They are temporarily lost but you know if we hire these guys to do contact tracing, which we are having a very hard time right? Doing the contact tracing.
I think we can provide good jobs to people. Because sometimes it takes one contact tracer one whole day to do contact tracing for one case. So we need to hire enough contact tracers to match the numbers we expect that will come with more testing.
To attract investors who want to relocate from other countries and in search of resilient high growth potential economies like the Philippines, this will involve the urgent passage of CITIRA or Package 2 of the Comprehensive Tax Reform Program, which we now proposed to include flexible tax and non-tax incentives so we can target specific companies that we want to invest here.
The bill has been with the Senate for a few months. We would like to ask for your support so that Congress can pass this before June 3.
Number four, we have to stimulate the consumer demand. We must promote manufacturing of products that have strong and inelastic demand such as those as food production. Inelastic demand means that you will buy it regardless of what your income is or what the price of the good is.
And that is food, number one. You have to eat food. So we must push food production and food logistics. We must be able to get the food here cheap. We must be able to store the food and so that — the fresh foods so it will last.
We would also like to support the whole value chain for the food products including food markets for efficient distribution similar to fruit and vegetable markets established many years ago in Japan.
The Duterte administration’s economic team and our legislators are finalizing an economic recovery program that will help us combat the pandemic and provide industries especially micro, small, and medium enterprises, the assistance they need to get back on their feet and our fellow Filipino workers — fellow Filipinos back to work.
So, Mr. President, our real problem is that the people are not buying things. So we must — because their incomes have gone down. So we must provide them the means of buying things. Because if they don’t buy things, it’s useless to help the companies. So we have to stimulate demand, and that’s through Build, Build, Build and push food production.