Finance Secretary Carlos Dominguez III said the double-digit growth in sales and high profit margins of premier retail and real estate companies in the Philippines are indications the implementation of the Tax Reform for Acceleration and Inclusion Law is a success” in boosting the spending power of Filipino consumers.
Dominguez said in a speech before the Japanese business community in Osaka, Japan, the TRAIN Law put more money in the pockets of the consumers and ensured strong domestic demand in the economy.
He said the revenue measure also raised much-needed additional funds for the government’s extensive spending on its “Build, Build, Build” program and on human capital development.
“Ninety-nine percent of individual taxpayers enjoy reductions in their personal income tax rates. Filipinos earning below US$4,500 annually are now exempted from paying personal income taxes while workers earning above it now receive about a month’s extra take-home pay each year from the deductions in their tax rates. To emphasize that point, by correcting the tax rate for our average wage earners, we have basically given out a 14th month pay annually,” Dominguez said.
He said published data showing the significant growths in sales and income of corporate giants in the real estate and fast-food industries are strong indications that Filipinos had started to benefit from the TRAIN Law by way of their greater purchasing power.
Dominguez noted, for instance, that Jollibee Foods Corp., the Philippines’ largest fast-food chain, posted sales of about $2.9 billion in 2018, up 16 percent from the 2017 sales level. Nt income also increased 17 percent to $158 million in 2018 from the previous year.
Ayala Land Inc., the Philippines’ premier and oldest property company engaged in the planning and development of large-scale, integrated estates, posted an 18-percent increase in sales in 2018 to US$3.11 billion year-on-year. The net income also rose 16 percent to$558 million, Dominguez added.
Meanwhile, SM Prime Holdings Inc., owner of the biggest and most number of malls in the country as well as the second-largest high-rise condominium developer, posted sales of almost $2 billion in 2018, up 17 percent from a year ago.
SM Prime’s net income jumped 17 percent to $616 million last year, driven mainly by new mall openings in the provinces.
The Philippines’ leading commercial banks also posted strong interest income growth on the back of strong customer loan growth in the first nine months of 2018. BDO Unibank Inc., the largest bank in the Philippines in terms of assets, saw its interest income rise by 20 percent to $1.4 billion on the back of an 18-percent customer loan growth, Dominguez said, citing published data.