Finance Secretary Carlos Dominguez III asked global institutional investors managing pension and sovereign wealth funds to invest in the Philippines’ $170-billion infrastructure modernization program and take part in the country’s economic emergence.
Dominguez told members of the Asia Pacific Investors Cooperation network during the Philippine delegation’s visit to Tokyo this week that now was a good time to build partnerships with the Philippines.
He said the Philippines emerged as one of the main growth engines in the region and the government aimed to sustain this status by embarking on an ambitious infrastructure program “with a great sense of urgency.”
“The modernization of our infrastructure and our governance will bring enhanced connectivity to the Philippine economy. They will open many opportunities for the global investment community. I hope that you will examine our on-going programs and decide to participate in the strong emergence of the Philippine economy,” Dominguez said during the APIC meeting held at the Shangri-La Hotel in Tokyo, Japan.
APIC is a private network exclusively created by and for Asian sovereign wealth funds, government funds, central banks and public and private pension plans.
The meeting, held on June 21, focused on discussions about investments prospects for foreign pension funds in the Philippines’ ‘Build, Build, Build’ infrastructure program.
Dominguez said that in the Philippines, state pension funds also played a role in funding infrastructure projects, as he cited the investments made by the state-run Government Service Insurance System in this field.
The GSIS, according to Dominguez, invested in private infrastructure assets through the Philippine Investment Alliance for Infrastructure”•the first private equity fund earmarked for the country’s infrastructure projects.
Among the investments made under the fund were solar power and wind farm projects, power plants and railways.
Dominguez said that to speed up the implementation of its massive infra program comprising 75 flagship projects, the Philippine government continued to streamline its institutional processes on approvals and execution and has also introduced the ‘Build, Build, Build’ portal to enhance transparency and fast-track project implementation.
“It is our desire to see the strategic projects completed at the shortest possible time in order to immediately realize their economic value and lessen unnecessary financing costs,” Dominguez said.
The Duterte administration’s economic strategy, Dominguez said, was anchored on two major programs: the infrastructure buildup and its comprehensive tax reform program that would generate the robust and reliable revenue flows needed for the cash-intensive infrastructure development
The first tax reform package which lowered personal income tax rates for 99 percent of the taxpaying population, raised revenues in the first quarter of 2018 that exceeded expectations, Dominguez said.
Dominguez said that following the implementation of this first package called the Tax Reform for Acceleration and Inclusion Act, the country’s tax effort rose from 13.4 percent of GDP to 14.3 percent, which was the highest first-quarter tax effort that the Philippines achieved in the past 25 years.