Finance Secretary Cesar Purisima on Friday extended his support to the policy reforms of the incoming administration of President-elect Rodrigo Duterte.
Purisima said the country had sufficiently freed itself from structural and fiscal constraints that would enable the next administration to increase investments in infrastructure and social services for the medium-term period.
Purisima said the past six years had built the right foundations, setting the stage for wider policy options to sustain growth.
With the next administration planning to double spending, raise the deficit ceiling and borrow more, Purisima extended his support, saying enough confidence and fiscal space had been amassed to enable the new government to support a more expansionary fiscal policy stance.
He cited the Philippines increased tax revenues by at least two-thirds from pre-2010 levels, raised the education budget by 125 percent, health by 336 percent, infrastructure by 360 percent and social services by 166 percent.
“For so long as the current growth trajectory is maintained, growth-inducing expenditures will keep having more and more room to comfortably expand,” he said.
Meanwhile, Purisima pushed for a holistic tax reform effort that could further spur long-term, equitable and inclusive growth without sacrificing the country’s macroeconomic position and push the tax effort to 16 percent of the gross domestic product.
“With the country hailed as the most upgraded investment-grade sovereign, the next administration is likewise in a position to tap the markets to finance aspirational growth requirements if needed,” Purisima said.
With a record debt-to-GDP level of 44.8 percent in 2015 and low weighted average interest rates, the Philippines had reasonable room to maneuver, he said.
Purisima is confident the incoming economic team has the experience and expertise to navigate a fiscally sustainable path in today’s lending environment.
“Awash with hope, the Philippines enters its best period yet,” he said.
