The Philippine government plans to target additional companies in its crackdown on tax evasion, said Finance Secretary Carlos Dominguez.
“We are on a roll, and this is part of the president’s program to make our country more law abiding,” Dominguez told Bloomberg Television’s Kathleen Hays in an interview in Washington on Friday. “Tax evasion is a really serious violation and we are going after” evaders.
Dominguez said he expected a tax reform bill to receive lawmaker approval. The bill is among the first of five tax packages proposed under President Rodrigo Duterte to raise taxes to pay for infrastructure projects. The plan has been approved by the lower house and awaits Senate approval.
“They have promised the bill will be passed,” he said. “I am 100 percent confident. The legislature will deliver what the president needs.”
Duterte, who’s facing renewed criticism about his drug war, is under pressure to sustain growth above 6 percent to maintain investor confidence amid a weakening currency. The Philippines also needs billions of pesos to rebuild Marawi City in the south, where government forces have been battling Islamic militants.
Moody’s Investors Service and S&P Global Ratings have the Philippines on their second-lowest investment-grade score, while Fitch Ratings has the nation’s sovereign debt just one notch away from junk.
On plans for fundraising, Dominguez said the government will sell debt in China”•a so-called Panda bond”•over coming months.
“We are just awaiting final approval of authorities in China,” he said.
Dominguez III said the Duterte administration’s economic reforms and public governance would attract more investors from the United States.
Dominguez, in a forum on the Philippine economy organized by the Center for Strategic and International Studies, updated US policy makers and leaders from the American private sector of the Philippines’ robust economic performance and the Duterte administration’s plans to realize its expansionary economic strategy and inclusive growth agenda through reforms in the tax system and accelerated spending on infrastructure and social services.
Dominguez said the Philippines managed to accomplish much in modernizing governance, improving policy formulation and strengthening the rule of law with the sustained support of the US government.
“The support likewise covers winning peace and progress for Mindanao, facilitating trade and modernizing our agriculture. With the help of generous development assistance from the US, we have accomplished much,” Dominguez said at CSIS Building in Washington D.C.
CSIS, a bipartisan, nonprofit policy research group, provides proposed policy solutions to current and emerging global issues. CSIS is headed by John Hamre, a former deputy secretary of the US Department of Defense. Thed private think tank, which has a contingent of policy experts in various fields, is regularly called upon by the US Congress, the White House and the media to offer recommendations on improving US strategy on a wide range of global concerns.
Dominguez said that “improvements in our governance and a benevolent conjuncture of factors favoring stronger growth will encourage private investments from the US to take a much closer look at our economic prospects.”
Dominguez also underscored the strong partnership between the Philippines and the US that was “tested by time and made more enduring by the shared values we hold.” “Let me say that the partnership between the Philippines and the US can only grow stronger in the coming period,” he said.
He said the Philippine government’s massive investments in education, training, health care and other social services would be supported in part by the first phase of the Duterte administration’s proposed tax reform program, which was expected to be approved by Congress later this year.
Dominguez said reforming the tax system would also enable the government to invest massively in infrastructure without compromising the country’s fiscal position.
The Duterte administration plans to spend $20 billion each year through the medium term to build its urgently needed infrastructure.
“We are optimistic and we are committed. We are confident we have the correct strategy and moving in the right direction. We will continue to rely on your support in this grand effort to reduce poverty, build strong institutions and properly care for the most vulnerable among our people,” Dominguez said. With Julito G. Rada
