Finance Secretary Carlos Dominguez III, the head of the economic team, said Wednesday the economy will strongly recover in the second half, after growing 6.3 percent in the first semester, or below the official target range of 7 percent to 8 percent.
Dominguez said the economic numbers for the second semester remained “very promising” and that the year’s second-quarter gross domestic product growth of 6 percent was a mere “exception that does not indicate a medium-term trend.”
“Domestic demand remains robust. Investment flows grew in the first half of this year. Our exports of goods and services recovered to a double-digit growth of 13 percent in the second quarter from 6.5 percent in the previous quarter,” Dominguez said at the weekly Kapihan sa Manila Bay forum in Malate, Manila.
He said in terms of expenditure, the government’s effort increased to 19.47 percent, representing the highest first-semester expenditure effort since 2003.
Dominguez said the government’s revenue effort also improved by 1.47 percentage points to 17.12 percent in the first six months, also the highest first-semester revenue effort since 1946.
The tax effort of 15.23 percent is also the country’s highest first-semester tax effort, he said.
Dominguez attributed this accomplishment to the result of the Tax Reform for Acceleration and Inclusion Act and tax administration improvements.
“Our tax effort is now at par with the best-managed economies in the region. It is a tax effort we can very well sustain, especially with the subsequent packages of the comprehensive tax reform program now being deliberated [by the Congress],” Dominguez said.
“The president has stressed the urgency of passing the rest of his tax reform program in his State-of-the-Nation Address and we hope that Congress would heed his call for the swift approval of the remaining packages,” Dominguez said. Julito G. Rada
Dominguez said that “once completed,” the tax reforms “will ensure a healthy revenue flow, a more efficient investment-led economy, and a more inclusive growth process.”
“We will finally have a modern revenue system fit to support a strong emergent economy,” he said.