A top World Bank executive lauded the Duterte administration for implementing a “proactive and forward-looking” comprehensive tax reform program that aims to raise funding for public infrastructure and social services that lay the foundation for long-term high growth.
World Bank director of macroeconomics, trade and investment Lalita Moorty said during a recent forum on the Philippine economy in Washington D.C. that it was “quite a change” to see a country implementing tax reform proactively with an eye on sustained growth, unlike the common practice for countries to implement such reforms only when they were in the middle of a fiscal crisis.
She said this was impressive because the government had enabled the economy to “grow so much” even as it managed to bring down its debt-to-GDP (gross domestic product) ratio.
Moorty said the Philippines’ recent accomplishments on the economic front, especially in implementing a tax reform program to enable the government to aggressively increase its investments on infrastructure and social services, was “quite impressive.”
She also cited the Philippine government’s sound fiscal policies as shown by its declining debt-to-GDP ratio while maintaining rapid growth and increased public spending.
Moorty described the implementation of the Duterte administration’s tax reform program absent a crisis as a “pro-active and forward-looking” approach to carrying out such reforms. Julito G. Rada
“It is actually quite a change to see a country that is taking a very forward-looking approach to reforms. [It is] very interesting to see. The Philippines is posting really fast growth rates, about three times of what we see in Europe and Central Asia. I think this is a good time to do these tax reforms. It is a good time and you have seized it. That is quite impressive,” Moorty said.
Moorty also lauded the tax reform program’s clear priorities of earmarking spending for infrastructure and social services, which she said, “are two critical elements when you are laying foundations for long-term growth.”
“When I think about comparing the Philippines to other parts of the world, it’s managed to do so much and grow so much while bringing its public debt-to-GDP ratios down. It’s very impressive that… it went from over 50 percent to around 40 percent in a decade. That’s quite impressive, in contrast to other countries where we’re seeing a rise in the public debt-to-GDP ratio,” Moorty said.
“The comments that Director Moorty said and that we shared through Facebook, it seemed to bring out a sense of pride among a lot of those who engaged with the post. The comments were very, very positive, and they shared how proud they were that they were Filipino,” Finance assistant secretary Antonio Lambino II said in a report to Finance Secretary Carlos Dominguez III.