Finance Secretary Carlos Dominguez III said the government is fully committed to reducing poverty incidence to 14 percent or lower by 2022.
Dominguez said during the joint general assembly of financial institutions at Makati Shangri-La Hotel last week the game-changing reforms being implemented by the government would make the country’s economic expansion not only rapid but also inclusive.
He said these reforms included the implementation of the Rice Tariffication Law that stabilized the price and supply of rice in the retail market; the Tax Reform Acceleration and Inclusion Act which gave substantial tax breaks to 99 percent of wage earners; and the increased tax rates on ‘sin’ products to help fund the Universal Health Care Program that primarily benefits low-income families.
He said these reforms, complemented by other initiatives along with positive economic developments that boosted the purchasing power of Filipinos, reduced the country’ poverty incidence from 23.3 percent in 2015 to just 16.6 percent in 2018.
This means 5.9 million Filipinos lifted themselves from poverty in the first three years of the Duterte presidency, he said.
“We stand by our commitment to reduce poverty incidence to 14 percent or lower by 2022,” Dominguez said.
Financial institutions that attended the event were the member-groups of the ACI Philippines-Financial Markets Association, Fund Managers Association of the Philippines, Investment House Association of the Philippines, Money Market Association of the Philippines and the Trust Officers Association of the Philippines. Julito G. Rada
Dominguez said official statistics showed that the lower-income brackets experienced the highest increase in mean per-capita income from 2015 to 2018.
He said that for the lowest 30 percent of the population, per-capita income grew by an average of 32 percent, outpacing the 20.9-percent overall growth. In comparison, the richest 20 percent of the population grew their per-capita income by only 18 percent during the period.
“Clearly, the growth we are experiencing is not only rapid, it is also inclusive,” Dominguez said.
Dominguez said among the positive developments that kept the economy on its high and inclusive were the lower debt load of 41.5 percent of gross domestic product in 2019 from 44.7 percent in 2015; improvement in revenue collections; and infrastructure spending which dramatically grew by 42 percent last year compared to 2015.
He said other positive developments were the much-improved tax effort of 15.1 percent of GDP last year—the strongest performance in 22 years and higher compared to 13.6 percent in 2015; dividend collections from government-owned and controlled corporations which reached a record P69 billion last year; a sustained campaign to crack down on errant Philippine Offshore Gaming Operators and their service providers that evade proper taxation, which led to the collection of P6.42 billion in taxes in 2019—a 169 percent increase from the preceding year; and the Philippines’ credit rating upgrade to “BBB+” by Standard and Poor’s and by the Rating and Investment Information Inc.
Fitch Ratings also revised its outlook on the country’s BBB credit rating from “stable” to “positive,” signaling a potential upgrade of the score within the next few months.
Meanwhile, revenues from ‘sin’ taxes were almost double in 2019 from what they were in 2015, he said.
Dominguez said this was the result of excise tax increases on tobacco products, whose tax rates were raised twice under this administration—the first time such taxes were adjusted in one administration—as well as on alcohol, e-cigarettes and sweetened beverages.
Dominguez said this year, the government was expecting ‘sin’ tax collections to increase by at least 130 percent over the 2015 collections.