Finance Secretary Carlos Dominguez III said over the weekend the Philippines is in a better position to weather the impact of the coronavirus 2019 pandemic because of its fiscal and economic strength.
Dominguez issued the statement after the London-based international newspaper The Economist ranked the Philippines sixth among selected emerging economies in the world, and the best among those ranked from the Southeast Asia.
“This assessment shows that improving our revenue flows through our tax reform program, being judicious with expenditures and investments, and maintaining a well-balanced debt management strategy are serving the country well,” Dominguez said.
He said the country had the confidence of the international community, which would go a long way in helping the government finance its COVID-19 response measures.
He said the same confidence would also help the country attract investments and create jobs on its road to recovery.
“While COVID-19 may be an unprecedented global crisis, the Philippines is better positioned to overcome this situation than at any other time in recent history,” he said.
He said President Rodrigo Duterte’s commitment to a conservative approach to economic policy resulted an average of 6.4 percent gross domestic product growth over the past three years and a sovereign credit rating of “BBB+,” the highest in the country’s history.
“This strong vote of confidence in the country’s fiscal and economic management encourages the Duterte administration to continue on its path of prudent macroeconomic and fiscal management,” he said.
Dominguez added the Department of Finance would work closely with Congress to build on the success by enacting urgent tax and economic reforms to strengthen the country’s recovery efforts.
Ahead of the Philippines in The Economist’s ranking are Botswana, Taiwan, South Korea, Peru and Russia. Thailand, at seventh, was the other Southeast Asin country included in the list.
Completing the top 10 are Saudi Arabia, Bangladesh and economic powerhouse China.
The Philippines posted strengths in the area of public debt, foreign debt, cost of borrowing and reserves cover.
Bangko Sentral ng Pilipinas Governor Benjamin Diokno said the Philippines was on the road to the most-coveted “A” rating when the pandemic hit.
“But our relative position among emerging economies gives us confidence that the Philippines would have a U-shaped bounce back once the pandemic fades,” Diokno said.
He said on an annual basis, GDP was expected to shrink 0.2 percent in 2020 before bouncing back to about 7.7 percent next year as the impact of the government policy support measures gained traction.
The economy expanded 6 percent in 2019, the low end of the target range of 6-7 percent, despite the delay in the approval of the national budget.