The resident economist of the House of Representatives has said the upgrade of the country’s growth domestic product growth outlook from 5.6 percent to 6.2 percent for 2021 by the credit benchmarker Moody’s Analytics represents “a very strong shift in the world’s view of our prospects, especially moving forward after the pandemic.”
Albay Rep. Joey Sarte Salceda cited developments as the November FDI data showing the country recovering to pre-pandemic investment levels also signifies the world’s “vote of confidence in the enduring strength of our economic fundamentals, fortified with the moat of economic and fiscal reforms.”
The growth projection for the Philippines is rosier than Indonesia’s 5.1 percent, Malaysia’s 5.4 percent, Singapore’s 4.6 percent, Taiwan’s 4.1 percent, and Thailand’s 3.2 percent. The country’s growth prospects are only second to those of Vietnam, at 6.5 percent.
“Of course, I’m happy with the projection, but I think we can still outdo it. We are working with the Cabinet to craft the transitional Strategic Investment Priorities Plan (SIPP) so that industries can already avail of tax incentives under the CREATE Law. That will put to rest investor uncertainty over the tax regime they’re falling under,” Salceda added.
Salceda added the expected passage of the Public Service Act amendments, which will open all but six public services to full foreign ownership, will also be a “tide-changing boost to foreign investments.”
“I expect December FDI figures to be stronger than those of November, and at least the investments of the First Quarter of 2021 to be marginally better than pre-pandemic levels,” Salceda said.
“Finally, election spending will provide a marginal but not insignificant boost to growth. I am petitioning COMELEC to exempt all social welfare and aid programs from the election spending ban, so that families can get out of the COVID slump faster this year,” Salceda added.
Meanwhile, Salceda emphasized the need to fortify the Philippines from what global economic analysts are warning about as “the coming lost decade” where global growth is expected to decline significantly after recovery from COVID-19.
“There will be a period of global economic slowdown, as countries naturally scale down their COVID spending and the scars that industries took during the pandemic set in. You will also begin to see the slowdown in productivity due to learning gaps during the school shutdowns,” Salceda said.
“Of course, the global average is not this country’s destiny necessarily. We have bucked the global trend several times before during the Arroyo administration, especially during the Global Financial Crisis,” Salceda added.
“The way to fortify the country from the global trend is threefold. First, you want to balance out the effects of our monetary and fiscal exit strategy. As we rollback low interest rates, we have to expand financial inclusion to even out the usual credit contraction that you see when the BSP hikes its rates. You also want to increase Public-Private Partnerships that are low on government liabilities, close down tax loopholes, and improve spending efficiency as we try to narrow the deficit, so that growth doesn’t slow down.”