Duterte’s Philippine economic agenda eyes sustained GDP growth

Philippine President-elect Rodrigo Duterte unveiled a 10-point agenda for economic growth in the country last week which aims at sustaining the average GDP growth level achieved under current President Benigno Aquino of 6.2 per cent annually, or even top it.

Duterte proposed cutting tax rates, but improving collection, relaxing constitutional restrictions on foreign investment in industries such as utilities and mining, and increasing public spending to fix the country’s dilapidated infrastructure. There are also proposals to install a national identification system to facilitate social services, as well as automating and streamlining processing for permits and land titles.

The agenda also covers the continuation the current macroeconomic policies, increasing business competitiveness, promoting rural tourism, human capital development and science and technology, ensuring land security, improving social programmes like the conditional cash transfer and better implementation of the reproductive health law.

In terms of infrastructure, the new government wants to push private financing and bring in private expertise to complete government-led infrastructure projects. Currently, 39 projects are in the pipeline and being taken over from the current government, including the expansion of a railway in Manila and improvements on five regional airports. The Duterte government said it would build upon Aquino’s reforms and accelerate timelines for overdue projects.

Duterte begins a six-year term on June 30 and has also promised to go hard against crime and corruption and improve basic government services. He also said he would push to open closed-off sectors to foreign investors and continue successful policies of his predecessors.

The Philippine new 10-point economic roadmap

• Continuing and maintaining the current macroeconomic policies, including fiscal, monetary and trade policies;

• Instituting progressive tax reform and more effective tax collection while indexing taxes to inflation, in line with the plan to submit to Congress a tax reform package by September;

• Increasing competitiveness and the ease of doing business, drawing upon successful models used to attract business to local cities such as Davao, as well as pursuing the relaxation of the constitutional restrictions on foreign ownership, except with regards land ownership, in order to attract foreign direct investments;

• Accelerating annual infrastructure spending to account for five per cent of the gross domestic product, with public-private partnerships playing a key role;

• Promoting rural and value chain development toward increasing agricultural and rural enterprise productivity and rural tourism;

• Ensuring security of land tenure to encourage investments and address bottlenecks in land management and titling agencies;

• Investing in human capital development, including health and education systems, as well as matching skills and training to meet the demands of businesses and the private sector;

• Promoting science, technology and the creative arts to enhance innovation and creative capacity towards self-sustaining and inclusive development;

• Improving social protection programmes, including the government’s conditional cash transfer programme, in order to protect the poor against instability and economic shocks; and

• Strengthening the implementation of the Responsible Parenthood and Reproductive Health Law to enable, especially, poor couples to make informed choices on financial and family planning