The United Kingdom, looking to boost its ties with countries in Asia, has dangled a £4.5-billion financing package that the Philippines could use to underwrite its ambitious infrastructure buildup program.
This was learned from the Department of Finance (DOF), which issued a statement saying the UK’s Secretary of State for International Trade Liam Fox bared the package when visiting Finance Secretary Carlos G. Dominguez III only recently.
Manila, the DOF said in quoting the British official, was offered access to the trade finance funds of up to £4.5 billion in this case.
“We hope that you can tap this rather undertapped resource,” Fox told Dominguez.
Fox said the UK was keen on establishing its footprint in the Philippines’s services sector and in exporting its education technologies.
“We have opportunities in life sciences, accounting, banking, the medical sector and education,” Fox emphasized.
At the meeting, the two officials discussed the expanding trade and investments between the two countries, as well as British exports to the world via the UK’s new online trade portal. Total Philippine exports to the UK in 2016 amounted to $476 million, while imports from the UK reached $480 million in the same period.
Dominguez also told Fox efforts at reversing the income inequality between Metro Manila and the countryside by boosting public infrastructures in the area and improving connectivity among the country’s regions.
“The opportunities are already there. It is just a matter of providing the infrastructure. Once you start connectivity, naturally it will attract investments,” Dominguez said.
He cited government plans to develop a second international airport, build high-speed trains between Manila and Clark in Pampanga, and possibly connect it to a commuter rail system in the South, along with improving Luzon’s ports to help decongest Metro Manila and encourage investments in the countryside.
In a separate event, the economic managers were to meet not only key officials of the International Monetary Fund (IMF) and the World Bank, but also some of the more important global investors, the credit-rating agencies and representatives of other countries, hoping to partake of opportunities created by the country’s march toward sustained economic expansion.
DOF Undersecretary and chief economist Gil S. Beltran will join National Economic and Development Authority (Neda) Secretary Ernesto M. Pernia, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. and Neda Deputy Director General Rolando G. Tungpalan in discussing with credit-rating agencies the government’s plans to sustain the robust pace of the Philippines’s growth via a massive public investment program focused on infrastructure and human-capital development.
The Philippine Statistics Authority reported GDP expansion averaging 6.9 percent in 2016. Pernia expects the GDP to have grown by 7 percent in the first quarter.
National Treasurer Rosalia V. de Leon were to attend the World Bank government bond market conference and technical workshop also in Washington, D.C., to discuss with global investors and senior country officials major issues regarding emerging local bond markets.
Finance Assistant Secretary and DOF Spokesman Paola Alvarez will join the Philippine delegation to the World Bank meetings scheduled from April 20 to 24.
According to the Neda, estimates on the infrastructure buildup unveiled at the forum in Manila just last week were to create 106,824 jobs in 2017; 823,696 jobs in 2018; around 1.12 million in 2019; 1.23 million in 2020; 1.399 million in 2021; and 1.705 million by 2022.
This has to do with the plan to dramatically raise funds via the proposed tax-reform program and spend big on infrastructure, human-capital formation and social protection to sustain the growth momentum, attract investments and create jobs, achieve economic inclusion and transform the country into a high middle-income country by 2022, by which time poverty incidence will have been reduced to 14 percent.
If “Dutertenomics” is sustained over the medium term, the government envisions the Philippines to be a high-income economy in one generation or by 2040.
Last year the IMF gave its nod to the proposed Comprehensive Tax Reform Program (CTRP) for being “net revenue positive with due attention paid to equity”.
The World Bank said the CTRP could become “game changers” that improve transparency, monitor the efficiency in tax administration that could, in turn, further expand the tax base.
In a recent statement, Fitch Ratings affirmed the Philippines’s sovereign triple “B minus [BBB-]” status, which carried with it a positive outlook.
Fitch earlier projected the economy to grow by 6.8 percent this year and 6.7 percent in 2018, or within target range for the next two years, driven in part by increased spending on infrastructure.
Fitch noted that “macroeconomic performance has remained strong” and “domestic political stability has been maintained” even as the government pursued the campaign against the illegal drug trade. Dominguez said, “Fitch Rating’s latest
affirmation of its positive outlook on the Philippines only means that the political chatter emanating from certain quarters has failed to dent the country’s sustained-growth narrative resulting from its strong economic performance, continued political stability and aggressive infrastructure and human-capital investments under the Duterte presidency.”
He added that, “To maintain broad policy continuity, the government…will continue to pursue its 10-point socioeconomic agenda on high—and inclusive—growth, with a focus on closing the infrastructure gap, improving the ease of doing business to attract more investments, and attacking poverty by spending big on human-capital formation.”
“Given the positive outlook of Fitch Ratings and other institutions, the government has more reason to highlight on the country’s growth story by moving ahead on such policy reforms as its Comprehensive Tax Reform Program to ensure the financial sustainability of its ambitious program to eradicate poverty and transform the Philippines into a high-income economy in one generation,” Dominguez said.