Finance chief says PH economy to remain strong amid nCoV threat, other challenges
Robie de Guzman • February 6, 2020 • 630
MANILA, Philippines – The Department of Finance (DOF) has expressed confidence that the challenges posed by the global spread of the novel coronavirus (2019-nCoV), the eruption of Taal Volcano and the cases of African Swine Fever (ASF) are not enough to drag the country’s economic growth below the government’s target.
In a joint hearing conducted by the Senate committees on health and finance on Tuesday, Finance Secretary Carlos Dominguez III said the administration’s economic teams stands by its target of attaining a gross domestic product (GDP) growth rate of 6.5 % to 7.5% this year even amid the headwinds from 2019-nCoV and other challenges.
“At this moment, it is reasonable to expect that while these developments might slightly restrain our economic expansion, these threats are not enough to force a dramatic reduction in our growth estimates,” Dominguez said.
While the hearing was called to study ways of mitigating the impact of the nCoV outbreak on the economy, Dominguez said this development should be assessed together with the effects of the recent Taal Volcano eruption and the ASF outbreak to determine whether these require revisiting economic growth targets this year.
“While these developments may dampen our growth somewhat, domestic tourism is expected to increase as more people would likely prefer to travel within our borders, thus boosting domestic consumption,” he said.
“With our ‘Build, Build Build’ program firing on all cylinders this year, complemented by a benign inflation rate and a stable monetary policy, we expect the economy at large to sustain its momentum,” he added.
The Finance chief also stated that with the nCoV outbreak still on its early stages, it would be difficult for the economic team to estimate its potential economic costs at this time.
“We are consoled by the observation that the virus has limited local transmissions outside China,” he said.
“A significant impact on the economy will most likely be centered in the tourism sector. The travel and tourism industries around the globe are taking a hit as a result of the various levels of travel bans imposed by national governments and of voluntary decisions of airlines to cut flights to and from China,” he added.
Dominguez also said that the country may also suffer a short-term slight decline in exports, particularly in the sale of electronics and auto parts, due to a possible disruption in the global supply chain as a result of the temporary factory closures in China, which is the country’s top trading partner.
“Incidentally, our top imports from China such as steel, machinery and petroleum are products that do not seem to carry the nCoV virus, though we will continue to take all necessary precautions,” he said.
To address the possible temporary decline in the exports of electronics and auto parts, the Department of Trade and Industry (DTI) has committed to work closely with affected Chinese and China-based companies, which will be looking to strengthen their operations by adding a production site outside of China, Dominguez said.
Dominguez added that what happened during the previous outbreaks of the Severe Acute Respiratory Syndrome (SARS), H1N1, and the Middle East Respiratory Syndrome (MERSCoV) might give authorities a glimpse of how the nCoV could impact the economy.
As for the ASF outbreak, Dominguez noted that the government has been successful in intercepting contaminated pork imported from other countries through the Bureau of Customs’ anti-smuggling campaign and the Bureau of Animal Industry’s meat inspection efforts.
The Department of Agriculture (DA) has also been strictly enforcing biosecurity measures and setting up more quarantine checkpoints, as well as providing more disinfection facilities to manage, contain, and control the spread of the ASF, he said.
As for the impact of the latest Taal Volcano eruption, the Finance chief said that an explosive eruption could still happen, and “unless and until this actually happens, we can only speculate on the full impact of this episode on the economy.”
As of January 20, estimates from the National Economic and Development Authority (NEDA) show that the total foregone income in the economic sectors owing to the eruption could reach P6.66 billion pesos or 0.26 percent of the 2018 gross regional domestic product of the CALABARZON (Cavite, Laguna, Batangas, Rizal and Quezon) corridor.
“The bulk of the foregone income comes from agriculture and fisheries sector, services, and industry,” Dominguez said. “Short of a major eruption, the damage to our crops and the challenges of dislocated communities to which the government will continue to respond, will not significantly impact our overall growth projections.”
He said the DA and the concerned local government units are expediting the release of production support, agri-fishery aid and livelihood assistance, and cash or zero-interest loan assistance programs to the affected farmers and fisherfolk, as well as the implementation of the recovery and rehabilitation plans for the affected areas.
MANILA, Philippines – Department of Finance (DOF) Secretary Carlos Dominguez III is proposing a “more proactive” and “targeted” investment promotion strategy to attract the kind of foreign investors that the government wants to relocate here as part of the efforts to restart the country’s economy.
In a statement, Dominguez said these investors may be offered a set of tax and non-tax incentives tailor-fit to their needs.
Dominguez said the government should discard its old “one-size-fits-all” incentives program and shift to a demand-driven approach where it identifies the types of industries that the economy needs to flourish.
He explained that these incentives can be granted based on the specific requirements of the industry players that the government wants to set up shop in the country.
“What we should be doing is identifying these industries and then going to each of the companies–each of the leading companies in those industries around the world—and asking them: what do you need for you to come to the Philippines? Instead of waiting for them to apply, we should be going to them and offering them a package,” Dominguez said during a virtual press briefing held on the sidelines of the recently concluded online “Sulong Pilipinas: Youth Partners for Progress” workshop.
“These industries include those that are labor-intensive and thus create stable, decent-paying jobs; provide excellent technology transfers that improve the skills of the country’s workforce; and have stable markets,” he added.
Dominguez said the “obsolete one-size-fits-all” formula of attracting prospective investors has “failed to make the Philippines an investment magnet, with the country persistently lagging behind its Southeast Asian counterparts in terms of the volume and amount of foreign direct investment (FDI) inflows despite being among the first economies in the region to offer fiscal incentives.”
He said the administration’s economic team and the Congress are now in the process of crafting a comprehensive stimulus program to revive the economy waylaid by the coronavirus disease 29019 (COVID-19) pandemic.
MANILA, Philippines — National Task Force Against Covid-19 chairperson and Defense Secretary Delfin Lorenzana on Sunday (May 24) said that Metro Manila may possibly be placed under general community quarantine (GCQ) in June.
With this, Metro Manila residents may expect more relaxed quarantine restrictions to be implemented next month.
Lorenzana said the Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF-MEID) has been discussing the readiness of the capital region for it to be transitioned to GCQ from the modified enhanced community quarantine (MECQ).
“More likely mag-gi-GCQ na tayo by June 1,” the defense chief said.
He added that areas that still have novel coronavirus disease (COVID-19) cases will remain under their control.
“Ang pinag-uusapan namin sa IATF, eh mag-GCQ, pero ‘yung mga areas na meron pa ring… mga infection baka ‘yun na lang ang ikontrol ng konti,” Lorenzana said.
The areas that will be placed under GCQ are those that are considered to be at low risk of COVID-19. With this, more industries will be allowed to operate.
Lorenzana insists that although recorded COVID-19 cases has been going down everyday, quarantine measures must remain to prevent the second wave of the infection.
“We would like to impress in our people ‘yung self-discipline, para masanay sila na ito na ‘yung new normal, na social distancing, wearing of face mask, sanitation,” the official said.
Task Force Against Covid-19 Chief Implementer Carlito Galvez, Jr. has earlier mentioned about the planned “zoning concept” or the measure that will limit the implementation of a lockdown in an area based on the number of confirmed COVID-19 cases. —(with details from Victor Cosare) /mbmf
MANILA, Philippines – Even with the ongoing public health crisis, the Department of Finance (DOF) said it is looking to roll out this year two digital-based programs that are aimed at “improving tax compliance” and “expanding financial inclusion,” especially among Filipino migrant workers.
Finance Secretary Carlos Dominguez III said one of these initiatives – the Electronic Receipt and Invoicing and Electronic Sales Reporting System (E-invoicing) – will possibly be launched by the third quarter of the year to provide better and faster services to taxpayers.
“The biggest (digitalization) program we’re working on now is e-invoicing. Once we get that e-invoicing program set up, that will mean a big step in e-governance already,” Dominguez said during a recent online hearing of the economic stimulus cluster of the Defeat COVID-19 Committee of the House of Representatives.
“We have been working on that for the last year or so, and we should come to a conclusion, a good program by the middle of, or maybe the 3rd quarter of this year,” he added.
His statement was in response to a recommendation by Deputy Speaker Luis Raymund Villafuerte during the online hearing for the government to strengthen and expand its digital-based programs for frontline services.
The e-invoicing program is part of the efforts of the Bureau of Internal Revenue (BIR) to digitalize its tax administration and collection system.
Dominguez said the system will complement the administration’s Comprehensive Tax Reform Program (CTRP) to make the tax system simpler, fairer and more efficient.
It will also translate into more convenient, reliable and transparent services for taxpayers, and set the stage for world-class tax administration in the country.
Its pilot stage was funded by the grant extended by the Republic of Korea through the
Korea International Cooperation Agency (KOICA).
Dominguez also revealed during the online hearing that the Land Bank of the Philippines has made good on its commitment to the DOF to have the country’s first ever digital-only, branchless bank up and running by the end of June this year.
The Overseas Filipino (OF) Bank, which will primarily benefit the country’s migrant workers, will utilize digital technology and smartphone apps to provide banking and other financial services, the DOF chief said.
“We set up this OF Bank a couple of years ago. We’ve had problems with the technology but I think with Cecile’s leadership, we are almost ready to launch,” Dominguez said, referring to LANDBANK president-CEO Cecilia Borromeo.
Borromeo earlier reported to Dominguez that the Bangko Sentral ng Pilipinas already granted last January 30 a “No Objection” Clearance to the OFBank on its use and implementation of a Digital Onboarding System (DOBS) with Artificial Intelligence (AI) facilitating an electronic Know-Your-Customer (KYC) process.
In September 2017, President Duterte signed Executive Order No. 44 authorizing LANDBANK to acquire the Philippine Postal Savings Bank (Postbank) so it could be converted into the OFBank. The OFBank is classified as a savings bank of LANDBANK.
Borromeo said that overseas Filipinos with Postbank accounts who migrated to OFBank were issued EMV-enabled VISA Debit Cards they could use for automatic teller machine (ATM) withdrawals, fund transfers, bills payments and online purchases, among others.
“Through the OFBank, overseas Filipinos would be able to invest in their own country that they have helped transform into one of the fastest-growing economies in the region,” Dominguez said.
A joint initiative of the DOF and the LANDBANK, the OFBank is the fulfillment of a 2016 presidential campaign promise of then-Davao City Mayor Rodrigo Duterte to overseas Filipino workers (OFWs) to put up their own bank when he becomes President.
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