The business community manifested a somewhat surprised mood at the slower growth of the economy for the first three months this year, prompting Manuel V. Pangilinan, who is Chairman of TV5 and Metro Pacific Investments Corp. to call on the business sector to pull together in order to help the government meet its ambitious infrastructure roadmap for the country.
The economy advanced by a softer-than-expected 6.4% in the January-to-March period, its worst performance in over a year, as personal consumption and government spending weakened without the boost from last year’s elections.
“I was slightly surprised why it was within range but on the lower end of the range, but [Socioeconomic Planning] Secretary Ernesto Pernia pointed out, historically, that has been the case compared year on year. This year is obviously not an election year, so there’s an explanation. We’re still optimistic that the succeeding quarters will be higher than 6.4%.”
Secretary Pernia explained the base facts: “Growth last year was high due to election spending, as you would already know by now, the impact of which has already dissipated. The changing of the guard of the government and reorientation of programs really take time to settle, and this slowed government spending for the quarter.”
Looking forward, though, the country needs to turn over about PhP8 trillion for its Build Build Build golden age of infrastructure roadmap up to the year 2022.
Speaking at the BusinessWorld Economic Forum, Pangilinan noted that the comprehensive tax reform program (CTRP) may help drive long term economic growth as it is expected to raise funds needed by the government for its various programs.
Mr. Pangilinan pointed out that, “central to this financing plan is the assumption that Gross Domestic Product will continue rising robustly over the period to accommodate the government’s rising debts … If for some reason our growth targets are missed – the 3% debt cap could get breached with possibly unpleasant consequences.”
Investments in the tourism and mining industry in rural areas where most poverty exists, would also support economic growth, Pangilinan said, while investments in the tourism industry should go side-by-side with the development of airports.
Speaking at the BusinessWorld Economic Forum Friday, Pangilinan noted that the comprehensive tax reform program (CTRP) may help drive long term economic growth as it is expected to raise funds needed by the government for its various programs.
Pangilinan observed that, aside from vigorous infrastructure development, investments, and gas in the South China Sea, CTRP may drive the country’s long-term economic growth.
“This is more friendly for businesses because it will lower tax rates for corporates. With these changes, CTRP aims to raise requisite funds for infrastructure spend, in part, as well as education, social safety nets and health.”
(With reports culled from Beverly Natividad/News5, BusinessWorld, and Louella Desiderio/Philippine Star)