Dominguez says inclusive growth goal now achievable with TRAIN

Date Posted : January 14, 2018

Dominguez says inclusive growth goal now achievable with TRAIN

Date Posted : January 14, 2018

Finance Secretary Carlos Dominguez III said the infrastructure modernization plans of the Duterte administration are starting to click into place with the rollout of the initial list of big-ticket projects plus early progress on the multi-year tax reform package and negotiations on Official Development Assistance (ODA), both of which will mainly bankroll these ventures under the “Build, Build, Build” program.

Dominguez said the roll-out of big-ticket infrastructure projects are proceeding as planned following the signing into law by President Duterte and the subsequent implementation of the Tax Reform Acceleration and Inclusion Act (TRAIN), which slashes personal income tax rates while raising additional revenues for infrastructure and social services.

About 70 percent of the incremental revenues from the TRAIN have been earmarked for infrastructure, and up to 30 percent for social services, including unconditional cash transfers of P200 a month (or P2,400 per year) for the country’s 10 million poorest households for 2018, which will increase to P300 a month (or P3,600 per year) in 2019 and 2020.

“The money is coming in from our taxes, the loans are coming in…. the implementing agencies are getting their act together. It’s coming together,” Dominguez said in a recent press briefing.

Dominguez said remarkable improvements in the collection efficiency by the Bureaus of Internal Revenue (BIR) and of Customs (BOC), as reflected in their respective high accomplishment rates in 2017, is also a key factor in ensuring that the government’s high-and-inclusive growth agenda is on track.

For 2017, the BIR achieved 97.18 percent of its revenue goal of P1.829 trillion, collecting a total of P1.777 trillion. The BOC collected P457.553 billion in 2017 as against a revenue target of P467.896 billion, representing an accomplishment rate of 97.7 percent in 2017.

BOC Commissioner Isidro Lapena said in his report during a recent Executive Committee meeting of the Department of Finance that the customs bureau attained historical highs in its monthly collections for 2017 of P41 billion, P42 billion, P46 billion, and P44 billion in September, October, November, and December, respectively.

The BIR, meanwhile, reported that besides a high accomplishment rate, the bureau also improved taxpayers service by streamlining processes and reducing the number of documentary requirements for taxpayers, which contributed to improving tax compliance.

DOF Undersecretary and Chief Economist Gil Beltran said with the TRAIN in place, the government’s “Build, Build, Build” agenda “will go on high gear” this year with a majority of the 75 flagship projects worth P1.8 trillion combined already in the construction or pre-construction phases.

Among these big-ticket projects are the P23-billion Metro Manila Flood Management Project, which is co-funded by the Asian Infrastructure Investment Bank (AIIB) and the World Bank; the P151-billion Philippine National Railways (PNR) South Long Haul Line to be financed by Official Development Assistance (ODA) from China and the P355.6-billion Mega Manila Subway funded by ODA from Japan, Beltran said.

Dominguez added the P19.8 billion Davao City Bypass Road, another flagship project, is also under the implementation phase.

Last Jan. 10, the Philippines and the Asian Development Bank (ADB) signed a loan agreement that aims to improve Mindanao’s links to international trade corridors and formalized the exchange of documents on sustaining reforms in the country’s capital markets, which Dominguez said are both in support of President Duterte’s high and inclusive growth agenda.

Dominguez, this year’s chairman of the ADB Board of Governors, and ADB president Takehiko Nakao signed the ADB headquarters the $380 million loan agreement for the Improving Growth Corridors in Mindanao Road Sector Project (IGCMRSP) and led the official exchange of documents on the $300 million Encouraging Investment Through Capital Market Reforms (EICMR) Program-Subprogram 2.

The first loan program involves the construction of about 280 kilometers of national primary, secondary and tertiary roads and bridges in the Zamboanga Peninsula and Tawi-Tawi in Mindanao, while the second will aid in accelerating investments in infrastructure by establishing a framework to diversify and broaden available funding sources, particularly private sector financing.

Dominguez said the enactment of the TRAIN was the first time the government had pushed a tax reform package not in response to a financial crisis or on​ external conditions imposed by other institutions, but to ​instead ​strengthen its ​programs meant ​to ​attack​ poverty and correct income inequality.

It is also the first time the government, through the initiative of the Duterte administration, lowered personal income tax (PIT) rates to make these more equitable, he said.


Date Posted January 14, 2018

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