Commentary: Duterte’s economic agenda
May 19, 2016 | 3:23pm
All systems go as far as presumptive president Rodrigo Duterte’s economic agenda is concerned. It seems we are in for another Singapore in the making, taking off from a mediocre economy that is “oligarchical" in character to a progressive economy that is inclusive down to the “commoner.”
The Filipinos as a whole are keeping a close watch on the policies by the new administration when its term commences on July 1, 2016. The eight-point economic agenda formulated by Duterte’s economic team is a response to the societal needs of the populace.
Qualitatively, the Duterte presidency is anchored on a disciplined society. High on his priority are the tax reforms that he promised to undertake. Twice he made emphasis on the need to restructure tax needs and priorities. Streamlining the tax collection system and rationalizing income tax collection is at the top of his agenda. This will have a direct effect on the disposable income of the people by way of an increase in purchasing power.
Either a decrease in tax rate or an increase in tax exemption may benefit low and fix income earners. This will have a trade-off effect on the economy because it will increase the income of the people, resulting in an increase in spending pattern thereby creating business opportunities and employment. Although the increase in purchasing power may prompt an elevated inflation rate, it may likewise induce an increase in savings, an offshoot of a possible increase in interest rate. As long as the price is within affordable limits, we are not likely to experience a potentially damaging inflation.
Either a decrease in tax rate or an increase in tax exemption may benefit low and fix income earners. This will have a trade-off effect on the economy because it will increase the income of the people, resulting in an increase in spending pattern thereby creating business opportunities and employment.
Second on his agenda is the acceleration of infrastructure spending which could benefit both sides of the spectrum. Government spending effectively pump-prime the economy considering the magnitude of investment spending created by public sector spending. Consequently, such phenomenon creates jobs and income.
On the other hand, infrastructure spending improves institutional facilities like roads, bridges and other farm-to-market roads, including access to roads for greater convenience. Inevitably, it should also contain facilities that would help alleviate the populace from the daily traffic grind, a dilemma that has gone from bad to worse. It, however, should preclude that perception of graft and corruption that normally is apparent under these government agencies.
More particularly, what was supposed to be the banner project of the Aquino administration called public-private partnership (PPP) seems to have been stalled because up to now it has not attracted a considerable amount of investment but mere promises that never materialized. Hopefully, with the realization of what has been started by the Aquino regime in terms of infrastructure facilities, the Duterte administration hopefully can utilize it for the full benefit of the people.
With Duterte at the helm of political leadership and fulfilling his promise of creating a more conducive business environment, the first order of the day for the presumptive president is to secure a community that is free from the dangers of criminality that threatens not only the citizen’s life and limbs but also impedes a favorable business environment. Liberalization and creation of a Magna Carta for Investment will attract investors to pour in the economy. The much neglected agricultural sector of the economy that employs at least 60 percent of our labor force will finally be given reprieve by the government. It has long been neglected in the previous rule and the insensitivity was brought about by the social class in which our former leaders belong to.
Liberalization and creation of a Magna Carta for Investment will attract investors to pour in the economy.
Basically belonging to the elitist and owners of vast tracts of land, our previous chief executives have overlooked whether deliberately or otherwise the welfare of the agricultural sector of our society. With the incoming president putting a premium on this long neglected sector, it is expected that poverty alleviation will be slowly realized in the next six years because a greater majority of those people in the impoverished level belong to the agricultural sector.
Basically belonging to the elitist and owners of vast tracts of land, our previous chief executives have overlooked whether deliberately or otherwise the welfare of the agricultural sector of our society.
Despite several strong oppositions to the K to 12 Program of the Aquino regime, it has shown great potential in so far as its ability to create a more productive individual is concerned. Before it will take one to finish the tertiary level to have specialization. With the K to 12, a specialization will be realized after finishing the senior high level.
Although, the level of drop-outs may increase, the Duterte administration’s thrust of expanding the scholarship program provides greater opportunities for competitiveness and opportunity for the poor but deserving students. The Duterte administration should sustain and continuously improve the basic education program because the acquisition of knowledge even at the most basic level should provide opportunities for the impoverished to uplift their lives.
The Conditional Cash Transfer (CCT) of the government should be an opportunity for our poorest among the poor to find ways and means to improve their lot using funds coming from government assistance. This should, however, be supplemental to the real intention of eventually making them sustain their own lives. This will happen if we provide them with better opportunities and not forever be reliant on whatever the government can provide them.
With the above-stated vision of our incoming government and the expected implementation of the same, we expect an improved society in terms of peace and stability. Although it is not possible to achieve a complete turnaround in terms of development, peace, and security, the start of something concrete relative to the presumptive president’s campaign promises is enough guarantee and proof that the president means business and the Filipino people may be in for a start of something good.
Although it is not possible to achieve a complete turnaround in terms of development, peace, and security, the start of something concrete relative to the presumptive president’s campaign promises is enough guarantee and proof that the president means business and the Filipino people may be in for a start of something good.
Emmanuel J. Lopez, Ph.D. is an associate professor at the University of Santo Tomas and the chair of its Department of Economics. Views reflected in this article are his own. For comments email: [email protected]
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