DOF, columnist spar over Philippine economy’s health

MANILA, Philippines — The Department of Finance on Tuesday slammed academic and author Richard Heydarian for his comments on the Philippine economy, which he said was suffering from a “fallout.”

In a June 21 opinion piece titled “More Duterte fallout on the Philippine economy” published on Nikkei Asian Review, Heydarian said the Philippine economy is “beginning to display vulnerabilities” under President Rodrigo Duterte, citing above-target inflation, peso weakness and a wide current account deficit.

Heydarian also said Duterte’s economic managers “grapple with erratic and populist policies.”

In an economic bulletin, the DOF said Heydarian went "overboard," adding that his comments on the double-digit decline in new investment pledges in the first half of 2017, supposed delayed rate hike by the central bank and “historically weak peso" were “erroneous and not backed up by accurate statistics.”

The Finance department also defended the Duterte administration’s tax reform program, saying the law is not a “populist” policy.

“The 'fallout’ that Heydarian is imagining is debunked by the rapid growth of the economy—6.7 percent in 2017 and 6.8 percent in the first quarter of 2018. If Heydarian is looking for ‘erratic and populist policies,’ his eyes are perhaps turned to the wrong country,” the DOF said.

“The Philippine tax reform is certainly not ‘populist’ and not ‘erratic’ but it is necessary to fund that ambitious infrastructure program which is necessary to enhance the competitiveness of the economy,” it added.

People have blamed soaring prices on the Duterte administration’s Tax Reform for Acceleration and Inclusion law, which lowers personal income taxes while raising excise levies on fuel and “sin” products, among others. Supply-side factors like higher global oil prices—worsened by the continuing depreciation of the peso—are also pushing up commodity prices.

Meanwhile, the government expects to bag rating upgrades soon due to the implementation of the TRAIN law, which debt watcher S&P dubbed as the “cornerstone” of the Philippines’ fiscal strategy.

In a Facebook post, Heydarian maintained that editors at Nikkei Asian Review “fact check every single point and data I present in my columns.”

He also slammed a “senior technocrat” for “spreading his ‘rebuttal’ to my column... via propagandists and troll armies.”

“I have been in conversations with senior economists around the country, and it appears many share my concerns in the article. I hope this kind of attitude will no longer be adopted by our technocrats and economic managers,” Heydarian said.

“Let’s not make this a kitsch propaganda affair. I’m open to dialogue, as always, and any public discussion or panel talk on this issue. Let’s make the Philippines great together,” he added. — Ian Nicolas Cigaral