Noy: Good fiscal policies lead to inclusive growth

MACTAN, Cebu, Philippines – The “Philippine story” has clearly shown that fighting corruption and implementing sound fiscal policies can lead to inclusive growth, President Aquino told a gathering of Asia-Pacific finance ministers here yesterday.

Addressing the opening of the Asia-Pacific Economic Cooperation (APEC) Finance Ministers’ Meeting here, Aquino said his administration has been unrelenting in confronting corruption, which he again blamed on the Arroyo administration.

“Every day, it seemed, we uncovered issues that had festered during my predecessor’s term. At that point, many of us could not help but long for the weekend, if only for a temporary respite from the problems bequeathed to us,” Aquino said, referring to then president and now Pampanga Rep. Gloria Macapagal-Arroyo.

“In the face of these challenges, we steeled ourselves, strengthened by the principle the Filipino people voted for in 2010, which is: ‘Where there is no corruption, there will be no poverty.’ We relentlessly pursued all those who had committed wrongdoing, regardless of their wealth or influence,” the President said.

He added his administration revamped the budgeting system and exercised fiscal prudence, making sure that taxpayer money was spent conscientiously and judiciously on projects and programs that truly benefited the people.

“We cut red tape and made it easier for investors to bet on the Filipino people; above all, we have massively increased our focus on social services, knowing full well that the only real growth is inclusive growth,” Aquino said.

In particular, the President cited the government’s conditional cash transfer program, which has been providing financial assistance to poor families, on condition their children are sent to school and vaccinated and pregnant mothers undergo regular health check-ups.

In the past five years, Aquino said the scope of the program has expanded from less than 800,000 households to 4.4 million households, covering about 20 million individuals.

“Our resolve began to reap results much faster than expected. One look at the figures tells a complete story: From 2010 to 2014, we posted a GDP (gross domestic product) growth rate of 6.2 percent, which marks the fastest period of economic growth for our country in four decades; and we believe the macroeconomic fundamentals are in place for us to continue, if not improve on, this performance,” he said.

Aquino also noted the Philippines received 22 positive credit rating actions – the most prominent of which occurred in 2013, when the world’s most prominent agencies unanimously gave the country investment grade rating.

On top of this, the Philippines’ credit default swaps have remained one of the lowest in the region, he said.

In the past five years, the President said the country has improved by several notches in  global competitiveness – from 85th to 52nd in the World Economic Forum’s Global Competitiveness Index, and from 144th to 95th in the World Bank’s Ease of Doing Business Report, among many other indices.

“Naturally, the global community has taken notice that in empirical terms – and in terms of self-confidence – the Philippines is stable, able and resilient,” Aquino said.

“This, ladies and gentlemen, is the Philippine story. I have chosen to share it with you to illustrate that, regardless of the seeming magnitude of the challenge, progress can be achieved sooner rather than later – especially if we work with solidarity, coherence and integrity,” he said.

“Of course, achieving this on a regional level will entail a greater amount of work, cooperation and time; but my optimism is shaped by my experience of how a group with a unified sense of purpose can accelerate our shared journey towards prosperity,” he said.

Cebu Action Plan

Aquino said the Cebu Action Plan has reinforced his positive outlook.

“I am told that it ticks all the right boxes: better financial integration among APEC members fosters an environment ripe for investment; greater transparency as regards government funds maximizes efficiencies – and more importantly – the benefits enjoyed by our peoples; and a renewed commitment to improve and finance infrastructure that will lay the necessary foundations for continued growth,” he said. He said the Cebu Action Plan “will also help equip us to respond to some of the gravest threats to our economies in the form of natural disasters, particularly those caused by the new normal of climate change.”

In November, Aquino said he would be discussing with leaders of APEC economies more ways to build more inclusive economies.

“The success of that meeting, however, is rooted in gatherings such as this, where the more technical aspects are forged into policies that public servants can carry out for the benefit of our countrymen,” he said.

“I am hopeful that your time here in Cebu will go beyond finalizing previously discussed agreements, and will involve speaking of new ideas that can further grow our economies,” he said.