The Philippines, for once, is at the forefront of Asia and Pacific development.
Thus claimed Finance Secretary Carlos Dominguez III, saying that the country is at the forefront of the region’s remarkable development.
“I am particularly proud of the fact that the Philippines is fully engaged with the rapid growth of the region,” Dominguez said in his welcome remarks during the Opening Session of the Board of Governors at the 51st ADB Annual Meeting in Pasig City.
The Finance chief sits as this year’s chairman of the ADB’s Board of Governors with the Philippines as host country of the annual meeting.
Dominguez boasted that in the past two years the country’s gross domestic product grew at an average of 6.7 percent.
“We seek to grow at 7 percent on a sustained basis. By 2022, we expect to bring down the poverty rate to just 14 percent,” he said.
He also lauded the Duterte administration’s comprehensive tax reform program which it said is aimed at “further expanding the fiscal space” to make possible immense investments in infrastructure and human capital.
“Our ambitious infrastructure program benefits from the support of the ADB and other partner development institutions. With this program, we will increase public sector infrastructure spending to 7.3 percent of GDP by 2022. This program will link all islands and make all communities part of the mainstream of wealth creation,” he said.
“The infrastructure program will, at the same time, reduce our vulnerability to natural calamities. It will also foster the growth of manufactures that will lessen our dependence on remittances from overseas workers and from the business process outsourcing sector,” he added.
The Finance chief added that the “center of gravity of the global economy” has decisively shifted to Asia. The world’s two most populous countries —China and India—are now among the planet’s largest economies.
“They have become the principal engines of growth for the global economy,” Dominguez said.
“The Asean region, a common market with 640 million consumers, includes some of the fastest growing economies,” he added.
As ADB chairman, Dominguez also took note that the Asia-Pacific region stands as “compelling proof” that free trade brings rapid progress in a period haunted by rising protectionist regimes and threatened by autarkic politics.
“This part of the world, after all, saw the liberation of hundreds of millions of people from the grip of poverty. Over the next few years, this part of the world will demonstrate to the rest that free markets are adapting to rapidly changing technologies that provide the best conditions for inclusive growth,” Dominguez said.
“The Asia-Pacific is proud of its economic achievement over the past few decades,” he added.
He also cited the ADB’s role in the region’s economic achievement.
“We are encouraged by the ADB 2030 Strategy formulated by the present leadership of the institution,” Dominguez said.
“This roadmap offers a new vision and strategy for the Bank to maintain its relevance and improve its capacity to adapt to changing conditions,” he said.
“It is fortunate that the Bank today has sufficient financial resources to enable it to boldly expand operations and respond in a highly-differentiated way to the growing diversity and aspirations of the member-countries.”
Meanwhile, the ADB has downplayed the concerns aired by Western countries, as it reaffirmed its belief that Philippine economy will grow faster in the coming years due to rising manufacturing and other investments.
According to ADB director-general for Southeast Asia Ramesh Subramaniam, the country’s rising labor productivity and investments in manufacturing and technology are building up the economy’s productive capacity.
“This means, there’s even further room for the Philippine economy to grow,” Subramaniam said in a media briefing after the ADB annual meeting.
The ADB director for Southeast Asia said the multilateral lender does not see “any material risk of overheating for the Philippines.”
The ADB official shared local economists’ view that the country has become one of the fastest growing economies in Asia in recent years.
Last month, World Bank’s lead economist Birgit Hansl warned that the Philippine economy is at risk of overheating.
But Subramaniam said that rising investments are sufficiently meeting robust domestic demand, thus helping keep inflation relatively manageable.
Based on ADB’s latest forecasts, the Philippine economy will grow by 6.8 percent this year and 6.9 in 2019, or up from 6.7 percent in 2017.
The government also envisions that the Philippines will hit upper middle income status by 2019 and to slash poverty by about a third to only 14 percent by 2022.
Growth drivers include rising private-sector investments, government infrastructure spending, and household consumption.
Subramaniam said the ADB is keen on adapting to the changing financing needs of member economies, including those that are reaching higher income levels like the Philippines.
The ADB has also expressed its support to the Philippines’ ambitious infrastructure program – “Build Build Build” – in which the government will spend about $160 billion on vital public infrastructure all over the country.
The program will be financed by a mixture of tax revenues and borrowings, including official development assistance, which offers interest rates much lower than commercial rates.
One of these infrastructure financing from the ADB is a $380-million loan for 280 kilometers of national roads and bridges in Mindanao.