Budget Secretary Benjamin Diokno delivers his keynote speech at the 2018 Euromoney Philippines Investment Forum on October 19, 2018 at Fairmont in Makati.

In his keynote address at the 2018 Euromoney Philippines Investment Forum last October 19, Budget and Management Secretary Benjamin E. Diokno shared with investors the strong macroeconomic fundamentals and economic reforms that will enable the Philippine economy to weather external headwinds and maintain its growth trajectory.

Addressing the investors in attendance, Secretary Diokno mentioned that “these are interesting times both for us as policy-makers and you guys as investors” citing the ongoing trade war between the United States and China, higher world oil prices, monetary tightening in advanced economies, higher domestic inflation, among other global and local developments.

Despite such factors, the Budget Chief asserted that the Philippines is one of the least vulnerable countries “because of its sound macroeconomic fundamentals and because it has adopted key structural reforms in the past.”

Secretary Diokno elaborated that the growth prospects of the Philippines remain firm, with economic growth projected to settle at 6.5 - 6.9% this year and 7.0 - 8.0% from 2019 to 2022, catapulting the Philippine economy into upper-middle income status by end-2019.

He also discussed the fiscal performance of the country, which has been a source of strength for the Philippines. “The fiscal indicators of the Philippines are improving significantly. The revenue effort, defined as revenue collection as share of Gross Domestic Product (GDP), has been steadily increasing from 13.4% in 2010 to 15.7% in 2017. Similarly, with a more efficient bureaucracy and a better budgeting system, government spending as share of GDP has increased from 16.4% in 2010 to 17.9% in 2017,” he added.

Moreover, Secretary Diokno cited the sound credit profile of the Philippine economy, which has garnered the attention of credit-rating agencies. “The credit profile of the Philippines has turned rosy. Its debt-to-GDP ratio is low and declining. Moreover, the bulk of our debt is owed domestically, about two-thirds domestic and one-third foreign, and will not mature any time soon,” the Budget Chief shared.

On economic reforms, the DBM Secretary elaborated on government measures to tame inflation and boost development. On the fiscal front, he detailed the Tax Reform Program and cash-based budgeting as landmark reforms to finance Build Build Build and quicken public spending. On inflation, he shared the directives of the President to boost food supply and lower food prices by virtue of Administrative Order No. 13 and Memorandum Orders No. 26 to 28.

These reforms, coupled with the sound macroeconomic fundamentals of the economy, are seen to push economic growth to the target levels set by the government. “We remain vigilant of the risks but are optimistic that our development objectives are intact and attainable,” Secretary Diokno concluded.

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