Economy and governance make Philippines ”promising investment destination” for Japan: Dominguez

December 1, 2020

Finance Secretary Carlos Dominguez III on Tuesday hoped the country’s strong fundamentals, fiscal stamina, and effective governance will continue to make a "promising investment destination and growing market” for Japanese investors.

During Philippine-Japan Business Investment Virtual Forum, Dominquez cited the plans made by the administration before, during and now that the country is slowly recovering from COVID-19.

He said the government prioritized health and safety of the people when the pandemic struck last March and they imposed the enhanced community quarantine (ECQ).

“As we gradually reopen the economy with health interventions, we are beginning to see the green shoots of recovery. The worst seems to be over for the country,” Dominguez said.

“The path is clearer to a strong bounce back in 2021,” he said.

Dominguez said among the “green shoots” is the smaller contraction of the Philippine economy in the third quarter of 11.5 percent from a decline of 16.9 percent in the second quarter of this year, which represents an 8-percent expansion on a quarter-to-quarter basis.

 He also cited other positive economic indicators such as the country’s gross international reserves (GIR) which hit an all-time high of US$104 billion, Philippine peso has appreciated by 5.14 percent against the US dollar, trade and manufacturing performance continued to improve for the fifth straight month since May, the unemployment rate dropped to just 10 percent in July, and net inflows of foreign direct investments (FDIs) rose for the fourth consecutive month in August, among others.

 “We expect to see additional improvements in the last quarter of this year as we progressively reopen businesses and mass transportation,” Dominguez said.

Dominguez said the government’s initiatives to sharpen competitiveness of the manufacturing and agriculture sectors, accelerate its switch to a digital economy, and improve its disaster preparedness and response programs, are among the areas of cooperation where the Philippines and Japan can continue to strengthen their robust partnership.

“We see many areas for cooperation between Japan and the Philippines on these initiatives,” he said.

Despite the challenges from the pandemic, Dominguez said the domestic economy is expected to rebound strongly next year, owing to the reforms being implemented and soon to be carried out by the Duterte administration to prop up the Philippines' status as a premier investment destination.

“We expect our economy to post a strong rebound. The challenges are immense, but we are determined to build back a better economy that our people deserve,” he said.

“We hope that the Philippines’ strong fundamentals, fiscal stamina, and effective governance will continue to make us a promising investment destination and a growing market for Japanese investors,” Dominguez added.

Dominguez cited Japan’s valuable assistance to the government’s “Build, Build, Build” project and its generous support when the government needed to access emergency financing for its COVID-19 response.

Dominguez added President Rodrigo Duterte’s prudent fiscal policy and political will to carry out his zero-to-10 point socioeconomic reform agenda made the country financially ready to fight COVID-19, pursue lasting peace in Mindanao with the Bangsamoro Autonomous Region for Muslim Mindanao (BARMM), and establish a national ID system.

He said the government was also able to face COVID-19 with strength on the food security front, and kept inflation low because of the passage of the rice tariffication law (RTL); maintained a historic low debt-to-GDP ratio of 39.6 percent and debt-to-Gross National Income (GNI) ratio of 22.7 percent; and significantly pulled down unemployment and poverty rates.

Dominguez said Duterte’s strong leadership led to the implementation of an Ease of Doing Business (EODB) Law, Universal Health Care (UHC) Program and tax reform that increased revenue flows and cut income tax rates for 99 percent of taxpayers; and a doubling in infrastructure spending compared to the past 50 years, he added.  Ella Dionisio/DMS