PHL to Assume Role of Donor Country
We must be proud that the Philippines is reaping the rewards of 84 quarters of uninterrupted economic growth.
From being a beneficiary of financial grants from different foreign agencies over the past decades, the Philippines is now trying to redefine its role before the international community by being a donor through a multilateral institution that is headquartered in the Ortigas business district.
Finance Secretary Carlos Dominguez III announced recently that the Philippines would begin contributing to the Asian Development Fund (ADF), which provides assistance to least developed countries, or LDCs, in the Asia-Pacific region.
It is about time that we do our share in helping countries that need help the most. The Philippines was considered an LDC not so long ago before graduating from being a recipient of ADF assistance in 1999.
The transition from beneficiary to donor also speaks about our country’s resilience from economic stagnancy in the past to become one of the most dynamic economies in the world today. Other members of the Association of Southeast Asian Nations, such as Indonesia and Thailand, are now ADF donors.
While we still have a lot of catch-up activities to do, this should not prevent us from helping other countries.
I believe our country’s contribution to the ADF conveys goodwill to the region’s LDCs. The Asian Development Bank’s (ADB) ADF grant facility promotes poverty reduction and improvement in the quality of life of people in LDCs of the Asia-Pacific region. Among the poorest and most vulnerable developing member-countries in the region are Afghanistan, Cambodia, Kiribati, Kyrgyz Republic, Maldives, Marshall Islands, Federated States of Micronesia, Nauru, Nepal, Samoa, Solomon Islands, Tajikistan, Tonga, Tuvalu and Vanuatu.
Dominguez said our contribution to ADF would be announced during a pledging session on the sidelines of the ADB’s 53rd Annual Meeting in May in Incheon, South Korea.
This is timely because as Dominguez said, we are making this contribution as we expect to rise to the upper-middle-income status ahead of schedule.
Despite the host of external challenges facing the region, we are on track to grow at least 6 percent this year. The Philippines has a strong domestic economy that could withstand the jolts of the global trade imbalance. Although our stock market suffered a decline mainly because of the volatile trading in the region, the peso remains a source of stability.
The last thing we need to do is to panic. Our strong economic fundamentals and improving government finances will shield us from these temporary headwinds.
Data show that the government’s revenue collection increased by a 10th to P3.137 trillion in 2019, as our tax effort improved to 15.19 percent of the gross domestic product last year from 14.72 percent of GDP in 2018. Of course, we can further improve it to the ideal 17 percent over the coming years as we implement more tax reforms. Better revenues will help us fund more infrastructure projects and social services.
I believe that we are on track to becoming an upper-middle-income economy this year, with a gross national income per capita of around $4,000. Most international institutions predict that the Philippines will continue to grow rapidly in the medium term.
Fitch Solutions Macro Research, a unit of Fitch Group, expects the Philippines to expand at least 6 percent in 2020. This would make the Philippines still one of the fastest-growing economies on the radar of international credit rating agencies.
Bangko Sentral ng Pilipinas Governor Benjamin Diokno was also quoted as saying that “the best is yet to come for the Philippines.”
I can only agree with Diokno. We have enough funds to support the construction of “Build, Build, Build” projects that will translate into concrete benefits for our people. Key economic indicators show that the country’s robust macroeconomic fundamentals remained intact.
And as we enjoy the benefits of this steady growth, we should also start showing our goodwill and become a responsible member of the international community.