Manila, Philippines – According to the president of First Metro Investment Corporation, Rabboni Arjonillo, Philippines’ Gross Domestic Product will spike up from 7 to 7.5 percent. This growth expects to be the fastest among other countries in ASEAN-5.
Aside from the Philippines, the countries included in ASEAN-5 are Malaysia, Thailand Indonesia, and Singapore.
The economic growth results from the improvement in manufacturing, purchases, and the continuous increase in remittances from abroad. Just recently, BSP’s Diwa Guinigundo affirmed that remittances from OFWs would blow up by four percent this 2018.
On the other hand, inflation rate might expand from about 3.5 to 4 percent throughout the year. Department of Finance (DOF) stated that the rate would likely to stabilize at 3.3 percent this month. Regardless, TRAIN law will affect it.
However, the percentage is still within the target range of Bangko Sentral ng Pilipinas which is set from 2 to 4 percent.
According to Victor Abola, an economist from University of Asia and the Pacific, only 0.6 percent of that 4 percent inflation is the impact of TRAIN law.
The TRAIN law removed personal income tax from employees who earn P250,000 annually. To fund socio-economic and infrastructure programs, this law will press higher tax on sugary beverages like soft drinks, then fuel, tobacco, and cars. These changes also reflected on transport rates which ascend to 3.1 percent.
But since most employees can take home higher net income, their purchasing power increases. This may result to more demand in commodities. Hence, the country needs to manufacture more products and services to attain these needs. GDP will likely increase because of bigger consumption demand.
Also, the TRAIN law will fund the government’s Build Build Build project. This is worth about P8-trillion. This project will focus on building sports amenity in public schools and military infrastructures. There will also be an installation of potable drinking water in public places like parks.
All these changes become a significant factor in our economic growth. If this will be handled smoothly and effectively, the Philippine economy will benefit. We must keep in mind that not everything that increases is a good thing. It will be efficient if we get to manage the inflation rate while we induce more goods and services.
If the country will be the fastest growing economy while competing with other powerhouse countries, it will attract more foreign investments. There still hope for the Philippines. Let us make sure to do our part properly.