Diokno says focus of Marcos admin would be to sustain growth
Outgoing central bank governor Benjamin Diokno, who was tapped by President-elect Ferdinand Marcos Jr. to be his finance secretary, said he would focus on sustaining growth.
''The focus is to sustain growth because by sustaining growth, you solve your tax problem. When the economy is growing, the tax collection is growing. It is what economists call elastic. The higher the growth, the higher the tax collection, '' he told ANC on Friday.
The inter-agency Development Budget and Coordinating Committee recently lowered growth targets to 7-8 percent this year.
''I think that is doable because the economy grew by 8.3 percent in the first quarter. I think the second quarter, we will do even better. Remember, there was a surge (of COVID-19 cases) in the first quarter. Even with the surge we grew by 8.3 percent,'' he explained.
Diokno said a focus should be how to make all sectors grow. ''There are some laggards, like agriculture which has not grown all these years. We have to focus on that. Mining, that was stopped for a while. Now it is back,'' he said.
Diokno said he is ''not worried'' about the level of the debt, which is around P13 trillion as long the economy grows.
'' That is easily manageable as long as the economy can grow at 6-7 percent, which is our record before the (COVID-19) crisis,'' he said.
''Most of our debt are domestic rather than foreign. The problem now is how do you come up wth a fiscal consolidation program because right now our deficit is in the neighborhood of seven percent of GDP. We want to go back to three percent of GDP and I think we have a plan for that,'' he said, without disclosing.
Diokno said a key factor is infrastructure, which under the Duterte administration has been setting aside 5-6 percent of GDP.
''Before Duterte, we were spending less than 2 percent for infrastructure. That's why we had the reputation of the oldest infrastructure in this part of the world,'' he said.
Infrastructure development creates ''high quality jobs. Better airports and seaport,'' he said.
He also said the Duterte administration is leaving a ''much better tax structure than before the previous administration.'
Diokno said his term as central bank governor was to end on July 2023. He said Marcos told him needed someone to run the economy.
''The president said he needed someone to run the economy. How can you say no to someone who was elected by 31 million people? There some doubts. I resisted as much as I can. There were a lot of people calling me so I finally gave in,'' he said.
Monetary Board member Felipe Medalla, said Diokno, will serve the latter's remaining term as central bank governor.
'' I have seen all the crisis. We are in a better position now,'' Diokno added. DMS
