A GDP growth of at least 7 percent is viewed as a viable feat this 2018 together with the newly implemented Tax Reform for Acceleration and Inclusion (TRAIN) Law.
According to Finance Undersecretary Gil Beltran, “solid fundamentals” supported by TRAIN 1, reform on the rice sector, and the Build, Build, Build (BBB) program “will push the country’s growth to seven to eight percent this year and sustain manageable inflation”.
The TRAIN program lessens personal income taxes and thus leaving a higher take-home pay for tax-payers. However, this entails higher tax collection on fuel, tobacco, automobiles, and sugary beverages.
Revenues from this will be utilized for projects under the BBB and social services that would weaken the effects of the increased tax on consumer goods.
With regard to this progress, a number of parties share the same view.
Increased spending on infrastructure projects, as well as strong private consumption, are viewed as contributing factors to this progress, according to the First Metro Investment Corporation (FIMC), which expects a GDP growth between 7 and 7.5 percent this year.
“With the recent passage of the TRAIN Law, the government’s Build Build Build program is anticipated to be full steam ahead, which will surely drive economic expansion further,” FMIC president Francis Arjonillo stated at the 2018 Economic and Capital Markets Briefing Thursday as he expressed their expectation on the economy’s growth.
Metrobank Group’s investment banking arm officials said that the GDP will be given a push also due the ricochet in exports, revenues from the BPO industry, the regeneration of tourism, as well as steady remittance inflow from OFWs.
Despite this, an increase in inflation is also foreseen with TRAIN’s implementation. FMIC expects it to rise to 3.5 to 4 percent, also given the hike in world oil prices.
Meanwhile, University of Asia and the Pacific economist Victor Abola said that the new tax reform law would normally cause a 0.6 percent increase in domestic inflation.
Story first appeared here.