Sure-footed finance minister keeps growth on track
Since being appointed to the role of finance secretary of the Philippines in 2016, Sonny Dominguez has barely put a foot wrong.
Being a childhood friend of his boss, Philippines president Rodrigo Duterte, a man who admits he knows little about financial policy, surely helps. But Dominguez, a successful businessman in his own right and a two-time minister in the 1980s under former president Corazin Aquino, has certainly navigated some choppy waters.
His greatest achievement to date has been to balance the books while pursuing a “build-build-build” national infrastructure campaign that focuses on the kind of local projects — electrification of towns and villages, highways linking second-tier cities, the digging of irrigation ditches — that matter at a micro level to rural Filipinos who voted Duterte into office.
Dominguez has kept the growth rate strong — the IMF tips GDP to come in at 6.5% in 2019 and 6.6% in 2020 – while staying true to two of Duterte’s key campaign pledges: keeping inflation under control, and ensuring the current account deficit continues to narrow, to a projected 1.8% in 2020.
For all of his easygoing charm and bonhomie, the finance secretary has never shied away from making tough decisions, or of seeking solutions when Duterte’s many opponents erect barriers.
Taxes have risen on his watch, mainly targeting so-called “sin” products like cigarettes, while more middle-class citizens have been drawn into the tax net, boosting revenues.
He has proven willing to borrow externally where necessary: a $211m loan secured from Export-Import Bank of China in March will fund a long-awaited dam on the Kaliwa river, raising fears of the Philippines being enmeshed in China’s so-called debt trap. Those warnings drew a tart response from Dominguez, who noted that China was set to account for 4.5% of total external debt by 2022, less than half the amount the country owes Japan.
These are interesting times in the country. Weighed down by a brutal drugs war and domestic political infighting, and struggling with his own health issues, Duterte is starting to look tired. Fortunately, he has excellent advisers, none of whom are more valuable to him, or better qualified, than Dominguez, a finance secretary who keeps his nose well out of politics, his head down, and simply goes about doing his job, quietly and effectively.