DoF anniversary, reunion and outlook

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FINEX Folio -- By Flor G. Tarriela


At the 122nd Department of Finance (DoF) anniversary hosted by Finance Secretary Carlos G. Dominguez III on May 6, it was a wonderful reunion of former DoF Secretaries: Prime Minister Cesar Virata, Ed Espiritu, Jose Pardo, Gary Teves and former Undersecretaries Romy Bernardo, Kune Gison, Chil Soriano, Ruben Fruto, among others. Present were current DoF Undersecretaries and agency heads: Karl Chua, Gil Beltran, Antonette Tionko, Bayani Agabin. Also present were Philippine Deposit Insurance Corp. President Bobby Tan, Securities and Exchange Commission Commissioner Tonette Ibe, Bureau of Internal Revenue Commissioner Caesar Dulay, National Treasurer Rosalia de Leon, Development Bank of the Philippines President Manny Herbosa, Land Bank of the Philippines’ Cecille Borromeo, and Philippine Export-Import Credit Agency head Albert Pascual, among others.

Everyone at the anniversary was upbeat as the Philippines was just upgraded to BBB+.

S&P Global Ratings didn’t even wait for the outcome of the elections which indicated its positive outlook on the Philippines. Seated at our table was DoF’s very capable Chief of Staff Annie Aquino who told us that the Philippines’ international credibility is very high. Economic managers have good plans — they articulate what they’re going to do, and they deliver on their plans, such as Regionalization, Diversification of the Loan Portfolio, and the Tax Reform. Last year’s surge in inflation rate to over 6% initially charged to the TRAIN implementation is now traceable mainly to the rice supply issue as well as the rise in world oil prices. With the passage of rice tariffication law, rice can now be imported by private sector with 35% tariff. DoF Secretary Dominguez had proposed rice tariffication 30 years ago when he was Secretary of Agriculture.

Flashback to 2000, when I was DoF Undersecretary, the DoF building was old. Some rooms did not have any aircon, the toilets were… never mind, and elevators worked, sometimes. Now, it’s a brand new DoF that welcomed us, newly renovated with modern glass facade. Progress!

We have gone a long way. In 2000, the country’s gross international reserves (GIR) was at $15 billion or about 30% of the external debt of P51 billion. Inflation was 4.4% and gross domestic product (GDP) growth rate was 4.4%. In 2018, GDP growth was at 6.2%, GIR stood strong at $79 billion versus total external debt of $78.96 billion. As of April, GIR was already $83 billion and if we just consider maturing short term obligations, the reserve cover is more than three times.

Clearly, the Philippines is in strong financial condition. The first-quarter GDP growth rate was 5.6% and had the budget not been delayed, the economy could have grown much more than 6%. There’s still half a year left and the country’s economic managers led by DoF have a catch-up plan to cover for time lost.

Business’ consensus on the economy? Very good. Sampling done with former Philippine National Bank (PNB) Chair Paquito Dizon and PNB Directors Ric Tan and Vicot Panlilio confirmed this, and so did JG Summit Holdings, Inc.’s chief strategist BJ Sebastian in his church message last Sunday.

PNB Economist Jun Trinidad however says there are some external headwinds to watch out for. The Philippines’ tech exports may not be spared the fallout from a worsening US China trade conflict. The US government’s blacklisting of Huawei that would compel US tech companies’ manufacturers not to deal with this China telecoms giant, will affect not just the global rollout of 5G but also disrupt the supply chain-driven tech activities. We may feel the pain sooner than later. Fortunately, the Financial Stability Coordination Council is mapping out a strategy against global shocks.

Meanwhile, over at Manila Polo, the Diamond Club with Eric Filamor and Archit Bartolome recently sponsored “Making Sense of Rocket,” a talk on real estate with Jun Camcam, Eddy Santos and Ricky Santos. It’s amazing how real estate prices have really gone up. he outlook remains upbeat as well in the provinces, especially with infrastructure expected to be in full swing with Build, Build, Build now that the budget has been passed.

Annie Aquino said DoF Secretary Dominguez’ goal is to make the Philippines a mid-high economy, meaning $4,000 income per capita in a year’s time. With the hard-working economic team and effective strategies, this is achievable. I am proud to be a Filipino and an alumna of the DoF.


Flor Gozon Tarriela is the Chairman of Philippine National Bank. She is former Undersecretary of Finance and the First Filipina Vice President of Citibank N.A. She is a Go Negosyo 2018 Woman Intrapreneur Awardee. She is a FINEX Foundation Trustee and an Institute of Corporate Directors (ICD) fellow. Contact her at