Why PH wants to be part of Trans-Pacific Partnership

Posted at 05/19/14 3:23 PM

MANILA, Philippines - Finance Secretary Cesar Purisima sees the next wave of Philippine growth to come from international trade deals.

In an interview on CNBC's Street Signs, Purisima said the Philippines hopes to be part of the second wave of countries participating in the Trans-Pacific Partnership (TPP), which is being pushed by the United States.

He said the TPP is expected to give the country access to half the world's gross domestic product.

"We're definitely aiming to be part of the second wave because it's very important. TPP, if it achieves its intent and vision, would be a high-standard agreement covering not just trade but government procurement, investment, etc and will cover over of half of the world's GDP," Purisima said.

Purisima also answered criticisms of government's failure to collect from the so-called informal sector, workers who practice their professions but don't declare their income.

The Finance chief says the government could add as much as 2 to 3 percentage points more to its average GDP of 6.2 percent, if it could collect taxes from these professionals.

"Take for example professionals. We believe there's 1.8 million of them practicing their professions. In 2012, approximately only 400,000 filed and the average payment was about P33,000. That's less than $1,000. We estimate that the average will probably be closer to P200,000 or $4,000 to $5,000. That alone if we're able to improve the number and improve the average, should bring us 2 to 3 percent of GDP in tax collection," Purisima said.

"That's why the beauty of the Philippine story I keep telling people is despite all the challenges, we're growing at an average of 6.3% since the Aquino administration. As we fix all these issues, you'll see more upsides, more engines, boosters for our Philippine growth story," he added.