The government is fully committed to restoring the pre-pandemic upward trajectory of the economy and achieving sustainable, inclusive growth by putting the country at the forefront of the global fight against climate change and pushing the congressional passage of its remaining tax packages plus other priority reforms measures in the homestretch of the Duterte presidency.
Finance Secretary Carlos Dominguez III said Monday these remaining reforms aim to raise additional funds for the Philippines’ recovery from the COVID-19 pandemic, broaden financial inclusion, and liberalize the economy to make it an investment-driven one.
“We are fully determined to restore the vigor of the Philippine economy at the soonest possible time. Even with the unprecedented crisis, the Duterte administration will continue to work hard until the last minute of its term to undertake the remaining reforms we had set out to do in our zero-to-ten-point socioeconomic agenda,” Dominguez said during the virtual Sulong Pilipinas 2021: Partners for Progress forum of the Cabinet’s Economic Development and Infrastructure Clusters held this morning.
To continuously develop “a truly broad-based and inclusive financial system fit for the 21st century,” the Duterte administration will endorse the passage of a bill that seeks to deepen the domestic capital markets by building a sustainable corporate pension system, along with another measure that aims to save the Military and Uniformed Personnel (MUP) pension program by making it fiscally sustainable for the long term, Dominguez said.
As part of the measures to help strategically important businesses survive the economic shock of the pandemic, Dominguez said the Duterte administration has called on the Congress to pass the Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery (GUIDE) bill.
Dominguez said the Duterte administration will likewise push the passage of the two remaining packages of its Comprehensive Tax Reform Program (CTRP)—Package 3, which is designed to make the Philippines’ property valuation system at par with international standards; and Package 4, which aims to simplify the taxation of passive income and financial services and transactions.
Fully liberalizing the economy would involve amending the Foreign Investments Act (FIA), Public Service Act (PSA) and the Retail Trade Liberalization Act (RTLA), which President Duterte has certified as urgent measures to help speed up their congressional approval within his term, Dominguez said.
To raise more funds for our economic recovery, the Department of Finance (DOF) is proposing to increase the mandated dividend remittances of government-owned and -controlled corporations (GOCCs) to the National Treasury, from the current 50 percent to at least 75 percent of their net earnings, Dominguez said.
Dominguez said the government will keep intact its huge budget for infrastructure development under President Duterte`s centerpiece program “Build, Build, Build” program as the high multiplier effect of infrastructure spending will make it the main driver of rebuilding the economy.
The government has programmed to increase infrastructure spending to more than 5 percent of the country’s gross domestic product (GDP) until the end of the Duterte administration, he said.
Dominguez said the government will also continue with its ongoing digital reforms at the Bureaus of Internal Revenue (BIR) and of Customs (BOC), to ensure that these agencies “match the efficiencies of the best comparable institutions worldwide.”
Acknowledging the urgency of putting in place stronger climate adaptation and mitigation measures to protect the country’s future economic gains, the national government will work hard with the Congress and local government units (LGUs) in achieving the Philippines’ commitments to the Paris Agreement on climate change.
These commitments, outlined in its Nationally Determined Contribution (NDC), targets to reduce the Philippines’ greenhouse gas emissions by 75 percent by 2030.
Dominguez said that as a concrete demonstration of its environment-friendly commitment, the government is now exploring a financing mechanism to enable it to improve the generating capacity of its Agus-Pulangi hydropower plant in Mindanao and acquire all coal-fired power plants in the region to repurpose them.
This proposal aims to shift most of Mindanao’s energy requirements to hydropower, which will eventually spur more investments from companies seeking to expand their operations in areas powered by clean energy, Dominguez said.
He said the national government will also urge the Congress to swiftly approve a bill banning single-use plastics, to allow every Filipino to do his or her part on a daily basis in helping save the world’s environment.
To safely reopen the economy and restore jobs and incomes, Dominguez said the government is fully rolling out its COVID-19 vaccination program to inoculate at least 70 million Filipinos or 100 percent of our adult population, hopefully within this year.
Despite supply challenges worldwide, the government has arranged the delivery of more than 140 million doses of COVID-19 vaccines for this year, of which about 15 percent will be delivered in the first half and 85 percent in the second half, Dominguez said.
Dominguez said most of the financing needed for the vaccination program was sourced through loans from the World Bank (WB), Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank (AIIB).
This financing strategy was chosen to assure the public that the vaccines being bought are internationally accepted, and have passed the stringent criteria for safety and effectiveness; and that their procurement is totally transparent, Dominguez said.