President Rodrigo Duterte is determined to secure an “A” credit rating for the country through levelling up the fiscal reform momentum and priority legislations, which are designed to make the Philippines more competitive, a Bicolano lawmaker said Sunday.
Albay Rep. Joey Sarte Salceda, House Ways and Means Committee chair, said these would include structural reforms to open the economy by amending the 83-year-old Public Service Act, ramp up infrastructure including faster internet and lower power costs, ease doing business, and tax reforms.
“Getting an ‘A’ credit upgrade means lower interest expenses and lower risk premium for investing or lending to the Philippines, its government and its enterprises. A competitive Philippines means comfortable life for all and a better future for the next generation,” he explained.
Recent fiscal reforms have led to a credit rating upgrade from the agency Standard and Poor—BBB+from BBB, showing a strong vote of confidence to Duterte’s reform agenda.
Salceda said TRAIN 2 or TRABAHO Bill, now called Corporate Income Tax and Incentives Reform Act or CITIRA, which is a certified priority legislation, will pass renewed scrutiny even if it reduces revenues and has a fiscal impact of negative five (on a scale of 1 to 10), but bears a positive structural impact of ten.
CITIRA, which was originally crafted by Salceda as a tax incentive for business, aims to reduce thecorporate income tax from 30% to 20% by 2029, or 2% every two years but generate 1.4 million jobs within the same period.
He said passing CITIRA, the second package of the government’s comprehensive tax reform program, is meant to transfer the dynamism of the economy back to the private sector and make the country competitive with the rest of the world.
While it lowers the corporate income tax rate, it also modernizes the incentive system by granting superior incentives to companies who create quality jobs, train their people, invest in research and technology, and invest in less developed areas or places recovering from calamity or armed conflict, and urges the private sector to contribute to the future of the next generation of Filipinos.
“It’s all about love of country. You must learn to contribute and share for the sake of the next generations... that’s how simple [TRAIN] package 2 is,” he added.
In his SONA, President Duterte declared his priority legislations as follows: Increasing and Restructuring
Excise Tax on Alcohol, Public Service Act, National Land Use Act, Postponement of Barangay/SK Polls from May 20230 to October 2022, Trust Fund for Coconut Levy, Department of Overseas Filipino Workers, Department of Water Resources and Services, Department of Disaster Resilience.
Also included are the National Defense Act, Death Penalty for Plunder and Heinous Crimes related to Drugs, Capital Income Taxation, Real Property Valuation and Assessment, TRAIN 2 or CITIRA bill, Mandatory ROTC, Benefits for Barangay Officials, National Academy of Sports, Rightsizing of the National Government, Health Workers in all Barangays, Salary Standardization to include Teachers and Nurses, Malasakit Centers, Fire Protection Modernization, More Benefits for Solo Parents, and Separation and Retirement Benefits for AFP.
Salceda stressed that through active partnership between Congress and Duterte’s economic managers, the country can take the truly needed economic direction to further boost investment and fetch an ‘A’ credit rating for the country in two years.
The 17th Congress had seen the passage of vitally important structural reforms in Philippine history born out of the enhanced collaborations between lawmakers and cabinet secretaries.
These include the TRAIN Law, Tax Amnesty, Tobacco Excise Tax, Rice Liberalization, National; ID, Ease of Doing Business, and Universal Health Care, among others.
The success of teamwork in the Duterte administration could be summed up in two indicators: high growth rate of 6.2 % in 2018 and falling poverty rate from 27.6 % in the first half of 2015 to 21% in the first half of 2018, lifting six million Filipinos out of poverty, pointed out Salceda, a noted economist.
Duterte’s economic managers, led by Finance Secretary Carlos Dominguez and Social Planning Secretary Ernersto M. Pernia, have once more sought the same effective partnership with Congress in pursuing the President’s SONA certified legislative agenda, he added.
The departments of finance, budget and management, and economic development have pledged to work more closely and provide timely inputs to various economic and fiscal bills, and frequently convene informal or technical meetings through the Legislative Executive Development Advisory Council.
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