The Philippines has risen to BBB+ in the Standard & Poor’s rating, just one level below the desirable AAA rating group. It can get to that much coveted AAA if Congress acts now.
The administration is doing the right things. Infrastructure is being built, the bureaucracy is going online, its fiscal house is in order, money is being properly controlled. It’s the reforms Congress must agree to that are stalled. If it passes some key bills in this last session (May 20-June 7), the Philippines can get there, and even sooner than the usual two years to review.
The administration has shown its will to get tough things done, with unpopular but beneficial changes enacted. President Duterte and his economic team under Carlos “Sonny” Dominguez III have implemented changes that previous governments were too fearful to do. Among these were the creation of a Bangsamoro autonomous area, revision of some tax laws, decision on a second national airport and allowing a third telco to operate.
The Duterte administration also approved the rice tariffication law and cleaned the cesspool that was Boracay, with Manila Bay next on its agenda. A national ID (Philsys) will be introduced in the next few years. Meanwhile, the well-conceived “Build, build, build” program has proved to be a fundamental game changer, a foundation upon which much else can be, and is being, built.
Some of them were with the help of Congress in passing the needed laws, including the Tax Reform for Acceleration and Inclusion, or TRAIN, and rice tariffication laws where lawmakers bucked populism and did the right thing.
There are a few more “right things” that Congress needs to act on in its last sessions, if that upgrade is to happen and, more importantly, if economic growth and the people’s well-being are to be improved through bills that may not be popular, but can really make a difference. With elections over and the next a long three years from now, the members of this Congress can do these right things without risking their appeal to voters. Any public negativism will be long forgotten by May 2022.
I appeal to Congress—help our country by passing these bills:
- The four Tax Reform for Attracting Better and High-Quality Opportunities or Trabaho bills, particularly No. 2—to reduce corporate income tax and rationalize incentives; it needs some minor amendments to arrive at incentives that the Department of Finance and investors could agree to. The bills will modernize and revolutionize our tax system, and their approval will lead to faster economic growth and more investments in business.
- Emergency powers to declog Edsa and get traffic moving, and hasten the construction of major infrastructure projects in key cities throughout the country. We can’t sit for hours on a mere 10 kilometers of road (Cubao, Quezon City to Ayala, Makati) just to get to work or conduct business.
- Amendments to the Public Service Act to increase foreign investments in key economic sectors such as telecommunications, shipping and airports and seaports, and provide competition that will lower prices and improve services to consumers
- Amendments to the Foreign Investments Act, where the proposed measure empowers the National Economic and Development Authority, the Department of Trade and Industry, the Board of Investments and other concerned agencies to review the foreign investment negative list yearly and report to Congress. The proposal “excludes the practice of professions from the coverage of the Foreign Investments Act to allow other laws to govern foreign nationals practicing their profession in the Philippines.”
- Build-operate-transfer law amendments, to allow other forms of public-private partnership such as joint ventures and attract more foreign investors willing to participate in the government’s massive infrastructure development program; also, to exempt projects of national significance from paying real property tax
- Freedom of Information Act, to improve transparency in government transactions and raise the country’s global anticorruption ranking, a major prerequisite among potential foreign investors, and demanded by the public.
- Amendments to the Retail Trade Liberalization Act to ensure the entry of more foreign retailers into the country and intensify competition in the local market, which should eventually benefit consumers. The bill proposes to lower the paid-up capital threshold for foreigners to own retail businesses in the country to $500,000 from $2.5 million.
Let’s have Congress retire with a job well done, and an economy able to rise above itself.
E-mail: wallace_likeitis@wbf.ph