Lib bills, Covid response in last Congress leg (Sabong News)

TO help the country’s economic bounce-back, the 18th Congress will highly prioritize the Duterte administration-backed measures liberalizing sectors of the economy and Covid-19 response bills in its third and last regular session, which will resume on July 26, Monday. Majority Leader Martin Romualdez and House Committee on Economic Affairs Chairperson Sharon Garin assured the public that the lower chamber is exerting all efforts to build a “resilient economy” post pandemic through long-term economic and industry reforms. With this, the two House leaders said these three certified bills are now in the Senate court: the New Public Service Act (PSA) or House Bill 78, Foreign Investments Act (FIA) or House Bill 300, and Retail Trade Liberalization Act (RTLA) or House Bill 59. The bills have been approved on third and final reading in the House. Garin said the House economic cluster is resolved to help the recovery. “We’ve always been consistent that we need to address the contraction. How do we recover from Covid?” she said. Garin said these liberalization measures are vital. “We need more investors. We are trying to push for more investments, not only Filipino investments, but also foreign investments.” Economic liberalization will boost the Covid-19 response programs and bring new economic opportunities for Filipinos. Allowing the transfer of technologies and know-how from advanced countries will help catalyze economic development and the productivity of the local workforce, she added. For his part, Camarines Sur Rep. Luis Raymund Villafuerte said these measures could help the country in current recovery efforts and hasten the return to its pre-Covid path of high and inclusive growth. Villafuerte said amendments to the FIA, RTLA and the PSA would at once liberalize the restrictive economic rules for foreign corporations, thereby encouraging overseas investors to do business in the Philippines or expand their current enterprises here “The three bills certified as urgent by President Duterte are doable reforms that aim to instantly make the economy more attractive to investors. Passing these measures is a more viable and acceptable option than tinkering with the Constitution on the premise of removing its  restrictive economic provisions or Charter change,” Villafuerte added. Meanwhile, Speaker Lord Allan Velasco and Majority Leader Romualdez vowed to coordinate with the Senate to finish some of the remaining priority measures identified by the Legislative-Executive Development Advisory Council (LEDAC) when it resumes session this Monday. Velasco said the five bills of top priority are the proposed Philippine Virology Institute Act, Center for Disease Control Act, Amendments to the Continuing Professional Development Act of 2016, Bureau of Immigration Modernization Act, and National Housing Development Act. “We will work toward the approval of these bills once we resume session and we will also take into account the priority measures President Duterte will mention in his sixth and final Sona,” Velasco said in a statement. In a separate interview with CNN Philippines, Velasco said the House has approved several priority bills but majority of them are pending in the upper house of the Congress. Velasco asked the Senate to immediately pass bills that the House transmitted to senators for their own deliberations, including bills creating a Department of Overseas Filipinos Act and creating a Department of Disaster Resilience Act, the proposed Internet Transactions Act, the Resolution of Both House 2 or the economic Charter change and the Bayanihan to Arise as One or Bayanihan 3. Meanwhile, Romualdez also asked the Senate to pass the Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery Act (Guide) to give financial aid to distressed enterprises critical to economic recovery; as well as the bill creating the Department of Disaster Resilience amid the continued unrest of Taal Volcano. Passage of Bayanihan 3 or the Bayanihan to Arise as One Act is crucial to the economic recovery program of the government, he added. The House has endorsed Bayanihan 3 for Senate approval.                 The majority leader, meanwhile, said House members are ready for bicameral conference in case there are differences in their version of the bill. According to Romualdez, also top of their agenda is the passage of the proposed 2022 national budget, which will be submitted after the Sona. Meanwhile, House Committee on Ways and Means Chairman Joey Sarte Salceda said his committee will continue to work on the passage of several bills providing the government much-needed revenue to support the economy amid the fight against Covid-19. With this, Salceda urged President Duterte to reiterate to lawmakers the urgency of passing the remaining packages of the Comprehensive Tax Reform Program (CTRP), to provide the government new revenue streams. These measures include the Real Property Valuation and Assessment Reform Act, Passive Income and Financial Intermediaries Taxation Act (Pifita), the proposed motor vehicle road users’ tax, tax on compensation and tax on revenues of Philippine Offshore Gaming Operator (Pogo), tax administration reforms on proposed digital taxation. “First, we will optimize existing revenue sources: that means, as much as possible, we will try to improve or update existing taxes, or enhance tax administration. That is why my digital economy taxation bill only closes tax loopholes for the tech giants instead of creating new taxes, and why my proposed taxes on Pogos clarifies confusion in taxing those companies. Our proposal on motor vehicle road users’ taxes also just updates the rates, which has not been done since 2004, even if it was mandatory to do so under the law,” he said. He said other reforms seen to provide additional revenue to the government are the implementation of oversight into customs-bonded warehouses, full digitalization of the taxpayer filing and payment in the Bureau of Internal Revenue, and the application of zero tax for some period and tax base expansion after, for the MSMEs. According to Salceda, the Real Property Valuation and Assessment Reform Act is undergoing deliberations at the Committee level in the Senate, where the Pifita is also pending. “Progress in both reforms is being observed by credit rating agencies, who believe that their passage is a net plus for our country’s credit standing,” he said. Salceda said his Committee on Ways and Means has a host of other measures lined up, including a Fiscal Regime for Mining, which remains very critical to maximizing the recent metals price boom. Other measures include the Ease of Paying Taxes Act, the Motor Vehicle Road Users’ Tax, and the Excise Tax on Single Use Plastics. Meanwhile, Salceda said Congress can help the country’s credit outlook recover once it completes the comprehensive tax reform program and reaches for “low-hanging fruits such as the Pogo tax and the e-sabong tax bills.” International credit watcher Fitch Ratings recently revised its outlook on the Philippines’s current rating, citing the strong impact of the pandemic on the economy, which could potentially result in scarring effects for the country. Fitch Ratings affirmed the country’s rating at “BBB,” but revised its outlook from the assigned “stable” in January this year down to a “negative” outlook. “Overall, we have weathered the possibility of a downgrade. That’s the headline here: no credit grade downgrades for us, even when our peers are getting pulled down some notches. Outlooks change depending on what we do with policy now,” Salceda said. “We should also reach for very low-hanging fruits such as the Pogo tax regime and the e-sabong tax regime. President Duterte himself said that these areas can be revenue generators. We will be better served if we impose tax regimes that regulate them well. We will give President Duterte a Pogo tax bill to sign by August. Hopefully we can do e-sabong by September. We are just waiting [for] the Senate to do it,” Salceda added.                 The lawmaker said passing these reforms is critical. “Over the next 5 years I expect revenue inflows from the Pogo taxes to be P144.54 billion. For e-sabong, total public resources generated should be P28.04 billion. On the first year, combined, we’re looking at P32 billion. That moves our revenue-to-GDP by around 0.16 percentage points. Fitch projects that we will recover to 15.2 percent revenue-to-GDP, so add that, and we reach around 15.4 percent. That is higher than any revenue effort in the 2008-2018 period, and only exceeded by President Duterte’s own performance in 2019,” Salceda explained. Salceda also pushed the government to “focus on growth” in GDP, as “much of the worries cited by Fitch hinge on GDP growth.” “The main source of Fitch’s outlook is really its projection of only moderate growth in 2021. They think we will only achieve 5.0 percent. A country like ours, with low GDP base last year, has the potential to go 12 percent GDP growth during periods of recovery. Nonetheless, since some quarantines were still imposed this year, we should at least aim for 7 percent this year,” Salceda said. “That’s still doable. The BPO sector is recording demand for more office space than it did pre-pandemic. We are seeing strong recovery in the manufacturing sector. Mining is a potential area for expansion. And CREATE has ended investor uncertainty over taxes, so as long as we sell the reform well, we should see more foreign capital into the country,” Salceda explained. “There is an overhang with CREATE investments because the Strategic Investment Priorities Plan has not yet been released, and, of course investors are waiting for herd immunity so that their capital can be maximized,” Salceda said. Nevertheless, Salceda said, vaccination remains the most critical economic intervention. “We are doing around 239,000 vaccinations daily. We should expand to 750,000 if we want to reach herd immunity by end of 2021. If we can do that, 2022 should be an exceptionally strong recovery year, with all the pent-up investments,” Salceda said. “If we can significantly grow our vaccination rate and actually achieve herd immunity this year, I have no doubt the outlook will improve,” Salceda concluded. —