Econ managers seek closer partnership with Congress on PRRD priority bills

Date Posted : August 22, 2019

Econ managers seek closer partnership with Congress on PRRD priority bills

Date Posted : August 22, 2019

The government’s economic managers have formally called for a closer working relationship with the Senate and the House of Representatives in ensuring speedy action on legislative proposals that are in line with President Duterte’s goal of providing a safe and comfortable life for every law-abiding Filipino.

Led by Finance Secretary Carlos Dominguez III, the economic managers proposed that the Departments of Finance (DOF) and of Budget and Management (DBM) and the National Economic and Development Authority (NEDA) actively engage the leaders and committees of both the Senate and the House in providing them with vital and timely inputs on the various economic and fiscal bills pending in the 18th Congress.

In a letter jointly addressed to Senate President Vicente Sotto III and Speaker Alan Peter Cayetano, they also proposed holding informal or technical-level meetings of the Legislative-Executive Development Advisory Council (LEDAC) more often to ensure better working relations with lawmakers.

They also underscored “the need for more clarity on the basis where the executive can support bills with fiscal or economic implications” to manage the expectations of lawmakers on such measures.

“The DOF, DBM, and NEDA look forward to working more closely with the 18th Congress, under your leadership, to better align the priorities of the legislature with the President’s development agenda,” the letter said. “This is to ensure that we can move our country forward and achieve our Ambisyon Natin 2040 objective of becoming a high-income country where poverty is eradicated”

They said the DOF, for one, has reorganized to assign more full-time directors and staff to engage with the Congress on a regular basis.

The letter was also signed by Socioeconomic Planning Secretary Ernesto Pernia and then DBM Officer-in-Charge (OIC) Secretary Janet Abuel, who has since been replaced by Secretary Wendel Avisado.

Continuing the fiscal reforms proposed by the Duterte administration would be a good start in setting in motion this close collaboration between the Executive and the Congress to ensure that the Philippines gets “a good chance” of reaching an “A” credit rating in two years’ time, they said.

Securing an “A” investment-grade credit rating “means that the government, businesses, and ordinary Filipinos can borrow more cheaply to invest, create jobs, and improve their lives,” the economic team said. “Thus, pursuing these reforms is not just about getting a credit upgrade. It is about upgrading everyone’s life.”

In their letter, the economic managers pointed out that “effective collaboration between the executive and legislative branches” during the previous Congress was crucial in the passage of key economic and fiscal reforms in support of the President’s 10-point socioeconomic agenda.

These reforms include, they said, the Tax Reform for Acceleration and Inclusion (TRAIN) Law, Estate Tax Amnesty, Tobacco Tax Reform, Rice Liberalization, National ID System, Ease of Doing Business (EODB), and Universal Health Care (UHC).

They said Filipinos are already feeling the benefits of these reforms as shown by the decline in the inflation rate to 3.4 percent, which is now within the official target range of 2-4 percent; and the drop in the retail cost of rice, which now sells for up to P10 per-kilo cheaper compared to the peak market rates last year.

Also, more jobs were created and people now have more money to spend, as a result of tax savings equivalent to a 14th month pay because of TRAIN, the economic managers said.

“The total value we give back to the people reached P111 billion in 2018. Spending on infrastructure was 41.3 percent higher in 2018, thanks in part to TRAIN revenues, helping create employment of over 300,000 in the construction sector. Likewise, larger Philippine Health Insurance Corp. (PhilHealth) premiums, free tertiary education, and rice subsidy to the 4Ps (Pantawid Pamilyang Pilipino Program) beneficiaries were made possible by higher revenue collections,” they said.

These positive developments have led to a high growth rate of 6.2 percent in 2018 and a lower poverty rate from 27.6 percent in the first of 2015 to 21 percent in the first half of 2018, thereby lifting six million Filipinos out of poverty, even as inflation was higher in 2018, they said.

“These game-changing reforms led to a credit rating upgrade from Standard and Poor’s. The upgrade, from ‘BBB’ to ‘BBB+’, is a strong vote of confidence in the Duterte administration’s reform agenda.

“This would not have been possible without the strong support of the Congress,” they said in their joint letter to Sotto and Cayetano.

Apart from ensuring that the Congress pass more game-changing reforms needed to secure an “A” rating for the Philippines, the economic team also underscored the need to guarantee fiscal discipline. This means “taking a strong position on what is not in the best interest of the people as a whole.”

“While some bills seek to benefit some sectors, they take away money from millions of other poor and jobless people who also deserve our help,” they said.

Thus, in the letter, the economic team outlined their position on, among others, the grant of incentives; the creation of more freeport zones; the imposition of guarantees or quotas on lending, credit, and other artificial barriers on resource allocation, including price controls and ceilings; mandatory addition of programs to the national budget; earmarking of funds; and the creation of new government corporations or departments.

They pointed out that in the 17th Congress, 147 bills were proposed that collectively would either erode revenues by P178 billion or mandatorily add P799 billion to the budget, or a total of P977 billion, which the government cannot afford.

Moreover, 31 bills proposed to create more tax-free freeports or ecozones, adding to the 546 that the country already has as of 2017. Many of these ecozones contribute to massive revenue leakages and the assorted incentives they grant are subsidized by taxpayers, they noted.


-oOo-

Date Posted August 22, 2019

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