LEGAZPI CITY --- Unless Congress amends the 83-year-old Public Service Act and introduce fiscal and structural reforms, it would be hard for the country’s economy to get a class “A” credit rating and be competitive in the global market, Albay 2nd District Rep. Joey Salceda said on Monday.
Salceda, House Ways and Means Committee chair, said President Rodrigo Duterte is determined to secure an “A” credit rating for the country through leveling up the fiscal reform momentum and priority legislations, which are designed to make the Philippines more competitive.
He, however, said amending the old Public Service Act by putting-up structural and fiscal reforms would secure the country an “A” credit rating.
He explained that the needed structural reforms would be in the form of infrastructures, faster internet and lower power costs, ease doing business and tax reforms, making the country competitive in the global market.
“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 in an emailed statement 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 the corporate income tax from 30 percent to 20 percent by 2029, or 2 percent every two years.
He said a bill once passed into law could 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 are how simple [TRAIN] package 2 is,” he said.
Salceda, a noted economist, stressed that through active partnership between Congress and the country’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.
Among the priority legislations lined up in the 18th Congress are as follows:
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.
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.