Duterte pressed to address business’ long-standing concerns
Malaya Business Insight | July 22, 2019
Businessmen want President Duterte to make a strong pronouncements on matters that will immediately address their long-standing concerns – ranging from traffic to red tape, jobs to taxes and infrastructure – in his State of the Nation Address (SONA) today.
Ahead of SONA, 13 business groups and joint foreign chambers in a July 8 letter to the President have expressed support for key measures in the administration’s legislative agenda for the 18th Congress. These include the passage of the remaining packages of the Comprehensive Tax Reform Program, which focus on reforms in the corporate income tax and fiscal incentive system, in property valuation and assessment, and in capital income and financial taxation; plus new excise taxes on alcohol, e-cigarettes and vaping products.
Job preservation
Job preservation, however, is at the top of the wish list of the Employers Confederation of the Philippines (ECOP) and the Philippine Exporters Confederation (Philexport).
Edgardo Lacson, ECOP president, said the group wishes Duterte to announce in his SONA his veto to the security of tenure (SOT) bill, “without hesitation nor guilt because (the veto) is for the common good.”
“SOT is unconstitutional, bad economics and morally wrong. A veto of SOT which is anti poor disguised as pro labor will be an act of a true leader imbued with the gift of vision, idealism, and deep sense for the common good,” Lacson said in a text message.
The SOT bill, which assures permanent status for employees by preventing labor-only contracting, has been transmitted to the Office of the President for signature.
Sergio Ortiz-Luis, president of Philexport shared ECOP’s sentiment on the SOT bill saying its passage will cause job loss for some of the fully and partially employed.
“This will worsen the unemployment rate, which though dropping to 5.1percent this month, is still equivalent to nearly three million people,” said Ortiz-Luis.
The group also expressed disapproval for the proposed 14th month pay and the increasing number of holidays, as such policies “put us at a disadvantage especially against our fiercest competitors, the Asean manufacturers.”
Anti- red tape
Ortiz-Luis said Philexport wishes the President to emphasize on the Ease of Doing Business and Efficient Government Service Delivery Act or Republic Act 11032 which he said would not just impact on businesses both small and large but will dramatically improve bureaucracy.
Ortiz-Luis said a statement by the President on the RA’s implementation following the appointment of a director-general and the issuance of the guidelines, sends a strong message to the bureaucracy of the wide-reaching effect of this law in cutting red tape and eliminating corruption.
MSME financing
Ortiz-Luis said Philexport wants the President to seriously address financing micro, small and medium enterprises by pushing an out-of-the-box solution of rechanneling 20 percent of the P87-billion conditional cash transfer fund to lending to these companies.
The group laments the fact that Filipino MSMEs are one of the most underbanked in the region and should therefore be exempt from the usual banking requirements for credit in the form of lower interest rates.
Ortiz-Luis said funds from banks for MSMEs barely scratch the surface and a sustainable lending program will preserve and create jobs and turn more Filipinos into entrepreneurs.
He pressed for the amendment of the Magna Carta for MSMEs to help provide solutions in this area.
Airport
Ortiz-Luis also noted the need for the Duterte administration to make a firm decision on the proposals for the airports, a key pillar of the country’s infrastructure network.
He said a long-term solution to the congestion in the main gateway, Ninoy Aquino international airport, should be prioritized even as he pushes the Bulacan airport project of businessman Ramon Ang.
Ortiz-Luis said NAIA should continue to be expanded and rehabilitated but the Bulacan offer should not be opposed.
He said the existing expansion of Clark and the proposal to develop an international airport in Sangley should also be considered
Francis Chua, honorary chairman of the Philippine Chamber of Commerce and Industry, shared Ortiz-Luis’ sentiment on the airport infrastructure since the country is experiencing not just road traffic but air traffic as well.
Chua also wants Duterte to make a pronouncement on how soon the country will experience better telecommunication service following the entry of a third player.
Chua also assured government of the business community’s support on issues on governance and on ease of doing business problems.
TRABAHO
Chua added it would be good for President Duterte to highlight the positive side of TRABAHO bill, in order for the measure to gain more groundswell.
Ortiz-Luis said the provision in the proposed TRABAHO bill to lower corporate income taxes is good, but “we strongly recommend the status quo for incentives being enjoyed by exporters using the bonded warehouses and located in ecozones.”
The 13 business groups in their letter to Duterte expressed support to the government’s remaining tax reform measures.
Signatories to the letter included the American Chamber of Commerce of the Philippines, Australia-New Zealand Chamber of Commerce of the Philippines, Canadian Chamber of Commerce of the Philippines, the European Chamber of Commerce of the Philippines, Foundation for Economic Freedom, IT and Business Process Association of the Philippines, Japanese Chamber of Commerce and Industry of the Philippines, Korean Chamber of Commerce of the Philippines, Makati Business Club, Management Association of the Philippines, Philippine Association of Multinational Companies Regional Headquarters, Philippine Chamber of Commerce and Industry, and the Semiconductors and Electronics Industries in the Philippines Inc.
Other priority measures identified by the groups are the amendments to the Public Service Act, Foreign Investment Act, and Retail Trade Act, all of which are meant to open the domestic economy to more foreign direct investments.
The Economic Development Cluster previously identified these bills as among their priorities during their Pre-SONA Forum held earlier this month.
The groups singled out these reforms, among others, as crucial “to improve the Philippine economy and our international competitiveness.”
They added they believe in the positive impact these reforms will have in “achieving our shared vision of inclusive growth through job generation, poverty reduction, and global competitiveness.”
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