A group of prominent businessmen met in Davao for a two-day summit last month to come up with a wish list – 10 items, in fact, ranked in order of importance, that they presented (through appointed Finance Secretary Sonny Dominguez) to the President. The President’s reaction? He said, “It’s all doable. It’s just a matter of doing it.”
We all know that President Rody, who took his oath of office at midday of June 30, Thursday, as stipulated by the 1989 Constitution, declared his priorities during his inaugural speech. He once again reiterated his campaign platform to fight corruption, criminality, and illegal drugs.
A few economic reforms were mentioned towards the latter part of his 16-minute speech, and they are contained in a 10-point socio-economic roadmap that was released by his team during the run-up to his first day of office at Malacanang.
We will take the first five items of the roadmap for discussion in this column, and put them in context with the wish list that businessmen submitted.
First on the list of both the roadmap and that of business is for the adoption of a comprehensive tax reform package. The new government promises this will be ready by September this year.
Whether corporate and personal income taxes will be reduced or the capital gains tax rates be lowered just like in Singapore and Hong Kong, as businessmen have specifically suggested, will need to undergo debates.
However, should there be a reduction in taxes, the best way to compensate for a resulting Treasury revenue loss would be to simplify the current value added tax system to reduce leakages, and remove the input-output tax computation and refund system.
Streamlining permits and licenses
Number two on the President’s roadmap is the streamlining of permits and licenses at both the national and local levels. While this is in number three of the businessmen’s list, it is still at the top of their wish list. The President during his inaugural address had given a warning to government officials to comply, so we should hopefully see some changes in this area soon.
Third in the government’s roadmap is accelerating annual infrastructure spending up to 5 percent of the gross domestic product, with public-private partnerships playing a key role.
Infrastructure development does not appear in the businessmen’s wish list, although the last item on their list calls for a reduction in bottlenecks when implementing Public-Private Partnership (PPP) and infrastructure projects. They also called for government to respect the sanctity of contracts.
Businessmen also called for concrete measures to be made to remove roadblocks that prevent the speedy implementation of vital infrastructure projects, such as right-of-way issues and lack of synergy between local and national government agencies. They also wanted an assurance from the new administration that existing and future contracts will be honored.
Among the infrastructure projects that businessmen asked to be prioritized were the development of regional airports, seaports, and mass transit projects such as the North-South Railway, C-6 Expressway, Cebu Bus Rapid Transit, and Davao port projects.
Fourth in the government’s roadmap is the promotion of rural and value chain development toward increasing agricultural and rural enterprise productivity and rural tourism. This is fifth in the businessmen’s wish list, but slightly rephrased.
Businessmen suggested for government to adopt value-chain development in rural-based enterprises, including agriculture and mariculture. Recognizing the vast untapped potential of the agri-sector, they recommended a support system through financing, technology, and logistics to raise rural productivity and employment.
Fifth in the government’s roadmap is to ensure security of land tenure to encourage investments and address bottlenecks in land management and titling agencies. This is contained to a certain extent in the seventh item of businesses’ wish list.
In particular, businessmen expressed the need for a national strategy to determine sectors where the country has the greatest competitive advantage. They added that land, people, and other resources need to be optimized, and that an action plan is needed to identify industry clusters and regions where SMEs should locate to avail of lower transport, energy, and logistics costs.
Not in the top 5
In the top five of business’ wish list, but not found in the government’s roadmap, is the implementation of a national ID system for improved social services. This has been in previous administrations’ to-do list, but had never really been given priority.
They noted that there is a pressing need for an ID system that will allow government agencies to provide better and more efficient service to the public. We have too many government IDs that are not reflected in one database.
A national ID system will not only simplify a lot of processes that Filipinos have to go through, but also facilitate a true inventory of bonafide citizens.
Also not mentioned in the government’s socio-economic roadmap is the fourth wish that businessmen wrote in its list. They had asked for Internet and telecom services to be improved to make the Philippines more competitive with its ASEAN neighbors.
To ensure enhanced connectivity, workshop participants recommended the creation of Internet cooperatives in far-flung areas similar to existing electric coops.
Among the items in both lists, the only conflicting positions on government and businessmen’s panels was the conditional cash transfer (CCT) program. Businessmen were generally against the CCT, citing that the program promoted dependency on government.
Instead, business suggested enhancing social protection initiatives through skills development, cash for work, livelihood projects, among others.
On the other hand, the government said it would improve social protection programs, including the CCT program to protect the poor against instability and economic shocks.
We’re seeing more lists now that the President has rolled up his sleeves and declared he’s ready to work. We have a real one from the left group with 15 items, but we also have some fun wish lists, like the orders of President Duterte, and new rules from the Metro Manila Development Authority to solve the traffic problem.
Oh, we also have a timer for six months that started ticking when President Rody took his oath of office. Yes, this is about his promise to remove corruption in government in three to six months time.
Facebook and Twitter
The socio-economic roadmap and businessmen’s wish list may be boring stuff to discuss, but there are other lists out there – and expect more to come – that promises some excitement during our new President’s first months in office.