Part Three
PRESIDENT Duterte rode on a ferry filled with the promise of change that won for him not only the votes of over 15 million Filipinos but their hearts and minds, as well.
His supporters clung to his every word, even if many of these were offensive to many people, foreign leaders and oligarchs alike.
Finally, some said, this country’s President put the mighty in their rightful place and the weak now have a champion. The change they have longed for has finally come.
As the President moves toward his second year in office, officials took stock of this administration’s accomplishments and experts continue to look forward to the year ahead.
According to Socioeconomic Planning Secretary Ernesto M. Pernia, the current administration was able to improve the Investment Coordination Committee (ICC) guidelines.
In March the ICC Cabinet Committee approved a new project cost threshold for ICC review and approval of P2.5 billion from P1 billion. This means only projects amounting to P2.5 billion and over will require ICC evaluation and approval except otherwise provided by law.
For projects costing below P2.5 billion, only a certification will be needed to approve it. The certification will be issued based on a project’s adherence to the Philippine Development Plan, Results Matrices, Public Investment Program and the implementing agency’s mandate.
The Neda said the certification will also be based on performance indicators approved by the Department of Budget and Management (DBM), among other requirements. The higher threshold for projects entering the ICC will hasten the implementation of “smaller” projects. The ICC process usually takes about six weeks to complete.
The length of the process is usually on top of the post-approval time needed to undertake contracts and bidding period. Only after projects are bid out and contracts are awarded will the projects start contributing to the economy.<
It’s an institutional reform; the way we approved projects is much faster than previous administrations and we have also streamlined the processes,” Pernia said. “The social discount rate has been reduced from 15 percent to 10 percent and the threshold for projects that will go through the ICC and the Neda Board has been raised from 1 billion to 2.5 billion.
Important bills
ACCORDING to Pernia, the Duterte administration has also played a hand in the reform of the National Food Authority (NFA) and the lifting of the country’s rice- import waiver or quantitative restriction (QR) on rice. In terms of priority bills, Pernia said the current administration is pushing for important bills, such as the amendment of the Tariffication Act and the Public Service Act.
The amendment of the Tariffication Act will enable the country to set a tariff on rice imports while the changes in the Public Service Act will pave the way for the government to liberalize public utilities.
There’s a move to revise the Public Service Act so that utilities, like telcos, can be redefined so that they will not be in the negative list. Public utilities kasi are in the negative list,” Pernia said.
The Neda earlier said the Legislative-Executive Development Advisory Council Executive Committee (Ledac-Execom) identified the conversion of the QR on rice into tariff and 12 other bills as measures that the President must certify as urgent.
The Ledac-Execom’s list includes the proposed Unified National Identification System Act, Security of Tenure Bill (end of contractualization), utilization of the coconut-levy fund; National Transport Act to address transport traffic crisis, Budget Reform Act, National Land Use Act and Rightsizing of the National Government.
Also tagged as requiring urgent certification were the Amendments to the Anti-Cybercrime Act; Amendments to the NIA Charter to provide free irrigation; Amendment to Public Service Act; Ease of Doing Business Act/Fast Business Permit Act; and Government Procurement Reform Act amendments.
The Ledac-Execom comprises the leaders of both chambers of Congress, the executive secretary, the socioeconomic planning secretary as overall head of the Ledac Secretariat and the presidential Legislative adviser. It convenes council meetings and allows opportunities to expeditiously address issues and concerns relating to priority Legislative measures.
Progressive tax
ACCORDING to Pernia, the government ensured that its infrastructure push will also not be stopped by temporary restraining orders (TROs) that threaten to delay the implementation of these projects.
Other efforts have to do with infrastructure projects. Projects that are of national significance will not be exposed to TROs except from the Supreme Court. So lower courts will not be able to issue TROs,” Pernia said.
But while these efforts have been significant, economists believe there is more to be done as the President embarks on his second year in office.
Local economists agree about the tax-reform program. Rene Ofreneo, UP School of Labor and Industrial Relations (Solair) faculty member, said the tax reform should be progressive and fair to all socioeconomic classes.
[We should have] a tax-reform program that is truly progressive at all levels,” Ofreneo said. “[A] tax [system] that will not squeeze the lower and middle classes.
University of Asia and the Pacific School of Economics Dean Cid Terosa said the “regressive consumption taxes” included in the Comprehensive Tax Reform Program (CTRP) should be repealed. Terosa said the tax on sugar-sweetened beverages must be removed. Under the House of Representatives version of the CTRP, these beverages will have a P10-a-liter excise tax.
Bittersweet
THE government wants to impose the excise tax on sugar as a health measure that will discourage Filipinos from consuming sugary products that can be a cause for lifestyle diseases, such as diabetes.
Based on data from the Philippine Statistics Authority (PSA), diabetes milletus is the fifth-most deadly disease that inflicts and kills Filipinos. In 2013 some 27,064 Filipinos died of diabetes.
But food manufacturers opposed the tax, saying it could be detrimental to consumers, manufacturers and the agriculture sector. The Philippines is one of the world’s largest sugar exporters.
Meanwhile, Philippine Institute for Development Studies President Gilberto M. Llanto said the government must continue its infrastructure push but must use public- private partnership to complement Official Development Assistant funding.
Ofreneo agreed and said the government cannot repeat the mistakes of the 1970s, which he referred to as “build-borrow-build-borrow-build-borrow” scheme. This was the reason for the country’s debts under the martial-law period.
Llanto said it is important for government to ensure that when these projects are undertaken, the contracts are honored. This will assure investors and local businessmen of the stability of the rule of law in the country.
He added the government must avoid unsolicited proposals, which he considers a “poison pill” for infrastructure projects. Instead, he said the government should encourage agencies to create and prepare their own infrastructure projects.
[The government must] enjoin all agencies to go for solicited, which means continue to build capacity among these agencies for identifying and preparing feasibility studies, etc.—which also implies using the PDMF [Project Development Monitoring Facility] of PPPC [PPP Center] for project preparation for competitive tender later,” Llanto said.
Social agenda
IN terms of labor, Ofreneo also said the government should also allow free-trade unionism and collective bargaining to allow companies and workers to find common ground on what they need and are capable of delivering.
Ofreneo also hopes that the government supports returning Filipino scientists and talents who have the knowledge and experience to innovate companies and products that will help grow the economy.
The former Labor Undersecretary also said the President should draft a social contract with the top 50/100 companies/conglomerates to ensure they observe ethical hiring arrangements for workers.
[The] top 50/100 companies/conglomerates [should] sign on to a social contract with Digong [President Duterte] on how to observe ethical, professional hiring arrangement, thus setting good examples to the rest of the corporate world,” Ofreneo said.
Llanto also said the continuation of social safety nets, such as the Conditional Cash Transfer Program and the universal health insurance, will help the poor get an education and safeguard their health.
He added the government must also help businesses by revoking cumbersome regulations and high costs of doing business through effective regulatory reforms.
For his part, Ateneo de Manila EagleWatch Senior Fellow Alvin Ang said many of these reforms will rest on improved coordination among agencies and local governments. Ang said the government must solve coordination issues and challenges that prevent reforms from reaching citizens.
All of these are doable but not for the faint of heart,” Llanto said.
PRESIDENT Duterte rode on a ferry filled with the promise of change that won for him not only the votes of over 15 million Filipinos but their hearts and minds, as well.
His supporters clung to his every word, even if many of these were offensive to many people, foreign leaders and oligarchs alike.
Finally, some said, this country’s President put the mighty in their rightful place and the weak now have a champion. The change they have longed for has finally come.
As the President moves toward his second year in office, officials took stock of this administration’s accomplishments and experts continue to look forward to the year ahead.
According to Socioeconomic Planning Secretary Ernesto M. Pernia, the current administration was able to improve the Investment Coordination Committee (ICC) guidelines.
In March the ICC Cabinet Committee approved a new project cost threshold for ICC review and approval of P2.5 billion from P1 billion. This means only projects amounting to P2.5 billion and over will require ICC evaluation and approval except otherwise provided by law.
For projects costing below P2.5 billion, only a certification will be needed to approve it. The certification will be issued based on a project’s adherence to the Philippine Development Plan, Results Matrices, Public Investment Program and the implementing agency’s mandate.
The Neda said the certification will also be based on performance indicators approved by the Department of Budget and Management (DBM), among other requirements. The higher threshold for projects entering the ICC will hasten the implementation of “smaller” projects. The ICC process usually takes about six weeks to complete.
The length of the process is usually on top of the post-approval time needed to undertake contracts and bidding period. Only after projects are bid out and contracts are awarded will the projects start contributing to the economy.<
It’s an institutional reform; the way we approved projects is much faster than previous administrations and we have also streamlined the processes,” Pernia said. “The social discount rate has been reduced from 15 percent to 10 percent and the threshold for projects that will go through the ICC and the Neda Board has been raised from 1 billion to 2.5 billion.
Important bills
ACCORDING to Pernia, the Duterte administration has also played a hand in the reform of the National Food Authority (NFA) and the lifting of the country’s rice- import waiver or quantitative restriction (QR) on rice. In terms of priority bills, Pernia said the current administration is pushing for important bills, such as the amendment of the Tariffication Act and the Public Service Act.
The amendment of the Tariffication Act will enable the country to set a tariff on rice imports while the changes in the Public Service Act will pave the way for the government to liberalize public utilities.
There’s a move to revise the Public Service Act so that utilities, like telcos, can be redefined so that they will not be in the negative list. Public utilities kasi are in the negative list,” Pernia said.
The Neda earlier said the Legislative-Executive Development Advisory Council Executive Committee (Ledac-Execom) identified the conversion of the QR on rice into tariff and 12 other bills as measures that the President must certify as urgent.
The Ledac-Execom’s list includes the proposed Unified National Identification System Act, Security of Tenure Bill (end of contractualization), utilization of the coconut-levy fund; National Transport Act to address transport traffic crisis, Budget Reform Act, National Land Use Act and Rightsizing of the National Government.
Also tagged as requiring urgent certification were the Amendments to the Anti-Cybercrime Act; Amendments to the NIA Charter to provide free irrigation; Amendment to Public Service Act; Ease of Doing Business Act/Fast Business Permit Act; and Government Procurement Reform Act amendments.
The Ledac-Execom comprises the leaders of both chambers of Congress, the executive secretary, the socioeconomic planning secretary as overall head of the Ledac Secretariat and the presidential Legislative adviser. It convenes council meetings and allows opportunities to expeditiously address issues and concerns relating to priority Legislative measures.
Progressive tax
ACCORDING to Pernia, the government ensured that its infrastructure push will also not be stopped by temporary restraining orders (TROs) that threaten to delay the implementation of these projects.
Other efforts have to do with infrastructure projects. Projects that are of national significance will not be exposed to TROs except from the Supreme Court. So lower courts will not be able to issue TROs,” Pernia said.
But while these efforts have been significant, economists believe there is more to be done as the President embarks on his second year in office.
Local economists agree about the tax-reform program. Rene Ofreneo, UP School of Labor and Industrial Relations (Solair) faculty member, said the tax reform should be progressive and fair to all socioeconomic classes.
[We should have] a tax-reform program that is truly progressive at all levels,” Ofreneo said. “[A] tax [system] that will not squeeze the lower and middle classes.
University of Asia and the Pacific School of Economics Dean Cid Terosa said the “regressive consumption taxes” included in the Comprehensive Tax Reform Program (CTRP) should be repealed. Terosa said the tax on sugar-sweetened beverages must be removed. Under the House of Representatives version of the CTRP, these beverages will have a P10-a-liter excise tax.
Bittersweet
THE government wants to impose the excise tax on sugar as a health measure that will discourage Filipinos from consuming sugary products that can be a cause for lifestyle diseases, such as diabetes.
Based on data from the Philippine Statistics Authority (PSA), diabetes milletus is the fifth-most deadly disease that inflicts and kills Filipinos. In 2013 some 27,064 Filipinos died of diabetes.
But food manufacturers opposed the tax, saying it could be detrimental to consumers, manufacturers and the agriculture sector. The Philippines is one of the world’s largest sugar exporters.
Meanwhile, Philippine Institute for Development Studies President Gilberto M. Llanto said the government must continue its infrastructure push but must use public- private partnership to complement Official Development Assistant funding.
Ofreneo agreed and said the government cannot repeat the mistakes of the 1970s, which he referred to as “build-borrow-build-borrow-build-borrow” scheme. This was the reason for the country’s debts under the martial-law period.
Llanto said it is important for government to ensure that when these projects are undertaken, the contracts are honored. This will assure investors and local businessmen of the stability of the rule of law in the country.
He added the government must avoid unsolicited proposals, which he considers a “poison pill” for infrastructure projects. Instead, he said the government should encourage agencies to create and prepare their own infrastructure projects.
[The government must] enjoin all agencies to go for solicited, which means continue to build capacity among these agencies for identifying and preparing feasibility studies, etc.—which also implies using the PDMF [Project Development Monitoring Facility] of PPPC [PPP Center] for project preparation for competitive tender later,” Llanto said.
Social agenda
IN terms of labor, Ofreneo also said the government should also allow free-trade unionism and collective bargaining to allow companies and workers to find common ground on what they need and are capable of delivering.
Ofreneo also hopes that the government supports returning Filipino scientists and talents who have the knowledge and experience to innovate companies and products that will help grow the economy.
The former Labor Undersecretary also said the President should draft a social contract with the top 50/100 companies/conglomerates to ensure they observe ethical hiring arrangements for workers.
[The] top 50/100 companies/conglomerates [should] sign on to a social contract with Digong [President Duterte] on how to observe ethical, professional hiring arrangement, thus setting good examples to the rest of the corporate world,” Ofreneo said.
Llanto also said the continuation of social safety nets, such as the Conditional Cash Transfer Program and the universal health insurance, will help the poor get an education and safeguard their health.
He added the government must also help businesses by revoking cumbersome regulations and high costs of doing business through effective regulatory reforms.
For his part, Ateneo de Manila EagleWatch Senior Fellow Alvin Ang said many of these reforms will rest on improved coordination among agencies and local governments. Ang said the government must solve coordination issues and challenges that prevent reforms from reaching citizens.
All of these are doable but not for the faint of heart,” Llanto said.
Indeed, the Duterte promise of change is not something that can be delivered on its first year. Clearly, there is more to be done. What is needed is the tenacity and commitment of this administration to achieve its goals.
To be continued
To be continued
