MANILA, Philippines, April 14 (Philippine Inquirer/ANN) —President Rodrigo Duterte has urged Congress, especially the Senate, to fast-track three bills which will further open up the economy to more foreign investors and, according to his economic managers, help the economy recover from pandemic-induced recession.
In an April 12 letter to Senate President Vicente Sotto III, the President said he certified the immediate passage of amendments to the Public Service Act, the Foreign Investments Act, as well as the Retail Trade Liberalization Act.
Amendments to the antiquated public service and foreign investment laws would allow greater foreign participation in sectors that had been restricted only to Filipino investors. The proposed amendment to the Retail Trade law seeks to bring down the ceiling for capital required of foreign-led retailers for setting up shop in the Philippines.
Speaker Lord Allan Jay Velasco was also furnished the letter, a printed copy of which was sent by Finance Secretary Carlos Dominguez to reporters on Tuesday (April 13).Enacting these measures into law will “address the immediate and continuing need for legislative reforms to provide a more conducive investment climate, increase job opportunities. foster more competition, and further spur the country’s economic growth,” Duterte said in his letter.
The Duterte administration’s chief economic manager, Dominguez, had said Congress should give priority to passing these bills as it would be more doable than the push in the House for Charter change to remove economic restrictions embedded in the 1987 Constitution.
In a text message, acting Socioeconomic Planning Secretary Karl Kendrick Chua said the Senate had pledged to pass these bills before Congress adjourned in June.
Chua, who heads the state planning agency National Economic and Development Authority (Neda), last month said these three measures will boost the recently passed Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, which took effect last Monday (April 12).
CREATE slashed the income taxes on corporations to 25 percent, while micro, small and medium enterprises enjoyed a bigger cut and will be taxed 20 percent retroactively applied to July 2020. Prior to CREATE, the Philippines had the highest corporate income tax rate in Asean with 30 percent.
Also, CREATE gave rational to the tax incentives being given away to investors in order to reduce foregone revenues for the government, while empowering the President to grant attractive fiscal perks to elephant-sized projects which would bring more value-added and jobs.
Chua had said that as foreign direct investments contract globally due to the pandemic, “CREATE will put the country in a better position to compete for investments.”