Things are about to get better.
This is the gist of the presentation of Albay 2nd District Rep. Joey Sarte Salceda at the annual economic and political briefing of the Lopez Group on Nov. 27.
Salceda, who chairs the House Committee on Ways and Means, highlighted the commitment of the legislature to discuss and approve proposed measures that will push for inclusive development and national progress. With the country reeling from a whole year of calamities consisting of a severe volcanic eruption, the global COVID-19 pandemic and the spate of typhoons in the last quarter of the year, he assured his virtual audience that Congress will follow through on reforms needed to jumpstart and sustain economic recovery.
Among the legislation committed was CREATE (Corporate Recovery and Tax Incentives for Enterprises), which lowers the corporate income tax from 30% to 25% and rationalizes incentives for economic zone locators. Aside from Bayanihan 3, which includes vaccine procurement among other items, and the timely passage of the government budget for 2021, Salceda also committed to measures favoring trade liberalization, government modernization, and reforms in the banking and education sectors.
He said some areas where the Lopez Group can help are in forming the country’s renewable energy (RE) policy through a “new deal on energy and rural electrification,” developing new technologies to address inefficiencies and volatility of RE supply, and aligning RE investments in the countryside with government plans for countryside development.
Era of populism
Meanwhile, Roberto Herrera-Lim, managing director of global CEO consulting and advisory firm Teneo, discussed the continuing prevalence of personality-based politics in the Philippines, where leading political parties have little differentiation.
“In an era of populism, how do you build or maintain public support,” he asked while naming possible presidential candidates for 2022.
Herrera-Lim also said the country is grappling with fear as the vaccine, when it does become available, would bring different risks into play, for example distribution and storage problems, public hesitation against vaccines due to the Dengvaxia experience and whether or not it would be sufficiently efficacious to reduce restrictions on the economy.
On the effects of a Joe Biden presidency in the US, he said business process outsource operations in the Philippines may see lower margins if Biden follows through on an outsourcing tax. He said in the next five years, the whole of Southeast Asia will interact with the US along five dimensions: human rights, trade, climate, security and health, in particular in relation to the issue of “vaccine diplomacy.”
Good and bad harvests
Finally, Dr. Ernesto Pernia, professor emeritus, UP School of Economics and former Secretary of Socioeconomic Planning, described good and bad harvests in his presentation, “We Reap What We Sow.”
While the country averaged 6.6% growth from 2016-2019, it will have negative growth in 2020 and achieve pre-COVID-19 growth rates likely in 2020 still. While it recorded the lowest unemployment rate in contemporary history of 5.3% in the last quarter of 2019 and lowered the poverty rate to 16.6% in 2018 from 23.5% in 2015, these are now suffering reversals with underspending on the COVID-19 response.
Pernia recommended increased spending in health system capacity, especially to raise pay and uplift working conditions for healthcare personnel. He also supported the passage of Bayanihan 3 which aims to improve social infrastructure especially in the provinces and establish digital connectivity, social amelioration programs and assistance for micro-, small- and medium-scale enterprises and the unemployed.
“To lay the foundation for inclusive growth, a high-trust and resilient society, and a globally competitive knowledge economy,” Pernia also recommended investing in science and technology and innovation, the full implementation of the Responsible Parenthood and Reproductive Health Law, and increasing investments in RE, nature protection and disaster risk reduction.
The economic and political briefing, which helps inform the annual budget process, was attended by over 250 executives and senior staff members across the Lopez Group. (Story/Photos by: Carla Paras-Sison)