DAVAO CITY, Philippines – The transition team of presumptive president Rodrigo Duterte revealed his 8-point economic agenda for the Philippines on May 12, Friday.
Former agriculture secretary Carlos “Sonny” Dominguez made the announcement after the transition team, of which he is part, met for the second time at the Marco Polo Hotel here.
The team was created in response to President Benigno Aquino III’s call for the Duterte camp to get started on the transition between the two administrations. (READ: Duterte presidency to have more women leaders)
A Duterte presidency’s economic priorities will be as follows:
- Continue and maintain the current macroeconomic policies. However, reforms in tax revenue collection (in the Bureau of Internal Revenue and the Bureau of Customs) efforts will be complemented by reforms within the bureaucracy of these tax collecting agencies.
- Accelerate infrastructure spending by addressing, among others, major bottlenecks in the public-private partnership (PPP) program. Maintain the target of setting aside 5% of the country’s gross domestic product to infrastructure spending.
- Ensure attractiveness of the Philippines to foreign direct investments by addressing restrictive economic provisions in the Constitution and our laws, and enhancing competitiveness of the economy.
- Pursue a genuine agricultural development strategy by providing support services to the small farmers to increase their productivity, improve their market access, and develop the agricultural value chain by forging partnership with agribusiness firms.
- Address the bottlenecks in our land administration and management system.
- Strengthen our basic education system and provide scholarships for tertiary education which are relevant to the needs of private sector employees.
- Improve the income tax system to make it progressive to enable those who earn little to have more money in their pockets.
- Expand and improve implementation of the conditional cash transfer (CCT) program.
“These are the broad outlines of the economic policies that the new admin will pursue,” said Dominguez.
He said that the tax collection during a Duterte presidency will be indexed with the current inflation rate.
“These tax tables were made years ago when P500,000 was more than what P500,000 meant now. So now, if you earn P500,000, automatically you are taxed 32%. And if you spend say 80% of that, you are taxed another 12% from VAT (valued-added tax),” said Dominguez.
He said this would mean that a person’s effective tax rate as stated above would be equal to about “38% to 40%.”
“The tax bite should be lower for those earning P500,000 today because that is less than what it was in real value to what the value was when the tax tables were made,” Dominguez explained.
Duterte, early in his campaign, said he would get rid of income tax for workers earning P20,000 and below. There was no mention of this proposal by his transition team.
Dominguez also emphasized that because the transition team has only met twice so far, further details behind Duterte’s economic agenda will be ironed out in the coming days.
Duterte himself earlier told Rappler that he is open to lifting the Charter’s restriction on foreign ownership of Philippine corporations.
He also said he will create a business environment that is friendly to foreign investors.
“I will open investments. If possible, in every region, I’ll have economic zones. And the foreigners can come, and they’ll have the same protection. I guarantee them profits that will be swiftly returned to them,” he said.
Reducing crime and corruption
According to Dominguez, the presumptive president’s economic agenda reflects his promise to stop corruption in government.
“So reforms in tax collection are a politically acceptable way of saying we will focus on eliminating corruption in the revenue-generating agencies,” he said.
Dominguez explained Duterte also wants to accelerate infrastructure spending because this would lead to job generation and will be “injecting economic activity in our country.”
Duterte has previously said that he will put off the construction of major infrastructure projects like mega dams during the first two years of his presidency but will continue building transportation infrastructure to ease traffic congestion in Metro Manila.
He also said he wanted a Mindanao railway system built during his term.
Duterte is seeking to use Davao City, where he was mayor for more than two decades, as a model in making the whole country more competitive in business.
This means the next administration will seek the removal of red tape in government processes to streamline businessmen’s transactions with government.
“In other words, licenses for doing business are given in the shortest possible time and where the government is actually helping business to establish in Davao,” said Dominguez.
“It also means that reducing crime in the area will certainly be an item attracting people to do business because it will increase the security of businessmen as well as the consumers,” he added.
Streamlined coordination among land agencies
Duterte is also eyeing to pursue an overall “rural development strategy” for the whole country. This includes providing better irrigation and other support services to farmers by the Department of Agriculture (DAR). This is consistent with statements Duterte made himself on the campaign trail. He had also promised free irrigation while campaigning.
Dominguez said Duterte will also promote tourism in rural areas “because our country is beautiful and we want to show the world the beauty of our country.”
According to Dominguez, Duterte also recognizes a lack in the coordination efforts among the Philippines’ 4 land title agencies: DAR, the Land Registration Administration, the Department of Environment and National Resources, and the National Commission on Indigenous Peoples.
“Unfortunately, there is very little coordination among these agencies and we know very well that the security of land tenure is so important because it allows more investments. It encourages more investments in the rural areas. It makes the projects more valuable if there is solid security of land tenure,” said Dominguez.
Addressing job mismatch, improving education
The next administration also seeks to address the ongoing problem of job mismatch, where only 10 out of 1,000 Filipino applicants are getting hired because many lack the necessary skills needed for the jobs available in the market.
Dominguez said that Duterte will not only seek to provide tertiary scholarships, but also ensure that the courses to be offered are currently in demand in the job market.
The basic education system will also be enhanced, added Dominguez.
“Essentially, this means that our training in communications, in mathematics, in logical thinking will be strengthened in the basic education portion so that when a student graduates from high school, which is under the K-12 system, that the student has adequate training particularly in communicating his ideas, in calculation and logical thinking,” he said. – with reports from Pia Ranada/Rappler.com