Dominguez touts gov't fiscal reforms with Singapore firms

Finance Secretary Carlos Dominguez III on Friday touted the Duterte Administration’s fiscal reforms which he said would lure Singaporean businesses to invest in the Philippines.

“I urge the Singaporean business community to take a much closer look at the investment opportunities in the Philippines,” Dominguez said in his remarks during the virtual Philippines-Singapore Business Conference.

“I hope that our strong fundamentals, fiscal stamina, pro-business environment, and effective governance will continue to make us a promising investment destination for Singaporean investors,” the Finance chief said.

Dominguez added that the government continued to advance policy reforms “required to ignite business activity and restore consumer confidence.”

“These key reforms will ensure a nimble bureaucracy able to support our businesses to recover from the pandemic. These will also increase the flow of investments that we need to fuel our long-term growth,” he added.

Among the reforms was the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill, which will be the biggest stimulus program for businesses in the form of significantly reduced corporate income tax (CIT) rates - from 30% to 25% - and a redesigned fiscal incentives system making it targeted and time-bound.

Another fiscal reform was the Financial Institutions Strategic Transfer (FIST) Law, signed into law in February, which allows banks to efficiently offload their bad loans so they can continue performing their crucial role of mobilizing savings and investments by extending more loans to pandemic-hit enterprises.

Dominguez said the Duterte Administration was also pushing the congressional passage of the proposed Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery (GUIDE) Act, which will help the government save strategically important companies with solvency issues.

“Despite lingering problems with fully suppressing infections, the mood is now more hopeful. The Philippine economy continues to demonstrate strength and resilience in adverse conditions,” Dominguez said.

Threat and opportunity

While the Philippines is recovering from the pandemic, the Finance chief said he expects the government to easily fulfill its funding requirements for this year on the back of a healthy liquidity situation and available policy tools to sustain a low-interest-rate environment.

He also touted the “Build, Build, Build" infrastructure program, the accelerated rollout of the national ID system, electronic invoicing, and digitization of frontline services; and other stimulus measures to ensure the active participation of the private sector in the country’s economic recovery from the COVID-19 pandemic.

“A crisis is both a threat and an opportunity. The pandemic seriously threatened our people’s health and our economy’s vigor. We have gone through a difficult test. From here, we are focused on the opportunities in the horizon,” Dominguez said.

“Rest assured, the Duterte Administration will work hard and will not waste any minute of the remaining months of its term to undertake the reforms necessary in rebuilding a strong and inclusive economy that thrives in the 21st century. We are doing our utmost to provide a sustainable, greener, and healthier future for the Filipino people,” he said.

The Cabinet official added that the government will also push for the completion of the final packages of the Duterte Administration’s comprehensive tax reform program (CTRP) involving improvements in property valuation and the taxation of passive income and financial intermediaries.

It is also backing congressional proposals to amend the Foreign Investments Act, the Public Service Act, and the Retail Trade Liberalization Act to further liberalize the economy and open more opportunities for partnerships with Singaporean investors.

“Conditions for partnerships and joint ventures with Singaporean investors will rapidly improve with the passage of these measures. These would open up the economy and allow foreigners like you to invest in industries that are otherwise reserved only for Filipino citizens, such as public utilities, educational institutions, mass media, and advertising,” Dominguez said.

The Philippines and Singapore should tap into each other’s strengths and explore opportunities for cooperation in developing new digital tools and technologies to take advantage of the growth of start-up companies in the region, according to the Finance chief.

“Singapore has positioned itself as a center for innovation, research and development, which the Philippines can complement with the intellectual capital of its highly talented, tech-savvy, and young workforce,” Dominguez said.

He said this would provide Singapore the opportunity to create an ecosystem for its leading start-ups to establish their presence in the Philippines and could likewise be instrumental in helping Filipino start-up companies to flourish.

Dominguez said he looked forward to more comprehensive dialogues with Singapore and the rest of the Philippines’ fellow members in the Association of Southeast Asian Nations (ASEAN) on how they can make their regional partnerships more dynamic to enhance each other’s economic recovery from the COVID-19 pandemic.

“We will not recover alone. The best way forward for the region is to resume integration and cooperation in earnest,” he said.

“We are each other’s best allies in recovery. We create products for each other’s consumers. A surge in demand later this year should translate into an expansion of our manufacturing activities and more robust investment flows.” — DVM, GMA News