|
Highlights Of The 97th LEDAC Meeting
The
Economic Growth and Job Creation Program
The President called on Secretary Neri to present the government’s
economic growth and job creation program.
The National Development Agenda
Secretary Neri
presented the tasks that need to be done in the next six years of the
administration as follows:
The Basic Tasks:
1. To create ten (10) million jobs
2. Triple the loans to self-employed and small business owners
3. Build 3,000 new classrooms a year, grant a college scholarship to
every qualified poor family, and put a computer in every school
The President commented that the
3, 000 new classrooms is an attainable figure and that it should be 6, 000
classrooms and 3, 000 school buildings.
4. Bring electricity to 1,500 barangays and reduce the cost to become
the lowest in the region.
The President corrected the
figures from 1,500 barangays to 45,000 barangays.
5. Bring clean water to all 45,000 barangays
The President emphasized that
clean water should be provided to ALL towns and Metro Manila barangays.
6. Reduce by half the price of commonly used medicines
Targets were set to
achieve the 10-point agenda of the government.
1.
Create 10 million new jobs in six years
2. Increase growth to a sustainable 7% or more up to 2010.
3. Bring poverty incidence from 34% to 17%
4. Increase investment rate from 19% of GDP to 28% of GDP in two years.
5. Increase exports from $38 billion to $50 billion in two years
6. Develop 2 million hectares of agri-business land.
7. Develop and support 2 million entrepreneurs
To strengthen and sustain
the country’s global competitiveness and exports to create 10 million jobs,
the government will focus on five strategic measures:
1. Make food plentiful at reasonable prices to make labor cost globally
competitive
2. Reduce cost of electricity to make cost of running machines and
manufacturing processes regionally competitive
3. Modernize physical infrastructure and logistics system at least cost to
ensure efficient movement of goods and people
4, Mobilize and disseminate knowledge to upgrade technologies and
increase productivity
5. Reduce red tape in all government agencies to reduce transaction
costs.
To further create jobs
and increase productivity, Secretary Neri enumerated the following thrusts:
disseminate knowledge/technology to rural poor; increase budgetary support
to R&D and field extension work; strengthen PCARRD Model, Philrice and other
provincial extension models; promote extensively mariculture activities with
mangroves and fish sanctuaries; LBP, DBP financing for SUC demonstration
projects; and free patent search for dissemination to SMEs.
The President added to the
thrusts the ladderized interphase between Vocational-Technical and Tertiary
Education.
Recognizing that Philippine poverty is basically rural poverty with
73% of the country’s poor residing in rural areas at a level of 48.8% as
against urban poverty level of 18.6%, the following anti-poverty measures
were also presented by Secretary Neri.:
1.
Six (6) pledges for the poor include: 6 million jobs, clean water,
power for the entire country, close the classroom gap, low cost medicine and
micro, small, and medium enterprises/livelihood credit;
2. Diversification of agriculture and off-season livelihood (supported
by extension services) micro-lending and KALAHI-CIDSS measures;
3. Pursue passage of Land for Loan Collateral Bill;
4.
Food support for learning program to ease school drop-out rates in
poor communities;
5. Emphasis on maternal and child and woman’s health, family planning
and nutrition;
6. Affirmative action for Muslim Mindanao and conflict-affected areas;
7. Indexation of health and education budgets to the growth of national
economy.
Economic Policy
Imperatives
Sec. Amatong's presentation had three (3) major sub-headings:
a.
Sustaining Macroeconomic Stability
b. Restructuring the Financial Sector
c. Increasing Investments, Employment and Exports
Sustaining Macroeconomic Stability
Sec. Amatong focused the
discussions on the country’s fiscal situation indicators as well as policy
objectives required to maintain macroeconomic stability:
She Identified the
following eight (8) legislative measures needed to reduce the fiscal
deficit:
1.
Gross Income Tax for corporations and self-employed persons;
2. Indexation of the excise taxes on sin products;
3. Increase the excise taxes on petroleum products;
4. Rationalize fiscal incentives
5. General Tax Amnesty with submission of Statement of Assets and
Liabilities (SAL);
6. Lateral Attrition System;
7. Franchise Tax on Telecommunications to replace the value-added tax
(VAT)
8. Two-step increase in the VAT rate.
Sec. Amatong identified the following policy and legislative measures
to support the government’s expenditure reduction priorities:
Push for the
enactment of the Fiscal Responsibility Bill, i.e. “no new expenditure
without new revenue measure”;
Push for the
enactment of an Omnibus Re-engineering Law;
Rationalize
existing pension/retirement schemes of all uniformed personnel and veterans;
Remove automatic
guarantee provisions in certain government owned and operated corporations (GOCCs);
Upward adjustment
of fees and charges;
Improve enforcement
mechanisms of revenue generating agencies to increase collection efficiency;
and
Issue an EO to
jumpstart reorganization process in the national government agencies and
GOCCs.
Issue an EO on
integrated control and supervision of GOCCs
Fully implement the
devolution of LGU Code
Increase social
safety net programs within the budget
Rationalize GOCCs
with negative retained earnings and limit NG exposure
Implement a debt
reduction plan
-
Bond exchange to lengthen debt maturity
-
Make more use of official development assistance (ODA) than
commercial borrowings
-
Limit guarantees to GOCCs
Restructuring And
Reforming The Financial Sector
Sec. Amatong
identified the
following policy objectives needed to make the financial sector a better
engine for growth and development:
Broaden and deepen
the financial system
Develop the
domestic capital market
Strengthen the
supervisory and regulatory powers of the financial regulatory agencies
Create an
environment of transparency and accountability in accordance with
international standards.
Action
Plan
Proposed
Legislative Measures
Amend
BSP Charter to strengthen its supervisory capacity
Amend
the Corporation Code to include stronger provision on governance
Establish a Central Credit Information Bureau and domestic credit rating
agencies
Enactment of the Corporate Recovery Bill, Pre-Need Code, Personal Equity
Retirement Account, Lending Investors Bill, Revised Investment Company Bill
Administrative
Measures
Allow
SSS to increase members’ contribution to narrow funding gap
De-politicize appointments to the Boards of SSS and GSIS
Diversify and professionalize the management of pension funds
Have
BSP and PDIC compel banks to clean up their balance sheets and increase
their equity base
Push
for fresh listings in the Philippine Stock Exchange
Strengthen the credit cooperative sector through regulation and supervision
Increasing Exports,
Investments And Employment
Sec. Purisima
presented the current situation for the sector as follows:
Stiff global
competition affecting our exports
Insignificant
increase in FDI inflows from US$1.43 B in 2002 to US$1.49 B in 2003
High cost of doing
business
Limited government
funding for infrastructure projects reducing global competitiveness
He
proposed the following policy objectives
Promote investments
in infrastructure
Promote investments
and exports
Promote
entrepreneurship and SME development
Likewise, he presented
the following administrative measures to achieve the above objectives:
Create the
Philippine Infrastructure Corporation (PIC) as a subsidiary of National
Development Corporation (NDC)
Amend IRR of the
BOT Law to promote wider private sector participation
Draw up a more
competitive incentives package with focus on priority areas: Infrastructure,
Information Technology, Automotive, Electronics, Mining, Health Care,
Tourism and Housing
Revitalize the
mining industry
Declare Subic and
Clark as logistics hubs
Declare Southern
Mindanao as a Halal food production area
Declare Palawan as
an eco-tourism zone
Conclude JPEPA,
ASEAN PIP, ASEAN-China
Promote trade
agreements by maximizing exports and investment opportunities offered by
trade agreements
Empower existing
SMEs to generate additional employment through increased lending and
promotion of Big Brother-Small Brother program
Tap returning
overseas Filipino workers (OFWs) as sources of capital
Continue Product
Development
Sec. Amatong concluded her
presentation with an enumeration of the relevant bills filed in Congress.
Discussions
The
President clarified that the Executive branch is committed to make a PhP 100
billion in increased collections and reductions in expenditures as part of
its commitment to reducing the budget deficit.
Senator Pangilinan suggested that the government start a strong
public relations campaign to advocate the government’s need to raise more
revenues to reduce our deficit and fund needed development activities. He
was supported by the House Majority Floor Leader Nograles and Rep. Suarez.
Rep. Suarez requested assistance from the DOF, DBM and the NEDA in
the processing of the bills in the legislative calendars. Specifically, he
cited the need for attendance of Cabinet members in the public hearings and
floor deliberations of the bills. Sec. Perez affirmed their support.
House Speaker De Venecia queried Mr. Cesar Virata of the Bankers
Association of the Philippines (BAP) about use of the Special Purpose Assets
Vehicles (SPAV) Law in the reduction the NPL in the banking sector. Mr.
Virata replied that the buyers and sellers could not come to terms on the
prices of the discounted assets. Mr. Virata requested for the extension of
the tax incentives. Senate President Drilon replied in the negative
considering the government’s fiscal situation.
Rep. Salceda suggested that the Council consider the Increase of
Excise Taxes on Petroleum Products as a revenue measure with higher impact
on the rich. He pointed out that the bill will have its greatest impact of
families with incomes over PhP 60,000 per annum. Senator Pimentel responded
that raising the price of oil products will increase inflation. Sec, Perez
suggested that the increase in taxes be done over a period of time and be
calibrated to have a lesser impact on the politically sensitive products
like diesel and liquefied petroleum gas (LPG)
Agreements
It
was agreed that Congress shall prioritize the following revenue measures:
1.
Tax Amnesty
2.
Sin Taxes
3.
Rationalization of Fiscal Incentives
4.
Excise taxes on petroleum products
The Chairs of the Ways and Means
Committees shall meet to harmonize their versions so as to facilitate
passage.
Download
The Full Version Of This Document In Microsoft Word Format
|
