July 27, 2021
President Rodrigo Duterte took a look back at some of the government’s accomplishments under his term — while also admitting there’s more to be done — as he delivered his final State of the Nation Address on Monday at the Batasang Pambansa. In his speech which lasted two hours and 45 minutes — the longest address recorded after the 1986 EDSA Revolution — the chief executive touched on a range of topics, including the war on drugs, insurgency, and the COVID-19 pandemic. Here are some highlights of Duterte’s SONA.
While the country cannot afford more lockdowns, it may go back to the “early days” if the threat of the Delta variant persists, President Rodrigo Duterte said. Early last year, Duterte placed Luzon under enhanced community quarantine for two months to help stem the spread of the coronavirus. Duterte admitted he does not know how to handle the Delta variant, adding that he is awaiting the recommendation of local health experts on what measures to take.
The Duterte administration has demonstrated it is capable of pursuing historic policies that will enhance the country's fiscal and economic performance, analysts and business groups said. While the President can point to the Tax Reform for Acceleration and Inclusion Act, Corporate Recovery and Tax Incentives for Enterprises Act, Rice Tariffication law, higher pensions and free college education in state colleges and universities, among others, as accomplishments, the issue that needs to be urgently addressed is economic recovery, Rizal Commercial Banking Corp. chief economist Michael Ricafort said.
President Rodrigo Duterte’s administration has done a lot in reforming the economy, but it still has some remaining business to take care of, ADB country director for the Philippines Kelly Bird said. While Bird acknowledged the Duterte government has done a “lot already” in the past five years, he says it still definitely has “unfinished business” for the year ahead. For instance, he counts on the passage of amendments to key economic measures like the Public Services Act and Foreign Investments Act — which he dubbed as big “game-changers.”
The government has reported spending P660 billion on efforts to contain the spread of COVID-19, amid allegations that it is underspending. Finance Secretary Carlos Dominguez III yesterday said he did not deny the claim that the government is underspending. Meanwhile, Senators Panfilo Lacson and Vicente Sotto III claimed the government has yet to spend at least P6 billion in Bayanihan funds. The lawmakers, who last week announced they would be running for the highest positions next year, said they want Congress to look into this supposed underspending.
With less than a year before the end of President Duterte’s term, the House of Representatives leadership yesterday vowed to pass all the necessary measures for the country to recover from the adverse effects of the pandemic. “To assist in our economic recovery, we are pushing for the taxation of Philippine offshore gaming operators and e-sabong betting activities,” the Speaker Lord Allan Velasco said. Also being readied for approval are the proposed Virology Institute of the Philippines and the Center for Disease Control and Prevention, amendments to the Retail Trade Liberalization Act, Foreign Investments Act and the Public Service Act.
The state planning agency National Economic and Development Authority (Neda) had taken stock of the prepandemic accomplishments while downscaling some of the more ambitious socioeconomic targets in light of the pandemic, through the Updated Philippine Development Plan (PDP) 2017-2022 it released early this year. The pandemic last year inflicted the Philippines’ worst post-war recession as gross domestic product (GDP) shrank by a record 9.6 percent, while pushing the unemployment rate to a 15-year high of 10.3 percent or 4.5 million jobless Filipinos at the height of the longest and most stringent COVID-19 lockdown in the region.
The Philippines is at risk of “long-term economic scarring,” with gross domestic product (GDP) growth expected to slow to around 6% after 2022, Moody’s Investors Service said. The economy shrank by a record 9.6% in 2020 and continued to fall by 4.2% in the first quarter. Last week, Moody’s lowered its growth forecast for the country to 5.8% this year. It also expects the Philippines’ GDP to grow by 6.5% in 2022.
The Philippine government should consider more public-private partnership (PPP) infrastructure projects as it faces increasing fiscal constraints due to the pandemic, experts said. Experts from international organizations, ASEAN+3 Macroeconomic Research Office (AMRO), Asian Development Bank (ADB), and the International Monetary Fund (IMF) acknowledged that well-designed PPPs can accelerate the country’s “Build, Build, Build” program. When the pandemic hit last year and state resources were stretched thin, economic managers last year signaled their willingness to be more open to PPPs as a funding option for its infrastructure push.
The House of Representatives will include the ease of paying taxes bill among its priorities, Speaker Lord Allan Jay Q. Velasco said as the 18th Congress reconvened for its third and final regular session. House Bill 8942 seeks to simplify rules and processes in filing and paying taxes such as removing venue restrictions and segmenting taxpayers; remove the P500 annual taxpayer registration fee; create registration facilities for non-resident taxpayers; and institutionalize a “Taxpayer’s Bill of Rights.” The measure has been approved by the House Committee on Ways and Means and is currently undergoing plenary deliberations.
Senate leaders gave assurances that despite continuing their hybrid session when the 18th Congress reconvenes on Monday, July 26, the chamber will work speedily on priority measures, topped by those certified urgent by the President including Amendments to the ForeKign Investment Acts (FIA), Amendments to the Public Service Act (PSA), and Package 4 of the Comprehensive Tax Reform Program (CTRP) among others.
With less than a year left, the Duterte administration is racing against time to pass the remaining packages under the Comprehensive Tax Reform Program (CTRP) and other pending economic reform bills to revive the pandemic-battered economy. Under the CTRP, the government has yet to pass Package 3 or the Real Property Valuation and Assessment Reform Bill, as well as Package 4 or the Passive Income and Financial Intermediary Taxation Act (Pifita), both still pending at the committee level in the Senate.
Presidential Adviser for Entrepreneurship Jose Maria A. Concepcion hopes the heightened restrictions due to Covid-19 Delta variant cases will not last long because easing mobility, especially by the fourth quarter, is crucial for economic recovery. He said the current situation should improve by the fourth quarter to allow for an economic rebound. The last quarter is the most critical, Concepcion pointed out, noting that it will be the last chance this year for businesses to recoup their losses accumulated over the last months.
Senate Majority Leader Juan Miguel Zubiri said Sunday that with the Delta variant posing a bigger threat to the populace, and possibly prolonging the health crisis from the Covid-19 pandemic, the Senate might be open to a Bayanihan 3 to cover for urgent requirements for Covid response. Senators had been cool to passing a Bayanihan 3, despite the push by certain House leaders, owing to observations of billions in unspent funds under Bayanihan 2.
Most chief executive officers (CEOs) surveyed by PwC Philippines are pinning their hopes of a business recovery on the government’s vaccination program, but 73 percent are already bracing for further revenue losses this year due to the COVID-19 pandemic. PwC Philippines partnered with the Management Association of the Philippines (MAP) to conduct a survey on 131 CEOs, 62 percent of whom represent large companies belonging to the top 0.5 percent of registered businesses. The rest of the respondents are from micro, small, and medium-sized enterprises (MSMEs).
The Philippine economy may have exited recession in the second quarter with a likely year-on-year growth rate of 10.6 percent—coming from a very low base last year, when tough lockdowns started—but it may take until the fourth quarter of 2022 to return to pre pandemic productivity level. This is according to Emilio Neri Jr., lead economist at Bank of the Philippine Islands, who sees full-year growth this year coming in at 5.1 percent, down from the bank’s original forecast of 6.3 percent due to the momentum disruption caused by the return to enhanced community quarantine from March 29 to April 11.
The central bank is urging lawmakers to expedite the passage of a law that will protect the interests of financial consumers due to the evolving landscape and rapid advancements brought about by the digitalization of transactions in the country. The proposed Financial Consumer Protection Act covers all financial products and services; institutionalizes consumer protection standards and promotes transparent and responsible pricing, fair and respectful treatment of clients privacy and client data protection.
The Philippine government has allotted about P45 billion for more coronavirus vaccines next year, the Finance department said on Saturday night, as the government strives to vaccinate the country’s entire adult population. Mr. Dominguez said the Philippines was set to take delivery of about 171 million doses of coronavirus vaccines by yearend. Deliveries this year were more than enough to vaccinate the entire adult population, he added. The Philippines has already received 30.98 million vaccine doses, including shots bought by the government and donated by other countries. About six million vaccine doses are set to arrive this week.
The government expects to complete 24 infrastructure flagship projects (IFPs) worth PHP194.78 billion before the end of President Rodrigo Duterte’s term in June 2022. These are under the “Build, Build, Build” program of the Duterte administration which is an ambitious infrastructure development plan composed of thousands of projects being implemented all over the country. A report furnished by the NEDA indicated that the construction of 12 of these projects amounting to PHP67.068 billion are ongoing and targeted to be finished by June next year.