Marcos vows tax reform, more infra, airports

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PRESIDENT Ferdinand “Bongbong” Marcos Jr. laid down his administration’s plans to further boost the country’s economic recovery following the effects of the coronavirus disease (Covid-19) pandemic.

In his first State of the Nation Address (Sona) on Monday, July 25, 2022, Marcos said his government will implement “sound fiscal management tax administration reforms” that will increase revenue collection of the government and make the country an attractive investment destination, examine the power transmission and distribution system to lower energy prices for consumers and industry, as well as expand health services and infrastructure development.

Marcos said the country’s rail transport system would be developed, including those beyond the National Capital Region, like the Cebu railway system, the Panay Railway Project, and the 102-kilometer Mindanao Railway Project.

Road and transportation system improvement in key cities would also continue, including through the Cebu Bus Rapid Transit (BRT), Davao High Priority Bus System, Ilocos Norte Transportation Hub, and the El Nido Transport Terminal.

To boost tourism, Marcos said the country’s airports would be upgraded and more international airports would also be created to help decongest the Manila Airport.

In the area of foreign policy, he said he would not “abandon even one square inch of territory of the Republic of the Philippines to any foreign power. With respect to our place in the community of nations, the Philippines shall continue to be a friend to all, an enemy to none.”

There was no mention on the fight against criminality or corruption in his speech.

Marcos started off his Sona by talking about tax reform.

“Our tax system will be adjusted in order to catch up with the rapid developments of the digital economy including the imposition of value added tax on digital service providers. The initial revenue impact will be around P11.7 billion in 2023 alone,” he said.

He said tax compliance procedures will be simplified to promote ease of paying taxes, while priorities will be realigned and spending efficiency will be improved to immediately address economic impacts of the pandemic, as well as in preparation for other future crises.

Marcos said tax incentives for enterprises will make the country attractive as an investment destination.

“Ecozones will be fully supported to bring in strategic industries such as those engaged in high technology manufacturing, health and medical care and all emerging technologies. This is also seen to facilitate economic growth outside Metro Manila,” he said.

“We will pursue measures to determine possible undervaluation and/or trade mis-invoicing of imported goods through information and communications technology. The Bureau of Customs (BOC) will implement streamlined processes,” he added.

Poverty, GDP

Marcos said they are determined to bring down the country’s poverty rate to nine percent by 2028, the national deficit to Growth Domestic Product (GDP) ratio to three percent by 2028, the national government debt to GDP ratio to less than 60 percent by 2025, and at least $4,256 income per capita and the attainment of upper middle-income status by 2024.

He said that based on forecasts that are consistent with guiding principles of coherence of strategies, policy discipline and fiscal sustainability, GDP is expected to grow by 6.5 to 7.5 percent in 2022 and 6.5 to eight percent annually from 2023 to 2028.

Marcos attributed the economic growth to the reopening of the Philippines following the loosening of restrictions due to the pandemic.

Marcos said the average inflation for 2022 is projected to range from 4.5 to 5.5 percent, but it will return to the target range of 2.0 to 4.0 percent by 2024 until 2028.

He attributed the inflation rate to the Russian-Ukraine conflict.

Marcos said exports of goods are expected to grow by seven percent in 2022 and to six percent from 2023 to 2028, while imports may grow by 18 percent in 2022, six percent in 2023 and eight percent from 2024 to 2028.

He said he has already instructed the National Economic and Development Authority to coordinate with other agencies for the establishment of the country’s development plan for 2023-2028 and to submit it to him before yearend.

Marcos also assured that there will no more lockdowns despite the increasing cases of Covid-19, as he vowed to put balance on health, economy and the welfare of the people.

He highlighted the importance of Covid-19 booster doses to ensure that Covid-19-related hospitalizations will remain low.

Health

Marcos sought the assistance of Congress for the establishment of the country’s own Center for Disease Control (CDC) and Prevention and a vaccine institute.

He pushed for the passage of a National Disease Prevention Management Authority bill for the creation of the CDC, which will be attached to the Department of Health.

Marcos also vowed to build more health centers and hospitals under his administration not only in Metro Manila but most especially in provinces.

“Bukod dito, upang mailapit natin ang health care system sa taumbayan nang hindi sila kailangang pumunta sa sentro ng kanilang bayan, lalawigan o region, ay maglalagay tayo ng mga clinic, mga RHU na pupuntahan ng mga doktor, nurse, midwife, medtech, isang beses, dalawang beses sa isang linggo — nang sa gayon, magiging mas madali sa may karamdaman na magpapagamot nang hindi na kailangang magbiyahe nang malayo,” he said.

“One of the cornerstones of a strong healthcare system is the provision of competent and efficient medical professionals. We will exert all efforts to improve the welfare of our doctors, our nurses, and other medical frontliners,” he added.

Marcos said he is also working to make prices of medicines in the country low, particularly by inviting more manufacturers in the country.

He said he directed the Philippine Competition Commission to ensure equality and to end the cartel among the pharmaceutical companies in the country.

“This is one of the hard lessons that we learned when the pandemic struck, and therefore, we must act on that shortcoming,” he added.

Agriculture support

To address the looming food crisis in the country, Marcos Jr. said he will issue an executive order for the imposition of a one-year moratorium on land amortization and interest payment for farmers.

Marcos, the concurrent secretary of the Department of Agriculture, highlighted the need for stronger support to the agriculture sector to achieve the country’s food security in the coming years.

“We will provide loans, while we will bring the less expensive farm inputs that the government will buy in bulk closer to the agricultural sector. This includes fertilizer, pesticides, seedlings, feeds, fuel subsidy and aid for eligible beneficiaries,” he said in Filipino.

He said loans and financial assistance to farmers and fishermen would be an institution and policy of his administration.

Agrarian reform

Marcos also urged Congress to pass a law that will emancipate the agrarian reform beneficiaries from the agrarian reform debt burden, thereby amending Section 26 of Republic Act 6657.

“In this law, the loans of agrarian reform beneficiaries with unpaid amortization and interest shall be condoned,” he said.

“Agrarian reform beneficiaries who are still to receive their awarded land under the comprehensive agrarian reform program shall receive it without any obligation to pay any amortization,” he added.

The country has 52,000 hectares of unused agricultural lands, which will now be used for distribution to the landless war veterans, their kin, as well as retirees of the Armed Forces of the Philippines and the Philippine National Police in accordance with Section 40 of the Republic Act 6657, as amended.

Marcos said he will prioritize modernization in the agriculture sector through the use of new technologies and science resilient in the face of climate change, and make farmers’ products more accessible by building farm-to-market roads.

Ahead of the Sona, legislators from the two chambers of Congress elected Monday Sen. Juan Miguel Zubiri as Senate President of the 19th Congress and Leyte First District Rep. Ferdinand Martin Romualdez, a cousin of Marcos, as House Speaker.

Zubiri said the 19th Congress will have a Senate that will provide a payload of solutions instead of fault-finding, while Romualdez promised a “fair and equitable distribution of resources for the development of our regions regardless of political affiliations.” (CTL, SunStar Philippines)

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