Philippine business leaders are recommending the improvement of the country’s transport networks and the strengthening of national connectivity to the incoming government.
Mindanao Business Council chairman Vicente Lao in a speech during the Sulong Pilipinas Business Forum held in Davao on June 21 said industry and business want the administration to “speedily implement infrastructure projects across the country.”
During the two-day forum that began on June 20, participants pushed for a clear national strategy for airports and ports, “which includes utilizing airports outside Metro Manila such as Clark airport or military airports, and utilizing the Batangas and Subic ports, to decongest Metro Manila.”
Lao said that for increased connectivity, regional airports should be developed and the Davao-Sasa port modernized.
Incoming Transport Secretary Atty. Arthur Tugade, during the same forum, responded that issues over the bidding for the Sasa port project must be resolved within the year.
On road and mass transit projects, Lao identified the North-South Railway project, C-6 project, Cebu Bus Rapid Transit, and Mindanao Railway Project as those that should be given high priority.
Undertake tax reform
A comprehensive tax reform package was also highlighted as a primary concern. Philippine Chamber of Commerce and Industry president George Barcelon said recommendations include a reduction in corporate income, personal income, and capital gains tax rates. Participants suggested pegging the country’s tax rates and tax system to those of Singapore or Hong Kong, and bringing Philippine tax rate levels even lower than those of its ASEAN neighbors to attract more investors.
Businesses called for a simpler tax system to help reduce the cost of compliance especially for micro, small, and medium enterprises (MSMEs), to promote voluntary compliance, and to increase collection. To fill the deficit arising from reduced tax rates, Barcelon noted proposals to increase excise taxes by expanding the definition of luxury goods, among others.
Meanwhile applying a national ID system will improve the targeting of social services and prevent double-counting or leakage. This will allow informal settlers to be properly identified, enabling targeted intervention mechanisms, such as improved access to health, food, education, and shelter programs.
Ease cost of doing business
Participants also recommended automating and streamlining business permits and licensing systems and reducing bottlenecks in land titling—at both local and national levels—to ease the cost of doing business and eliminate windows of corruption.
Additional suggestions centered on expanding the “single window” concept and limiting human discretion to clamp down on corruption. The government should likewise consider extending the validity of various permits and licenses as well as applying “negative confirmation” for government approvals (i.e., automatic approval after a certain period of inaction by the concerned agency), the businessmen said.
Improving internet and telecommunications services is also being proposed as a way to make the sector competitive with the best in the region. For a start, the private sector requested the government to amend Republic Act No. 7925, or the telecommunications law, and pass a law to regulate mobile or wireless internet services.
Recognizing the untapped potential of the agriculture sector, businessmen sought the delivery of support services to farmers and fishermen in the form of financing, incentives, technology transfer, irrigation access, post-harvest facilities, farm-to-market roads, improved logistics, and integration into the supply chain to unlock the capacity of the agriculture sector to usher countryside development.
Another recommendation is to implement responsible mining, as well as limit raw ore exports in order to grow value-added processing and develop a strong local mineral industry.
Support for competitive industries
Part of the set of proposals presented to the new government is the development of a national strategy for the country’s most competitive industries, along with the preparation of the local workforce to support these industries. Lao repeated the industry’s call for the removal of silos in the bureaucracy and adoption of an all-of-government approach across departments and in national and local governments, with strategic partnerships with the private sector.
The action plan can identify industry clusters, within which will be developed manufacturing and agriculture, farming, supply and value chain capabilities. At the same time, the government should develop specific industries within regions. For instance, Clark and Batangas may be targeted for manufacturing development, Bohol for tourism, Negros for agriculture, Sarangani for fisheries, and Cagayan de Oro for agriculture and manufacturing.
Lao said the clustering approach will lead to lower transport and logistics costs, reduced energy costs, and economies of scale. MSMEs can locate themselves within these clusters and become part of these value and supply chains. There is a need to adopt a shared-cost mindset to cut infrastructure costs, which may be achieved by consolidating requirements for roads, housing, ports, and airports. These clusters are envisioned to become hubs where the skills and competencies of the workforce of that region are to be developed.
Meantime, the review of the conditional cash transfer (CCT) program was also underscored, as the program is perceived to promote the dependency of people on government. Forum participants noted that the best way to help the poor is to teach them skills and give them jobs—that is, carry out a long-term intervention that teaches them to catch fish rather than gives them fish.
Lastly, the reduction of bottlenecks in public-private partnership (PPP) projects and infrastructure projects and respect for the sanctity of contracts are also important objectives to the private sector. Participants said they want concrete measures that will break down barriers to the speedy implementation of vital infrastructure projects.
President-elect Rodrigo Duterte responded to all this by saying that his economic team will study and review the set of recommendations.
“I assure you we will study and review it. It is doable,” Duterte said. – Roumina Pablo
Image courtesy of mapichai at FreeDigitalPhotos.net
