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Aug 10, 2023 •407 likes •1.15k views

DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. 1 DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Vision for the Philippines 2 DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Progress in achieving the 10-point socioeconomic agenda is advancing strongly. 3

  1. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. 1

  2. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Vision for the Philippines 2

  3. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Progress in achieving the 10-point socioeconomic agenda is advancing strongly. 3

  4. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. 1. Macroeconomic policies Constraints to doing business have shifted from macro to micro issues… World Bank 2005 World Economic Forum 2017-18 5

  5. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. 1. Macroeconomic policies Strong macroeconomic fundamentals underpin solid growth. 6

  6. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. 1. Macroeconomic policies Credit rating upgrade means upgrading everyone’s life. Philippine credit rating 0 0 BBB+ 0 BBB Investment BBB- 0 grade BB+ 0 BB 0 BB- 0 0 7 Source: S&P

  7. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. 2. Tax reform Tax reform is about INVESTING in our country’s FUTURE. 8

  8. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. 2. Tax reform Impact on Taxpayer’s Personal Income 9

  9. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. 2. Tax reform Higher tax revenues funding social services and infrastructure 10

  10. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. 2. Tax reform Lower debt has led to reduced interest payments 11

  11. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. 2. Tax reform …Creating more fiscal space for more productive spending. 12

  12. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. 2. Tax reform 13

  13. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. 3. Ease of doing business 14

  14. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. 3. Ease of doing business 15

  15. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. 4. Infrastructure spending photos from DOF, DOTr, BCDA 16

  16. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. 4. Infrastructure spending 17

  17. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. 4. Infrastructure spending 19

  18. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. 5. Rural development photos from IRRI 20

  19. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. 5. Rural development Rice Competitive Enhancement Fund (RCEF) Farmers benefit from the Rice Competitive Enhancement Fund (RCEF) with a 10 billion peso annual appropriation for the next six years, plus any additional Photo: IRRI amount from rice tariff Photo: IRRI Photo: IRRI exceeding PHP 10 billion. 21

  20. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. 7. Human capital development 22

  21. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. 7. Human capital development These are some of the specific benefits that Filipinos will receive under UHC if fully implemented. 23

  22. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. 9. Social protection programs 24 photos from DSWD, IRRI

  23. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Results after the first three years 25

  24. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. GDP growth has remained robust despite headwinds in the global economy. 26

  25. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. With higher growth, the Philippines is scheduled to become an upper-middle income country in 2020. 27

  26. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Poverty reduction is encouraging. First semester poverty estimates among the population 32 27.6 28 28.6 Poverty rate (percent) 27.9 26.3 24 21.0 20 15.0 16 14.0 2006 basket based series 2012 basket based series 12 Source: PSA Note: Poverty rates for 2021 to 2022 represent government targets. 29

  27. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Rice liberalization reform is a game-changer. Rice liberalization is… pro-consumer pro-farmer Photo: IRRI pro-taxpayer pro-workers pro-children pro-poor Photo: IRRI 32 32 Photo: IRRI

  28. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. The next three years will be focused on achieving entirely the 10-point socioeconomic agenda. 33

  29. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Development objectives in next three years. • The overarching objectives for the next three years are to: 34

  30. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Some economic priorities in next three years 1. Accelerate implementation of the Build Build Build infrastructure program. • We have achieved 5.1 percent of GDP spending on infrastructure and we are on track to achieve 7 percent of GDP by 2022. This is consistent with achievingan 8 percent GDP growth. ● Consider hybrid PPPs ● Improve pre-planning ● Involve LGUs in identification and strategic planning of projects ● Upgrade technical capacity of LGUs to deliver local infrastructure ● Introduce land valuation reform to resolve right- of-way conflicts ● Introduce National Land Use Plan to implement proper zoning 35

  31. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Some economic priorities in next three years 2. Pursue the remaining tax reform packages to make the tax system simpler, fairer, and more efficient, while ensuring sustainable financing for the infrastructure program. Four major packages remain: Package 2 Package 4 Package 2+ Package 3 Corporate income tax Passive income Alcohol and Property valuation and incentives reform and financial taxes e-cigarette excise 36

  32. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Some economic priorities in next three years 3. Pursue economic reforms to increase FDI and jobs. Priority bills include • Public Service Act amendment • Retail Trade Liberalization Act amendment • Foreign Investment Act amendment 37

  33. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Some economic priorities in next three years 4. Improve implementation of existing reforms such as • National ID • Ease of doing business • Universal health care • Rice liberalization • Social programs to increase investment in health, education, and social protection • Building resilience to climate change 38

  34. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Some economic priorities in next three years 5. Improve the productivity of agriculture, including distribution of individual titles to land reform beneficiaries. 39

  35. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Tax reform is about INVESTING in our country’s FUTURE. 40 40

  36. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Why tax policy reform is needed: A bad tax system Effect Cause Outcome High tax rates Inequity Inflation Special treatment Narrow base Complexity and exemptions (only about half of the economy Lack of is taxed) Inefficiency information (e.g., bank secrecy) 41

  37. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Duterte Administration’s Comprehensive Tax Reform Program Package 2 Package 3 Package 4 Package 1 Corporate income tax Passive income Package 1A: TRAIN Property valuation reform and fiscal incentives and financial tax Personal income tax, consumption tax, and transaction taxes (RA 10963) Package 2+ Others Package 1B: Tax amnesty 1. Motor Vehicle Users Tax Estate and delinquency tax amnesty (RA 11213) 2. General amnesty with lifting of bank secrecy for A. Tobacco excise (RA 11346) fraud cases and automatic exchange of information. B. Alcohol and e-cigarette 3. Mining tax regime 42

  38. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Rice Liberalization Act (RA 11203) 104 Photo: IRRI Photos: IIRI

  39. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Year-on-year inflation further decelerated to 2.4 percent in July 2019. 8 6.7 6.7 7 6.4 6.0 5.7 6 5.2 5.2 5.1 5 4.6 4.5 4.4 4.3 Percent 3.9 3.8 4 3.4 3.3 3.2 3.0 2.7 3 2.4 2 1 0 Photo: IRRI Photo: IRRI Photo: IRRI 2018 2019 Photo: IRRI 105 Source: PSA

  40. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. With the recent implementation of the Rice Liberalization Act, prices of rice has fallen and is no longer a top contributor to inflation. Historical rice contribution to inflation 2.5 2.0 1.5 Percentage point 1.0 0.5 0.0 -0.5 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 YTD Source: PSA 106 Note:Rice inflation ratesfrom 1995 to2012 arebased on the 2006 series,while rates from2013 to2018 arebased on the latest 2012 series

  41. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Rice brought inflation to a decade high Rice supply issues 1. NFA did not buy enough paddy rice during harvest season. 2. NFA imported to fill the gap but importation was delayed. 3. Yet, importation given underlying issues in rice policy… 107 107

  42. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Rice tariffication and food policy reform are needed to address repeated rice supply problems. Historical rice inflation rate 25 20 15 Percent 10 5 0 -5 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 YTD Source: PSA 108 Note:Rice inflation ratesfrom 1995 to2012 arebased on the 2006 series,while rates from2013 to2018 arebased on the latest 2012 series

  43. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. NFA monopoly and regulation, resulting in rents 1. Quantitative restrictions : bureaucratic control of trade volumes. 2. Regulation of all aspects of rice trade : country origin, quality, shipping, stevedoring, warehousing, domestic landing and movement, wholesaling, transport, packaging, retailing, etc. 3. NFA has operated for nearly 50 years that the rice industry is co-opted and resists reform. 109

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