Keynote Speech for Philamlife Asset Management

Posted on January 18, 2017

Philam Asset Management Forum, 18 January 2017, Blue Leaf Events Pavillion, Taguig City

Good evening, ladies and gentlemen. Thank you for inviting me here. Thank you also for giving me the opportunity to talk about what the government has been doing and will be doing in the next few years to achieve its economic and political goals.

One of the priority agenda of the government is to aggressively bridge the country’s infrastructure gap in the next six years. Poor infrastructure has been a major constraint to growth. Hence, infrastructure development is given P850 billion for FY 2017 – or about 5.3 percent of GDP.

This year, the government has a lined up infrastructure projects to address our traffic crisis which is costing us 2.4 billion pesos daily according to a JICA study, to link the major cities to the lagging regions, and increase the mobility of people, goods, and services while creating 700,000 jobs to Filipino workers annually in the medium term.

New road networks will be built across the archipelago. A total of P349 billion is earmarked for road networks. A noteworthy project is the Mindanao Logistics Infrastructure Network (MLIN), which will connect the cities and provinces of Mindanao to ports and production areas.

For mass transport, a number of railway projects will be implemented this year. Bus transport systems and terminals will also be constructed to provide efficient, comfortable, and inexpensive transportation to commuters in Metro Manila and Cebu.

Examples of these projects include the extension projects for LRT Lines 1 and 2, and our funding for the North-South Commuter Rail Project. This brand new railway system, which will be completed in the term of President Duterte, will link Tutuban to Malolos, Bulacan; and Malolos all the way to Matnog, Sorsogon.

The P850 billion funding for this year is just a down payment. We estimate that between 8 to 9 trillion pesos (or $163 to $183 billion) will be spent on public infrastructure for 2017 to 2022.

Besides infrastructure, social services will be prioritized to mold our young population into an agile and competent workforce. P1.35 trillion, or 40 percent of the P3.35 trillion budget, is allocated to social services. This will fund education, healthcare, social protection among other services.

Our plans are bold and our goals are lofty, thus we must secure the sources of funding for our programs. This is where the Comprehensive Tax Reform comes into play.      It will hit two birds with one stone: it will fund our expenditure priorities, and it will also make our tax regime more competitive in the region.

Our tax regime is out of sync compared to our ASEAN neighbors, costing us precious investments. This is why we intend to cut personal income tax rates and corporate income tax rates from 32 percent and 30 percent, respectively, down to 25 percent.

To offset losses, we will then broaden the Value-added Tax base; increase excise taxes on petroleum products and automobiles; rationalize fiscal incentives, and improve tax administration.

For entrepreneurs and investors, government is undertaking initiatives to lower the cost of doing business in the country as well as encourage and assist micro, small and medium enterprises (MSMEs).

Processing business permits and licenses will be streamlined and facilitated in local government units. We will emulate the Davao model where government offices are able to issue permits and licenses within three days.

The Department of Trade and Industry (DTI) is also firming up its support to MSMEs. Negosyo Centers have tripled in number from 144 in 2015 to 447 in 2016, most being created under our term. Sources of credit will also be made available to aspiring entrepreneurs so they may start their own businesses.

Project Repeal, a whole-of-government initiative, is in full swing. It aims to repeal and/or amend outdated, unnecessary laws and regulations. This will reduce the cost of compliance for firms, as well as the cost of administration for regulators.

We have much to look forward to this year and in the years ahead. Allow me to assure you that this government is bent on delivering a positive change that can be felt by businesses, entrepreneurs, investors, and ordinary workers. Let us then support this government, so that we can reach our common goal of peace, safety, comfort, a vibrant economy, and prosperity at the soonest possible time.

Thank you and Mabuhay!