8 Things to know about Duterte economic agenda

8 Things to know about Duterte economic agenda

Presumptive president Rodrigo Duterte’s transition team has disclosed Duterte’s 8-point economic agenda for the Philippines on May 12.

8 Things to know about Duterte economic agenda

(Photo credit: Inquirer.net)

Carlos “Sonny” Dominguez, former agriculture secretary who is also part of the transition team of Duterte, announced the agenda after they convened at the Marco Polo Hotel.

The transition team was formed in response to President Benigno Aquino III’s call for the Duterte camp to get a head start on the transition between the two administrations.

Here are the 8-point economic agenda of presumptive president Rodrigo Duterte:

1. Preserve and sustain the current macroeconomic policies. However, reforms in tax revenue collection (both in the Bureau of Internal Revenue and the Bureau of Customs) efforts will be applied side by side with reforms within the bureaucracy of these tax collecting agencies.

2. Stimulate infrastructure spending by addressing, among others, major bottlenecks in the public-private partnership (PPP) program. Maintain target goals of reserving 5% of the country’s gross domestic product for infrastructure spending.

3. Ensure that the Philippines will be more attractive to foreign direct investments by addressing restrictive economic provisions in the Constitution and our laws, and enhancing the competitiveness of the economy.

4. Undertake a genuine agricultural development strategy by providing support and services to small farmers that will increase their productivity, refine their market access, and enhance the agricultural value chain by collaborating with agribusiness firms.

5. Address the bottlenecks in the land administration and management system.

6. Bolster our basic education system and provide scholarships for tertiary education, which are relevant to the needs of private sector employees.

7. Improve and make progressive the income tax system to enable those who earn less to have more money in their pockets.

8. Enlarge and strengthen the implementation of the conditional cash transfer (CCT) program.

 

These, Dominguez said, are the administration’s “broad outlines of the economic policies they [the new admin] will pursue.”

He added that the tax collection during the presidency will be indexed with the present inflation rate.

“These tax tables were made years ago when P500,000 was more than what P500,000 meant now. So now, if you earn P500,000, automatically you are taxed 32%. And if you spend say 80% of that, you are taxed another 12% from VAT (value-added tax),” he explained.

This means that a person’s effective tax rate would be equal to around “38% to 40%.”

“The tax bite should be lower for those earning P500,000 today because that is less than whatit was I real value to what the value was when the tax tables were made,” he noted.

Earlier in his campaign, Duterte said he would get rid of income tax for workers earning P20,000 and below. This was not mentioned in the proposal by his transition team.

Dominguez reminded everyone that the transition team has only met twice, and further details behind Duterte’s economic agenda will be straightened out in the coming days.

Mitigating coruption and crime

Dominguez said the economic agenda reflects the presumptive president’s promise to stop corruption in the government.

“Reforms in tax collection are a politically acceptable way of saying we will focus on eliminating corruption in the revenue-generating agencies,” he explained.

He furthered that Duterte also plans on accelerating infrastructure spending, because this would lead to job generation and will “inject economic activity in our country.”

Duterte has previously mentioned putting off the construction of major infrastructure projects, like mega dams, during the first two years of his presidency. He will, however, continue building transportation infrastructure to lighten the traffic congestion in Metro Manila.

In addition to transportation infrastructure, he also said he wanted a Mindanao railway system built during his presidency.

Duterte plans on using his hometown Davao City as a model in making the Philippines as a whole more competitive in business. He was mayor of the city for more than two decades.

This means that the next administration will push for the removal of red tape in government processes to make businessmen’s transactions with the government more efficient.

Dominguez believes that with this, “licenses for doing business are given in the shortest possible time and where the government is actually helping business to establish in Davao.”

“It also means that reducing crime in the area will certainly be an item attracting people to do business because it will increase the security of businessmen as well as the consumers.”

Streamlined coordination between land agencies

Duterte is considering the pursuit of a general “rural development strategy” for the whole country. The strategy includes the provision of better irrigation and other support services to farmers by the Department of Agriculture (DAR). This plan is consistent with Duterte’s statements while campaigning.

Dominguez said Duterte will also encourage tourism in rural areas “because our country is beautiful and we want to show the world the beauty of our country.”

Dominguez also said that Duterte recognizes lack in the coordination efforts between the Philippines’ 4 land title agencies – DAR, the Land Registration Administration, the Department of Environment and National Resources, and the National Commission on Indigenous Peoples.

“Unfortunately, there is very little coordination among these agencies and we know very well that the security of land tenure is so important because it allows more investments. It encourages more investments in the rural areas. It makes the projects more valuable if there is solid security of land tenure,” he noted.

Providing jobs, fortifying education

Finally, Duterte’s administration plans to address the continuing problem of job mismatch – where only 10 out of 1,000 Filipino applicants get hired because the others lack the necessary skills needed for the jobs that are open in the market.

Duterte is seeking to provide tertiary scholarships, and to ensure that the courses to be offered are currently in demand in the job market.

Dominguez added that the basic education system will also be enhanced.

“This means that our training in communications, in mathematics, in logical thinking will be strengthened in the basic education portion so that when a student graduates from high school, under the K-12 system, the student has adequate training particularly in communicating his ideas, in calculation and logical thinking.”

 

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