the presidentiables on the Economy and Jobs
PDI is running an interesting series of articles on the presidentiables. we ae providing a link here and excerpts.
Agenda of the next president: Economy and jobs
Starting Feb. 9, 2016, the Inquirer is coming out with a 10-part series on pressing national concerns that should be high on the agenda of the five contenders in the May 9 presidential election. The series should help Filipinos choose wisely the country’s next leader.
In line with the Inquirer’s “ThINQ.Vote.” advocacy, we have asked the presidential candidates to outline their concrete plans of action in dealing with 10 decades-long issues on poverty, economy and jobs, food security, peace and order, corruption, health care, foreign policy, traffic, climate change and Internet connectivity.
Under the Aquino administration, the economy has grown by an average of 6.2 percent–the fastest since the late ’70s. And thanks to reforms in the bureaucracy, business has been bullish and foreign direct investment has been rising 53.1 percent from 2012 to 2014. But not everything is rosy. Creating jobs remains a challenge, more so as global oil prices plunge. If the downturn continues, some 1.5 million temporary workers in the Middle East could lose their jobs.
INQUIRER.net is publishing verbatim the candidates’ action plans to strengthen the economy and create jobs for Filipinos. For the summary of the 10 pressing issues, go to our special Election 2016 website.
A Binay administration will pursue the amendment of the economic provisions of the Constitution. We aim to ease the foreign ownership restrictions on key sectors as this will open up the economy further–a major factor in attracting more foreign direct investments (FDIs). More FDIs mean more jobs and livelihood for Filipinos.
Under a Binay presidency, we will also strengthen substantially the sectors of agriculture, manufacturing, tourism, business
process outsourcing, and exporting–which are the five biggest job generators.
Reforms will be undertaken to foster a competitive and sustainable agriculture and fisheries sector to increase agricultural productivity. A Binay presidency will create agricultural economic zones in key agricultural provinces and promote agricultural value-added processes to increase job creation, reduce post-harvest process and enhance output value.
We will train farmers to shift from subsistence farming to agribusiness; amend CARP (Comprehensive Agrarian Reform Program) provisions to allow farmers to lease their land to agri-entrepreneurs and investors; and push crop diversification, wherein high-value crops–much more profitable than rice and corn–are planted.
A Binay administration will also provide subsidies in irrigation, fertilizer and seeds to help farmers defray some costs. We will also help farmers get connected to markets such as restaurant chains, supermarkets and food processing companies, and enable them to access credit. We will strengthen crop insurance services and credit guarantee to minimize farm-related credit risk. We will also seek to lower transaction cost to reduce lending rates.
We will improve water resource management and planning through research, and train local farmers as an operational intervention to increase manpower and double the area of irrigated lands.
Many of our farmers are now aging and young Filipinos shun farming because it is perceived to be difficult and its returns are low. It is vital that the government help reverse this thinking in order to ensure the sustainability of our agricultural sector and our food security.
Business Process Outsourcing
The business process outsourcing industry has greatly contributed to the economy and provided an unprecedented number of jobs to the Filipino people. The “IT-BPO Roadmap 2011-2016: Driving Global Leadership” formulated by the Business Processing Association of the Philippines stated that if the forecast will come true, the IT-BPO companies could employ up to 1.3 million Filipinos and generate 10 percent of gross domestic product (GDP).
As the industry relies heavily on good Internet connection, the Binay administration will create a Department of Information and Communications Technology to help improve the country’s IT infrastructure and help grow the BPO sector further.
The Philippines also needs to promote tourism as an economic driver. If tourist arrivals increase to 15 million by 2020, it will result in employing almost 10% of our population in tourism-related work and for the tourism sector to contribute 10% of our GDP. A Binay administration will develop, craft and implement a National Tourism Strategy that will link infrastructure development, support services and establishments, marketing and promotions plan, and development plans for tourism areas.
Manufacturing and export
There is a need for the manufacturing and export sector to become more competitive since the sector provides higher wages and absorbs more Filipino workers as compared to other sectors. A Binay presidency will focus on policies and reforms that will allow expansion of this sector by improving infrastructure and technology/logistics to lower costs of production, establish finance support programs for small- and medium-scale enterprises, streamline the bureaucratic process such as establishing one-stop shop, ensure affordable energy/power cost, continue to produce strong and highly-skilled workforce and encourage domestic linkages for raw materials.
To bolster these areas of development, it is essential that: (1) infrastructure development is made a priority; (2) increase fiscal space to benefit the businessmen and free the middle class; (3) streamline the bureaucracy; (4) adopt an energy policy conducive to growth; (5) leave business to the businessmen; (6) empower the local government units; (7) adopt policies that take into consideration issues on climate changes; and (8) a cooperative foreign policy.
Initiate measures to curb the present practice of contractualization.
Set higher coverage targets for the Social Security Systems, Philippine Health Insurance Corp. and Pag-ibig Fund.
Revitalize basic industries like steel to create raw materials for downstream industries that are job generating.
Prioritize agriculture and the processing of agricultural products to provide job and livelihood opportunities in the countryside, as
well as increase farm incomes, farmers and fishermen being among the poorest of our population.
Create the peaceful environment in the countryside to encourage investment beyond incentives.
Lower electricity costs by encouraging smart grids and small scale power generation to include household solar power generation.
By prioritizing agricultural development, coupled with transportation infrastructure to link farm production with their markets, we can ensure accessibility and affordability of food, which is the biggest part of average household expenditures.
Infrastructure gaps, whether in the countryside or in key urban centers, shall be prioritized and substantially filled, or at least initiated, during my term.
Poverty Alleviation: Poverty Alleviation is our flagship economic strategy.
Pursue a context sensitive poverty alleviation strategy anchored on enterprise development, development of agriculture/agribusiness, manufacturing and tourism, human development, fair competition policy, political empowerment and participatory development, social security, direct assistance to the poor and asset building and reform.
Critical Infrastructure: Ensure that our infrastructure program is
designed to be participative, collaborative and innovative.
Undertake a whole-of-government approach and tap the participation of private sector and civil society in making an assessment and evaluation of our existing infrastructure situation for a sounder national infrastructure plan
Review existing contracts, particularly in transport infrastructure, to terminate onerous agreements and contracts loaded with huge penalty payments and sovereign guarantees that short-change both the general public and taxpayers
Maximize three viable options in the development of key infrastructure projects: National Government Financing, Public-Private Partnerships and Office Development Assistance and ensure the wise and strategic use of these mechanisms.
Regional Competitiveness: The building blocks of national competitiveness are competitive regions. Our program to increase regional competitiveness is anchored on three pillars: 1) fostering a healthy local economy, 2) good local governance and 3) appropriate infrastructure.
Healthy Local Economy. Coupled with efforts to development enterprises, micro, small and medium enterprises (MSMEs) will be empowered to have full access to and become competitive in both regional and international markets by: (1) identifying markets and opportunities where their products and services are in demand, (2) upscaling the quality and compliance of their products to international standards, and (2) finding ways to move their goods and services to various markets at the least possible cost.
Good Local Governance. Establish an apex MSME agency to ensure the effective implementation of the integrated services system; Harmonize the efforts of both national agencies and local government units to make the support system—from access to finance to business mentoring—easily accessible to MSMEs.
Appropriate Infrastructure. National government agencies such as the Department of Transportation and Communications and Department of Public Works and Highways will work with regional and local government counterparts to ensure that infrastructure projects undergo correct procurement process and projects are awarded to contractors with track records in long-term maintenance.
Tax Environment: Design and implement a tax system that is simple, stable and certain.
Tax rate and bracketing reforms. Introduce two sets of reforms in our tax system:
Adjust income tax brackets taking into account inflation so that the cut-off for every tax bracket would be increased based on the amount of current prices to protect the purchasing power of the individual tax payer
Lower personal and corporate tax rates in a well-phased manner (annual) to be at par with our Asean neighbors
Tax administration. Improve tax collection rates of both the Bureau of Internal Revenue and Bureau of Customs from a moderate 1% to an aggressive 2% of the GDP by leveraging on full automation of tax filing and customs procedures through ICT to ensure maximum tax compliance.
Tax simplification. Re-engineer the tax filing process by minimizing the number of steps, requirements, forms and fees imposed by tax collection agencies. It takes around 36 payments and 193 hours to fully comply with tax obligations.
Investment Climate: Create an attractive, healthy, low-cost and predictable investment climate.
Increase level of cohesion between government, business groups and stakeholders in crafting and developing industry roadmaps to attract more investments in the country.
Investment promotions agencies such as the Bureau of International Trade Relations, Export Marketing Bureau and Foreign Trade Services Corps shall work with the Board of Investment to identify bottlenecks that cause foreign direct investment inflow fluctuation and align investment priority areas with industry roadmaps for a solid and time-bound action agenda.
Take careful but important steps to review and amend the economic provisions of the Constitution, particularly in industries that need more foreign investments—the primary and service sectors, mining, oil and gas industries while ensuring that support systems and adequate safety nets are in place to increase absorptive capacities of our local industries.
For the past five years, we’ve managed to sustain our growth numbers but efforts to do so were simultaneous with our anticorruption measures, which may have limited government spending at first. Nonetheless, we have managed to yield positive results and gained the confidence of the world from being the “sick man of Asia” to “Asia’s bright spot” by upholding the bedrock principles of Daang Matuwid: Transparency, rules-based
governance and a strong anticorruption foundation. To make for an environment that is even more conducive for social and economic development, we must ensure stability and predictability of policy outcomes.
Therefore, it follows that if we want to achieve more, we must continue on our path. The first five years of Daang Matuwid have allowed us to address the leakages in the system. Now that the pipelines have been sealed, the next years will be devoted to investing in our people by providing quality services such as education, trainings in diversified skills, infrastructure, and the creation of more and higher value jobs.
For example, we see agriculture as both an immense challenge and a lucrative opportunity that holds the key to our country’s development. We can revitalize our agricultural sector by consolidating the production of agricultural products in order to achieve efficiencies and economies of scale. In the process, we are insulating our farmers from vulnerabilities caused by natural calamities such as droughts and typhoons by treating them as employees with a monthly salary. Not only are we providing the farmers a safety net, we are also reducing their operational costs, making agriculture an efficient, profitable, and competitive venture for investors and job-seekers.
We also intend to see resurgence in the manufacturing industry by inducing competition in the power sector, which in turn will lower power costs and attract investments in industry. Jobs generated in the manufacturing sector can provide a stable source of income for Filipinos. By using our balance sheet to make capital more accessible to the people, we can also spur growth in local economies and unleash the energies of our micro, small and medium entrepreneurs.
All these deliberate efforts will be undertaken to ensure that the workforce can move higher in the value chain and that every Filipino family is given a fair chance to be free from hunger, free from fear, and free to dream.
I commit that the Philippine economy will grow faster than ever before, that it will be truly inclusive by making sure that real incomes of workers will increase over time. We will achieve the goal of higher and sustained economic growth by investing heavily in public infrastructure. Our roads, bridges, urban transit systems, airports and seaports are crumbling. We need to build them up at par with, if not better than, our Asean neighbors. We need to prepare our people for a more modern, more competitive global
economy. We need to educate them, take care of their health, and feed them so they will become productive members of a growing work force. Only by investing in people can we truly make growth inclusive. Only if the young are educated and healthy can they benefit from growing economic prosperity. My administration will:
Modernize agriculture and make it more productive by:
Investing in productivity enhancing infrastructure to boost agriculture;
Investing in irrigation and water impounding facilities in order to allow more planting cycles and to minimize the impact of El Niño and La Niña;
Financing programs that would expand the use of new seed varieties and modern technology in order to increase farm yield; and
Investing in research and technology;
Reinvigorate manufacturing and reenergize exports by:
Implementing a more affordable and stable power supply;
Reducing cost of doing business in the Philippines;
Improving peace and order in farms and factories;
Creating national industries that can be marketed internationally, such as machinery and equipment for agriculture; and
Making the peso competitive relative to currencies of our competitors;
Improve the investment climate by:
Streamlining and harmonizing business process and licensing procedures;
Codifying and updating laws and issuances affecting customs and tariffs;
Enhancing trade facilitation measures;
Cutting red tape at the local government level;
Drastically reducing regulations at the Bureau of Customs and the regulatory bodies; and
Amending the restrictive provisions in the Philippine Constitution which have discouraged the entry of foreign investors into the country;
Reform the tax system by:
Adopting comprehensive income taxation and reducing maximum personal income tax rate from 32 percent to 25 percent;
Reducing the corporate income tax (CIT) rate from 30 percent to 25 percent;
Rationalizing fiscal incentives to partly offset the revenue loss from lowering the CIT rate;
Imposing a national real property tax (RPT) piggybacked on local RPT;
Abolishing the estate tax;
Abolishing tax on dividends; and
Gradually raising the value-added tax rate from 12 to 15 percent by 2019; and
Reduce unemployment and underemployement by:
Ending contractualization, which is an economic deprivation of life and security of person;
Creating national industries to increase job opportunities for skilled workers in the Philippines to prevent migration of workers; and
Creating more jobs per sector, especially in the science and technology, and infrastructure industry.