Business optimistic about gov’t tax plan

THE DUTERTE administration is on the right track to unlocking faster and more inclusive economic growth, with the business community pledging support for tax reform plans and a more aggressive infrastructure spending push despite nagging concerns.

Economic managers of President Rodrigo R. Duterte dangled the comprehensive tax reform program ( CTRP) — this week scheduled for House plenary debates— as well as his government’s ambitious P8.4-trillion infrastructure program before an audience of businessmen during the BusinessWorld Economic Forum last Friday.

“CTRP is central to DuterteNomics; it is in fact the catalyst to the government’s 10-point economic program. That is why I believe the business sector should support it,” Manuel V. Pangilinan, chairman of the Metro Pacific Investments Corp., said in his keynote speech during the forum held at ShangriLa at the Fort, Taguig City.

Socioeconomic Planning Secretary Ernesto M. Pernia signaled confidence in implementing the infrastructure spending plan over the next six years, with such reforms seen boosting gross domestic product (GDP) growth and bringing development closer to the countryside.

Updated estimates from the Finance department show a net revenue gain of P157.2 billion from its first tax package before Congress, which will be derived from higher excise duties on oil and cars and reduced value-added tax exemptions to compensate for lower personal income tax rates. Albay Rep. Clemente “Joey” S. Salceda, senior vice-chairman of the House committee on ways

and means, on May 17 put the net revenue gain at P204.8 billion, which committee chairman Rep. Dakila Carlo E. Cua had said at the time includes all revenues from the tax reform policy and legislated tax administration.

Mr. Pernia added that the country still has more than enough room to borrow from various funding sources, given the country’s “very low” exposure to external debt at 42.1% of GDP as of end-2016.

“Borrowing capacity is not a problem,” Mr. Pernia said, noting that anything below 50% is still healthy.

Francisco C. Sebastian, vice-chairman at GT Capital Holdings, Inc., said there is more than enough money available for infrastructure lending, with interest rates expected to remain low against the backdrop of a sound and stable macroeconomy despite ballooning funding requirements.

For his part, Public Works Secretary Mark A. Villar said his agency plans to spend some P450 billion this year alone, including plans to build 200 bypass roads nationwide. The Cabinet official dismissed fears that the government would again hit a snag in rolling out these projects, confident that it is now “wellequipped” to lead construction.

The Philippine economy expanded by a slower-than-expected 6.4% during the first quarter, just below the government’s 6.5-7.5% target for the full year but still one of the fastest in the region.

Bangko Sentral ng Pilipinas Deputy Governor Diwa C. Guinigundo said that the full rollout of the government’s “Build Build Build” initiative would contribute between 1.5% and 7% more to GDP growth.

“Growth can further be increased if substantial public spending is sustained,” Mr. Guinigundo said during the morning session.

Corporate bigwigs cheered the Duterte government’s thrust, but flagged issues in terms of setting up a more business-friendly environment.

“The private sector is willing to spend money. The problem is, the government needs to realize that we also want to make money,” added Christian R. Gonzalez, head for Asia Pacific at the International Container Terminal Services, Inc.