DTI chief urges passage of urgent economic bills before Oct
THE Department of Trade and Industry (DTI) wants the pending bills aimed at liberalizing the economy to be passed by the third quarter so the country can reap their benefits.
Trade Secretary Ramon M. Lopez was referring to the bills seeking amendments to the Public Service Act (Senate Bill 2094), Foreign Investments Act (Senate Bill 1156) and Retail Trade Liberalization Act (Senate Bill 1840).
“We hope these three [proposed] laws will be moved into effect by this third quarter, hopefully before October,” Lopez said in a TV interview on Tuesday.
“As long as we pass those laws this third quarter, there is still a good chance to benefit from the improvement in the investment climate and a more liberal structure that will allow higher foreign equity participation in these critical services,” he added.
The pending bill seeking to amend the 84-year-old Public Service Act aims to improve the quality of public services and goods by allowing more players. The proposed amendments provide the inclusion of public markets in the coverage of “public service”; and the definition of “public utility” in the following sectors: distribution of electricity, transmission of electricity and water pipeline distribution and sewerage pipeline systems.
The bill amending the Foreign Investment Act seeks to cut the minimum employment requirement to 15 from 50 direct local hires for small and medium local firms established by foreign firms with at least $100,000 in paid-in capital.
The Senate version of the bill seeking to revise the Retail Trade Liberalization Act aims to further loosen up foreign restrictions by removing investment categories. This, as it aims to lower the minimum paid-up capital requirement for foreign retailers to $300,000 from $2.5 million.
Based on the latest data, Lopez welcomed the rebound in the foreign direct investments (FDI) entering the country.
FDI net inflows rose by 114.4 percent to $670 million in April from $317 million year-on-year, the Bangko Sentral ng Pilipinas reported recently. In the first four months, total FDI inflows reached $3.1 billion, which is 56.3 percent more than the $2 billion registered in the previous year for the same period.
“We just hope that we can continue with that, especially as we are able to do these other reforms after the CREATE [Corporate Recovery and Tax Incentives for Enterprises] reform,” Lopez said.
Under CREATE, the corporate income tax rate is reduced to 20 percent from 30 percent for domestic corporations with net taxable income of P5 million and below and have total assets of P100 million and below effective July 1, 2020. All other local firms and resident foreign companies are imposed a 25-percent income tax.
IN the same interview, Lopez vowed to continue offering loan assistance to struggling micro, small and medium enterprises (MSMES) through Covid-19 Assistance to Restart Enterprises (CARES) micro-financing program.
The DTI chief said that P5.05 billion worth of loans were provided to 32,500 borrowers already. But the department has secured additional funds of about P2.4 billion, which is available for loan grants.
The CARES program was launched through Small Business Corporation. It draws P1 billion in funds from the 2021 General Appropriations Act and P4 billion from Bayanihan 2.
Lopez said the MSMES could also avail of the Pondo sa Pagbabago at Pag-asenso (P3) financing program, which serves as alternative to informal borrowing schemes that implement exorbitant interest rates.
He said some 222,000 borrowers were given P8.8 billion worth of loan grants already.
We hope these three [proposed] laws will be moved into effect by this third quarter, hopefully before October.
Trade Secretary Ramon M. Lopez