29th Visayas Area Business Conference
August 28, 2020
Ambassador Benedicto Yujuico, President of the Philippine Chamber of Commerce and Industry; Ms. Maria Alegria Limjoco, Chairperson of PCCI; Consul Samuel Chioson, Area Vice President of PCCI for Visayas; business community of Visayas; distinguished guests; ladies and gentlemen: Good afternoon.
On behalf of the Duterte Administration, I congratulate the Philippine Chamber of Commerce and Industry for successfully organizing the 29th Visayas Area Business Conference despite challenging circumstances. I also thank the Cebu Chamber of Commerce and Industry for hosting this important meeting and the Sulong Pilipinas consultative workshop.
The conference is aptly themed “Innovation During the Pandemic.” This captures the essence of what we need to do so that our enterprises and our economy can bounce back quickly from this unprecedented challenge.
The enterprises must be ready to more aggressively innovate, to shift more rapidly to take advantage of new digital technologies, and to identify emerging business opportunities. These are not only moving into the “new normal.” We should be purposefully moving towards a New Economy.
I thank the leaders from the Visayas business community for your active participation during this year’s Sulong Pilipinas sessions. Since its launch in 2016, Sulong has played a crucial role in bringing our key stakeholders together in collaborative and participatory workshops in support of game-changing reforms.
Through the years, the PCCI has been a dependable partner of the government in pushing for key priorities that benefit hardworking businesses and the whole economy. The TRAIN Law or Tax Reform for Acceleration and Inclusion; the amnesties on the estate taxes and delinquencies; and the increases in sin taxes to fund universal health care were passed with the support and contributions of PCCI chapters nationwide.
Your continued support for Sulong Pilipinas has also led to the enactment of several of this administration’s other far-reaching reforms, such as the National ID System, Universal Healthcare, Ease of Doing Business, and the Build, Build, Build program. These initiatives have strengthened our fiscal and economic position. We are better prepared now than at any point in recent history for “black swan events”, such as the COVID-19 pandemic that has put lives and livelihoods at serious risk.
These reforms helped us bring down our debt-to-GDP ratio to a historic low of 39.6 percent in 2019; build up our gross international reserves to an unprecedented 98 billion US dollars in July of this year; and improve our revenue stream to 16.1 percent of GDP last year—the highest in two decades. They have given us our highest-ever credit ratings; and rapidly brought down our poverty rate to 16.7 percent last year, compared to 23.5 percent when the President took over in 2016.
When the pandemic struck, we were able to quickly access emergency loans from our development partners and the commercial markets at very low rates and longer repayment periods. These loans have provided us a good amount of ammunition to fight the pandemic.
The government has been focused not just on saving lives from COVID-19, but saving lives from other factors, such as hunger and other diseases. While we continue to fight COVID-19, we have to rebuild our economy. Unemployment and reduced incomes due to the lockdowns have public health consequences, also.
Rebuilding the economy is a condition for ensuring public health. We cannot fight a pandemic with a weak economy; nor can we restore economic vigor without solving the public health crisis. The health of our people and the strength of our economy are mutually reinforcing.
While we know that economic recovery is not going to be a sprint, we do have the fiscal stamina for running this marathon. It is to our own advantage to keep our deficit within manageable limits so we can continue to access financing at terms that are favorable to the Filipino people.
We therefore thank the House and Senate bicameral committee for approving a fiscally responsible Bayanihan 2.
Our health response is front and center in Bayanihan 2. It provides funds to hire thousands of contact tracers and various forms of support for our medical workers. We will purchase safe and effective vaccines when they become available. But ahead of that and even beyond that, we will continue to intensify our public health response. Only a healthy people will ensure a healthy economy.
The World Health Organization recently assessed our efforts in strengthening our health capacity as highly effective in saving lives. The decisive move to implement strong lockdown measures also helped us avert an estimated 1.3 to 3.5 million infections according to researchers from our universities.
Continuous health system improvements are crucial for bringing back the confidence of our people in the new economy. If we can prevent the need for lockdowns and keep the virus at bay, the people can work, shop, and move around more freely as long as we all comply with the required health behaviors.
The infusion of capital in our government financial institutions will have large multiplier effects in economic activity. These interventions are cost-effective for the taxpayer, with every peso generating around 10 times of its value in credit available to businesses, both large and small. The capital infused in the banks will be used to support and protect the productive parts of our economy.
The Duterte administration will continue to work with Congress on our economic priority bills. In particular, we are pushing for the swift passage of the CREATE bill or Corporate Recovery and Tax Incentives for Enterprises Act that will provide an outright 5 percentage point reduction in the corporate income tax rate, from 30 to 25 percent, as soon as it is made effective.
We seek to allow banks to dispose of non-performing loans and assets through asset management companies similar to special purpose vehicles created in 2000 to deal with the effects of the Asian crisis.
We also support a legislative measure that will enable government banks to form a special holding company that will infuse equity, with strict conditions of course, into strategically important companies facing insolvency.
We seek to provide greater support to the agriculture sector by giving the banking system the ability to support the whole value chain of agri-enterprises through amendments to the Agri-Agra law.
We will keep working with the Senate and the House to get these bills passed and complete our economic recovery package.
Our strategy for recovery rests on sustaining the Build, Build, Build program. Investing in sound infrastructure has the largest multiplier effect in the economy. It creates jobs, fires up consumption, and spurs productive activity. It will help us rapidly decentralize our economy and cure the present vulnerability where the concentration of business activity is also the concentration of infections.
Even before the public health crisis, Visayas had already become a major growth center and contributor to our overall economy. Thanks to massive investment in infrastructure, we have witnessed rapid growth in various sectors in this area.
For instance, the Mactan-Cebu International Airport is now fully operational after its inauguration in 2017. Dubbed as the “World’s Friendliest Resort Airport”, its world-class architectural design has already won numerous international and local awards. In January of this year, its new second runway was inaugurated, which will further boost the airport’s operational capacity.
The neighboring Bohol-Panglao International Airport was inaugurated in 2018. This is the country’s first eco-airport and has become a gold standard for eco-technology.
The completion of big-ticket infrastructure projects are also underway.
Now 22 percent complete, the Bacolod-Negros Occidental Economic Highway will reduce the travel time from Southern Negros and Northern Negros to Bacolod-Silay Airport by 25 and 40 minutes, respectively, from about one-and-a-half hours. This is expected to be completed in 2024.
To increase interconnectivity across the Visayas islands, several bridge projects are in the pipeline. The largest is the 3.3-kilometer Cebu-Mactan Fourth Bridge, together with a 4.9-kilometer four-lane Coastal Road construction project. We just recently signed the loan agreement for this project with the government of Japan on June 16. This will create jobs in the Queen City of the South and dramatically improve movement of goods and people. Through the completion of this project in 2029, the travel time from Mactan-Cebu International Airport to Cebu Port Area will be reduced to 27 minutes from the current 44 minutes.
These developments underscore the commitment of the Duterte administration to move ahead with our Build, Build, Build program even amidst the global health and economic crisis brought about by the contagion. These investments will primarily fuel our plan to quickly and smoothly get back to our growth trajectory upon the defeat of COVID-19.
We know that beyond infrastructure, there are mounting socioeconomic concerns that require targeted, viable, and locally relevant solutions. On behalf of President Duterte, I am very pleased to accept your top actionable recommendations. These suggestions will be the building blocks of our sustained recovery efforts.
We value our strong and close partnership with the PCCI. This partnership will drive our reconstruction and recovery. This solidarity is our nation’s source of strength.
Thank you.
@@@
Copyright © 2021 Department of Finance