At a meeting of the government’s cabinet officials to prioritize the cabinet’s legislative proposals, Finance Secretary Cesar Purisima put forward a list of proposed bills to answer key economic concerns of both the government and private sector. The meeting will result in a list of measures which the executive branch will propose for legislative action at the start of the 16th Congress on July 22, coinciding with President Benigno S. Aquino III’s State of the Nation Address.
Purisima presented nine (9) priority measures of the cabinet’s Economic Development Cluster, namely: Amendments for the Build-Operate –Transfer Law or RA 7718, the Rationalization of the Mining Fiscal Regime, the Rationalization of the Fiscal Incentives Law; the Tax Incentives Monitoring and Transparency Act (TIMTA); and the Customs Modernization and Tariff ACT (CMTA).
Also included: Amendments to the BSP Charter; and further Amendments to the Anti-Money Laundering Act; the Removal of Investment Restrictions in Specific Laws cited in the Foreign Investment Negative List (FINL); Amendments to RA 8974 otherwise known as the Act to Facilitate the Acquisition of Right-of-Way, Site or Location for National Government Infrastructure Projects and For Other Purposes; and Amendments to the Cabotage Law.
According to the finance chief, amendments in the BOT law will accelerate the PPP program by directly addressing obstacles and issues encountered in implementation.
“We propose to amend the inclusion of other PPP modalities such as joint ventures, concession and management contract, and enhancing provisions on unsolicited proposals including the conduct of competitive challenge. We also need to make sure that the PPP Governing Board is properly accounted for in legislation. These measures will make sure that the lessons we learned from our PPP experience are institutionalized,” said Purisima.
The Finance department and the National Economic Development Authority (NEDA) will also discuss together with the Department of Trade and Industry how to make the country’s fiscal incentives system more efficient, citing to repeal an initial of 26 special laws with tax incentives provisions that may be contributing to wasteful tax incentives estimated at 1% of GDP, according to a World Bank survey. Purisima says that a monitoring and accountability mechanism through the TIMTA bill will effectively account for the utilization of public monies, including monies that are “spent” through the grant of tax incentives to businesses and activities.
“The Investment Promotion Agencies (IPAs) and Other Government Agencies (OGAs like CDA) granting tax incentives should submit their annual tax expenditures to the DOF, and DOF will prepare an Annual Tax Expenditure Report that will be part of the BESF and reported to the President and to Congress. This will enhance our ability to track the incentives that government gives out and properly evaluate which incentives most effectively spur development,” added Purisima.
Purisima, as Secretary of Finance, leads the Economic Development cabinet cluster with the NEDA as its secretariat. The members include the secretaries of NEDA, Department of Agriculture (DA), Department of Budget and Management (DBM), Department of interior and Local Government (DILG) as well as the Departments of Trade and Industry (DTI), Public Works and Highways (DPWH), Transportation and Communications (DOTC), Energy (DOE); Science and Technology (DOST), and Tourism (DOT).