May 14, 2020
Good afternoon, everyone, and welcome to the first-ever Sulong Pilipinas consultative workshop in an e-conference format. There are more than 100 schools from 97 campuses represented in this virtual meeting, from Luzon, Visayas, and, Mindanao. There are also more than 42 national youth organizations who are here with us. Thank you for being part of this historic event.
If you think about it, running an event called “Sulong” on an online service called “Zoom” augurs well for our country’s economic recovery. And I am very confident that the Philippines will bounce back from this crisis. This, we all know, will not happen instantly. But we are accelerating what needs to be done so that businesses come back online and Filipinos get back to work as safely and as soon as possible.
Let me express the hope–wherever you are in the Philippines right now–that you and your loved ones are staying well and healthy, given our unusual circumstances.
“Unusual circumstances” and “unprecedented times” are phrases you have probably already grown tired of. Perhaps they remind you that your education and your plans for the short-term have been rudely disrupted. We all empathize with each other.
At the same time, these phrases are a reminder of the evolving challenges we face as a country – and they imply that all sectors need to come together and engage in dialogue on reshaping public policy toward meeting the needs of Filipino families and businesses. Being responsive to these needs is even more important now, as we assess the damage ofCOVID-19 and what it has wrought on our communities and our commerce.
We are already seeing the pandemic’s effects on our economy, which shrank by 0.2 percent in the first quarter of 2020. This contraction of our GDP, the first in more than two decades, is largely explained by the quick imposition of strong lockdown measures designed to save lives and protect communities. While it is likely that next quarter’s economic results will be even worse, experts from the World Bank and Yale University have advised us not to focus too much on these quarter-to- quarter numbers. After all, and I’m sure you all know this: the pandemic is hurting the entire global community.
We need to focus on a smart combination of fundamental reforms and recovery measures to help ensure that we get the country back on its positive growth trajectory.
President Duterte’s prudent approach to fiscal management, which we have been implementing at the Department of Finance, the Department of Budget and Management, National Economic and Development Authority, and other agencies, has placed the Philippines in a position where we are better able to weather the impact of COVID-19 compared to any other time in recent history.
This includes a sovereign credit rating of BBB+, the highest in history; strong gross international reserves; low inflation and stable prices; and improved revenue flows from the comprehensive tax reform program. The passage of the Tax Reform for Acceleration and Inclusion or TRAIN Law, and sin tax increases on tobacco, alcohol, and e-cigarettes have enabled us to increase revenues and more ably respond to the pandemic. Even amidst the negative impact of COVID-19, the Economist magazine, in their April 30 issue, ranked the Philippines 6th out of 66 selected emerging economies in terms of fiscal strength.
This “saving-for-a-rainy-day” approach to economic management has gained for us the trust and confidence of the world’s most respected credit rating agencies and development partners, such as the Asian Development Bank, the World Bank, the Asian Infrastructure Investment Bank, among others, allowing us to borrow money at lower interest rates and longer repayment periods.
Our prudent approach to economic management has given us the fiscal space necessary to fund programs that will help us overcome COVID-19 and revive the economy.
One such program, implemented very shortly after the lockdown was imposed, is the DSWD’s Social Amelioration Program. At 205 billion pesos, it is the largest social protection program in the country’s history for 18 million low-income families and informal sector workers.
The DOF, the Bureau of Internal Revenue, and the Social Securty System are currently implementing a complementary program for formal sector workers. The Small Business Wage Subsidy Program, provides salary subsidies to the employees of small businesses whose operations have been disrupted because of the enhanced community quarantine. Through automation and harnessing the power of cloud computing, we have already credited more than 2.1 million accounts of vulnerable small business employees faster and more efficiently than similar programs that use manual processing. This is our way of helping small businesses retain their employees.
Moving forward, we have recommended to the President and the Cabinet a few priority actions to revive the economy while, at the same time, protecting the health and well-being of our citizens. These actions include the revival and acceleration of the Build, Build, Build program, subject, of course, to compliance with minimum health standards; and the massive hiring of contact tracers to boost our efforts to slow down viral transmission; we also need to attract foreign investors in search of resilient, high-growth economies like ours by passing Package 2 of the Comprehensive Tax Reform Program. We have proactively designed Package 2 to include flexible tax and non-tax incentives so we can better target companies.
To stimulate demand, we must promote the manufacturing of products that have strong, inelastic demand, such as food production and logistics, and support their whole value chains, from inputs to packaging and logistics. We need to help businesses, especially micro, small, and medium enterprises, and consumers weather the economic storm together.
These are some examples of how we are being responsive to the needs of our country today. We are empowered to do this, precisely because of our sustained efforts to engage with and understand our stakeholders – these efforts include the recently fielded online survey that received more than 44 thousand responses, and through platforms such as Sulong Pilipinas.
Participation and collaboration have always been at the heart of these consultative workshops since we first launched this series in 2016. Perhaps most importantly: we don’t just listen to your recommendations; we actively implement them. Sulong has resulted in game-changing reforms such as Build Build Build, the National ID System, comprehensive tax reform, the Ease of Doing Business Act and more recently, the Universal Healthcare Law and additional funding from sin taxes for its implementation.
Through multiple Sulong workshops over the years, we have been fortunate to see such strong engagement from the youth. This is why, last year, we held our first youth-focused Sulong Pilipinas at the University of Santo Tomas. Around 500 participants from over 40 universities and colleges joined us for an informative – and fun – day of working sessions, lectures, and panels.
That gave us insight into some of the policy items that the youth want government to prioritize, including development of the countryside; and support for science, technology, and innovation. They also recommended the support for the welfare of our indigenous peoples; and the establishment of continued dialogue through accessible policy communications.
We hope to see the same kind of dynamism today, though we are using a different format, as we continuously adjust to “unusual circumstances” during “unprecedented times.” Thank you for your active citizenship. We look forward to today’s meaningful discussions.
Thank you very much.
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