Public Private Partnership (PPP) and digitalization are keys to the country's macro fiscal stability, according to Finance Secretary Benjamin E. Diokno.
This was emphasized by Diokno in his keynote to the Chinese Filipino Business Club Inc. (CFBCI) Forum on Wednesday, April 19, at the Century Park Hotel.
Physical connectivity, via public-private partnership (PPP), as well as digitalization, along with laws upholding a fairer, simpler and more efficient tax system, are keys to this model, he underscored.
"We need a functioning PPP framework via the new implementing rules and regulations of the Build-Operate-Transfer (BOT) Law which determines the real cost of the project to the government, consumers, and taxpayers," the Finance Secretary pointed out.
The two economic pillars are contained in the country's Medium-Term Fiscal Framework, the first ever of its kind in the Philippines, serves as the country's roadmap to macro-fiscal stability and achieve its targets by 2028.
"Using the PPP mechanism, we will tap into private resources and technical expertise to accelerate infrastructure development and spur job creation in the most cost-efficient manner."
Diokno cited the recent National Economic Development Authority (NEDA) Board-approved 194 high-impact Infrastructure Flagship Projects valued at P9 trillion ($163 billion).
Among the projects are three priority bridges crossing the Pasig-Marikina River and Manggahan Floodway with funding from the Government of the People’s Republic of China.
Diokno updated the Chino Filipino Business Club members that in January this year, the DOF and China Eximbank signed four loan agreements to finance priority bridges to be implemented within four years.
These include the North and South Harbor Bridge, the Palanca-Villegas Bridge, and East-West Bank Bridge 2.
The mixed US Dollar and Renminbi currency financing worth $202 million was the first set of loan agreements signed by the Marcos Jr. administration.
"Aside from physical connectivity, we are also working to upgrade our digital infrastructure," according to Secretary Diokno.
"The pandemic has made it clear that traditional ways of doing business will not survive the industry of tomorrow " he maintained.
"Digitalization will be the key to a resilient and sustainable economic model, a modern and efficient tax administration, and a transparent, high-functioning bureaucracy."
"We are happy to report that Package 3 or the Real Property Valuation and Assessment Reform Bill, Package 4 or the Passive Income and Financial Intermediaries Taxation Bill, and the Ease of Paying Taxes Bill are all set to be taken up by the Senate this year," he told the CFBCI forum.
First, the new Retail Trade Liberalization Act opens up local retail sector to foreign investors by lowering the minimum paid-up capital requirement for foreign retailers wanting to locate in the country from $2.5 million to half a million US dollars.
Meanwhile, the amended Foreign Investments Act provides flexibility and transparency in reviewing the Foreign Investment Negative List.
"In a few months’ time, the government is coming up with the shortest Foreign Investment Negative List yet. This reflects our desire to open up more sectors to foreign participation," he announced.
The government has also amended the 90-year-old Public Service Act. The aim is to open up key sectors like telecommunications, airports, shipping, and toll roads, to full foreign ownership.
"Just two weeks ago, the implementing rules and regulations of the amended PSA finally took effect," Secretary Diokno noted.
"Also in a recent Supreme Court decision, we have opened up renewable energy to foreign participation, so investment in solar, wind, tidal energy sources is open for foreign participation."
"Introducing new players into these industries will bring about much needed competition which will increase the quality of public services at more affordable prices," he maintained.
Furthermore, the Philippines has also officially joined the largest trade deal in the world: the Regional Comprehensive Economic Partnership (RCEP).
"This landmark agreement will create a free trade zone covering about 30 percent of the world’s gross domestic product, trade, and population."
"And with the Philippines and China as co-members, we look forward to more trade and economic opportunities with the Chinese business community in the years to come," he said.
"In this post-pandemic world, cooperation could spell the difference between stagnation and progress," he concluded.