House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) who also co-chairs the House Ecomomic Stimulus and Recovery Cluster, says that the quick passage and rollout of the COVID-19, the corporate income tax and incentives reform bill, and the economic amendments to the 1987 Constitution under the Resolution of Both Houses No. 2 are the key pillars of the country’s short, medium, and long-term economic strategy.

“The recovery will enter three stages: short, medium, and long-term. The vaccine is our immediate-term intervention. So we need to get it out fast, before anything else. The Corporate Income Tax and Incentives Reform Act or CITIRA will be the short-to-medium term fix for investor uncertainty and private sector sluggishness. Finally, RBH 2 will shake the dormancy out of our rent-heavy sectors,” Salceda said.

“Actually, if you were to ask me, I would say RBH 2 is a thousand times more important than CITIRA. The problem with FDIs isn’t so much that we don’t give enough incentives. We do. The current investment priorities plan probably covers 70% of GDP. And we’re the only ASEAN country to give forever incentives through the gross income earned (GIE) incentive,” Salceda said.

“The problem really is that the door is closed to begin with. If you close the door to foreign investment, you should not be surprised that your market is domestic-led. And of course, domestic investments tend to be redundant, especially in a country of 110 million consumers, who will buy with or without incentives,” Salceda added.

CREATE/CITIRA to be enacted by January

“I expect CITIRA/CREATE to pass both houses by the end of this month. I have submitted my committee’s amendments to the Speaker for his final decision. I expect a discussion between the Senate President and the Speaker very soon, perhaps even tomorrow,” Salceda said.

“CITIRA is an instrument. It is not, by itself, a solution. It still depends on the investment promotion agencies to promote the country. I expect robust discussions with these agencies even after the bill is enacted into law,” Salceda added.

“RBH 2, on the other hand, is the strongest signal we could ever send to the world that we are open for business,” Salceda explains.

“The business community waited long enough, so I understand the frustrations of several groups. I just do not appreciate the tone that the House has not acted quickly upon the bill. First of all, the House approved the bill on September 2019. So, no intention to delay at all. Second, I vowed the House will immediately approve a fiscally responsible version. CREATE gives 17 years of incentives to domestic investors, when the current system only gives 6 years maximum. Of course, there would have been problems,” Salceda added.
“But we are working very hard to get it done by end of January. I submitted our committee’s final draft to the Speaker after two sleepless weeks of work. I promise the public and the Executive that fiscally, our version is more prudent and responsible,” Salceda emphasized.

Quick vaccine rollout key to economic recovery

Salceda cautions however that a speedy vaccine rollout will be the “cornerstone of economic recovery.”

“CREATE/CITIRA will be useless without quick vaccine rollout. We will be wasting government revenues unless we rollout the vaccines quickly,” Salceda said.

“If we face delays on vaccine rollout, the recovery will also be delayed. If we vaccinate faster than planned, recovery will be faster than expected. It is really very simple,” Salceda said.

Salceda is author of the Bayanihan sa Bakuna Act or House Bill No. 8285, which aims to reduce the barriers to speedy procurement, administration, and distribution of the vaccine. Salceda also wants LGUs and the government to invest in supply chain management for the vaccine.

“Storage will be key. Public confidence will also be essential. In many states in the US, the vaccines are not being rolled out quick enough, despite being already available, because either people do not want to be vaccinated, or the distribution chain is not available.”

Salceda is confident, however, that the country’s barangay system, which he says is among the only institutionalized village-level government systems in the world, will make vaccine distribution effective.

“We just need to make sure barangay health workers are properly trained and protected,” Salceda adds

“The framework will be simple. The vaccines will tell the world that it is safe to be in the Philippines. CITIRA/CREATE will tell them it is rewarding to invest in the Philippines. RBH 2 will tell them they are welcome to invest in the country,” Salceda explains.