Finance Secretary Carlos Dominguez III told American business leaders that now is the best time to invest in the Philippines, given its vibrant economic prospects anchored on an unprecedented infrastructure buildup on the Duterte watch.
Dominguez said President Duterte’s “Build, Build, Build” program, which is a capital-intensive undertaking to be partly funded by the administration’s Comprehensive Tax Reform Program (CTRP), aims to modernize the country’s logistics backbone, attract investments and create more jobs.
“We are making the right investments, we are moving ahead,” Dominguez said in his recent meeting with members of the US-ASEAN Business Council led by its president and CEO Alexander Feldman.
Besides Feldman, also present at the meeting were Ambassador Michael Michalak, Senior Vice President and Regional Managing Director of the Council; Kim Yaeger- Director for ICT and Energy in Maritime Southeast Asia; Riley Smith- Senior Manager for Energy in the Philippines and Singapore; Elizabeth Magsaysay-Crebassa, Senior Representative, ASEAN-Philippines; and Evelyn Mariano, Representative, Philippines.
Representatives of US companies in Asia such as 3M, Citi, Coca-Cola, Emerson, Exxon Mobil, Fluor, Fod, IM System Group, Microsoft, Monsanto, PMFTC Inc., Uber, UPS and Visa also attended the meeting.
Feldman said they met with Dominguez to find out how American companies can support the Philippine government in carrying out its economic agenda.
In response to queries about the government’s economic priorities, Dominguez told the Council that in President Duterte’s recent State-of-the-Nation Address (SONA), the chief executive gave his unequivocal support not only for reforms in tax policy and administration, but also in running after bigtime tax cheats.
Dominguez informed them that the President has accepted the offer of a cigarette manufacturer to settle its tax iabilities for P25 billion, which will rise to P30 billion inclusive of the value added tax–the biggest settlement ever in the Philippines’ tax history.
Mr. Duterte also said that the case of the cigarette manufacturer, which is facing several criminal complaints before the Department of Justice for using counterfeit tax stamps, should serve as a lesson to others that his “administration will spare no one found cheating the government of its due.”
Dominguez has said that the Philippines’ benign interest rates, low oil prices, positive credit ratings, low debt-to-GDP ratio and its young, dynamic workforce are among the key factors that will help sustain robust economic growth beyond the medium term and entice investors to relocate here.
He also told American investors at the meeting that the government is currently reviewing its Foreign Investment Negative List to further liberalize and open more industries to foreign investors.
Dominguez said after the first package of the CTRP—the Tax Reform for Acceleration and Inclusion Act (TRAIN)–hurdles the Congress, the administration will propose other tax reform packages, which will include lowering corporate tax rates and rationalizing fiscal incentives.
“The (second tax reform) program on rationalizing fiscal incentives is going to be very targeted based on performance, and time bound like most tax systems,” Dominguez said.
When he was asked about the administration’s policies on reproductive health (RH) and government procurement procedures, Dominguez said that the President himself in his SONA called on the judiciary to aid the government in fully implementing the RH law and for the Congress to review existing procurement laws with the goal of expediting the delivery of basic goods and services to the people.
On the national ID program, Dominguez said that the government is considering it as a major component of its anti-red tape program.
“A number of legislation had been filed for that. Our goal is to have a national ID issued at birth. It will then be changed when one turns 18 and can be used for transactions. We are looking at the Indian model, which was done in two to three years,” Dominguez said.