In observance of the Holy Week, the Philippine News Agency’s online news service will be off on March 29, Good Friday, and March 30, Black Saturday. Normal operations will resume on March 31, Easter Sunday.

— The Editors

Salceda pushes fiscal, structural reforms for 'A' credit rating

By Mar Serrano

August 14, 2019, 6:01 pm

<p>Albay Rep. Joey Sarte Salceda.</p>

Albay Rep. Joey Sarte Salceda.

LEGAZPI CITY -- Unless Congress amends the 83-year-old Public Service Act and introduce fiscal and structural reforms, it would be hard for the country to get a class “A” credit rating and be competitive in the global market, a Bicol solon said on Monday.

Albay Rep. Joey Sarte Salceda, House Ways and Means Committee chair, said President Rodrigo Duterte is determined to secure an “A” credit rating for the country by leveling up the fiscal reform momentum and priority legislations, which are designed to make the Philippines more competitive.

He said amending the old Public Service Act by putting up structural and fiscal reforms would secure the country an “A” credit rating.

He explained that the needed structural reforms would be in the form of infrastructures, faster internet, lower power costs, ease in doing business and tax reforms, which would make the country competitive in the global market.

“Getting an ‘A’ credit upgrade means lower interest expenses and lower risk premium for investing or lending to the Philippines, its government and its enterprises. A competitive Philippines means comfortable life for all and a better future for the next generation,” he explained.

Recent fiscal reforms have led to a credit rating upgrade from the agency Standard and Poor -- BBB+ from BBB, showing a strong vote of confidence to Duterte’s reform agenda.

Salceda, in an e-mailed statement to the Philippine News Agency, said TRAIN 2 or the Tax Reform for Attracting Better and High-Quality Opportunities (Trabaho) Bill, now called Corporate Income Tax and Incentives Reform Act or CITIRA, which is a certified priority legislation, will pass renewed scrutiny even if it reduces revenues and has a fiscal impact of negative five (on a scale of 1 to 10), but bears a positive structural impact of 10.

CITIRA, which was originally crafted by Salceda as a tax incentive for business, aims to reduce the corporate income tax from 30 percent to 20 percent by 2029, or 2 percent every two years.

He said the bill, once passed into law, could generate 1.4 million jobs within the same period.

He said passing CITIRA, the second package of the government’s comprehensive tax reform program, is meant to transfer the dynamism of the economy back to the private sector and make the country competitive with the rest of the world.

While it lowers the corporate income tax rate, it also modernizes the incentive system by granting superior incentives to companies who create quality jobs, train their people, invest in research and technology, and invest in less developed areas or places recovering from calamity or armed conflict, and urges the private sector to contribute to the future of the next generation of Filipinos.

“It’s all about love of country. You must learn to contribute and share for the sake of the next generation ... that’s how simple [TRAIN] package 2 is,” he said.

Salceda stressed that through the active partnership between Congress and the country’s economic managers, the country can take the truly needed economic direction to further boost investment and fetch an ‘A’ credit rating for the country in two years.

The success of teamwork in the Duterte administration could be summed up in two indicators: high growth rate of 6.2 percent in 2018 and falling poverty rate from 27.6 percent in the first half of 2015 to 21 percent in the first half of 2018, lifting six million Filipinos out of poverty, said Salceda, a noted economist. (PNA)

Comments