NEARING the final assessment on the accomplishments and failings of the Duterte administration, Finance Secretary Carlos Dominguez is faced with the challenge of whether to give a passing grade or not on the economic aspect of this dispensation.
In his recent talk with businessmen, Dominguez was optimistic and even loose with praise for his team, saying the President will leave Malacañang with several economic liberalization measures in place, and these will definitely push the nation forward in the coming years.
Tax reforms have been mentioned by the finance secretary as a strong area of gains for Duterte. He said the Digong presidency is the only administration in the country’s history that was able to decisively pass and implement the most comprehensive tax reform program ever.
The first comprehensive tax reform program package — the Tax Reform for Acceleration and Inclusion (TRAIN) Law — reduced personal income taxes for 99 percent of workers, giving them much-needed relief after 20 years of non-adjustment.
The second — the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act — became the largest economic stimulus program for businesses by drastically reducing corporate income taxes and finally modernizing the fiscal incentives system. While it is true that the CREATE Act benefited certain businesses, the law also negatively affected others, something that Dominguez glossed over.
While Dominguez touted that the next administration will inherit a slew of “hard-won” reforms, it is well to judiciously examine these measures to guide the next administration on deciding whether to retain them or tweak some parts. Dominguez listed these reforms as the following: comprehensive tax reform program (CTRP), the flagship Build, Build, Build infrastructure modernization, “sin tax” reform, rice tariffication, a national identification (ID) system and the Ease of Doing Business (EODB) law.
We can cite as an example the rice tariffication policy, which is now a law. Both pro-Duterte and anti-Duterte lawmakers and candidates have been pointing out the inadequacies of rice tariffication, with Sen. Panfilo Lacson and former agriculture secretary Manny Piñol saying that it has not reduced the prices of rice in the market, and has not made a dent in improving productivity of farmers. Dominguez is banking on the amendments to the Retail Trade Liberalization Act (RTLA), which has been enacted, and the respective amendments to Foreign Investments Act (FIA) and the Public Service Act (PSA), which are expected to be signed into law by the President soon. If such a passage is made, then the finance secretary’s bright expectations might be in order.
