Gov’t zeroes in on investment curbs

November 11, 2016 at 10:36

Gov’t zeroes in on investment curbs

By Marifi S. Jara, Provincial Bureau Chief | Posted on November 09, 2016

DAVAO CITY — Lifting foreign investment restrictions and fast-tracking public infrastructure projects are among steps the Duterte government will immediately take as it sets out to get 1.5 million Filipinos out of poverty annually until 2022, the Finance chief said yesterday.

Speaking at the Philippine Development Forum (PDF) 2016 at SMX Convention Center here, Finance Secretary Carlos G. Dominguez III said, “there is a window that is opening” in May 2017 where the government can “administratively remove” certain restrictions.

Mr. Dominguez did not spell out what these possibilities are but assured his audience of multi-sectoral decision-makers — including representatives of foreign business chambers — that “whatever we can do administratively, we will do.”

The Philippine Competition Commission (PCC) is working on a study that will include recommendations on how to ease foreign business restrictions.

PCC Chairman Arsenio M. Balisacan announced in a news conference in September that the initial assessment will be ready by the end of the year and will be used for drafting the Philippine Development Plan (PDP) 2017-2022.

The two-day forum here is likewise intended to gather inputs for the PDP 2017-2022 from leaders of the business sector, representatives of national and local governments, development partners, academe and civil society organizations.

“The overarching goal of this administration’s reform program is the reduction of poverty by about 8% over the medium term. Each year, we aspire to liberate 1.5 million Filipinos from misery. The reduction of poverty will be made possible by maintaining an annual GDP (gross domestic product) growth rate of at least 7%,” Mr. Dominguez said.

The government targets GDP to grow 6-7% this year from 2015’s 5.9%. This year’s 6.9% first-half expansion hovers right below the top end of that full-year target.

The government then hopes to prod GDP to grow by 6.5-7.5% next year, speeding up to a 7-8% clip annually from 2018 to 2022, when the current administration steps down.

Mr. Dominguez also said the Executive will propose to Congress, “probably” by Jan. 2017, legislative amendments that will give more room for foreign investments.

He cited as an example the restriction on foreign participation in rice and corn operations, including warehousing, that are key segments of the country’s agriculture sector that accounts for a third of the country’s jobs but contributes only a 10th to GDP.

At the same time, Mr. Dominguez acknowledged the protracted nature of legislation, saying: “In Congress, I cannot guarantee the timetable there.”

In the same forum, Socioeconomic Planning Secretary Ernesto M. Pernia reiterated earlier pronouncements that the government will be aggressive in rolling out infrastructure projects to induce economic activity.

“We are moving projects rapidly,” Mr. Pernia said, citing that seven projects are up for approval next week by the National Economic and Development Authority (NEDA) Board, which is led by President Rodrigo R. Duterte.

The NEDA Board has so far approved nine projects since Mr. Duterte assumed office on June 30, including the development of airports and land transport, enhancing agricultural competitiveness and health facilities.

Public infrastructure spending is proposed to increase 13.79% to P860.7 billion equivalent to 5.4% of GDP under the P3.35-trillion 2017 national budget that has just cleared the House of Representatives and is about to be taken up in the Senate from P756.4 billion, or 5.1% of GDP, this year.

“The investments to be made will most likely generate job opportunities and these investments in infrastructure and human capital will attract more businesses which will further lead to more jobs,” Mr. Dominguez said.

Mr. Pernia also said the moratorium on land conversion will soon be modified to cover only those “suitable for agriculture.”

Following discussions among Cabinet members, Mr. Pernia said they have agreed on the common concern that a blanket moratorium will have a negative impact on infrastructure and housing development as well as on growth of the agro-industrial sector.

Mr. Pernia said they are confident that “there are enough safeguards against inappropriate conversion” to balance a limited moratorium.

Mr. Pernia also said that the administration’s socioeconomic agenda is not just 10 points but “0-10,” with 0 referring to the peace and order situation.

Jesus G. Dureza, the Presidential Adviser on the Peace Process, pointed out that the peace process and development projects will have to be simultaneously pursued although he acknowledged that this could prove to be a “chicken-and-egg” situation.

“Businessmen do not want to invest in conflict-affected areas,” said Mr. Dureza, who is co-chairman of the PDF. But at the same time, he rallied forum delegates to “invest for peace.”

Mr. Dominguez said: “The high growth rate will not be enough if it is not inclusive.”

“We have seen in the past few years that our economy — while posting healthy growth — made the rich richer and the poor poorer,” he added.

“We seek to alter that pattern through public investments in human capital and policy changes to more evenly distribute created wealth.”