Camarines Sur Representative LRay Villafuerte has supported the call by economic managers for Congress to focus on “doable” legislation to attract foreign direct investments (FDIs) and accelerate economic recovery, as he fretted that the revival of the Charter Change (Cha-Cha) initiative at this time would only sidetrack national efforts to overcome the coronavirus pandemic and save sectors in distress.
While he has long been a Cha-Cha advocate, Villafuerte said “now is the wrong time to pursue this politically sensitive and potentially divisive issue as it would only deflect national attention from the principal concerns of Covid-19 response and economic recovery.”
“Now is the wrong time to pursue this politically sensitive and potentially divisive issue as it would only deflect national attention from the principal concerns of Covid-19 response and economic recovery.”
“Charter Change should have been done yesterday,” said Villafuerte. “Amid the health and economic crises now sweeping across the globe, we should keep our focus on the Covid-19 vaccine program, which will be the only way of putting any semblance of normalcy back into our lives.”
“Right now we are just catching up with other countries that have already rolled out their mass vaccination programs,” he added. “The Congress and all other sectors should work together with Malacañang in making sure that we are able to acquire sufficient vaccines at a reasonable cost soon enough, and that the government could deliver on its commitment to inoculate some 70 million Filipinos before the year is over.”
Villafuerte said lawmakers should also help carry out an information blitz in their respective districts amid the apparent low public support nationwide for the Covid-19 immunization program.
According to a Pulse Asia survey done on Nov. 23 to Dec. 2, 2020, 95 percent of Filipinos were aware of the development of the vaccines, but only 32 percent were willing to be inoculated and 47 percent were not. The remaining 21 percent were undecided.
An earlier survey by Social Weather Stations (SWS) last September, meanwhile, showed that a majority of Filipinos (66 percent) were willing to get inoculated and 31 percent were unwilling. Public trust and confidence in vaccines waned following the Dengvaxia controversy.
Alongside Covid-19 response, Villafuerte said the nation’s focus should also remain at this point on accelerating economic recovery and regaining the economy’s pre-Covid growth momentum.
“This has acquired greater importance,” he said, “amid the bleak forecasts by multilateral and international institutions that it will be a slow recovery for the Philippines as a result of the economic scarring from last year’s stringent lockdowns and the relatively smaller amount that the government has spent on reviving the economy when compared to those allocated by many of our Asian peers.”
Villafuerte said the government actually has enough resources to supercharge the economy this year with the timely approval of the 2021 General Appropriations Act (GAA) and the extension of the validity of the GAA 2020 and the Bayanihan 2 law in place.
“Let us not squander this opportunity for a quick and strong rebound by turning national attention to a counterproductive Cha-Cha,” said Villafuerte, who co-authored the Bayanihan 1 and 2 laws as well as the laws extending the validity of the unspent funds under the 2020 GAA and Bayanihan 2.
Villafuerte agreed with Secretary Carlos Dominguez III who said at a Tuesday hearing of the House committee on constitutional amendments that the Congress can help speed up economic recovery by passing the proposed Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) and the Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery (GUIDE) Act as stimulus packages.
“Let us not squander this opportunity for a quick and strong rebound by turning national attention to a counterproductive Cha-Cha.”
Dominguez said the approval of these measures should be complemented by the congressional passage of pending bills to make the economy more attractive to foreign investors, particularly the amendments to the Foreign Investment Act (FIA), Retail Trade Liberalization Act (RTLA) and the Public Service Act (PSA).
Trade and Industry Secretary Ramon Lopez similarly batted for the passage of the proposed FIA, PSA, and RTLA during the same House committee hearing.
“These bills should be our doables this year in lieu of Cha-Cha,” Villafuerte said in expressing support for the swift congressional passage of CREATE and GUIDE along with the bills amending the FIA, RTLA and PSA to make the Philippines a more attractive hub for foreign investors.
He pointed out that Cha-Cha will not actually bring about immediate reform that could help in the ongoing recovery efforts because the current proposal does not directly give Congress the power to quickly relax certain constitutional restrictions.
As pointed out by the proponents of the Resolution of Both Houses (RBH) No. 2, Villafuerte said that the current proposal in the House to lift prohibitive economic provisions in the Charter would ultimately be decided by Filipinos in a plebiscite come May 2022 yet.
In contrast, said Villafuerte, “the pending economic bills meant to stimulate the economy and ease restrictions on foreign participation in local businesses would, once passed and enacted into law, usher in immediate reform that would help hasten economic recovery and transform the Philippines into a magnet for FDIs in the region.”
CREATE, for instance would reduce the corporate income tax (CIT) for micro, small and medium scale enterprises (MSMEs) from the current 30% to just 20%, thus becoming the biggest stimulus ever for businesses, said Villafuerte who co-authored the House-approved version of this bill.
The hefty CIT cut as proposed by CREATE will be essential to economic recovery, he said, considering that MSMEs comprise 99% of local enterprises and employ almost 70% of the country’s workers.
On the other hand, he said, the necessary amendments to the FIA, RTLA and the PSA—as endorsed by Secretaries Dominguez and Lopez—would immediately ease the restrictive economic rules for foreign businesses and thus encourage overseas investors to at once set up shop in the Philippines or expand their current enterprises here.
“Despite the Philippines’ image as one of Asia’s fastest-growing economies before the Covid-19 outbreak and its excellent investment-grade credit ratings, FDIs inflows have remained relatively low because of the protectionist policies that have been deal breakers for prospective investors,” Villafuerte said.
Villafuerte said Cha-Cha will only polarize the nation, especially in the wake of concerns that this move might just be a political ruse by certain pro-administration groups to lift the term limits of elective officials.
He cited the strong opposition voiced against Cha-Cha in the ongoing House committee hearings by at least 10 business groups led by the Makati Business Club (MBC) and Philippine Chamber of Commerce and Industry (PCCI), which said that “introducing any charter change…before presidential elections will only raise fears that other constitutional changes, some of which may be highly controversial, may be introduced and passed.”
The other big groups opposing Cha-Cha are the Financial Executives Institute of the Philippines (FINEX), Filipina CEO Circle (FCC), Investment House Association of the Philippines (IHAP), Judicial Reform Initiative (JRI), Management Association of the Philippines (MAP), Philippine Retailers Association (PRA), Philippine Women’s Economic Network (PhilWEN), and Women’s Business Council Philippines (WomenBizPH).
He said the opposition by the country’s major business organizations to Cha-Cha already shows how this political issue is a highly divisive one that will only polarize the nation at this time of the pandemic.