Group urges government to take advantage of US-China rift.
Group urges government to take advantage of US-China rift !-- -- Czeriza Valencia (The Philippine Star) - May 21, 2019 - 12:00am MANILA, Philippines The Foundation for Economic Freedom (FEF) is urging government to undertake a series of economic reforms to enable the country to lure China-based investments amid a worsening US-China trade war. US President Trump recently raised tariffs on $250 billion worth of Chinese imports to the US to 25 percent, a sign the trade conflict between the world's top two economies will not end soon.
As a result of the escalating trade battle, many companies with factories based in China are seeking to relocate their investments to other countries to avoid being hit by punitive tariffs on exports to the US. "We are urging the Duterte administration to seize an opportunity provided by the worsening US-China trade war to luring factories now based in China to the Philippines," said the FEF, a group of top economists, former government officials and prominent members of the business community.
"Luring these factories to the Philippines will greatly boost manufacturing, result in much needed technology transfer, and increase and diversify our exports," it added. FEF said the Philippines could become an alternative destination for thousands of companies seeking to avoid the US-China trade war because of its highly-skilled and English-speaking workforce.
"However, the Philippines will have to do a lot of things to lure these factories in large numbers," it said. The organization thus urged the immediate passage of the TRABAHO bill to remove the uncertainty about the tax regime on fiscal incentives and corporate income taxes.
But at the same time, FEF supports the retention of incentives for labor-intensive industries. "We support the rationalization of fiscal incentives and the lowering of corporate income taxes under TRABAHO, but we also support the retention of incentives for footloose and labor-intensive industries," it said.
FEF also urged the swift issuance of the implementing rules and regulations of the Ease of Doing Business Act to set the law in motion and pave the way for the establishment of the Anti-Red Tape Authority. The law will simplify procedures and establish timelines in securing permits and transactions with the government.
It is also encouraging a "serious" and quick implementation of the government's Build Build Build program to address the country's infrastructure deficiency. "Our creaky infrastructure, from ports to roads, make doing business in the Philippines costly and inefficient," FEF said.
It recommends that the government shift to the use of public-private partnership (PPP) mode of project delivery where feasible, but undertake projects under official development assistance (ODA)) or General Appropriations Act (GAA) when there is no incentive for private participation. It said the government should also quickly make a decision on the rehabilitation and expansion of the Ninoy Aquino International Airport and the Davao airport by private companies.
However, FEF discourages the passage of the Security of Tenure bill, also known as the Ending ENDO bill, which is pending in the Senate. With Ding Cervantes