SONA 2016: NATION MIRED IN POVERTY LOOKS FORWARD TO NEW LEADER’S SPEECH

Duterte raises hopes of the poor

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President Duterte

President Duterte

PRESIDENT Rodrigo Duterte sets the national agenda for the first time in his State of the Nation Address (SONA) today (Monday), confronted with the twin problems of poverty and unemployment despite record economic growth in the past few years.

Duterte has heightened the expectations of businessmen and policymakers with his no-nonsense attitude towards governance and the fight against corruption, but as he takes the rostrum during the joint session of Congress at the Batasang Pambansa, Filipinos look forward to concrete measures that will provide better-paying jobs and reduce the ranks of the poor.

But the emerging focus of policymakers and legislators is on political reforms such as a shift to a federal form of government and populist measures like the restoration of the death penalty to give teeth to the new government’s war against criminality and illegal drugs.

The legislative agenda, so far, deals with the central problems of poverty and joblessness only indirectly, analysts told The Manila Times.

“It is clear that the underlying philosophy behind the legislative agenda of the House is that once crime and law and order are addressed, poverty will follow,” political analyst Alfred Sureta of the University of Makati said.

The challenge for Duterte’s economic team is to craft a new Medium-Term Philippine Development Plan that will effectively address these “systemic” problems and outline the legislative measures needed, said Edmund Tayao, political science professor at the University of Santo Tomas (UST).

“We need to change the system and to come up with polices that will resonate. The previous administration had legislative priorities but they hardly made a dent,” Tayao said.

The Aquino administration failed to reduce poverty. Official data show that 26.3 percent or one out of every four Filipinos fell below the poverty line in the first half of 2015, the latest available data, hardly changed from 28.6 percent in 2009 before President Benigno Aquino 3rd took office.

Translated into headcounts, the number of poor Filipinos in 2015 stood at more than 26 million, about the same as in 2010.

Data also show slow progress in the jobs picture: 2.6 million Filipinos were unemployed in 2015, or an unemployment rate of 6.3 percent. In 2010, 2.9 million Filipinos were unemployed, or 7.3 percent of the labor pool.

The quality of jobs remains an issue: of those employed in 2015, only 59 percent received salaries, and 10 percent worked without pay, figures from the Philippine Statistics Authority show.

The urgency of these issues was evident in the recent Pulse Asia survey taken from July 2 to 8, which showed that most Filipinos want the Duterte administration to prioritize three economic issues—controlling increases in prices (68 percent), creating employment opportunities (56 percent), and crafting new pro-poor programs (55 percent).

Other national concerns included loan grants to small entrepreneurs and the self-employed (23 percent), a program to address the government’s debt problem (17 percent), and pursuing peace negotiations with different armed groups (17 percent).

Curbing criminality was only the fourth top concern among Filipinos at 48 percent.

Filipinos meanwhile believe the least priority should be given to forging a government of national unity (9 percent), and amending the Constitution (7 percent).

Legislative agenda
Measures that will address poverty and create jobs are not reflected, at least not yet, in the emerging agenda of Congress.

Davao del Norte Rep. Pantaleon Alvarez of PDP-Laban, Duterte’s choice to become House Speaker, wants three measures enacted into law within a year: overhauling the Constitution to shift to a federal government, restoring the death penalty, and lowering the age of criminal liability to nine years old from 15.

Under a federal government, each of the country’s 16 regions will be self-governing.

“That’s the three we have so far. We will work hard to ensure that this all can be done in a year. The majority coalition has a lot of members, and we expect them to support the bills that the administration wants passed,” Alvarez said.

Camarines Sur Rep. LRay Villafuerte of PDP-Laban shared Alvarez’s sentiments.

“The onset of the Duterte presidency is the perfect time to push for a Constitutional Convention because President Duterte has no political agenda and he is being trusted by more than 90 percent of Filipinos,” Villafuerte said in a statement.

Alvarez is committed to supporting the Duterte administration’s anti-crime stance through the restoration of the death penalty, amid an ongoing battle against illegal drugs that has claimed the lives of more than 300 suspects, killed by either the police or vigilantes.

“We need to put teeth in our criminal justice system, and I believe that this will deter crime,” the presumptive Speaker said of anti-crime bills set to be tackled by the House.

Tayao said the current legislative priorities did not mean that the Duterte administration won’t seek to address poverty and unemployment, however.

“I want to see what [Duterte] intends to achieve for the country six years from now,” Tayao said.

‘Reduce tax to reduce poverty’
Analysts have said constitutional changes could help create new jobs through the lifting of the 40 percent foreign ownership cap.

The move is expected to stimulate foreign direct investments, an area where the Philippines lags behind the rest of its neighbors in Southeast Asia.

But overhauling the 1987 Constitution could take at least two years, as Congress still needs to deliberate on a resolution calling for a Constitutional Convention, whose work could be dragged by debates.

The new charter will also have to be subjected to a plebescite.

One House measure that could increase disposable incomes of low-income families in the short term is the proposed reform in personal income tax rates, which was rejected by the Aquino administration.

Marikina Rep. Romero Quimbo said reducing poverty could start with reducing tax rates through restructured income tax brackets. The measure will amend the National Internal Revenue Code for the first time since its passage in 1997.

With the restructuring, a public school teacher earning P241,137 annually will pay P9,935 in taxes, instead of P14,231 under the current tax table.

Quimbo proposes seven tax brackets wherein those earning P21,613 and below annually will pay just a 5 percent tax rate; those earning P21,613 to P64,839 will pay only P5,402 plus 15 percent of the excess of P21,613; those earning P151,290 to P302,581 will pay P18,370 plus 20 percent of the excess of P151,290; those earning P302,581 to P540,323 will pay P48,628 plus 25 percent of the excess over P302,581; and those earning P540,323 to P1,080,645 will pay P108,063 plus 30 percent of the excess over P540,323.

Finally, those earning more than P1,080,645 annually will pay the highest rate – P270,160 plus 32 percent of the excess over P1,080,645.

“This will reduce the tax burden of more than six million Filipino workers. Under the current system, only 16 percent of 22 million workers serve as the milking cow of BIR (Bureau of Internal Revenue),” Quimbo, a former chairman of the House Committee on Ways and Means, said.

Department of Finance spokeswoman Paola Alvarez said in a recent television interview that the reduction in personal income tax rates, among other tax reform measures, has the backing of the Duterte administration.

The Finance department wants to raise revenues to fund new expenditures such as hiking the salary of the police and the military.

One such measure is the imposition of taxes on sweetened beverages, which will also help prevent obesity and diabetes.

Senator Aquilino “Koko” Pimentel 3rd of PDP-Laban, who is expected to become Senate President, supports the tax reform plan.

“I am hoping to hear the President’s priority legislations in his SONA because this is where he would need Congress’ cooperation. I am hoping to hear his push for tax reform, as well as the continued fight against drugs, crime and corruption,” Pimentel said in an interview.

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5 Comments

  1. Benny Inventor on

    I believe in th power of political will to change, the implementation of the rule & no one is above on it, no political and personal interest would arise i believe we could survive in every challenges and people would feel the safety and see a difference in their living. God bless Pres. Duterte in your cause to uplift the living of Filipinos.

  2. CARLOS BARTOLOME on

    reducing tax rates???? anybody could tell me how much REVENUES/TAX COLLECTIONS WILL GO DOWN. sino ang tatamaan sa pagbaba ng revenue????

  3. Only problem I can see is this. The country will be divided into about 12 self governing region. Each region will have their own Governor, and their own legislative body. Each will be collecting their own taxes. Can this work fine in a country that has Political dynasty on the role. Are they gonna have their own Police Department? How is National Government going to control this 12 regions?

  4. It is very clear that the Aquino economic growth was felt only by the rich. Per SWS survey, the poor did not see the effect of the so called economic growth. Pnoy cannot get the praise for the growth. He did not do anything. He is just a big joke.