The economy could grow by 6 percent next year if the public-private partnership (PPP) program is improved and constitutional reforms that will make it easy for foreigners to invest are implemented, a former Cabinet secretary said.
Speaking at a Philippine Futuristics Society forum, Philippine Veterans Bank Chairman and former Finance Secretary Roberto de Ocampo outlined reforms that need to be implemented as a new administration steps in next year.
“The anticipated decline in infrastructure projects next year may outweigh the increase in public spending during the election period,” de Ocampo said. “The next administration should focus on improving public-private partnerships as the centerpiece of infrastructure.”
“Easing the entry of foreign direct investments is likewise essential to the economy,” he added.
De Ocampo said he was hoping for an increased effort with regard to transportation PPPs, which he said would create magnet cities and increased employment.
“We have transport but we don’t have a system. Improvements in public transportation shouldn’t be so narrow-minded. It’s not just about easing traffic, we have to look at the bigger picture and see how proper infrastructure can hit several objectives,” he said.
He also cited the importance of an adequate internet infrastructure, particularly enhanced broadband connectivity, to encourage the entry of global companies.
“We have a top-class BPO [business process outsourcing]industry and we’re the world’s texting capital. Companies that can bring us thousands of jobs want to base their operations here. We need faster broadband connections to be able to properly accommodate them,” de Ocampo said.
He claimed the business community was one in calling for constitutional reforms to liberalize the entry of foreign direct investments in a bid to integrate the Philippines with the rapidly expanding and interdependent global society.
While a slowdown in China has led to a decline in Philippine exports, de Ocampo said a resurgent US economy would provide a mitigating factor. The peso, he added, could hit P47.50 per dollar in the wake of an expected US interest rate hike.
Reforms in other key sectors were also highlighted. De Ocampo said land redistribution efforts would be effective only tandem with increased farm productivity, thus the government should shift its focus from ownership to output.
The mining industry, meanwhile, was said to have stagnated due to complicated policies. He expressed dismay over lost investments and urged the next administration to seize the opportunity presented by mining corporations that remain interested in investing.
De Ocampo also proposed changes to the current tax system, advocating lower income taxes while expanding the tax base.
“My philosophy with taxes is to always keep it simple. Complicated systems can be taken advantage of by tax evaders. Tax brackets should be simplified and taxes should be adjusted to compete with our Asean (Association of Southeast Asian Nations) neighbors,”
said de Ocampo, who added that he favored expanding the value-added tax coverage to compensate for lower income taxes.