Hotel owners group chief backs tax reforms

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The president of the largest organization of hotel and resort owners nationwide is supporting the proposed Comprehensive Tax Reform Program (CTRP) as this would guarantee the implementation of the government’s infrastructure buildup that is crucial to sharpening the competitive edge of the tourism sector.

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Addressing the country’s infrastructure gap is key to meeting the fast-growing demand for transport facilities and other infra-related requirements in the tourism sector, which is targeting 12 million foreign tourists by 2022, said Arthur Lopez, who heads the Philippine Hotel Owners Association (PHOA).

“For our association, it’s very important that we have this (tax) reform. Personally, I’m endorsing it because we need the infrastructure–the ports, roads, railways and other facilities which the tourism industry depends on,” Lopez said.

“The government said that we are expecting 12 million [foreign]tourists in 2020 or 2022. And how will they go to our resorts? The bridges, the railways, the ROROs [roll-on, roll-off vessels] need to be developed,” Lopez noted.

The PHOA represents major hotel and resort establishments nationwide.

Its members include owners or owners’ representatives of the Amanpulo, Anya Resort, Aurum Hotel, Baguio Country Club, Bayview Plaza, Club Punta Fuego, Dusit Thani, Fairmont Makati, Friday’s Boracay, Grand Hyatt Fort, Henann Boracay, Heritage Manila, Hotel 101, Island Cove Cavite, Linden Suites, Manila Hotel, Marriott Manila and Travellers Intl complex, Movenpick Mactan, New World Hotels-Makati and Manila Bay, Novotel Hotel, Oakwood Premier, Okada Manila, Pan Pacific Hotel, Plantation Bay Cebu, Raffles Suites, Sofitel Philippine Plaza, Solaire Resort and Casino, Vivere Suites, the Bayleaf Hotels, Astoria Plaza, Bellevue Hotels and Resorts, Diamond Hotels Philippines, Discovery Leisure hotels and resorts, El Nido Resorts, Filinvest Crimson Hotels, Marco Polo Hotels-Cebu, Davao, Ortigas, Microtel Inns and Suites, the Robinsons Land hotels, Go and Summit group, the Seda Hotels, The Ascott Ltd hotels, and the Waterfront Hotels and Resorts.

According to the Department of Tourism (DOT), it is targeting some 89 million domestic tourists by 2022 and eyeing to increase tourism revenues to P3.9 trillion after the term of President Duterte ends in 2022.

Lopez said the PHOA hotel owners are willing to expand their hotel facilities outside Metro Manila where many of the country’s world-class tourist destinations are located, but the lack of infrastructure has hampered the full growth of the Philippine tourism sector, which continues to lag behind its neighbors in Southeast Asia.

Tax reform, he said, will generate the extra revenues needed by the Duterte administration to fully fund the unprecedented public investments in infrastructure.

“So our ultimate goal is to increase tourism. And it’s been really [behind]compared to the other countries in the Asean region. But now, tourism seems to have quite picked up, and the government is projecting 12 million foreign tourists, and currently, there are about 25-30 million domestic tourists traveling around the country,” Lopez said.

Based on estimates by the Department of Budget and Management (DBM), the total infrastructure budget–both national and local–will grow from P861 billion in 2017 to P1.898 trillion by 2022, or from 5.4 percent to around 7.0 percent of the gross domestic product (GDP).

The government would need around P8 trillion to P9 trillion in infrastructure investments between now and 2022 to fulfill the Duterte administration’s promise of high and inclusive growth, according to DBM data.

House Bill No. 4774 contains the first package of the CTRP that provides for the lowering of personal and corporate income taxes, with the goal of shifting the tax burden to the rich and large taxpayers. It was authored by Rep. Dakila Carlo Cua, who chairs the House ways and means committee.

It also includes several revenue-generating measures to offset the projected losses from the income tax reductions and to raise enough revenues for the government’s massive public spending not only on infrastructure but on human capital and social protection as well.

In the medium-term, Finance Secretary Carlos Dominguez III said that tax reform is expected to help reduce the poverty rate from 21.6 percent in 2015 to 14 percent in 2022, lifting some six million Filipinos out of poverty, and helping the country achieve upper middle income country status, with the per capita gross national income increasing from $3,550 in 2015 to at least $4,900 by 2022, or close to where Thailand is today.

Business tycoon Lance Gokongwei, 15 former DOF secretaries and undersecretaries plus five former National Economic and Development Authority (NEDA) directors-general have also backed the CTRP.

Ex-DOF Secretaries Cesar Virata, Jose Isidro Camacho, Jesus Estanislao, Roberto De Ocampo, Jose Pardo, Cesar Purisima, and Juanita Amatong; ex-NEDA chiefs Arsenio Balisacan, Emmanuel Esguerra, Cielito Habito, Felipe Medalla, and Romulo Neri; and former finance undersecretaries Romeo Bernardo, Cornelio Gison, Lily Gruba, Milwida Guevara, Jose Emmanuel Reverente, and Florencia Tarriela, have signed a manifesto supporting the CTRP.

Ex-finance secretary Margarito Teves has also expressed his support for the CTRP during a recent House ways and means committee hearing.

Fifteen (15) foreign and local business organizations belonging to the Philippine Business Groups – Joint Foreign Chambers have also backed the tax reform program, and called on both Malacanang and the Congress to give it top priority in order to improve the country’s investment climate, create more jobs and clear the way for inclusive growth.

A total of 64 big-ticket projects ranging from major road networks, railway systems and bus rapid transit systems to airport and seaport modernization are either for implementation or in the pipeline as part of the Duterte administration’s envisioned “golden age of infrastructure.”

Another 15 ongoing projects are being implemented by the Department of Public Works and Highways (DPWH) that are either locally funded, with Official Development Assistance (ODA), or through Public-Private Partnership (PPP) projects.

These ongoing projects include the Mandaluyong Main Drainage Project (Phase II); Central Luzon Link Expressway, Phase I, Tarlac-Cabanatuan, Nueva Ecija; Integrated Disaster Risk Reduction and Climate Change Adaptation Measures in the Low Lying Areas of Pampanga Bay; Tarlac-Pangasinan-La Union Expressway (Binalonan-Rosario Section), Flood Risk Management Project (FRIMP) in Cagayan de Oro River and the Sen. Gil Puyat Ave.-Paseo De Roxas / Makati Ave. Vehicle Underpass Project.

The DPWH is also set to either oversee or implement 10 infra projects in Metro Manila and Mindanao. These are the: Bonifacio Global City-Ortigas Center Link Road Project; UP-Miriam-Ateneo Viaduct along C-5/ Katipunan; Metro Manila Priority Bridges Seismic Improvement Project (Guadalupe Bridge and Lambingan Bridge; Widening/Improvement of Gen. Luis St.-Kaybiga-Polo-Novaliches; Cavite-Laguna Expressway; NLEX-SLEX Connector Road; Metro Manila Interchange Construction Project VI; Davao City By-Pass Construction Project (South Section (Road) and Center Section (Tunnel); Panguil Bay Bridge, and Phase 1 of the Metro Manila Flood Management Project.

The Department of Transportation (DOTr), on the other hand, has awarded 6 PPP projects and is either bidding out or about to bid out 10 PPP projects, according to DOTr Secretary Arthur Tugade.

The DOTr, through a combination of ODA and PPP, is implementing and developing a total of 23 rail projects which will greatly expand the country’s rail system from the current 77 kilometers to over 1,750 Km.

It is also implementing at least three Bus Rapid Transit (BRT) systems, establishing 77 km of segregated bus ways and improving pedestrian and bikeway facilities.

These include the Cebu BRT, the Quezon Avenue BRT, and the Central Corridor (EDSA) BRT. Several other BRT systems and corridors are also currently being studied by DOTr.

Alongside these projects, there are 12 other DPWH projects in the pipeline.

These include the Panay-Guimaras-Negros Link Project; EDSA-Taft Flyover; Central Luzon Link Expressway, Phase II, Cabanatuan-San Jose, Nueva Ecija; Flood Protection Works in the Marikina River including Retarding Basin; and the Dalton Pass East Alignment Alternative Road Project.

Another six big-ticket projects funded through PPPs are also either being proposed by the DPWH or already in the pipeline.

These include the R-7 Expressway, Manila Bay Integrated Flood Control, Coastal Defense and Expressway, and the Laguna Lakeshore Expressway Dike.

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