As Filipinos elected mostly administration allies as legislators, hopes are high that the 2019 national budget impasse—which had impacted sharply on the country’s economic growth in the first quarter—will be a thing of the past.
Priority pieces of legislation that are needed to make the domestic economy more competitive, particularly the subsequent phases of a comprehensive tax reform program, are also seen to gain ground.
Philippine Chamber of Commerce and Industry (PCCI) president Alegria Sibal-Limjoco said the results of the elections should not keep the country from moving forward with its economic agenda.
“The election has proven that democracy is very much alive and while many may have misgivings on the outcome of the elected candidates, this should not dissuade us from once again uniting and rallying our leaders to continue with the economic agenda that is now putting our country in the map of the international business community,” she said.
While business groups dodged questions on the implications of having a Senate dominated by President Duterte’s bets, some said they would just have to see what happens moving forward.
In separate interviews with the Inquirer, the heads of local and foreign business groups have commented on a rather divisive national elections, considered a referendum on the Duterte administration thus far.
With nearly all of the votes already transmitted as of press time, politicians who either were endorsed by President Duterte or were allies of the administration had taken hold of the upper chamber of Congress.
With policies such as federalism posing uncertainty to businesses, a lot is at stake in the election, which some saw as a matter of whether or not the Senate stays independent from the current administration.
Business groups, however, have either deferred from commenting on these implications, or declined to comment at all, despite the questionable track record of some officials who have won.
“I think [it’s] too early to make any conclusions at this point. Let’s wait and see what the Senate actually does,” said Riza Mantaring, president of the Management Association of the Philippines.
The Makati Business Club (MBC) said that they hoped Congress would “seriously consider” economic factors despite the political nature of some proposals like federalism.
MBC executive director Coco Alcuaz said the administration had done a “good job” on its economic legislation, which he hoped Congress would continue, such as work on bills concerning security of tenure and tax reform.
“We hope they seriously consider economic factors if and when they discuss federal government and other political proposals,” Alcuaz said.
Nabil Francis, president of the European Chamber of Commerce of the Philippines (ECCP), said they trusted Congress to continue improving the country’s competitive standing against regional peers and create more jobs.
“With a Senate likely to be composed of administration bets, future budget proposals may most likely be passed within the timeframe and the tax reform programme will likely be revived,” said Robert Dan Roces, chief economist at Security Bank.
With the credit rating upgrade recently seen from Standard & Poor’s, Roces said both chambers would also likely consider expediting passage of those bills that would boost the country’s chance for an “A” rating upgrade.
“If deemed not political-capital draining to the legislative sponsor, expect a revival of the tax reform program; and as long as the original spirit of the measure - that is to generate 120 billion pesos in additional revenues to fund key infrastructure projects - remain, we see the measure being prioritised by the incoming 18th Congress,” he said.
One much-awaited phase of the tax reform program is the reduction in corporate income tax rates, one of the highest in the region.