Businesses urged to gear up for digital economy

MANILA, Philippines — Local firms should be prepared to vigorously innovate and identify emerging business opportunities as they transition to a digital-based new economy, to enable them to recover quickly from the crisis spawned by the COVID-19 pandemic, the Department of Finance (DOF) said.

Finance Secretary Carlos Dominguez III said in a speech during the virtual 29th Visayas Area Business Conference organized by the Philippine Chamber of Commerce and Industry (PCCI) that the government’s partnership with the business community would help drive the country’s reconstruction and recovery from the pandemic.

“The enterprises must be ready to more aggressively innovate, to shift more rapidly to take advantage of new digital technologies, and to identify emerging business opportunities. These are not only moving into the new normal. We should be purposefully moving toward a new economy,” Dominguez said.

He assured the business community that the Duterte administration would continue to work with the Congress on its other priority measures that are necessary to help the economy bounce back from the pandemic.

These include the swift passage of the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) bill that would provide an outright five percentage point reduction in the corporate income tax rate to 25 percent from 30 percent as soon as it is made effective.

Allowing banks to dispose of non-performing loans and assets through asset management firms, enabling government banks to form a special holding company that will be able to infuse equity, with strict conditions, into strategically important companies facing insolvency, and providing greater support to the agriculture sector by giving the banking system the ability to support the whole value chain of agri-enterprises through amendments to the Agri-Agra Law are the other economic priority bills the administration wants the Congress to pass to complete the economic recovery package.

“While we know that economic recovery is not going to be a sprint, we do have the fiscal stamina for running this marathon. It is to our own advantage to keep our deficit within manageable limits so we can continue to access financing at terms that are favorable to the Filipino people,” Dominguez said.

The DOF chief said the Bayanihan To Recover As One Act (Bayanihan 2) approved and ratified by the Congress along with other economic priority measures complete the economic recovery plan meant for businesses to bounce back from the pandemic-induced crisis.

Dominguez also cited the continued implementation of the massive infrastructure program under the administration’s Build, Build, Build program.

He added that the government’s COVID-19 response is “front and center” of the P165-billion Bayanihan 2 stimulus package providing funds to hire thousands of contact tracers and various forms of support for medical workers as well as for the purchase of safe and effective vaccines once available.

“Continuous health system improvements are crucial for bringing back the confidence of our people in the new economy. If we can prevent the need for lockdowns and keep the virus at bay, the people can work, shop, and move around more freely as long as we all comply with the required health behaviors,” Dominguez said.

Dominguez said the government would continue to intensify its public health response efforts as unemployment and reduced incomes resulting from the lockdowns also have public health consequences.

“Rebuilding the economy is a condition for ensuring public health. We cannot fight a pandemic with a weak economy; nor can we restore economic vigor without solving the public health crisis. The health of our people and the strength of our economy are mutually reinforcing,” the DOF chief said.

Dominguez said the government’s economic recovery strategy remains anchored on the Build Build Build program, as it not only “creates jobs, fires up consumption, and spurs productive activity” but will “also help to rapidly decentralize the economy and cure the present vulnerability where the concentration of business activity is also the concentration of infections.