Senate President Vicente Sotto III said the government must put a premium on rebuilding the economy once it relaxes strict community quarantines that have been imposed to minimize the health impact of the coronavirus disease 2019 (COVID-19).
Senate PRIB
Sotto files economic stimulus bill prioritizing mass testing
Paolo Romero (The Philippine Star) - May 28, 2020 - 12:00am

MANILA, Philippines — Senate President Vicente Sotto III yesterday filed an economic stimulus bill that focuses on government investments on health, agriculture and micro, small and medium enterprises plus startups (MSMEs+).

Sotto said the government must put a premium on rebuilding the economy once it relaxes strict community quarantines that have been imposed to minimize the health impact of the coronavirus disease 2019 (COVID-19).

Senate Bill 1542 seeks to “establish an economic stimulus strategy for the country’s growth and development” in the aftermath of the pandemic.

“In order to offset and mitigate the damage that COVID-19 has brought to our country, measures should be put in place through legislative enactments. Since the intent of the Bayanihan to Heal as One Act is to cushion the effects of COVID-19 on the country’s health system and to its citizens… it did not cover the economic effect of this pandemic,” Sotto said.

Quezon Rep. Mark Enverga, who is Sotto’s partymate in the Nationalist People’s Coalition (NPC), has filed a counterpart measure at the House of Representatives.

Sotto estimated that the cost of the stimulus package would be at P548 billion until the end of the year and at least an additional P80 billion in 2021.

SB 1542 proposes a stimulus program to “restore economic growth, maintain employment levels and expand the productive capacity of the country.”

Its salient provisions include mandatory immediate mass testing for COVID-19; wage subsidies to non-essential businesses, freelancers, self-employed and repatriated overseas Filipino workers (OFWs); expansion of the tertiary education subsidy provided under Republic Act 10931, to include students whose families are now facing financial difficulties due to the various community quarantines; and waiving of registration and other related fees and the grant of special trading accommodations for a limited time to MSMEs+.

The measure also directs the Land Bank of the Philippines and the Development Bank of the Philippines to establish a special interest-free loan fund and provide interest-free loans to non-essential businesses and MSMEs+.

Sotto wants the Department of Tourism and its sub-agencies to assist critically impacted DOT-accredited tourism enterprises and financial infusion for the agriculture sector.

The country’s economy could collapse if urgent measures are not set in place at the soonest time possible, according to the senator.

“Lawmakers need to work fast in giving back life to our economy. We cannot dilly-dally until the last minute. Measures to help revive businesses adversely affected by the COVID-19 crisis should be enacted with haste to prevent the economy from total collapse,” he said.

Revised revenue measure

The Senate is aiming to pass next week a revised revenue measure that aims to attract investors leaving China by lowering the country’s corporate income tax (CIT) rate and help the economy recover from the COVID-19 pandemic.

Sotto bared the plan as the committee on ways and means, chaired by Sen. Pia Cayetano, met with economic managers led by Finance Secretary Carlos Dominguez III to come up with a final version of the bill – Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act – for the chamber’s approval next week.

“Let’s see if (CREATE) can be sponsored on Monday and possibly be passed on Tuesday on second reading and interpellation and (approved on) third reading on Wednesday… because it’s an urgent bill,” Sotto told reporters via video conference.

CREATE, submitted by the Department of Finance to Congress last week, was a repackaging of the original Corporate Income Tax and Incentives Reform Act (CITIRA) to make it more of an economic stimulus measure.

CITIRA seeks to gradually lower CIT by one percent every year from 30 percent to 20 percent by 2030.

CREATE accelerates the reduction by five percent or to 25 percent starting as early as July if Congress approves the bill before it adjourns by the end of next week.

President Duterte has certified CITIRA as urgent and Sotto said the certification can be carried on to CREATE. If not, Malacañang can issue another one as CREATE is being pushed by the executive branch.

“Our proposal for the CREATE bill is the first ever proposal that is revenue eroding so we realize the needs of the times and we are willing to drop the tax rates from 30 to 25 percent in one big jump, that in itself is a big stimulus, because essentially, that puts in the pockets of businessmen more money than they would otherwise have,” Dominguez had earlier said.

‘Reset’ button

The P1.3-trillion stimulus fund that the House of Representatives approved last Tuesday will “reset” the country’s stalled economy as a result of the extended lockdown brought about by the COVID-19 pandemic, Deputy Speaker LRay Villafuerte said yesterday.

“It will set the stage for Congress to help the Duterte administration reset the economy and generate jobs following the sudden work stoppage set off by the quarantine measures,” Villafuerte said.

The House’s social amelioration cluster of the Defeat COVID-19 Committee (DCC), headed by Speaker Alan Peter Cayetano, approved House Bill 6709, or the COVID-19 Unemployment Reduction Economic Stimulus (CURES) Act of 2020, the other day.

The Camarines Sur congressman said the measure is “guaranteed to create a multitude of employment opportunities, especially in rural areas, to partly make up for the jobs that were lost amid the coronavirus pandemic.”

“With infrastructure investments having the highest multiplier effect on the economy, this will raise state spending on HEAL (health, education, agriculture, local road and livelihood) infrastructure to create rural jobs,” he said.

It will also “blunt the impact of what the International Monetary Fund expects to be the worst recession since the Great Depression in the 1930s,” according to the senior administration legislator.

The crucial piece of legislation will help ease the pressure on the administration to create hundreds of thousands of jobs this year, even as the outbreak has displaced almost 2.76 million workers, not to mention the 102,000 establishments forced to shut down.

Cayetano and Villafuerte’s co-authors include House Majority Leader and DCC co-chairman Martin Romualdez; Deputy Speakers Paolo Duterte and Loren Legarda; and Reps. Eric Go Yap, Laarni Cayetano, Mike Defensor and Jose Antonio Sy-Alvarado. Delon Porcalla, Cecille Suerte Felipe

VICENTE SOTTO III
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