The challenges brought about by the COVID-19 pandemic must prompt the government to lay down the groundwork for economic goals to ensure the country’s competitiveness, at least in the decade ahead.
The targets should include 20 percent corporate income tax rate by 2027; 20 million new and/or upgraded high-skill jobs over the next 10 years; and $20 billion in annual foreign direct investments (FDI) inflows.
Do-or-die goals, as Albay Representative Joey Salceda call them, will be the minimum basis for national economic development in a globalized, information-based world.
“If we don’t make them happen, we can forego whatever national ambitions we have of becoming a high-income economy,” he said.
Salceda said the enactment into law of the long delayed Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act is the “lowest hanging fruit” that will help the country generate $20 billion in annual FDI amid the escalating US-China trade tensions that push global manufacturing investors to diversify their value chains.
“CREATE, at the very least, will help us get to 20 percent CIT (corporate income tax) rate by 2027. That is critical. I will not accept a decoupling of the CIT and the fiscal incentives regime. The latter has been delayed for far too long to the detriment of the increased FDI inflows,” he said.
“You leave the question hanging, and we will continue to see the uncertainty that every respectable economist says was caused by policy indecision. We need it now. We need CREATE’s flexible non-fiscal incentives if we want to attract the kind of whale-sized or elephant-sized investments we need to develop a thriving higher-order value chain.”
He also emphasized the need for a well-trained, digital-ready workforce.
“We typically do not look at labor and training proposals as economic policy. That narrow-mindedness will not get us anywhere in the digital age,” he added.
“Our labor force is service-sector based, but the services we offer are still at the lower-order in sophistication and economic value. By 2030, if we cannot create 20 million high-skilled jobs, the game is up, as far as achieving high income status by 2040 is concerned.”
Salceda said he will seek the leadership’s commitment to prioritize the passage of his proposed “21st Century Skills Act,” “Financial Technology Industry Development Act,” “Digital Economy Taxation Act,” “Satellite Liberalization Act,” “Faster Internet Act,” and the Comprehensive Education Reform Agenda.
“The crisis has emphasized the urgency of national evolution. We have to be prepared for a future where low-skill, lower-value services are no longer necessary, and where retail and other sectors that employ most of our people will no longer be the same industries they look like now,” he said.