PHILIPPINE Veterans Bank chairman Roberto de Ocampo, OBE, outlined the reforms that need to be implemented by the next administration in this year’s Philippine Economy Fearless Forecast. De Ocampo, who pegged the country’s 2016 growth rate at six percent, proposed two focal points to stimulate the economy in the annual Center for Philippine Futuristics program.
Infrastructure
“The anticipated decline in infrastructure projects next year may outweigh the increase in public spending during the election period. The next administration should focus on improving Public Private Partnerships (PPP) as the centerpiece of infrastructure. Easing the entry of foreign direct investments is, likewise, essential to the economy,” said de Ocampo.
The former finance secretary hopes for an increased effort in implementing PPPs, particularly in the transportation sector, where he noted the opportunity for creating magnet cities and increased employment.
“We have transport but we don’t have a system. Improvements in public transportation shouldn’t be so narrow-minded. It’s not just about easing traffic. We have to look at the bigger picture and see how proper infrastructure can hit several objectives,” said de Ocampo.
A former chair of the Metro Rail Transit (MRT) line 7, de Ocampo noted the potential of the system to create magnet cities outside of Metro Manila, boosting employment opportunities and properly dispersing the population. MRT line 7 will run from NLEX to North EDSA, effectively rerouting provincial buses away from the dense NCR area, according to de Ocampo.
The PVB chairman also mentioned the importance of Internet infrastructure in the form of enhanced broadband connectivity to encourage the entry of global companies into the country.
“We have a top-class BPO industry and we’re the world’s texting capital. Companies that can bring us thousands of jobs want to base their operations here. We need faster broadband connections to be able to properly accommodate them,” said de Ocampo.
Global impact
The secretary likewise noted that the business community is one in calling for constitutional reforms to liberalize the entry of FDIs in a bid to integrate the country in a rapidly expanding global interdependent society. De Ocampo discussed the impact of China’s economic slowdown on the country’s export growth, which fell five percent from 2014. He predicted the greater role of a resurgent US economy in the Philippines’ trade industry, as he pegged the dollar exchange rate at P47.5 in light of the incoming US Fed interest hike.
He also noted a 30 percent drop in international investments from the previous year amounting to $2-billion worth of FDIs in 2015.
Necessary reforms in other key sectors were likewise highlighted by de Ocampo in his assessment of recent government initiatives. He cited efforts in redistributing lands to farmers as effective only in tandem with increased productivity in each farm, noting that government focus should shift from ownership to output.
The mining industry, meanwhile, had stagnated in the past years, according to de Ocampo, due to complicated policies. He expressed dismay over lost investments while urging the next administration to seize the opportunity presented by interested mining corporations.
The PVB chairman also proposed changes in the current tax system, advocating for lower income taxes while expanding the tax base.
“My philosophy with taxes is to always keep it simple. Complicated systems can be taken advantage of by tax evaders. Tax brackets should be simplified and taxes should be adjusted to compete with our ASEAN neighbors,” said de Ocampo. (PR)