LAWS that will improve the quality of education, make food affordable, create fiscal space, and promote pandemic resiliency should be passed to ensure the country recovers from Covid-19 and posts inclusive economic growth in the medium term, according to economists.
Ateneo Eagle Watch Senior Fellow Leonardo A. Lanzona Jr. told BusinessMirror ahead of the President’s first State of the Nation Address (SONA) that priority legislation should be headlined by efforts to address skills development, especially of millions of Filipinos who suffered from unemployment and underemployment during the lockdowns.
The National Economic and Development Authority (Neda) earlier estimated that in terms of human capital investment and returns, the losses are P11.025 trillion in education investments and P4.503 trillion in health for Covid-19 and non-Covid-19 diseases (https://businessmirror.com.ph/2021/09/25/neda-pandemic-to-cost-phl-economy-p41-4-trillion-in-total-losses-over-next-40-years/).
“I think that we need to pursue more laws that will result in greater productive employment and skills development. While institutions need to be rid of corruption and poor management, we have to develop and form our human capital if these institutions are to be resilient. For one, the quality of education in the country has to be improved,” Lanzona said.
In order to improve the education system, the government should, Lanzona said, liberalize the education system—similar to what Singapore has done. This can be done by passing laws that “allow foreign schools and companies to build and own schools and training facilities in the country.”
He said this is especially the case with technical vocational training. Firms, he said, should be allowed to set up training facilities to improve the skills of workers, particularly those working in the manufacturing sector.
According to University of Gadjah Mada’s Asean Studies Center Senior Fellow Dio Herdiawan Tobing, skills training in the Philippines is the most expensive in Southeast Asia. The high cost of skills training has become a major obstacle, especially for young Filipinos who are looking to upgrade their skills. (Story here: https://businessmirror.com.ph/2022/07/19/pricey-training-hobbles-pinoy-youths-aspiration-to-improve-digital-skill-sets/)
Apart from improving the education system, Lanzona said of utmost importance are efforts that will “maintain and develop our agricultural sector.” Part of this will be the passage of the National Land Use Act, despite the opposition of legislators “running real estate businesses.”
“I don’t think we should emphasize food security. Our vulnerability to the food crisis can also be reduced if we can improve our ability to trade both in industry and services. The goal is to have diversity and not to put all our eggs in one basket,” Lanzona added.
Efforts to boost efficiency and productivity in agriculture, Action for Economic Reforms (AER) Coordinator Filomeno Sta. Ana told BusinessMirror, jibes well with the need to address high inflation.
Sta. Ana thinks the administration should ensure the population’s access to affordable food. The government should work toward removing or relaxing barriers to the entry of food items.
He also encouraged the national government to invest in renewable energy by resisting attempts to roll back fuel taxes. Sta. Ana said this can be the administration’s climate change agenda.
“The problem is mainly supply-side inflation. (The government should) resist any attempt to roll back fuel taxes; rather, use those taxes to subsidize public transport and the poor. Main users of fuel are car owners who belong to the 10 percent in terms of family income,” Sta. Ana pointed out.
Apart from these, he cited a need to follow the recommendation of former Socioeconomic Planning Secretary Karl Kendrick T. Chua to pass a pandemic flexibility bill.
Chua said the pandemic flexibility bill will strengthen government institutions to better respond to health emergencies and expedite the rollout of health and social protection measures (Full story: https://businessmirror.com.ph/2021/12/02/pandemic-flexibility-bill-pushed-by-neda/).
This would also support efforts to strengthen the primary health-care system while removing obstacles that delay government procurement of health and other related goods and services.
“Reform procurement rules to become agile in responding to pandemic. Remove procurement rigidities and capacitate LGUs (Local Government Units) to procure goods and services,” Sta. Ana said.
University of the Philippines School of Economics Director for Research Renato E. Reside Jr. said bills that rationalize pensions of uniformed personnel in the Philippines should be passed to create additional fiscal space.
Rationalizing these pensions would give the country additional fiscal savings, which can also be used to reduce poverty incidence.
Reside said the primary sponsors of bills in the last Congress were Albay Representative Jose Sarte Salceda as well as Senators Christopher Go and Ronald ‘Bato’ de la Rosa.
“Right now, such pensions are funded out of direct government appropriations every single year and only promise to grow if the rules for providing them are not changed,” Reside said.
In the recent State of the People’s Address (SOPA), Freedom from Debt Coalition (FDC) President Rene E. Ofreneo stressed the need to pass wealth tax measures to create fiscal space for the national government.
Ofreneo said the administration should enact an emergency one-time tax measure on the richest Filipinos and their families, especially those engaged in power, telecommunication, pharmaceuticals, “import-distribution industries, and those in the top 500 richest.”
He said the government should create a progressive tax system that is focused on wealth taxation, where higher incomes are taxed higher. One formula, he said, is to apply progressive tax rates on the networth of rich Filipinos.
In a separate briefing, Ibon Foundation Executive Director Sonny Africa added that wealth taxes—imposed on the country’s 2,919 billionaires—could generate as much as P470 billion.
Africa said in general, on the matter of taxation in the country, the administration should pursue fair, efficient and corrective measures to help more Filipinos recover from the pandemic.He cited a need to create a broad-based tax system where all Filipinos can contribute their fair share; cover areas that ought to be taxed such as the digital space; and correct behavior such as through sin and gambling taxes.