The Department of Finance (DOF) has successfully pushed for the congressional passage of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act and the signing into law of a new “sin” tax reform package in 2020, while providing technical support in monitoring the implementation of other key reform socioeconomic measures, such as the Rice Tariffication Law (RTL) and the National ID system.
With its Strategy, Economics, and Results Group (SERG) spearheading the effort, the DOF also provided critical support in 2020 to the crafting or implementation of COVID-19 response measures, such as the Small Business Wage Subsidy (SBWS) Program and the two Bayanihan laws—Republic Act (RA) No. 11469 or the Bayanihan to Heal as One Act, and RA 11494 or the Bayanihan to Recover as One Act.
SERG also extended technical support to lawmakers and helped them engage stakeholders in the congressional deliberations on the Financial Institutions Strategic Transfer Act (FIST), which aims to assist banks in offloading bad debts and non-performing assets (NPAs) so that they can open more credit facilities to pandemic-hit enterprises.
President Duterte signed the FIST into law—RA 11523— on Feb. 16.
SERG, which was tasked by Finance Secretary Carlos Dominguez III to focus on gathering support from lawmakers and stakeholders for President Duterte’s comprehensive tax reform program (CTRP), overshot its goal of having at least one tax reform package approved in 2020 with the congressional passage of CREATE; and the signing into law of RA 11467, which increased excise taxes on alcohol products, electronic cigarettes (e-cigarettes), and heated tobacco products (HTPs).
This year, Dominguez directed SERG to assist the Bureau of the Treasury (BTr) in providing and generating support for the DOF’s proposed reforms in the military and uniformed personnel (MUP) pension system and the portability of the two pension funds — the Government Service Insurance System (GSIS) and Social Security System (SSS).
“There are a couple of bills that the Treasury is working on and I want you to support them on these. Number one is the military pension bill and Number 2 is the bill that will allow for the portability of pensions. I want that as part of your support,” Dominguez told SERG, which is led by Finance Assistant Secretary Juvy Danofrata.
CREATE, which reforms the country’s corporate taxation system, was signed into law by President Duterte on March 26, 2021 as Republic Act 11534.
Meanwhile, RA 11467 was signed into law on Jan. 22, 2020.
RAs 11534 and 11467 are Packages 2 and 2-plus of the CTRP, respectively.
As for the RTL, SERG has continued to monitor the impact of this reform on the rice industry and on consumers, and has held webinars with over 500 key stakeholders to generate support for the effective implementation of this law.
In partnership with the Philippine Chamber of Commerce and Industry (PCCI), SERG also organized in 2020 the online Sulong Pilipinas consultative workshops with more than 1,000 members of the youth and micro, small, and medium enterprise owners (MSMEs), despite the pandemic. These consultations guided the government’s pandemic response.
SERG has also provided technical support last year to the implementation of the Philippine ID System (PhilSys) and organized a webinar with over 600 attendees from national government (NG) agencies and local government units (LGUs) representing the 32 provinces identified by the Philippine Statistics Authority (PSA) as priority areas in the rollout of the national ID program.
The government’s priority infrastructure projects under the “Build, Build, Build” program and first CTRP package that the DOF had successfully pushed in this administration —RA 10963 or the Tax Reform for Acceleration and Inclusion Act (TRAIN)—are also being continuously monitored by SERG.
Aside from assisting the BTr in gaining congressional approval for MUP reform and portability of pensions this year, the SERG will also work with Congress in finalizing the review of the measure reforming the country’s property valuation system, which is Package 3 of the CTRP.
SERG will also push the congressional passage of Package 4 or the Passive Income and Financial Intermediary Taxation Act (PIFITA); and the proposed Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery (GUIDE) Act, which aims to enable government financial institutions (GFIs) to form special holding companies that will infuse equity, but subject to strict conditions, into strategically important firms facing solvency issues.
SERG will also intensify the DOF’s anti-scam and personal finance campaign and assist the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM), as part of the DOF’s contributions to the National Government–Bangsamoro Government Intergovernmental Relations Body (IGRB), and its efforts to update the public on its progress and performance.
