WALLACE BUSINESS FORUM with Senate President Tito Sotto

By Alina M. Manaig

Attending the Wallace Business Forum session last January 22, 2021 was certainly an enlightening experience. We were privileged to hear Senate President Tito Sotto talk about the status of the CREATE Bill, economic provisions for the constitution, and updates on the government’s vaccination program.

First off was the Corporate Recovery and Tax Incentive for Enterprises Act or CREATE Bill. We all know that this bill proposes to (1) accelerate Corporate Income Tax (CIT) rate reduction; (2) extend the Net Operating Loss Carry Over (NOLCO) period; and (3) rationalize fiscal incentives to adapt to the changing business needs brought about by the pandemic. This has been passed by the Senate last November 26, 2020 and they are saying that there is no need for a bicameral discussion as it can only dilute the effectiveness of the bill. The question now is when it will take effect, given that there is a need to boost our economic activities and help companies recover faster because of the pandemic. Sen. Tito Sotto confirmed that it can be retroactive to July 1, 2020; specifically the 1% deduction of the income tax rate. As for the date of the forum, he said that it now sits with the House of the Speaker and he will definitely push and encourage to expedite its review and approval.

The second item discussed was the economic revisions in the constitution. Sen. Sotto said that it will be like “biting the silver bullet”. A constitutional convention or constitutional change will be very difficult at this time. Not taking any credit for the idea he gathered from the Former Speaker of the House of Representatives Sonny Belmonte, Sen. Sotto said that we can specifically hit the economic restriction only and that all we need is a one-liner saying “Unless otherwise provided by law…”, which will trigger Congress to enact a law.

This is just like what happened with the Party List System of the Philippines — there was no constitutional change that happened; it just needed an enabling law. Thus Republic Act 7941 was created. This was an ACT providing for the election of party-list representatives through the party-list system and appropriating funds. Yet, a plebiscite has to happen, but it can be relatively inexpensive as this can ride during the 2022 elections.

Another featured speaker at the WBF session, Gary Teves, former Secretary of the Department of Finance, also proposed a faster way of doing it by simply removing the obstacles — an outright removal instead of adding. He also suggested modifying the law on land ownership through selective land ownership by foreigners in regions which are in need of development, as this can enhance job creation and economic activity in said areas. This is what Thailand and Singapore are doing. As he said, even if foreigners own them, they still cannot take them out of the country anyway. All of these were noted by Sen. Tito Sotto, who promised to take it up in their next meetings.

The last item discussed was the government’s vaccination program. Per Sen. Sotto, he has seen the roadmap, and the plans are not only good but excellent. He only hopes that the implementation is as good as the presentation. The proposal states that the program prioritizes about 70 million Filipinos to be vaccinated by Q1 of 2022 if everyone agrees. In fact, inoculating 50% of the 70 million will be enough to have herd immunity. When asked about the government being transparent about its borrowings for the vaccinations that may lead to distrust or corruption, Sen. Sotto assured the audience that the Senate will closely monitor so that no overpricing will happen and the budget will be spent properly.

Meanwhile, how about a manufacturing plant in the Philippines? He is not closing his ears to this idea, looking at the Thailand model of having filling stations, and he promised to take this up in their meetings as well.

It has been an informative morning for all the attendees. In fact, even our guest speaker himself mentioned that it has been a productive session for him as he gained several key takeaways which he pledged to take up in his meetings with the appropriate government agencies.

The morning session did not end there as two other speakers, Gary Teves and Romy Bernardo, a GlobalSource economist in the Philippines, also said their piece about the Philippine economy in 2020 and the economic outlook for 2021 and 2022. But that’s a topic for another article.

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About the author:

Alina has over 25 years of professional experience in executive management consultancy, talent search and recruitment operations, and sales and marketing. Alina is mother to three beautiful children and a wife to a wonderful husband. Aside from her love for coffee, she also loves shopping with her older sister. Alina spends her free time traveling, playing badminton, and watching movies.