Economy

Sen. Bam: Fast track financial assistance for poor families

Senator Bam Aquino renewed his call to the government to hasten the implementation of the cash transfer program to help 10 million poor Filipino families bear the effects of the Tax Reform for Acceleration and Inclusion (TRAIN) on the prices of goods and services.
 
“Kung talagang seryoso tayong gawing positibo ang epekto ng TRAIN sa ekonomiya at sa lahat ng kababayan natin, itong programang ito na tutulong sa 10 million Filipinos – 10 million Filipino families, should be in place at the soonest possible time,” Sen. Bam said in a television interview.
 
Sen. Bam pointed out that the funds needed for the cash transfer program was already included in the 2018 budget and the exact date of its implementation is the only issue. 
 
“Hopefully, the Departments of Social Welfare and Development (DSWD) and Department of Finance (DOF) will speed up the process. Sana huwag nang patagalin ang programang ito, gawin nila as fast as they can, and as efficiently as possible,” Sen. Bam emphasized.
 
Based on the recommendation by the DOF, the law provides a cash grant of P200 a month to poor families on the first year.  The monthly financial assistance will be increased to P300 for the second and third year to help cover the increase in prices of basic goods. 
 
During the measure’s period of amendments in the Senate, Sen. Bam pushed for the immediate implementation of the financial assistance program to help poor Filipinos absorb the expected increase in the prices of goods and services.  
 
However, Sen. Bam’s proposal was not accepted, prompting the senator to vote against its ratification. 
 
“Without a cash transfer program in place, poor Filipinos will bear the brunt of the increase in prices of goods and services due to the TRAIN,” Sen. Bam emphasized.
 
Also, Sen. Bam called on the government to be transparent in the selection and disbursement of the cash transfer program.
 
“Aside from ensuring that it will be implemented at the soonest possible time, the government must conduct its rollout without any political patronage or accommodation,” added Sen. Bam.

Senate Bill No. 692: Corporation Code

The Philippines is enjoying the best economic growth it has seen in years and has deemed to be a rising star in the region. But the challenge remains to enhance the local markets and business environment in order for investments to continuously come in. Updating pertinent laws is needed to keep up with the fast-changing business landscape and sustain this unprecedented progress.

This measure seeks to introduce key amendments to Batas Pambansa Blg. 68 or the Corporation Code, which was passed in 1980 or more than three decades ago.

Two key provisions aim to address the needs of entrepreneurs in the country.

Firstly, a sole proprietor presently needs to have incorporators of five to fifteen individuals to be able to register with the Security and Exchange Commission (SEC). The policy has created cases for dummy incorporators.

In addition, sole proprietorship exposes all the properties of the entrepreneur for the business’ liabilities. Such exposure risks all of the assets of the proprietor, even his family’s properties.

To address these, this measure recommends the recognition of the one-person corporation to encourage entrepreneurs to declare truthful and transparent information about their businesses, limit liabilities and spare family assets, and further grow their businesses.

Secondly, the law currently provides for a limited corporate term of 50 years maximum. Many big firms forget to renew after 50 years and they end up dissolving the company, liquidating their assets and transferring their properties. This unfortunate event leads to loss of income and livelihood for families, and the loss of legacy and dreams for entrepreneurs and employees.

The bill seeks to allow corporations to have perpetual corporation existence but with renewal requirements every 25 years. Failure to comply with the requirements will not end corporate existence but penalties will be imposed. It allows a corporation to develop long-term plans and to look into more sustainable and far-reaching strategies for more economic growth.

 

Other related provisions have been proposed to make the policy relevant and attuned to present times, adopt global best practices, attract more investments and start-ups in the country and specifically address the needs of entrepreneurs.

In view of the foregoing, immediate approval of this bill is earnestly sought.


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Senate Bill No. 687: Pantawid Pamilyang Pilipino Program Act

Despite country’s success in achieving moderate economic growth, the results of the 2015 Social Weather Stations (SWS) survey still show that 50% of Filipinos consider themselves as poor. This result is a call for the national government to strengthen its effort in addressing problems of unemployment and alleviating poverty.  A study conducted by Asian Development Bank in 2006 suggests a strong link between poverty levels and educational attainment. Almost 50% of household heads who did not complete any formal schooling are poor while only 2% of college graduates have income below the poverty line. Despite Philippine Statistics Authority (PSA) reporting an increase in subsistence incidence among Filipino Families from 10% in 2012 to 9.2% in the first semester of 2015, it is still reported that incomes of poor families were short by 29% of the poverty threshold. Based on this, on the average, an additional monthly income of PHP 2649 is needed by a poor family with five members in order to move out of poverty in the first semester of 2015.

These data show that despite the decrease in in poverty levels, improvement to current poverty alleviation efforts is much needed.  It is in this line of reasoning that we push for the institutionalization of the Pantawid Pamilyang Pilipino Program. Pantawid Pamilyang Pilipino Program is a human development measure of the national government that provides conditional cash grants to the poorest of the poor, to improve the health, nutrition, and the education of children aged 0-18. Other countries have been implementing similar programs like Argentina’s Universal Allowance for Children, Brazil’s Family Grant, and Chile’s Solidarity System which all have reduced their poverty levels significantly. All these have been made into laws. The Pantawid Pamilyang Pilipino Program Act of 2016, with its enhancements on the existing program, hopes to ensure that all youth beneficiaries will have the assistance they need to finish high school and college and thus have a greater chance of landing a job. These include the expansion of age coverage from 0-14 to 0-18 years old and the increase in the amount received by students 12-18 years of age. This Act also strengthens implementation by penalizing actions which jeopardize the integrity of the program.

With the current implementation of the program in the country, high compliance rates were recorded by the Department of Social Welfare and Development (DSWD) for the months of March and April 2015, with 99.91% for the deworming of children aged 6-14; 98.99% for school attendance of children aged 6-14; 98.33% for school attendance of children in daycare aged 3-5; 97.05% for school attendance of children aged 15-18; 95.95% for health visits of pregnant women and children aged 0-5; and 94.84% for attendance in family development sessions. The program, designed to address short term needs for the long term goal of breaking the intergenerational poverty cycle, is only beginning to receive its return on investment, with year 2015’s 300,000 thousand high school graduates from household beneficiaries.  Given what the program has already accomplished and in consideration of what it could still achieve given the improvements to the program, it is the government’s responsibility to ensure sustainability regardless of transitions the Philippines may go through as it shifts from administration to administration.

In view of the foregoing, the immediate passage of this measure is earnestly sought.

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Senate Bill No. 690: Magna Carta of the Poor

The country’s economic performance in recent years has been impressive and unprecedented. Its 7.2% GDP growth in 2013 was the highest in Asia earning the country improved investment grades. Its economic climate is now attractive, viable and profitable for investors to come in – doing business has become more fun in the Philippines.

Despite the accomplishments of the country, it still does face a myriad of challenges – around three million Filipinos do not have jobs and a fifth of the populace is poor.

The daunting task for the State is how to capitalize on its outstanding growth, the critically acclaimed reform efforts and the renewed global confidence, in order to make growth more inclusive and felt by all of the one hundred million Filipinos.

In the midst of this economic progress, it is essential for the State to craft policies so that every Filipino family is recognized regardless of the socio-economic status of its members, and to take care and provide for their needs.

The proposed measure thus seeks to ensure the protection and promotion of five basic rights of every Filipino: the right to food, employment, quality education, shelter and basic health care. It supports the creation of a just and dynamic environment where prosperity is shared through provision of adequate social services and enabling a rising standard of living and improved quality of life for everyone.

As the Philippines grows, no filipino should be left behind. 

In view of the foregoing, immediate approval of this bill is earnestly sought. 

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Senate Bill No. 652: Philippine Bamboo Industry Development Program Act

There is tremendous potential in the bamboo industry. Globally, the value of exports of bamboo and bamboo products is estimated to be US$12 billion. Locally the reported value of exports of bamboo and bamboo products in 2014 was US$ 10 million. Bamboo production and processing has provided direct and indirect employment to an estimated 190,000 people and these numbers can continue to climb, with the right support systems in place for the industry.

However, bamboo is officially classified as a minor forest product by virtue of PD No. 705 otherwise known as the Revised Forestry Code. As a consequence of this classification, the main considerations and attention of the Department of Environment and Natural Resources (DENR) has been focused on timber and timber products, which is understandable because of timber’s sizable economic contributions.

But with the destruction of our forests and the diminution of the supply of wood and wood products for construction, there are attempts to fill the void with suitable substitutes such as bamboo.

Bamboo has always been an important construction material in the rural areas. Because of its versatility it has found applications in many uses, from house construction, farm implements, kitchen utensils, furniture and handicrafts. Bamboo is also relatively cheap given its ubiquity and ready availability in the rural areas. However, its low price is also a result of low natural durability against agencies of deterioration and its poor reputation as a material for construction.

Fortunately, the research sector has been working on technologies to lengthen the service life of bamboo and has developed new bamboo products such as engineered bamboo, which can take the place of wood as panel products and for structural purposes. Today, furniture and handicraft manufacturers incorporate bamboo in the design of their products with amazing results, even attracting foreign buyers. Bamboo has also become a medium in carving and architects have designed structures entirely made of bamboo.

In the environmental front, bamboo has been found to excellently reduce erosion. It is also capable of absorbing heavy metals in mined-out areas. Studies have also shown that it can sequester carbon dioxide of about 45% of its dry weight.

An important advantage of bamboo to tree plantations is that there is a need to replant when trees in plantations are harvested. In contrast only mature culms are harvested from a clump of bamboo and if managed well a clump of bamboo can continuously provide raw materials indefinitely.

With these developments and benefits, bamboo has been gaining popularity both locally and in foreign countries. Unfortunately there is no national program on bamboo industry development.

It is recognized in the industry that there is a general insufficiency of raw materials for which reason many enterprises on bamboo processing have closed down because of lack of raw materials yet there is little initiative in bamboo plantation development. Support to research and development is sorely insufficient and product marketing is left generally to the private sector.

In order for the country to be more competitive in foreign markets, capture a sizeable portion of the global market, provide livelihood to rural communities, and take advantage of the environmental contributions of bamboo to rehabilitate degraded watersheds, sequester carbon dioxide, and assist in the mitigation of climate change, it is necessary to have an organized and well managed bamboo industry development program.

In view of the foregoing, immediate passage of this bill is earnestly sought.


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Senate Bill No. 355: Charter of the Philippine Trade Representative Office

The Center for Global Development in Washington D.C. ranked the Philippines as the most resilient economy among 21 countries studied. Our island nation ranked number one above South Korea and China, second and third respectively.fi]

The country is also considered among the most entrepreneurial countries in the world in a report produced by Approved Index.[2]

The Philippines is now considered a highly competitive player in the market of foreign direct investments thanks to our robust economy and the great potential of our workforce.

In 2014, our country’s net foreign direct investments reached a record-breaking 6.2 billion U.S. dollars – a stark improvement from our 2010 net FDI of 1.07 billion U.S. dollars.[4]

To maintain this competitiveness, we need to improve trade negotiation and facilitation and ensure that we have a cohesive and coherent trade policy that upholds the country’s national interest.

The Charter of the Philippine Trade Representative Office kick-starts this initiative by creating the Philippine Trade Representative Office or PTRO. The PTRO is tasked to consolidate and harmonize all existing functions from various government agencies such as the Bureau of International Trade Relations under the Department of Trade and Industry (DTI), Attaches and Permanent Missions to the World Trade Organization (WTO), Association o f Southeast Asian Nations (ASEAN) and United Nations International Organization (UNIO), and the trade negotiating and policy making functions of the Tariff and Related Matters Committee (TRMC). This is in order to enhance the formulation of domestic and national priorities that should drive our trade positions and negotiations.

The PTRO shall also form the Multi-Sectoral Advisory Committee (MSAC) that will compose members from both government and civil society, including representatives from the agriculture industry, labor sector, small business, service sectors, retailers and consumer groups, to advice the office on trade matters in relation to the country’s achievement of its economic goals.

Our country is now open for business. Let’s pass the Charter of the Philippine Trade Representative Office to bolster our positions and voice in the international trade community.

In view of the foregoing, the approval of this bill is earnestly sought.

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Senate Bill No. 354: Secured Transactions Act

Micro, small, and medium enterprises (MSMEs) are critical in the country’s drive to maintain strong economic growth and uplift millions who live in poverty considering that in 2014 they comprised 99.6% of all Philippine businesses, generated 62.8% of all jobs in the Philippines,1and contributed to around 35% to Philippine GDP.2

The challenge is to ensure that microenterprises grow into small business; and small businesses develop into medium-sized enterprises. We must provide these businesses with an enabling environment so they survive, grow, and expand to create better lives for their families and increase job opportunities for other Filipinos. Crucial to their growth is access to financing at reasonable rates.

While there is notable growth in the microfinance sector, there is still a major gap relative to financing small enterprises, whose loan requirements are beyond the scope of microfinance institutions. Despite being a growth area for banks, SME financing is still considered unattractive given the perceived risks, without traditional collateral such as land and other real property. However, MSMEs’ assets are mostly personal in nature (equipment, inventory, motor vehicle, accounts receivable,etc.), making it difficult for MSMEs to meet bank requirements to get loan approvals. 

As early as 1906, the Philippines has in place a secured transactions legal environment, the Chattel Mortgage Law, and a document-based movable collateral registry operated by the Register of Deeds. The current regime recognizes a diverse set of movable assets acceptable as collateral for loan purposes (e.g., motor vehicles, standing crops, like rice, sugarcane, and other agri-aqua commodities, equipment, etc.,); however, these assets are not being fully utilized nor preferred by banks as loan collateral, except motor vehicles, which leaves the law ineffective to increase trade or facilitate access to finance for MSMEs, and underscores the need to modernize these laws governing movable asset lending in the Philippines. 

The Secured Transactions bill seeks to enable financial institutions to rethink how they view collateral and reduce the perceived risks, by providing protection for framework to govern lending transactions that involve the use of personal property as collateral, as well as the design, establishment, and operation of a unified, centralized, online notice-basednational collateral registry to assure banks that the collateral being submitted has not already been utilized for another loan. These reforms have the potential to increase credit access for women and small businesses, reduce the risks of non-satisfaction of debt and thereby lower the cost of borrowing, and reduce the rate of non-performing loans of financial institutions. 

Jurisdictions like Mexico, Vietnam, and China have undertaken similar reforms and have seen their positive impacts. For example, in Mexico, similar reforms led to the creation of a national Accounts Receivable Finance Platform by the government’s development bank, which has supported at least 130,000 SMEs through accounts receivable financing. In Vietnam, the number of collateral registrations (each representing a loan) surpassed 6000,000 cumulatively over a period of four years. In China, loans with movable asset security are now disbursed at about USD 3.0 trillion per year. 

The bill can bring growth to both MSMEs and to our financial institutions, and enjoin our banks to take part in MSME development with less risk. This measure provides us an opportunity to create a win-win, balanced environment for financial institutions and small businesses, which will generate more employment and sustainable livelihood for Filipinos across the country. 

In view of the foregoing, immediate passage of this bill is earnestly sought. 


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