Planting new seeds

What’s so great about a new year?

For many of us, a new year provides a fresh start, a chance to reflect on the year that was, an opportunity to finish what we failed to wrap up last year, an occasion to open new doors, and so much more.

If 2019 wasn’t good, then 2020 could be better. After a long break from work or school, we are all starting 2020 energized, reinvigorated, hopeful. For those who wanted to lose weight but failed to do so last year, then we can all set a new goal and create a new plan of action. For those who wanted to improve their quality of life by going into business, building a new house, relocating, changing jobs but did not have the courage or the funds to do so, then now could be the right time to tell yourself, kung hindi ngayon, kelan pa.

Businesses, and even governments, can also take stock of the events of 2019 in order to come up with a better plan for this year. But unlike individuals who can do this assessment on New Year’s Eve, corporations conduct their planning much earlier, like last November or December. That does not change the fact though that even business organizations look at a new year as a chance to do things even better, to correct wrongs, to come up with new projects, to attract new investors.

The year 2020 is not just a new year. It is also the end of a decade or the start of a new one. Make the most of it. This year may not be the year to harvest, but it can be the time to sow new seeds.

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According to Malacanang’s 2019 yearend report, the best is yet to come for the country in the last two and a half years of the Duterte administration.

Presidential spokesperson Salvador Panelo attributed the government’s achievements in 2019, such as the improved credit rating of the country, to how the President used his political capital wisely.

He said the Filipino people could remain hopeful in 2020 as they have so much to look forward to in the remaining years of the Duterte administration.

For many businesses, however, 2020 is starting with a lot of uncertainty.

Many companies, especially foreign ones located within special economic zones that currently enjoy special tax breaks such as a five percent tax on gross income in lieu of national and local taxes after the expiration of their income tax holiday, are looking at relocating to countries with more favorable business incentives.

This is because of the second package of tax reforms being pushed by the Duterte administration which will include rationalizing fiscal incentives, even removing existing ones which have been built into the business plans of many foreign investors.

Philippine Economic Zone Authority (PEZA) director general Charito Plaza had earlier warned that economic zones here may soon lose many firms because of the country’s unstable investment policies and laws. Many of companies, she said, are waiting for the outcome of the Senate deliberations on the matter before making new investments or deciding on pulling out for good.

Plaza said some companies have delayed expansion plans while waiting for the new law, adding that industries feel that the Philippines has unstable investment policies and laws and they are scared to expand if our government keeps on changing the rules in the middle of the game.

The PEZA chief had earlier pushed for the exemption of PEZA-registered firms from the proposed Corporate Income Tax and Incentive Rationalization Act (CITIRA) as she pointed out that “we are not the only game in town and that Philippine economic zones are competing with countries with far more developed ecozones.”

Unfortunately, reports say that Plaza has had a changed of heart and has guaranteed the Department of Finance of her agency’s support for the CITIRA bill, especially after Trade Secretary Ramon Lopez agreed to cooperate in fine-tuning the measure to consider concerns of PEZA and its industries.

But Plaza is correct. We cannot keep changing the rules. Investors need stability and sudden changes in government policies runs counter to our country’s goal of attracting new investments.

Then as if foreign investors are not yet scared enough, here goes our President announcing that the government will not renew the agreements with water distribution concessionaires Manila Water and Maynilad. Expiring in 2037, the concession agreements will now end in 2022 which is the original expiration date after the Metropolitan Waterworks and Sewerage System revoked the extension which was approved in 2009 during the Arroyo administration.

The revocation came after the two concessionaires already invested hundreds of billions of pesos to improve water and wastewater services, investments which they may no longer be able to recover because of the revocation.

Which foreign investor in its right mind would now invest in the Philippines given the government’s propensity to change rules midstream?

The President keeps talking about economic sabotage committed by MWC and Maynilad due to what he claims are onerous contracts with government. He seems to have forgotten, or simply refuses to acknowledge the fact that these contracts were prepared and reviewed by the government and that the said provisions which he is now questioning were included because no investor at that time wanted to invest in water distribution.

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Then, of course, there is this matter of government warning that it will not renew the franchise of television, radio, and film network ABS-CBN which will expire on March 30.

Duterte had earlier accused ABS-CBN of swindling him for not airing his paid political advertisements during the 2016 presidential campaign. Even House Speaker Alan Peter Cayetano has alleged that they were given unfair airtime by the network.

While these personal grievances may be legitimate, unfortunately, the action smacks of political vendetta.

Duterte has advised ABS-CBN to just sell its network. With new oligarchs and cronies of the Duterte administration into the water and media business, let us hope that all these actions will not result in old oligarchs being replaced by the new ones.

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