Mrs. Arroyo told a meeting of the Legislative-Executive Development Advisory Council at Malacañang that the passage of a bill to privatize state transmission lines and another providing tax incentives to asset management firms before the Sept. 7 recess of Congress would show that the country was still a "functioning economy."
The President’s appeal to Congress came a day after reports that US investment fund Cerberus Ltd. had cut a third of its planned investment in the Philippines due to disappointment over the slow pace of economic legislation in the country.
"This is to counter the currency and financial pressure the Philippines faces arising from the turmoil in Brazil and Argentina and the budget deficit of the national government," Mrs. Arroyo said.
"So, if the House of Representatives could pass these two bills this week, I hope the Senate could pass it next week."
The Philippines, which has high level of foreign debt, has often been grouped by the markets with emerging economies in Latin America teetering on the brink of defaulting on debt payments.
But Mrs. Arroyo’s ruling coalition held majority of the seats in both chambers of Congress so it would not be difficult to pass the reform bills, a statement from the presidential palace said.
The government estimates it would raise about $2 billion from the privatization of the transmission lines of the state power firm National Power Corp. (Napocor) under the Transmission Corporation Franchise bill.
That amount would give the government some leeway in achieving its P130-billion budget deficit target this year.
As of the first seven months of the year, the country’s budget deficit already overshot the full-year target, reaching P133.1 billion.
Legislation would allow the transfer of the electricity franchises to groups interested to lease transmission assets of Napocor.
The special purpose asset vehicle (SPAV) bill would give tax and other incentives to asset management companies that would be buying Philippine banks’ non-performing loans. Banks may also be allowed to invest in the asset management firms.
Foreign institutions, like Cerberus, have been waiting for the legislation on asset management firms before they pump investments in the country. – Reuters, Marichu Villanueva