‘Phl making headway without higher taxes’

MANILA, Philippines - The country is gaining headway without raising taxes, as shown by the robust economic growth in the first quarter and improving business outlook, President Aquino said yesterday.

The President touted the country’s economic achievements at the inauguration of the Advanced Device and Materials Testing Laboratory – the country’s first – at the Department of Science and Technology (DOST).

Aquino said that with more people gaining access to opportunities, resources and skills, the economy has finally gained steam and maintained its momentum.

“Since we believe that this is the way to further accelerate the growth of our economy – which, as you have probably heard, grew by 7.8 percent in the first quarter of 2013, making us the fastest growing economy in Asia – we have nearly doubled the budget of the Department of Science and Technology since coming into office, from P5.2 billion in 2010 to P9.9 billion in 2013, obviously without raising taxes except for the sin products,” Aquino said.

He said the nation is seeing the fruits of “betting such a large sum” on the creativity of the Filipino.

“Innovation is the engine of any modern economy, and one look around the Philippines tells us that we have the natural inventiveness to be one of the world leaders in this regard,” he said.

What has been lacking, he said, is support. He pointed out that his administration is giving the people the necessary resources and opportunities to be creative in their respective fields and industries.

“We came into office with a promise of change. Today, few will deny that we have made great headway in fulfilling this promise,” the President said.

He stressed that his administration has managed to improve the global perception of the Philippines and “reversed the psychic make-up of our people, from one bogged down by negativity to one revitalized by solidarity and hope.”

A key factor in maintaining the growth momentum is providing   the technological resources for the people and Philippine industries to compete and succeed globally, he added.

 

Country’s first

With the new testing laboratory at the DOST, semiconductor and electronic industries need not go abroad to have their materials and products tested.

“Now that this lab is fully operational, companies here will not have to send their products for failure analysis to the United States or Singapore. They can do it here in their own backyard, with the tests conducted by our very own scientists,” the President said.

“I know that many of you in the semiconductor industry have spent decades asking for a facility such as this one to be built. And knowing what you contribute to our economy – knowing how much more you can contribute – we made absolutely certain that this got done,” he said.

Science Secretary Mario Montejo said the semiconductor and electronics industries had been a lifeblood of the country’s exports. But at present, the Philippines captures only 10 percent of the total world semiconductor market, which earned $30 billion in 2011.

The local semiconductor industry is involved mainly in the assembly of products such as integrated circuits, chips, rectifiers, capacitors and resistors, among others, and has not gone into more profitable activities such as design and manufacturing.

Montejo said the country imports materials and “we only assemble the chips.”

With the new testing facility, the DOST hopes to encourage industries to expand from design to prototyping and to mass production.

“We need to become the country that not only has the capacity to build semiconductors – and build them well at that – but that which has the capacity to design, and test them here,” Aquino said. “And I can promise you: you have a government committed to helping you do just that.”

He revealed that a Philippine Product Development Center is set to open next year. The facility is designed to further improve the semiconductor industry’s testing and prototyping capabilities.

He also said a Philippine Microelectronics Center is set to be unveiled later this year in cooperation with several universities, to train engineers in integrated circuit design, simulation, and lay outing.

“This comes from a strong belief that we can do much more than assemble items or answer phones; that if we continue down this path of making the most of our inherent talents, the next great developments of human civilization can conceivably come from this archipelago,” Aquino said.

“This will not happen overnight, but if we put a premium on innovation – in dreaming bigger, doing better, and always reaching further with our talents – then it will only be a matter of time until we get there,” he said.

 

‘Seeds of change planted’

At the House of Representatives, Speaker Feliciano Belmonte Jr. said lawmakers would double their effort to sustain the country’s growth momentum, with the outgoing Congress having already “planted the seeds of change.”

“We will continue our hard work, we will do our part to sustain this growth and attract more investments, create more businesses, better jobs for our people, and make sure that our growth is inclusive,” Belmonte said.

“Meaningful socio-economic development means, among others, promoting and enhancing economic efficiency and full competition in trade, industry and all related activities,” Belmonte said, adding “we must encourage more direct investments.”

He said it is the task of the next Congress “to develop and harvest, so to speak.” 

He stressed the need to enact the proposed Fair Competition Policy or Anti-Trust Act (House Bill 4835), which is essential to level the playing field among firms and to effectively reduce transaction costs and risks for businesses.

Belmonte said he is also pushing for the enactment of amendments to the Build-Operate-Transfer law as well as revision of the 70-year-old Immigration Act to make them conform to the requirements of national security and economic development.

Judicial reform, considered vital to growth and good governance, will remain a priority, according to Belmonte.

For the Department of Labor and Employment (DOLE), the robust growth in the first quarter and possibly in the coming months would mean more employment and livelihood opportunities for Filipinos.

“The remarkable growth of the economy all the more inspires us to work harder in ensuring that the larger segment of the population benefits from our reform programs and enhanced services,” Labor Secretary Rosalinda Baldoz said in a statement.

While manufacturing and consumer spending were seen as main drivers of first quarter growth, remittances from overseas workers had contributed immensely to gross national income – at 3.2 percent, according to Baldoz.

She said DOLE is working closely with other government agencies in ensuring that workers are adequately protected with social security and insurance coverage, reasonable compensation, access to emergency employment program and even housing.

Baldoz said they are also encouraging businesses, particularly those in the manufacturing and agriculture sectors, to take in more investors so that they can hire more workers in the informal sector.

“The real indication that the country is making any progress is if there is a decrease in the number of its informal workers, since that would mean they were able to find a better job in the formal sector,” Baldoz said.

Sen. Alan Peter Cayetano, meanwhile, said the robust growth figure would only be meaningful if more jobs and opportunities are made available to the people. “We must do more to create jobs, lower prices, and increase wages,” he said.

“We praise the continuing economic growth of our country but we should ensure that the effects of a rising economy translate to a betterment of the lives of poor families throughout the country,” he maintained.

He proposed the development of cooperatives with the capacity to lend to members so that more Filipinos can start their own small businesses or even hire people.

 

Hype only

Militant groups, however, belittled the latest growth data, saying many Filipinos remain poor and that government spending had hardly benefited vital sectors like health and education.

“There is no significant increase in government spending for education and the government has allowed 354 colleges and universities to increase tuition this school year,” the Kilusang Mayo Uno said in a statement.

It attributed the 7.8 percent first quarter growth to election spending.

“Instead of increasing subsidy for health services, the government is privatizing public hospitals. Instead of providing affordable decent housing to the poor, the government is threatening urban poor communities with demolition,” KMU pointed out.

“This kind of news only elates the big businessmen or those who trade in the stock market. It doesn’t thrill those who are jobless and have nothing to eat,” Bagong Alyansang Makabayan secretary-general Renato Reyes said.

“Aquino’s economic managers can hype the GDP growth all they want. They can hype the investment grade and all the supposed positive news on the state of the economy but at the end of the day, it’s still about sufficient wages and income, productive jobs and livelihood, and food on the table that matter,” Reyes said.

He said inclusive growth “is impossible under the current economic setup” and that the economy “needs a new framework and orientation if growth is to be really broad-based and inclusive.” – Mayen Jaymalin, Christina Mendez, Rhodina Villanueva, Paolo Romero