Reforms sought for ‘new normal’

by Czeriza Valencia (The Philippine Star), 29 May 2020

MANILA, Philippines — The country’s economic managers will work on 11 structural reforms over the next 12 months to support the so-called new normal of economic activity amid the prevailing coronavirus pandemic.

In a presentation during a business forum yesterday, acting Socioeconomic Planning Secretary Karl Chua said the reforms, along with the re-prioritization of the 2021 and 2022 national budget to build health and economic resilience, will form the resiliency stage of the government’s response to the COVID-19 pandemic.

“In the resiliency stage, we have two instruments, the budget and the structural reforms, and we intend to align the last two years of this administration to making the Philippines much stronger to address any shocks in the future,” Chua said.

Economic managers are proposing the re-prioritization of the 2021 and 2022 budget to roll out infrastructure projects with the strongest impact on growth, jobs, poverty reduction, multiplier effect on the economy, and business confidence.

On the forefront is the strengthening of digital and health infrastructure, housing, as well as water and sanitation.

Flexibility in the procurement and budget allocation for such projects are also proposed in the national budgets for 2021 and 2022.

“All of these are the basic foundations of a new normal. And we will put a bit more money in the budget to support all these. And some flexibility for instance so that if there will be a second wave or third wave (of infections) for instance, we can respond to that immediately,” Chua said.

The economic team will also push for several measures that will introduce structural reforms in 11 areas that cut across health, agriculture, business, digitalization, investments, education, social protection, labor, public transportation, logistics and disaster response.

“We are proposing a number of structural reforms. All of these do not cost much money but they can radically make the economy much stronger and can provide more opportunities for growth,” said Chua.

“All of these are what we propose to do in the next 12 months. Some of these are easier to do, some are more difficult but these are what we think the basic elements for us to survive and do better in the new normal.”

These structural reform clusters may be covered by a bill each, Chua noted.

For instance, reforms in the health sector comprise the improvement of infrastructure; production of pharmaceutical-grade medical supplies; strategic inventory of medicines and equipment; improvements in the implementation of universal health care; strengthening of research and development, establishment of a virology center and pharmaceutical development center.

In agriculture, reforms cover productivity enhancement and consolidation of land management to enhance production and food security, and introduction of a progressive idle land tax.

Digitalization of more government transactions will be pushed to ease the burden on the private sector.

Passage of economic liberalization bills and modernization of investment promotion agencies will be pushed to enable these to “proactively seek out the desired investors and give tailor-fitted incentives.”

Making it easier for businesses to obtain credit, introducing regulatory reforms to improve competition, and ushering in Industry 4.0 (innovation, digitalization, and entrepreneurship) will be reforms sought for businesses.

Enabling flexible learning options in schools will be introduced to enable students to continue their education.

For social protection, enabling the digital delivery of social protection, unemployment insurance, and financial inclusion will be pushed. This includes having one bank account per family.

Labor market policies meant to help businesses retain their workers and skills retooling will be introduced.

For public transportation, economic managers will be seeking route rationalization and supporting structures such as bus rapid transit, bus stops, prioritized right of way; modernization of public utility vehicles, automated fare collection, promotion of non-motorized transport such as walkways and bike lanes.

Rationalization of freight system, establishment of strategic warehousing, cold-chain systems, and food terminals will be sought for logistics.

Including health-related disasters in the country’s disaster and emergency response framework will also be proposed.