Emergency subsidy for 18-M poor families amid COVID-19 quarantine

The main objective of Senate Bill No. 1418 is to provide immediate assistance to 18 million Filipinos who belong to the poor and informal sectors. They are also the most vulnerable in this time of crisis.

We need P200 billion to ensure that the most basic necessities are provided to them, including food, medicine, and other subsidies. When we look after them and care for their needs, these people would be encouraged to remain in their homes, not worry where to get their next meal, and be one with our government in fighting the COVID-19 virus.

The bill also provides emergency funding to allow the government to adopt and implement measures to suppress the spread of the virus. This will be done by expanding access to testing centers, providing adequate support, including PPEs for our health workers, strengthening support to medical facilities, and intensifying public education campaigns on prevention.

We have the funds. Our economic managers have assured us on this. Some P175 billion cash and its equivalent can be accessed from various GOCC accounts. We also have some P100 billion in various national government agencies’ accounts outside the Treasury Single Account.

This brings the total amount available – off-budget – at around P275 billion. This can be made available quickly to finance the Emergency Subsidy Program without affecting our national government’s fiscal position.

The 2020 spending program of P4.1 trillion will therefore remain intact, but we are ready to give the President the power, as needed, to repurpose funds within the General Appropriations Act from non-essential to essential items that are required for fighting COVID-19.

Other world leaders have already called for urgent emergency measures because this virus has been projected to infect anywhere between 40 percent and 70 percent of the world’s entire adult population. That’s at least three billion people, according to experts at Harvard University.

It is time to put our political affiliation aside and act together fast. Let us not sit idly and argue endlessly, lest we want COVID-19 overwhelm us. #

Passed! SB 1418 principal sponsor Senator Pia S. Cayetano with Senate President Vicente Sotto III, Acting Majority Leader Sherwin Gatchalian, and Senate secretariat officers and staff.

Legislation to outline PH action vs COVID-19

A report to the people

By Senator Pia S. Cayetano
Chair, Ways and Means
Chair, Sustainable Dev’t Goals, Innovation, and Futures Thinking

On Saturday, March 21, I went to Malacañang to discuss the urgent legislation needed in the time of COVID-19. A lot of people live day-to-day and the loss of income hits them the hardest.

We will work towards legislation that will make available P200 billion, mostly as financial assistance to the 16 million families – mostly coming from the informal sector like street and market vendors, agri workers etc., to allow them to buy food and other essentials.

We also discussed the funds available for medical supplies and equipment.

We ended the day with hope knowing that we can beat COVID-19 if we all work together. God bless and protect the Philippines and our people.

View from where I sat: Social distancing was observed as the panel from the Executive Branch, led by Executive Secretary Salvador Medialdea and Finance Secretary Carlos Dominguez III discusses the proposed Bayanihan to Heal as One Act with the Legislative panel represented by Senate President Vicente Sotto III and House Speaker Alan Cayetano.
Executive-Legislative Meeting in Malacanang
Discussing the proposed bill to outline government’s comprehensive action vs COVID-19 with Senate President Vicente Sotto III.

 

On President Duterte’s certification of CITIRA (SBN 1357) as urgent

Statement of Senator Pia S. Cayetano

Chairperson, Senate Committee on Ways and Means (March 11, 2020)

I welcome President Rodrigo Duterte’s certification as urgent the Senate’s version of the Corporate Income Tax and Incentives Rationalization Act (CITIRA).

This Presidential directive underscores the urgency to forge a more fair, efficient, and accountable tax system – one that should foster a stronger economy amid the many challenges our country is facing.

The certification also affirms the position earlier taken by our top economic managers, finance experts, and various business organizations fully backing SBN 1357.

The Senate version of CITIRA is a result of the successive discussions our committee conducted with investors to address their concerns. And what we repeatedly heard from various stakeholders is that we need to pass this measure.

Like the President, I am hopeful that passing CITIRA will end all uncertainty, assure investors of a more level playing field in terms of doing business in the country, and lead to a brighter and more sustainable future for all Filipinos. #

Senate Ways & Means Chair Pia S. Cayetano holds a press conference in the Senate on February 19, following her sponsorship speech on Senate Bill 1357 (CITIRA bill). She was joined by leaders from government, academe, and business organizations who expressed their full support for the measure.

Pia calls for renewed commitment to UN global goals

“Let us make sustainability an integral part of our national development goals.”

Thus said Senator Pia S. Cayetano, as she called for government’s renewed commitment to fulfill the 17 Sustainable Development Goals (SDGs).

The Chairperson of the Senate Committee on SDGs, Innovation, and Futures Thinking, Cayetano on Monday (March 2), together with Senate President Vicente Sotto III, led the opening of the Senate exhibit on the SDGs at the Senate legacy hallway.

The exhibit which runs until March 5 aims to promote public awareness on the importance of achieving the 17 SDGs to benefit all Filipinos.

Among those who joined the ribbon cutting ceremony were: United Nations Development Programme (UNDP) Resident Representative Titon Mitra; National Economic and Development Authority (NEDA) Assistant Secretary Carlos Bernardo Abad Santos; and Senate Deputy Secretary for Administration and Finance Services Atty. Arnel Bañas.

Cayetano stressed that while the country has committed to adopt the global goals, much remains to be done to achieve the various targets by 2030.

“We continue to face issues arising in health, education, agriculture, environment, equality, peace and justice, among others. We need to initiate more reforms to renew our commitment to the SDGs,” stressed the senator, who has filed measures in the Senate towards this cause.

Cayetano filed Senate Resolution No. 308, declaring the 2020s as the “SDGs Decade of Action.” It seeks to mobilize government, private sector, stakeholders, and citizens to work together towards sustainability in the next 10 years leading to 2030.

The senator also filed Senate Bill No. 1362 or the Sustainable Development Framework Act, which mandates NEDA to incorporate the SDGs and their associated targets in its sustainable development policy and programs.

Cayetano’s committee recently conducted a public hearing to discuss these measures with stakeholders from both the government and the private sector. The senator said she hopes to sponsor her proposals in plenary soon.

(L-R): Senate Deputy Secretary for Administration and Finance Services Atty. Arnel Bañas, Senate President Vicente Sotto III, Senate Committee on SDGs, Innovation, and Futures Thinking Pia S. Cayetano, United Nations Development Programme (UNDP) Resident Representative Titon Mitra; and National Economic and Development Authority (NEDA) Assistant Secretary Carlos Bernardo Abad Santos.

 

Sen. Pia Cayetano has filed the Sustainable Development Framework Act, which mandates NEDA to incorporate the SDGs and their associated targets in its sustainable development policy and programs.

Over 1M abandoned, neglected kids need a caring home

Senator Pia S. Cayetano is pushing to synchronize the country’s different adoption laws to hasten the process of finding a ‘second home’ for abandoned and neglected children across the country.

Cayetano delivered a privilege speech on Wednesday (February 26) to urge her fellow senators to support her bill, the Alternative Child Care Act (SBN 61). Her speech also coincided with the commemoration of February as Adoption Consciousness Month.

Citing a report from the United Nations’ Children’s Right and Emergency Relief Organization (UNICEF), Cayetano said about 1.8 million Filipino children remain abandoned or neglected for various reasons, including extreme poverty, domestic problems, natural disasters, armed conflicts, and other issues.

Meanwhile, the senator cited data from the Department of Social Welfare and Development (DSWD) showing that only around 2,191 children in the country have been placed for domestic adoption between 2010 and 2018.

“In eight years, [that’s] less than 300 children we are placing for adoption [yearly],” she pointed out.

“It is my personal conviction that we consider the state of each of these [abandoned and neglected] children,” added Cayetano, herself a foster parent and eventual adoptive mother to her 8-year-old son, Rene Lucas.

SBN 61 seeks to codify the country’s different laws on alternative child care and further improve the country’s foster care programs, such that out-of-home care provided by residential facilities shall only be a last resort for abandoned and neglected children.

The bill also makes domestic adoption administrative in nature in order to streamline its procedures and make formal adoption more accessible to families who are willing and qualified to adopt a child.

“The Constitution states that, ‘the State shall defend the right of children to assistance, including proper care and nutrition, and special protection from all forms of neglect, abuse, cruelty, exploitation, and other conditions prejudicial to their development,’” Cayetano cited in her privilege speech.

“I leave all of you with that visual of 1.8 million Filipino children without families who will care for and love them – not a mother or father to read them a bedtime story, to tuck them in, to even ensure that they come home when the sun goes down,” she added

“This is the objective of improving our law, so that we can expedite our [adoption and foster care] procedures, and we can place these children [under foster or adoptive families] faster so that they can have the home that they deserve,” the senator concluded. #

Senator Pia S. Cayetano delivers a privilege speech at the Senate in commemoration of February as ‘Adoption Consciousness Month.’ (February 26, 2020)
In this file photo, then House Deputy Speaker Pia S. Cayetano stands witness to the christening of three babies under the care of Taguig Lingap Center, the city’s shelter for children at risk.

CITIRA:  A fair deal for business, a winning deal for Filipinos

Sponsorship speech of Senator Pia S. Cayetano

Chairperson, Committee on Ways and Means

February 19, 2020

 

Mr. President, distinguished colleagues, today, I rise to sponsor and seek your support for Senate Bill No. 1357, per Committee Report No. 50, also known as the CITIRA bill, which has 2 main objectives:

 

(1) lowering the corporate income tax rate; and (2) modernizing the tax incentive system, making it more fair, efficient, and accountable.

Mr. President, from the onset let me clarify a major issue. A major source of resistance to this bill is the fear that incentives will be removed once this measure is enacted. This will not be the case, Mr. President. In truth, what we intend to do is to continue a sound incentives scheme, the details of which this representation will explain as we go along.

 

Having said that, allow me to start with a bit of history. 

I am sure that both Senate President Sotto and Senate Minority Leader Drilon, the leaders of both sides of this chamber, would also know from their experience that ever since a bill on rationalizing tax incentives was first proposed in 1995, the Department of Finance and the Department of Trade and Industry have urged Congress to finally make this crucial reform happen.

But even further down memory lane, when I was a college student in the school of Economics of the University of the Philippines, my father, the late Senator Rene Cayetano, was a member of the Batasan and was appointed as the Deputy Minister for Trade and Industry Administrator of the Export Processing Zone Authority otherwise known as EPZA. I had the opportunity to visit the export processing zones in Bataan, Baguio, and Cebu. In fact, my thesis was on fiscal incentives. This was in 1985.

And here we are today in the year 2020. 

Mr. President, in the series of hearings and meetings we conducted, we gave members of the business community, civil society, the academe, government, and business associations the opportunity to share their views in depth. The DOF and the DTI also held their own briefings with key stakeholders. The bill before us is a new and fairer deal between businesses and the Filipino people.

So where are we now and what are we doing? 

We are cognizant that Philippine enterprises are the backbone of the economy and that they contribute to national development by supplying much-needed employment and livelihood. And yet, companies doing business in the Philippines are slapped with a 30 percent corporate income tax rate, the highest in the region.

To address this, we will bring down the Corporate Income Tax rate from 30% to 20% over the next ten years. This should result in some 1.5 million more jobs, a feat I am certain we can accomplish, inso far as we have already provided millions of jobs to the economy. We believe that the reduction of 1% per year, is the pace that does not compromise the country’s vital fiscal resources.

However, Mr. President, we cannot talk about the corporate tax regime without earnestly discussing the tax regime for companies that have received unreviewed, and almost unconditional special tax treatment for decades.

 

From 2015 to 2017, the Philippine government granted more than one trillion pesos in tax incentives in the form of exemptions and tax discounts to various companies. In 2017 alone, the government granted billions of pesos to a select group of some 3,150 businesses. These companies pay an effective rate of 6 to 13 percent of Corporate Income Tax as opposed to other enterprises that pay the regular 30 percent Corporate Income Tax.

Let me make this clear again, I mention the amount of incentives, Mr. President, not to say that we will scrap them. All we want to do is rationalize them.

Incentives should not be given out to any corporation without the proper conditions. They should be performance-based and targeted, and granted in such a way that would benefit the public – by way of providing employment, boosting needed industries, and promoting the growth of less-developed areas in the country.

When we give out incentives on behalf of the people, then we are duty-bound to ascertain that we get what is rightly due to them. That is the essence of this bill: a fair deal for all, and the best deal for Filipinos.

My point, Mr. President, is that true incentives yield results, like the situation with our neighbors, Singapore and Malaysia. If a tax perk is given, without a clear set of conditions, without a time limit, and without adequate oversight, it’s not an incentive. It is a giveaway, and this country cannot afford corporate giveaways.

 

The billions of incentives we granted are equivalent to more than 10 percent of our 2020 national government budget, around 80 percent of DEPED budget, and more than four times the amount allocated to the Department of Health.

 

So let’s discuss tax incentive principles 

With billions of pesos on the line, we need to ensure that the incentives which the government provides are in accordance with the following principles based on international good practices:

 

  1. Performance-based: There should be clear attainment of actual investment, job creation, export, country-side development, and research and development commitments, else incentives will only be wasted. Parang scholarship grant, dapat may resulta, pasado sa exam at maka-graduate.
  2. Targeted: To minimize leakage and to avoid spreading our scarce resources too thinly, tax incentives should be given to activities with significant positive contribution to the economy, or those that really matter for the future, as specified in a strategic investment priority plan (SIPP), to be determined by the Board of Investments (BOI).
  3. Time-bound: There should be a reasonable timeframe for the enjoyment of incentives, and an extension period for companies that perform and contribute to the economy. Parang allowance na binibigay ng magulang sa anak, hindi pwedeng habang-buhay; and
  4. Transparent: Monitoring and evaluation of tax incentives should be institutionalized and reported by the government to the public. Yung pinaghirapang buwis ng ordinaryong taxpayer ang ginagamit nating pampondo sa incentives, kaya nararapat lamang na alam ng taumbayan kung saan napupunta ang buwis niya.

 

And let me add another principle: the incentive system should also be governed well. Currently, there are 13 different investment promotion agencies, or IPAs, each with its own charter and mandate, that offer different menus of incentives to various industries, sometimes not in line with national priorities, and often without the DOF or DTI knowing. As a result, there is no one simple set of incentives that the country may promote to potential investors. This can be very confusing and definitely not investor-friendly.

 

Another concern is that the number of industries that could potentially get incentives from these IPAs, which is some two-thirds of the economy, also makes our incentive system indiscriminately open to just any activity, and thus open to abuse.

 

This representation thus proposes that there be: (1) a set of incentives for different projects or activities, depending on the location and industry, and (2) incentives that shall be based on the Strategic Investment Priority Plan (SIPP), which will be determined by the BOI, in coordination with the Fiscal Incentives Review Board, IPAs, government agencies administering tax incentives, and the private sector. We also propose to expand the functions of the Fiscal Incentives Review Board, a body that currently grants incentives to government-owned or controlled corporations, to also approve all incentives given to private companies, as recommended by the IPAs. We also recommend this board to oversee the IPAs. This much-needed governance reform is at the heart of the CITIRA bill.

Before I proceed with more details of the proposed bill, allow me to acknowledge the work of some of our predecessors such as Senator Recto, who filed the first Fiscal Incentives Review Board expansion bill in 2001 and Senator Drilon, who authored the Tax Incentives Management and Transparency Act, or the TIMTA Law, passed in 2015. The law mandates companies to provide the government with data to estimate the tax incentives they receive, which is now being used to objectively assess our tax incentives. Both senators, along with Senators Lacson and Villar, have also filed in previous congresses bills on fiscal incentives rationalization. We are now building on their ideas to move the reform forward.

 

I would also like to put on record that our team painstakingly took the time to ease the transition period for investors and minimize the drastic changes the new incentive scheme could bring to their businesses.

 

Let me now discuss the salient points of the reform as proposed by this representation.

 

Reduction in the corporate income tax rate 

As mentioned earlier, the corporate income tax rate shall be lowered gradually by one percent every year, from the current 30 to 20 percent by 2029.

We have made the reduction of corporate income tax automatic in our version for the first five years to ensure predictability. By 2025, the reduction can be suspended by the President upon recommendation of the Secretary of Finance, if the projected deficit target as a percent of GDP exceeds the programmed deficit.

 

Modernization of the fiscal incentive system 

The centerpiece of the country’s current tax incentives regime is the income tax holiday or ITH for 4 to 6 years, and the special 5 percent tax on gross income earned, or GIE, in lieu of all taxes, both national and local.

 

The 5 percent tax on GIE is granted forever without conditions, even if the firm does not contribute to the economy in terms of jobs and exports at a level commensurate to the amount of incentives given. Colleagues, no other country gives incentives forever.

 

Dear colleagues, it is time to end a regime that distributes costs to many, and concentrates benefits to a few.

 

Sunset provisions 

After listening to the concerns and apprehensions of existing investor groups that will be affected by this bill, we came up with terms that address their request for a smoother transition period. This addresses our objective, which is to keep companies and investors here in the country while rationalizing the incentives that we give them.

 

For those granted ITH only 

Existing registered activities granted the income tax holiday shall be allowed to complete the remainder of their ITH period.

For those granted 5% GIE but not yet enjoyed

These are the firms with unfinished ITH and a succeeding Gross Income Earned (GIE) of 5%. In their case, their ITH will be allowed to expire on schedule and will be followed by a 5% GIE, with a maximum of 5 years. If the firm has no ITH but is about to go into 5% GIE, they will also enjoy 5% GIE, for a maximum of 5 years.

Granted and currently enjoying 5% GIE forever 

Existing registered activities that were granted the 5 percent tax on GIE, in lieu of all taxes, will be allowed 2 to 7 more years as a transition period, while paying the same rate of 5 percent GIE. The duration of the proposed transition period is as follows:

  • 2 years for those who have been receiving the GIE incentive for more than 10 years;
  • 3 years for those who have been receiving the GIE incentive for between 5 and 10 years;
  • 5 years for those who have been receiving the GIE incentive for below 5 years, and
  • A special 7 years for those that meet any of the following conditions:
  1. Exporting 100 percent of their goods and services, b. Employing at least 10,000 Filipino workers, or c. Engaging in highly footloose activities. And in addition Mr. President, after the sunset period, they will still be allowed to apply under the new incentive package where they will be assessed by virtue of the new package of this bill.

 

What is the new incentives package? 

Under our version of CITIRA, a registered activity may be granted an income tax holiday of 2 to 4 years, followed by a Special Corporate Income Tax (SCIT) rate, that is based on Gross Income Earned (GIE). The Special Corporate Income Tax Rate will be equivalent to 8% GIE for 2020, 9% for 2021, and 10% for 2022 and onwards.

 

Like the current system, this shall be in lieu of all other taxes, and can be availed for 3 to 4 years, depending on the location and activity. This provision preserves the one-stop shop nature of present incentives. We hear the concerns of investors that they do not want to deal with many government agencies when paying taxes. This is why we retained the “in lieu of” provision and one-stop-shop. Based on my discussion with the firms, this particular provision already addresses 90 percent of their concerns.

 

The initial availment of tax incentives, which includes Income Tax Holiday plus the Special Corporate Income Tax Rate is from 5 to 8 years, depending on the category of the registered activity as indicated on the screen. There are three categories: basic, enhanced, and advance. This is our response to the need to make incentives more targeted to locations that need them and industries that we want to promote.

Duration of income tax holiday (ITH) and Special Corporate Income Tax (SCIT), per category 


There is more good news in our version. The availment of Special Corporate Income Tax may be extended by 3 to 4 years at a time or more than once, up to a maximum of 12 years, depending on the category, so long as the firm remains true to its performance commitments.

In lieu of the Special Corporate Income Tax, the registered activity may instead be granted the enhanced deductions shown on the screen subject to the regular prevailing corporate income tax rate. These enhanced deductions incentivize good behavior, such as local job creation, exports, and investment in hi-tech. As proposed by the DTI, our enhanced deductions menu was expanded to include deductions for power costs to account for the country’s challenges in this area. The expanded deductions list is shown on the screen.

Like the ITH and Special Corporate Income Tax (SCIT), the availment of enhanced deduction may be extended also for up to 12 years.

 

To attract the biggest investors, like what Vietnam did with Samsung, the President may give incentives for a longer period of up to 40 years for highly desirable projects, provided that the benefit that the public could derive from such investment is clear and convincing and far outweighs the cost of incentives that will be granted.

 

Governance of fiscal incentives 

To ensure that incentives granted are performance-based, time-bound, targeted, and transparent, the present Fiscal Incentives Review Board’s function is expanded so that it can provide proper oversight over the IPAs, in the same way that the GCG law of 2011 created the Governance Commission on GOCCs to oversee the GOCCs and ensure better performance and accountability.

Under our proposal, the Board will be chaired by the DOF and co-chaired by the DTI, with representatives from the Office of the President, DBM, and NEDA.

 

Let me assure all the officials and employees of the IPAs that we are not abolishing your agencies or cutting down your jobs. IPAs will continue to perform their function of promoting investments in the Philippines, receive and process applications, and recommend to the Fiscal Incentives Review Board worthy incentives for approval by the Board. None of you shall lose your jobs because of this reform. Sec. 9 of Senate Bill No. 1357 provides: The IPAs shall maintain their functions and powers as provided under the special laws governing them except on the approval of incentives.

 

Mr. President, esteemed colleagues, allow me to underscore one final point, and this is the urgency of our task ahead. Let us end the uncertainty.

 

As an economics graduate, Mr. President, I was trained to think of resources, including our fiscal space, as limited. With limited fiscal resources, from the hard work of our countrymen, we must ask ourselves the following questions as we deliberate on this measure:

 

  1. Should we cut taxes for the many, or should we keep conditions loose for the few?
  2. Should we move incentives towards Philippine labor and Philippine products, or should we continue privileges that have gained our economy little value-added?
  3. When we spend our country’s fiscal resources, do we prefer more accountability, or less?

 

On these basic questions of principle, I trust that this Senate of the People has seen the merits of this reform.

 

Further, as part of our commitment to the United Nations 2030 Agenda for Sustainable Development, all efforts must be exerted to achieve the Sustainable Development Goals (SDGs) by 2030. This is the ideal future, a future where there is no poverty, and where our people and economy thrive.

Rationalizing incentives and lowering the corporate income tax will bring in more investments and provide more jobs for Filipinos. This ensures we remain on target with SDG 8, which promotes decent work and economic growth; SDG 9, promoting inclusive and sustainable industrialization and fostering innovation; and of course, SDG 1, which calls for ending poverty in all its forms. This is only the beginning, as working on just one SDG creates a ripple effect on all the other SDGs, especially on hunger, health, education, and equality. A flourishing economy driven by the Filipino people will safeguard the country’s future, even beyond 2030.

 

Dear colleagues, you have appointed me to be chair of the ways and means committee and trusted this representation to study the matter and make recommendations. I humbly ask that you review these proposals, keeping in mind that the greater majority will benefit from the lowering of the corporate income tax and that a rationalized incentives scheme that rewards investments that are result-based will lead to greater prosperity for our nation.

 

Thank you, Mr. President. 

Pia bats for ‘fair, efficient, accountable’ CITIRA

“A fair deal for all. The best deal for Filipinos.”

This was how Senate Ways and Means Chair Pia S. Cayetano described Senate Bill No. 1357, or the proposed Corporate Income Tax and Incentives Rationalization Act (CITIRA) which she sponsored in plenary on Wednesday.

CITIRA seeks to reduce the corporate income tax (CIT) rate in the country, which is currently among the highest in the ASEAN region, and reform the fiscal incentives system to make it more fair, efficient, and accountable.

Under the bill, the country’s CIT rate will be gradually lowered by one percent every year, from 30 percent to 20 percent by 2030.

The measure will also rationalize fiscal incentives given to firms to make these “performance-based, time-bound, targeted, and transparent.”

The bill intends to prioritize incentives to business activities that generate domestic employment; promote research, development and innovation; promote agribusiness; and invest in areas that are less developed or are recovering from disasters and conflicts, among others.

CITIRA shall likewise offer additional tax deductions to reward corporations’ good behavior, such as local job creation, exports, and investment in high technology.

Meanwhile, the committee is also proposing to implement sunset provisions for firms currently enjoying fiscal incentives to help them transition to the new tax regime under CITIRA.

“After listening to the concerns and apprehensions of existing investor groups that will be affected by this bill, we came up with terms that address their request for a smoother transition period. This addresses our objective, which is to keep companies and investors here in the country while rationalizing the incentives that we give them,” the senator stressed in her speech.

Furthermore, the measure seeks to expand the functions of the Fiscal Incentives Review Board (FIRB), which presently grants incentives to government-owned or controlled corporations. If passed, CITIRA shall mandate the FIRB to approve all incentives, including those given to private companies, as recommended by the different Investment Promotion Agencies (IPAs).

“Currently, there are 13 different IPAs… that offer different menus of incentives to various industries, sometimes not in line with national priorities… There is no one simple set of incentives that the country may promote to potential investors,” Cayetano stressed.

Lastly, the measure allows the Philippine President to grant incentives for a longer period of up to 40 years for highly desirable projects, as long as they will primarily benefit the Filipino public.

“This is the urgency of our task ahead. Let us end the uncertainty (in the business community) by passing CITIRA” Cayetano said. #

Download Sen. Pia Cayetano’s presentation here: CITIRA sponsorship speech ppt

On the recent outlook upgrade for PH by Moody’s and Fitch Ratings

Statement of Senator Pia S. Cayetano
Chair, Committee on Ways and Means
February 18, 2020
The two top international credit rating agencies, first, Fitch Ratings, and now Moody’s have both given the Philippines an outlook upgrade. This signifies an upgrade from stable to positive.
This is good news because it sends a signal to the global business world that the Philippines is now a prime candidate for a credit ratings upgrade, which would mean lower borrowing costs from international creditors, both for the government and private sector investors.
The work I am currently doing on tax reforms in the Senate complements this.
Soon to be sponsored is Corporate Income Tax and Incentives Rationalization Act (CITIRA), which is made up of 2 parts: 1) gradually lowering corporate income tax from 30% to 20%; and 2) rationalizing fiscal incentives.
The  CITIRA committee report I will be sponsoring is a product of numerous hearings and consultations with government representatives and the business sector.  Knowing that we have reached out to all of them and have worked out very favorable terms for existing investors, the groups I have met expressed satisfaction and are now looking forward to the swift passage of the measure once it’s sponsored on the floor.

Pia welcomes multi-sectoral support for PIFITA

Senate Ways and Means Committee Chair Pia S. Cayetano welcomed wide support coming from different stakeholders for the immediate passage of the proposed Passive Income and Financial Intermediary Taxation Act (PIFITA).

The panel on Wednesday (February 12) held its second hearing on ‘Package 4’ of the government’s Comprehensive Tax Reform Program (CTRP), which seeks to make passive income and financial intermediary taxes in the country “simpler, fairer, more efficient, and more regionally competitive.”

During the hearing, various stakeholders from government, business organizations, industry groups, and private companies expressed their support for the measure, with only a few concerns raised regarding specific provisions.

Manifesting general support for PIFITA were representatives from the Bangko Sentral ng Pilipinas (BSP), Bureau of Internal Revenue (BIR), Bureau of the Treasury (BTr), Capital Market Development Council (CMDC), Insurance Commission (IC), Association of Global Custodians (AGC), Philippine Insurers and Reinsurers Association (PIRA), and Philippine Stock Exchange (PSE), among others.

“I am very happy to hear that most [stakeholders] are supportive [of PIFITA], and there are just a few issues that need to be resolved,” Cayetano stressed in an interview on the sidelines of the hearing.

On the other hand, the senator noted that the concerns raised by various sectors would also be taken into account when the committee drafts its version of the bill.

Finance Undersecretary Karl Chua, for his part, said the administration remains open to endorse the amendment of certain provisions that are worrisome for industries.

“When you think of passive income, there are many other areas that are affected, like trust corporations, thrift banks, microfinancing, insurance corporations, non-life and life. The objective of the administration is to simplify it… So we have to hear everybody so that we are sure about the effect on all of these sectors,” Cayetano stressed.

“Ang objective talaga natin is to provide a market so that the Filipino citizens – hindi lang mayayaman kundi ang mahihirap – can invest their money and have access to these markets. Para hindi naman mauubos ng taxation ang kanilang mga iniipon,” she added.

The senator said the panel is planning to conduct at least two technical working groups (TWG) to discuss and address specific concerns on certain provisions of the measure.

“At this point, everything is open. I understand the [stakeholders’] concerns. They want a level playing field. We don’t want to create a situation where we are discouraging investments in certain sectors. So we take note of [those concerns and] we want to study them properly,” Cayetano said.

“We just have to [make] clear with everyone that we can try our best to address their concerns,” she further noted. #

The Senate Ways and Means Committee conducts its second public hearing on the proposed Passive Income and Financial Intermediary Taxation Act (PIFITA).
Finance Undersecretary Karl Chua says the administration is open to studying and endorsing amendments to PIFITA from various stakeholders.
Representatives from government and the financial market sector were invited to state their position on the bill seeking to simplify the tax system covering passive income and financial intermediary investments and transactions.

Private sector participation key to achieving SDGs

“Creating a sustainable future for all is an integrated responsibility. We all need to do things together to achieve our goals.”
Thus said Senator Pia S. Cayetano as she called for stronger public-private partnerships in fulfilling the country’s commitment to the United Nation’s Sustainable Development Goals (SDGs).
“The whole point of the SDGs is to look at it from an integrated point of view. Public-private partnership is so important. It’s important that as we lead, we also follow. As we inspire people, we also aspire to be better,” the senator said in a speech before top executives of the Alliance Global Group Inc. (AGI) during their SustainAGIlity Conference on Thursday (February 6).
Cayetano stressed that private companies and corporations also carry the role of educating the public on the 17 Global Goals that the country seeks to achieve by 2030.
“A lot of people still don’t know what SDGs are. So the big challenge we have, and I’m sure all of you are onboard, is to share with everyone what these goals are. Right now, we lack information campaigns on the SDGs, so maybe you can help us share the news,” she said.
The chair of the Senate Committee on SDGs, Innovation, and Futures Thinking, Cayetano recently filed a resolution declaring 2020s as the “SDGs Decade of Action.”
This initiative seeks to encourage participation of experts from both government and the private sector to work towards achieving the SDGs.
“We need people who can take a step back and ensure that we are thinking of the future. Because otherwise, we get stuck in the now. We need to think of this on a national level [and determine] our baselines,” the senator said.
“It’s really necessary for people to be able to think creatively.  Without sustainable plans, well-intended policies may not necessarily give us the outcomes we expect,” she added.
Furthermore, the senator also urged companies to look at the SDGs as a set of intertwined goals, instead of treating each goal separately.
“It is erroneous to think that we have the option to choose just one goal that we want to deal with. It’s not meant to work that way. These goals are all integrated and indivisible,” she emphasized.
“These goals balance the dimensions of sustainable development of the economy, society, and environment. So for any activity, it’s not just about identifying one goal. It’s about tying them all together,” she added.
In particular, Cayetano said private companies can be drivers of SDGs by helping make the country’s cities and communities more sustainable, and by promoting the practice of sustainable consumption and production.
“A lot of these companies are involved in building cities, communities, and places where people live. In a way, they are also planning the lives of these people, as they play a part in deciding how these people manage their families and improve their quality of life. So they need to consider that as they plan for sustainability,” Cayetano said.
“There is also a need for innovation on how they produce their services for everyday life. They need to reinvent our manner of consumption by making sustainable alternatives more available to consumers,” the senator concluded. #
Senator Pia Cayetano was one of the speakers at the SustaiAGIlity forum organized by the Alliance Global Group Inc.(AGI), one of the country’s largest conglomerates.
Senator Pia Cayetano shares the success story of Barangay Fort Bonifacio, Taguig, in setting up a Materials Recovery facility (MRF).
Cayetano: “Without sustainable plans, well-intended policies may not necessarily give us the outcomes we expect.”
Facebook live: Senator Pia Cayetano with Alliance Global Group Inc. CEO Kevin Andrew Tan.