Duterte’s popularity positive for fiscal reforms
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Thu, 11 Apr 2019 16:25:18 +0000
President Rodrigo Duterte’s continued popularity could boost his fiscal reform agenda, Japan’s Nomura Securities Ltd. said, especially if his allies end up winning seats in Congress next month.
In a commentary on Thursday, Nomura economist Euben Paracuelles noted that Duterte’s +66% net satisfaction rating based on the latest Social Weather Stations (SWS) survey was the highest since he took office in 2016.
“The first quarter marks the third straight quarter in which President Rodrigo Duterte’s popularity has increased after hitting a low in mid-2018…,” he said.
“This implies a rising likelihood of his allies retaining a strong majority in Congress, which, in turn, should support the fiscal reform agenda during the second half of his six-year term,” he added.
Approval of Duterte’s Comprehensive Tax Reform Program (CTRP) has stalled following the passage of the Tax Reform for Acceleration and
Inclusion (Train) Act in late 2019. Implemented at the start of 2018, the law — which raised taxes on fuel, cars and other items in exchange for lower personal income tax rates — has been blamed for causing above-target inflation.
This subsequently soured legislators’ enthusiasm, particularly in the Senate, for other CTRP packages that remain pending in Congress and could have to be refiled after a new set of lawmakers takes office in July.
Still to be approved are:
• Package 1B, which seeks to reform the Motor Vehicle Users’ Charge;
• Package 2, which calls for the reduction of corporate income tax reduction and streamlining of fiscal incentives, that has already been passed by the House of Representatives as the Tax Reform for Attracting Better and High-Quality Opportunities (Trabaho) bill;
• Package 2 Plus, which proposes additional excise taxes on tobacco and alcohol products as well as increase the government’s share from mining.
• Package 3, which covers reforms in property valuation;
• Package 4, which proposes the rationalization of capital income tax, that has also been approved by the House.
Lawmakers are currently on a break for the May mid-term elections. Sessions are scheduled to resume May 20 and 17th Congress will wrap up its business on June 7.
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