Duterte Pushes to Open Philippines to More Foreign Investors
(Bloomberg) -- Philippine President Rodrigo Duterte pushed for opening the economy to more foreign investments in his final address to Congress, where he also pledged pandemic support to help businesses bounce back and defended his much-criticized drug war.
Duterte called on lawmakers to amend laws to ease restrictions on international retailers and professionals, as well as to allow foreigners greater ownership in some public utilities. He also pushed for further tax reforms and the completion of infrastructure projects outside Manila.
“This is by no means my swan song,” Duterte said Monday. “I shall never cease to implore Congress to pass vital and critical legislation as well as to push the entire government to ensure nothing less than the full recovery and revitalization of our country.”
The Philippine leader said that his government will work to restore jobs, and is “committed to assist the private sector to regain the commercial vibrance of the country prior to the pandemic.” He said that while the nation can’t afford another lockdown, he won’t hesitate to reimpose restrictions if needed.
Earlier in the day, Senate President Vicente Sotto said at a briefing that senators will prioritize the bills on foreign ownership that Duterte backed. Meanwhile, the House will focus on next year’s budget that will aid in the nation’s pandemic fight, Speaker Lord Allan Velasco said in a separate speech.
Duterte used the first part of his speech to champion his drug war that has killed thousands, saying his government has gone after syndicates and reformed drug dependents. He also backed a bill to reform the nation’s military pension system “to maintain government fiscal flexibility,” and the creation of a department for migrant workers.
The president reiterated his independent foreign policy, and said he’s been asserting the Permanent Court of Arbitration’s 2016 ruling favoring the Philippines and dashing China’s expansive claims in the South China Sea.
Duterte has maintained majority support in Congress in the past five years, solidified during the 2019 elections. His popularity -- which was as high as 91% in the most recent poll -- allows him to keep legislators on his side, said Jean Franco, a political science professor at the University of the Philippines.
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“It’s really unusual for a president to be this popular near the end of his term,” said Franco, who specializes in legislative politics. “It gives the president a lot of leverage in terms of his relationship with Congress.”
The Philippine leader’s sustained appeal with voters will also be an advantage for his candidate in next year’s presidential elections. Among his possible bets are his daughter Sara, his aide Senator Christopher “Bong” Go and former Senator Ferdinand Marcos.
Businesses have also expressed hopes that the president will use his political capital to pass laws that will attract more investments, including a measure simplifying taxes on financial services.
“If there’s any legacy that the president will leave, it’s these structural changes in our business landscape that will make it more conducive,” said Francis Lim, president of Financial Executives Institute of the Philippines.
The issues that the public would like Duterte to tackle in his annual address include ways to create jobs, improve the economy and control inflation, according to results of a June survey by Pulse Asia Research Inc. released Monday.
The Covid-19 pandemic plunged the Philippines into its worst recession and soured investor sentiment. Its main stock index was among the world’s worst performers among major benchmarks this year, while the peso earlier this month dropped to its lowest level in more than a year at over 50 against the dollar.
“Before we end our term, the Duterte administration will make sure that we help the next president and the next generations address fiscal and economic risks,” Finance Secretary Carlos Dominguez said last week.
Still, the upcoming elections could pose a challenge to approving these key economic measures with legislators expected to also spend time on their re-election bids, said Nicholas Antonio Mapa, senior economist at ING Groep NV in Manila.
“As we round out the final year of this presidency, it appears that legislators do have the ability to get important legislation off the ground,” Mapa said. “The question now is whether political dealings will delay this process as the polls are now less than a year away.”
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