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Duterte’s SONA promises a stable environment for business

Tax reform, improved transportation and faster internet – all for ease of doing business
By Althea Lauren Ricardo |



It may not have been the same “heart-wrenching” speech that made communications secretary Martin Andanar cry, but President Rodrigo Duterte’s first SONA did give businessmen reason to smile.


In his first state of the nation address, Duterte reiterated his plans to boost the country’s continued economic growth by creating an environment in which business can thrive, allaying concerns that his focus was largely on the switch to federalism and fighting crime, illegal drugs and corruption.



Less than 30 days into his term, Duterte stressed that he will “continue and maintain current macroeconomic policies,” emphasizing that he intends to “even do better.”



Ease of doing business

One of the issues that the president promises to improve is the ease of doing business in the country. “Reforms to ensure competitiveness and promote ease of doing business will be mandatory,” he said, to much applause.


This provides needed continuity and renewed support for the goal of the National Competitiveness Council (NCC) to improve the Ease of Doing Business ranking of the Philippines from 103rd to 63rd or better, a goal that was set at the start of the previous administration.


Duterte acknowledged the bureaucratic red tape plaguing businesses and vowed to cut processing times and streamline requirements. “We shall also enhance the local business environment by addressing bottlenecks in business registration and processing, streamlining investment application processes, and integrating the services of various government offices.”



The government intends to attract investments that would generate jobs for “the poor and less-skilled members of the workforce,” especially in labor-intensive industries such as agriculture, manufacturing and tourism.


Duterte said the government will also encourage entrepreneurship in areas where employment may not be possible, as in extremely rural areas.


Tax reform

In his speech, Duterte also promised to implement tax reform. “My administration will pursue tax reforms towards a simpler, more equitable and more efficient tax system that can foster investment and job creation. We will lower personal and corporate income tax rates and relax the bank secrecy laws,” he said, again to much applause.


This gives additional push to Sen. Bam Aquino’s proposed Small Business Tax Reform Act, a measure that calls for tax exemptions and lower tax rates for micro, small and medium enterprises (MSMEs).


Lowering tax rates can spur consumption and stimulate more business and investment activities.



Transport and infrastructure reform

The president addressed the transport woes that have been plaguing the country, especially Metro Manila, and promised practical solutions alongside ambitious infrastructure projects which will give the transport of goods in the country a much needed and long-awaited hand up.


Traffic in the capital has been estimated to cost us Php 3 billion a day, according to a study done by the Japan International Cooperation Agency (JICA).


Apart from providing new trains and other improvements to the LRT and the MRT systems in Metro Manila, Duterte also promised to pursue rail projects in Metro Manila and the key points in the country, including the Mindanao Rail Project.


“I assure you it’s going to materialize, (these) rail projects: the Davao Transit System, the Cebu Transit System, the North and South Luzon Railways and the Panay Railways project,” he said.


He also pledged to address the need for alternative transport systems, highlighting his support for the revival of Pasig River Ferry Service System, which reopened in 2014 and plans to expand with new stations this year.



The president also suggested Sangley Point in Cavite as an alternative to the congested NAIA, but said that Clark was a good option if there is a fast train from Clark to Manila.


The government is also going to accelerate infrastructure spending “by improving national roads and bridges and implementing the Mindanao Logistics Infrastructure Network and other road network master plans.” It will pursue inter-island linkage projects.


Faster internet and connectivity

The issue of internet and connectivity was addressed as well in Duterte’s speech. The Philippines has been a laggard in information and communication technology despite statistics showing that the Philippines has the fastest growing internet population in the world and is the fastest growing app market in Southeast Asia.


To address needed improvements in the field, Duterte announced that he has ordered the Department of Information and Communication Technology, which was established just before the end of the Aquino administration, to “develop a national broadband plan and to accelerate the deployment of fiber optics cables and wireless technologies to improve internet speed.”



He also said that the government will soon provide free Wi-Fi access in public places, including public libraries and school.


Needless to say, this is a development that both Filipinos (including the 47 million active Facebook users) and businesses who capitalize on the fact that the Philippines is an excellent launchpad for start-ups will watch closely.


Businesses remain optimistic

The business community generally welcomed Duterte’s promises, especially regarding tax reform and the bank secrecy law. Makati Business Club executive director Peter Perfecto said that the president’s speech detailed “a clear vision for the next few years.”


“We welcome the inclusion in the SONA of priorities critical to doing business and furthering the country’s competitiveness, including significant reduction in red tape, tax reform, massive infrastructure investments, and improvement of current macroeconomic policies,” Perfecto said.  


Businesses remain optimistic in the face of the changes the Duterte administration will bring. The president’s first SONA, delivered less than 30 days into his term, was ambitious and powerful. It promised a lot of great things. However, the plans have yet to be ironed out, so it was also wanting in specifics.



As with any new administration, we begin with cautious optimism. Hopefully, if the president delivers on his word, we can have strong cause for it.






Althea Lauren Ricardo is a freelance writer-editor and a business communications trainer. She is currently studying organization development at De La Salle - College of St. Benilde while working on her MFA creative writing thesis at De La Salle University.


Photo courtesy of People's Television Network

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