“The government should be anticipatory rather than reactionary.” These were the words of Vice President Jejomar Binay, the first presidential candidate to be featured in GoNegosyo Talk’s Meet the Presidentiables Series.
The 73-year-old politician was also among the first who made public their intention to run for the presidency in the upcoming May 2016 elections. Most observers think that his ambition became evident the first day he assumed the Office of the Vice President in 2010.
For about two years now, he has been a staunch critic of the government under President Benigno Aquino III. Since he formally announced plans to aim to be the President’s successor, he has always emphasized his managerial competence, alluding to Aquino’s supposedly lack of enough leadership experience.
“‘Daang Matuwid’ [Righteous path] is not enough especially because it is narrow and slow,” he declared during his opening speech in the GoNegosyo event in December last year. Binay pointed out that what the country needs is a government with orderly, fast, and caring administration. He said that a visionary leader like him could lead the Filipinos forward.
Binay’s political career started when he was appointed by the late President Corazon Aquino (mother of the current President) as the officer-in-charge of Makati City following the EDSA People Power Revolution in 1986. He held the position until 1987.
In 1988, he ran and won to become the city mayor of Makati. He held the position for a total of 20 years, in six different terms (with his wife, Elenita, taking the position in between terms so he would not breach electoral requirements). He also acted as the governor of the Metro Manila Commission (from 1990 to 1991), which later became the Metro Manila Authority before it transformed into today’s Metro Manila Development Authority (MMDA).
In 2010, he aimed for the Vice Presidency and succeeded, beating former Department of Trade and Industry Secretary and Senator Mar Roxas, who was then the running mate of Aquino. Ironically, Binay and Roxas are now facing each other again in the race for the highest seat in national government, with Roxas as the standard-bearer of the administration.
Taking from his campaigns in 2010, Binay still promises to replicate the success of Makati City and apply it to the entire country. He recalls that immediately after he was appointed as the city’s OIC, he met businessmen and committed to them a “business-friendly” city government.
“First year in office, I paid off all the city’s debts totaling to about P200 million ($4.21 million),” he said. Binay also said he invested in city infrastructure; built high schools and modern universities; constructed new hospitals and government offices; and provided services, incentives, and privileges unheard of in any other local government that time.
Binay also recalled that as Makati City progressed under his term, micro, small, and medium enterprises (MSMEs) also flourished. “My friends, what I bring to the table is a track record of effective governance; a record of understanding and confronting of people’s needs and problems; and finding solutions in a timely, efficient, and competent way.”
When asked to identify the needs of MSMEs, he said, “They need a political and regulatory environment that helps solve problems instead of becoming part of those.” If elected as president, Binay promises to provide access to funds for all small businesses’ capital and credit needs.
Binay has other plans for the MSMEs across the country. “At present, MSMEs are concentrated in NCR (National Capital Region); CALABARZON (Cavite, Laguna, Batangas, Rizal, Quezon), and Regions 3, 6, and 7,” he said and added that there is a need to expand this to the entire country through active government interventions.
He also promises to push for the passage of several bills now pending in Congress that are designed to expand microfinancing assistance to small businesses. The goal is to accelerate the establishment of more MSMEs nationwide, he said.
He also vows to further simplify the current business registration process. Several local government units have already adopted practices to make it easier and faster for entrepreneurs to put up small businesses. But that simplification has yet to be adopted nationwide.
Should he take the helm from Aquino, Binay said he will make his administration focus on five core industries, namely, agriculture, manufacturing, tourism, business process outsourcing, and exporting.
“I will include small businesses in supply chains of these industries,” he said. And how will that be possible? Binay said he would require major businesses within those industries to make small, local counterparts the suppliers of the raw materials they need.
Binay also plans to push for the allocation of at least 5% of the gross domestic product (GDP) for integrated infrastructure development. This would translate to construction of new roads, bridges, ports, and airports to provide greater access to the markets and to bring the benefits of economic growth to rural areas.
Binay wants to provide incentives to foreign investors that would pursue infrastructure projects in the country. He underlined the need to support projects that would garner alternative sources of energy, as he thinks doing so would eventually help improve social services and support small businesses.
About the restrictive economic provisions of the Constitution, Binay did not clearly state his stance but said, “Foreign investments should not be confined to the issue of ownership.” Foreign investors are prohibited to own more than 40% of real properties and businesses and are totally restricted to exploit natural resources and own any company in the media industry, Article 7 of the Constitution states.
He said he will also launch programs to show to potential foreign investors that the country’s justice system is reliable. “We’ll show foreign investors that they should not worry about their business contracts here.”
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Binay has always been a supporter of calls to reform the national taxation system. “I’m a firm believer that more affordable corporate income taxes will result in greater profitability, which in turn will result in higher revenues for the government.”
He said he will push for the reduction of the corporate income tax (currently about 30% of declared income) because it would also further attract more foreign investments into the country.
Based on available data from the Joint Foreign Chambers of the Philippines, the country imposes a personal income tax rate of about 32% and a corporate income tax income rate of 30%. Those rates are the second highest and the highest, respectively, among its ASEAN (Association of Southeast Asian Nation) peers. Up to 85% of income taxes are paid by the middle class workers.
Binay estimates that an overhaul in the current income tax system may cost the government up to P30 billion ($632.31 million) per year. But he said the amount is less than 1% of the 2016 national budget (worth about P3 trillion or $63.23 billion)) and just about 0.23% of the country’s GDP.
Interestingly, that tax collection loss would also be less compared to the government’s underspending of about P500 billion ($10.54 billion) in 2015. Thus, Binay said, “That income loss should not scare us at all!”
But how would he make tax collection more effective? The Vice President said there should be a stricter enforcement of collection and the Bureau of Internal Revenue should focus on chasing after big tax evaders instead of running after small businesses like sari-sari (variety) stores and carinderias (small food joints).
When asked about the possibility of implementing tax amnesty to businesses with tax evasion cases, Binay said he will not favor it as doing so would be unfair to those that pay on time. Currently, according to tax expert Mon Abrea, there are 400 tax evasion cases in courts, less than 3,000 examiners, and more than 22 million tax payers.
Traffic, other issues
If Binay would continue to implement some projects that are being carried out by the Aquino administration, he identified three of those: anti-corruption; infrastructure developments; and the conditional cash transfer program, which was initiated by the government of former President Gloria Macapagal-Arroyo.
About the worsening traffic problems in Metro Manila, Binay simply emphasized his goals to implement the three E’s: enforcement, education, and engineering.
From that point, Binay shared plans to split the Department of Transportation and Communications into two departments overseeing transportation and communications. For him, doing so could possibly lead to creation of solutions to two kinds of traffic—road and Internet.
Binay also stood firm on his stance that he is a victim of what he calls “demolition by perception.” He said that he has already answered the corruption accusations hurled against him five times in different press conferences. But he said he does not resent not appearing in Senate investigations because he thinks the demeanor of those invited in the sessions will be unbecoming for him.
“What happened to ‘presumption of innocence?’ It’s only the court that will tell if one is guilty of a crime or not,” he said and added that he has already submitted an affidavit and the city government has turned over numerous documents to counter allegations of corruption against him.
Entrepreneur Philippines profiles the leading presidential, vice presidential, and senatorial candidates in the upcoming May 9, 2016 elections. We aim to help voters know these candidates through their platforms focusing on the economy, entrepreneurship, tax reform.