Category : Press Release
Date : October 07, 2020
Agency : Department of Finance
Title : Dominguez calls for innovation in Gov’t, private sector to ensure resilient recovery from coronavirus pandemic
Article : Innovation in both the government and the private sector is needed to build resilience against, and guarantee a quick recovery from, the COVID-19 pandemic and future adversities, Finance Secretary Carlos Dominguez III said Wednesday.

Dominguez made this point before a big gathering of business leaders as he stressed anew the need to “start reopening the economy by allowing people to return to work and providing them additional modes of public transportation.”

“This is why our aim has been to pursue a safe new normal while we strive for a better normal. We cannot completely lock up ourselves to avoid COVID-19 at the expense of other vital dimensions of our lives. We should take less costly but effective measures,” he added.

Speaking before the Philippine Chamber of Commerce and Industry (PCCI) at its 46th Philippine Business Conference and Expo, Dominguez cited small and medium enterprises (SMEs) for their “inventiveness and willingness to adapt quickly” to the rapidly changing conditions triggered by the COVID-19 outbreak and for complying with minimum health standards, which have helped preserve jobs and keep the domestic economy afloat amid the global health and economic crises.

On the part of the government, Dominguez said it is accelerating its digital transformation to drastically cut red tape, hasten the efficiency delivery of services to the people and curb official corruption.

The successful implementation by the Department of Finance (DOF), Bureau of Internal Revenue (BIR) and the Social Security System (SSS) of the two-month Small Business Wage Subsidy (SBWS) program, which had harnessed digital tools to avoid face-to-face transactions between state personnel and the intended worker-beneficiaries amid the pandemic, demonstrated a model for the rapid and efficient delivery of cash aid that other government agencies can duplicate, Dominguez said.

He said that to broaden financial inclusion, the government has fast-tracked the implementation of the National ID System; launched mobile apps such as the Digital PERA for the Personal Equity Retirement Account and the Bonds.PH for domestic bond issuances; and made significant progress in making cashless transactions affordable through electronic cash transfers that most major banks are now offering.

“These digital developments are historic steps not only into the New Normal, but also into the New Economy,” Dominguez said during the event organized by the PCCI online via Zoom.

To improve tax administration, Dominguez said at the PCCI event that the BIR has introduced additional electronic channels for filing and paying taxes, and is speeding up the implementation of its e-invoicing system; while the Bureau of Customs (BOC) is modernizing its infrastructure and simplifying customs processes, such as those covering conditionally tax- and duty-free importations to open more market opportunities for micro, small and medium enterprises (MSMEs).

Dominguez said the government is also studying how to tax the fast-growing digital economy better by ensuring that regulations expand opportunities for legitimate businesses while protecting the welfare of consumers.

He said one of the hardest pandemic-hit sectors—tourism—should likewise build its resilience and ensure its strong rebound from the crisis by turning this into an opportunity to rehabilitate and upgrade its weak infrastructure and poorly maintained facilities.

Another sector that needs to be revitalized in the post-pandemic era is manufacturing, Dominguez said.

“Our country leapfrogged from an agriculture-based to a service-oriented economy, but we failed to build a strong manufacturing base. Now is the best time to accelerate the competitiveness of this sector to create more jobs and regain our economic momentum,” he said.

While the country is preparing for a rapid digital transition, Dominguez said the government has been doing its best to balance efforts to revive consumer confidence and reopen the economy with health interventions.

Dominguez pointed out that although the earlier strict community quarantines were necessary to save lives and protect communities in the face of the highly infectious and lethal coronavirus, he said that further lockdowns “will bring more damage to the economy.”

“Prolonged strict quarantine measures will threaten the gains we have made in employment and poverty reduction over the past four years. We need to start reopening the economy by allowing people to return to work and providing them additional modes of public transportation,” Dominguez said.

Dominguez said beating COVID-19 involves not just keeping people safe from the virus, but also having a productive economy that sustains their basic needs and the costs of healthcare, so that they can also be protected from other diseases.

He noted that in the first six months of 2019, over 358,000 Filipinos died from heart disease, tumors, cerebrovascular disease, diabetes, among other causes.

For the same period this year, the death toll from these diseases and other notable causes significantly declined by 39 percent to just a little over 218,000. Of the total, 5,154 deaths were traced to COVID-19.

While medically tried and tested courses of treatment are available for heart ailments, diabetes, and other serious illnesses, they still accounted for a far larger number of deaths from diseases, Dominguez said.

“While we continue to find ways to defeat the pandemic, we need to balance our healthcare response. We have to ensure that those afflicted with life-threatening ailments other than COVID-19 also receive quality medical care and treatment.”

Dominguez expressed confidence that the country could regain its growth momentum by next year should the government and businesses work together to revive consumer confidence and domestic demand.

“On the part of the government, I can assure you that we will continue to maintain a pro-business environment for our enterprises to prosper. Together, we will overcome the challenges of this year and provide our people the inclusive economy they deserve,” Dominguez said.

He said the government’s fiscal and economic stamina resulting from the game-changing reforms implemented by President Duterte since 2016–and supported by the PCCI–ensures that the country has sufficient ammunition to outlast COVID-19.

To support businesses, Dominguez said that Republic Act (RA) 11494 or the Bayanihan 2 Law provides credit programs that wouldn’t intervene excessively in the workings of private-sector financing.

These programs include, he said, the infusion of more capital to government financial institutions (GFIs) to expand their lending to MSMEs and enable them to serve as wholesale banks and rediscounting agents for small and medium-sized banks and microfinance institutions; and the extension of the carry-over period of net losses in 2020 and 2021 from three to five years for businesses.