Spain backs PHL infra, tax reform programs

The government of Spain has expressed its full support to the Duterte administration's 10-point socioeconomic agenda, particularly on the implementation of tax reforms and accelerating infrastructure spending as effective tools to help realize its goal of making growth inclusive for all Filipinos.

In a meeting with Finance Secretary Carlos Dominguez III, Spanish Ambassador to Manila Luis Antonio Calvo CastaAo also congratulated the Philippine government for its "progressive" and "on-point" tax reform program that aims to reduce personal and corporate income tax rates while raising fresh revenues to bankroll social protection programs for society's most vulnerable sectors.

Ambassador CastaAo said the Spanish government is "very encouraged by the 10-point socioeconomic agenda of President Rodrigo Duterte," as he pointed out that the "promotion of social rights is the key to the development of the country."

He also said that Spanish companies are interested in investing in the Philippines' infrastructure buildup, particularly rail projects, pointing out that Spain has the second largest high-speed railway network in the world next to China.

In the hour-long meeting, Dominguez informed the Ambassador that one of the priority goals of the administration is to reduce the poverty rate in the country from last year's 26 percent to 17 percent by the time President Duterte steps aside in 2022 by increasing infrastructure spending outside Metro Manila that would not only connect communities but also create meaningful jobs; vigorously implementing the Reproductive Health law; and boosting agricultural productivity, among other initiatives.

The Philippine government's plan to raise infrastructure spending from 3 percent to 5 percent of the Gross Domestic Product (GDP) would be complemented by efforts urging Congress to propose amendments that would lift the Constitution's economic restrictions, Dominguez said.

On developing a law-abiding country as another priority goal of the government, Dominguez said the Duterte administration envisions "a society where law is respected and where authority is followed, but freedom is still active."

He also informed the Spanish ambassador of the government's ongoing peace efforts with insurgent groups in the country.

In explaining the proposed tax reform program of the Department of Finance (DOF), Dominguez told the Ambassador that the primary goal is to cut personal and corporate income taxes, while, at the same time, simplifying and improving tax administration, adjusting fuel excise taxes, imposing a sugar tax as a health measure and plugging leakages in Value Added Tax (VAT) exemptions.

Ambassador CastaAo, for his part, pointed out that DOF's tax plan is "on point, progressive and would help ease the burden of the middle class and vulnerable sectors."

Dominguez and CastaAo also discussed the proposed signing of the Memorandum of Understanding (MOU) on Economic and Financial Cooperation between the Philippine government and the Kingdom of Spain, which aims to explore cooperation between the two countries in various fields such as agriculture, industry, energy and services, water infrastructure, climate finance, environmental economics and disaster risk finance.

The DOF secretary expressed his appreciation for Spain's disaster preparedness and response project in Albay, which involves the rehabilitation of hospitals and setting up a well-equipped disaster preparedness and evacuation center in the province, and broached the possibility that this initiative could be replicated nationwide.

A proposed project to be funded by the Spanish Agency for International Development Cooperation (AECID) through a combination of grants and loans aims to replicate the Albay initiative in at least 14 provinces. The initial list includes Cagayan, Isabela, Pangasinan, Quezon, Zambales, Camarines Sur, Benguet, Abra, Iloilo, Capiz, Southern Leyte, Davao Oriental, Surigao del Sur, Lanao del Sur and Maguindanao.

Dominguez also expressed his appreciation for Spain's grant of Official Development Assistance (ODA) to the Philippines and ongoing projects in the Autonomous Region in Muslim Mindanao (ARMM).

As of April 2016, the total ODA grant from Spain amounted to US$27.23 million, according to data from the National Economic and Development Authority (NEDA).

The cooperation framework between the two countries aims to expand this ODA grant with focus on the Bicol region and Mindanao.

Source: Philippine Information Agency