5-POINT ECONOMIC PROGRAM UNVEILED
LOWER POWER COSTS, TAXES KEY TO ECONOMIC RECOVERY: CHIZ

Opposition Sen. Chiz Escudero said lower taxes and power energy costs will be the keys to the accelerated recovery of the Philippine economy.

Escudero said power costs can be lowered by completely privatizing all generation plants of the National Power Corp. including all power purchase agreements (PPAs) to generate more competition. He said the government has so far managed to sell off only 40 percent of its generation plants when all plants should have been sold as far back as 2004.

At the same time, he said the country's tax levels are not competitive and should be lowered. The opposition senator spoke at the First National Business Conference of Independent Business Clubs organized by the Makati Business Club (MBC) and the Cebu Business Club (CBC) in Mactan, Cebu yesterday.

"We should lower taxes to competitive levels. In Hong Kong it is at 17 percent while ours stand at 32 percent. We should bring it down to 20 percent and move toward a flat rate tax system," Escudero said.

He also called for the immediate start-up of the Wholesale Electricity Spot Market (WESM) in the Visayas and apply time-of-use pricing as a means of further driving down electricity costs.

At the Cebu forum, Escudero unveiled his five-point priority plan to achieve a "Progressive Philippines." The five priority areas that need the most urgent attention are: lower costs of doing business, investment in education, lower food costs, more focus on tourism, and promotion of good governance.

"We all seek to improve the quality of life of every Filipinos. To achieve this, we must focus on increasing family incomes by creating new jobs. Jobs, in turn, can only be created if we attract new and added investments, both foreign and domestic," Escudero said.

"But investors will not come in if doing business is not profitable or only marginally profitable. Therefore, our first area of priority should be lowering the costs of doing business in the Philippines," he added.

In line with this, Escudero also said banks need to be convinced to lower their spreads on loans to lower the cost of money, which at about five percent is higher than countries like Singapore, Malaysia, and Thailand where spreads are at around two percent only.

"We can achieve this by providing incentives for mergers among banks, improving our bankruptcy and foreclosure laws, and modernizing and expanding our micro-financing program to make credit available to micro, small and medium enterprises," he said.

Escudero also pushed for lowering legitimate bureaucratic costs and vowed to eliminate "under-the-table" expenses.

"We should find ways and means to further reduce red tape and official discretion because discretion equals corruption especially in revenue and law enforcement agencies including our courts," he said.

Meanwhile, Escudero said there was an urgent need to invest in education to trim the backlog in classrooms which presently stands at 40,000 rooms, expand the conditional cash transfer and nutrition program, and upgrade the skills of teachers with more emphasis on math and the sciences.

"There is simply no excuse for a 35-percent dropout rate in elementary and a 60-percent dropout rate for high school," he said.

The opposition senator also said the cost of food needs to be lowered to give all Filipinos a non-wage increase to lessen the pressure for salary increases by investing more on agriculture support infrastructure, and tripling the budget for agriculture research and development.