Arroyo Bares Plan for Economic Reform; Signs 2 Landmark Measures
Byline: GENALYN D. KABILING
President Gloria Macapagal Arroyo yesterday unveiled the economic reform agenda of her administration aimed at spurring economic growth as she signed two landmark laws, one allowing banks to unload billions of pesos of bad loans and repossessed assets and the other ensuring transparency in the procurement of government resources.
In a major policy statement at the Philippine Stock Exchange in Makati City, the President laid out several "proactive and microeconomic structural reforms" in the transportation, revenue, power, and trade sectors to boost the domestic economy in the remainder of her term.
The President - who was with Senate President Franklin Drilon and House Speaker Jose de Venecia - signed the Special Purpose Assets Vehicle law (SPAV) or Republic Act 9182 and the Government Procurement Reform law or Republic Act 9184 designed to improve the loan portfolios of banks and make government transactions more transparent and efficient.
The banking law gives tax breaks and privileges to special purpose vehicles that will acquire and invest in banks' non-performing assets and unlock much-needed credit to spur economic growth.
"The SPAV law seeks to save the banking sector from the financial fallout of lending decisions that went sour after the Asian crisis" she said.
According to the President, the law would give relief to the banking sector saddled with more than P300 billion of bad loans and more than P200 billion of repossessed assets.
"The SPAV law takes away these burdens - for a price of course. But it allows banks to charge their losses against their taxes," she said.
Mrs. Arroyo said the SPAV would "bring in new money to revive bad loans, find new uses for foreclosed assets, rehabilitate failed businesses and open wide the lending windows again."
An interagency group composed of the Bangko Sentral ng Pilipinas, Securities and Exchange Commission, and the Bureau of Internal Revenue is expected to complete the final implementing rules of SPV law by the of the month.
The Government Procurement Reform Law, on the other hand, provides for the modernization and standardization of the procurement activities of the government.
"RA 9184 will help government procurement officers to stick to the straight and narrow path. It will fight graft and corruption, improve operational efficiency, foster transparency in bidding procedures, and encourage competition," she said.
The money saved from government e-procurement program will help reduce the swelling budget deficit, she added.
Aside from these laws, the President said she is ready to implement other crucial economic reforms to entice more foreign investments that would create jobs and raise the people's income level "in the shortest time possible."
Among these reforms include the improvement of infrastructure particularly the rehabilitation of the transport system, privatization of the power sector, and revitalization of the mining industry before the end of her term.
Arroyo also wants to improve revenue collections, prosecute big-time tax evaders, and rid the government of corrupt officials.
"By 2004, I want to see a revitalized economic that adequately serves the needs of our people, creates even more jobs, and raises our people's income levels, and pushes poverty to the margins," she said.
Hinting another shakeup in her cabinet, Arroyo said she will make the members of her cabinet "realize the urgency for policy coherence and coordination or need for them to step down."
The Chief Executive at the same time vowed to fast track the implementation of various infrastructure projects "that will be vital arteries of commerce."
She took pride over the opening of the Batangas international port "after a decade of red tape" while announcing the near completion of the San Roque dam in Pangasinan. …