MANILA – The Chair of the Economics Committee of the Lower House Rep. Art Yap (3rd district of Bohol) will push for ground-breaking economic and financial reforms which will both accelerate GDP (Gross Domestic Product) growth and a more equitable wealth distribution (inclusive growth).
REVVING UP AGRICULTURE
Despite having 33% of the total land area of the nation, Agriculture contributes a measly 12% of the GDP. Rep Yap is mulling a comprehensive agriculture financial eco-system that will include a bigger government guaranty pool and a weather index- insurance system.
The reluctance of the banking system to accept agriculture land as collateral as hampered the industry’s growth -leading them to self-finance or fall prey to high interest lenders. To this, the economic committee chair proposed b a bigger guaranty pool from government for agri.borrowers.
For the nation ravaged by 25 annual weather disturbances, he also proposed a weather index-based insurance system where government may partially “pay the insurance premium with sovereign money.”
PRIVATE CAPITAL FOR INFRASTRUCTURE
Dutertenomics is anchored on a “golden age of infrastructure” which will attract foreign investors- to create jobs and, thus, reduce poverty from 21% to 16% by the end of the president’s term.
In a closed-door , high level consultation with FINEX (Financial Executives Institute of the Philippines) on various economic topics, the former agriculture secretary sees the need for private capital to supplement the government budget to fund the planned mega infra-projects.
Thus, his committee is pushing hard for the approval of the CISL (Comprehensive Investment Scheme Law) , the approval of the REIT (Real Estate Investment Trust) and the PERA (Personal Equity Retirement).
The three will form part of the collage of sources of investment vehicles that ordinary citizens can pull in (in small or large quantities) to develop a big long term capital market base to fund long gestating but viable infrastructure projects.
According to Rep Joey Salceda, thousands of Filipinos have been duped into many quasi investment scams precisely due to the lack of legitimate financial instruments and literacy. One statistic showed “one of every ten Filipinos” have been victimized by investment scams with the loss of P25-Billion of hard-earned money.
There are moves to unify the regulatory and tax features of the different investment types in the CISL with the SEC likely to capacitate itself to be the lone regulatory body. The REIT is expected to be passed this year and the PERA is now being sold initially by two commercial banks for those interested to increase their future pension coverage.
In many nations including India, huge projects for power and energy are funded by private capital from Business Investment Trust Units. Likewise, malls, airport, highways, seaports are REIT-able in many countries.
Amid the big buzz about the shift to a Parliamentary form of government, the third district solon prefers a mere shift to a unicameral form of government to crush the usual gridlock that delays passage of legislation,
Yap also opined that the mis-distribution of the budget to the prejudice of the regions can be answered by mandating a formula-driven allocation to places -erasing the arbitrariness of the different executive agencies. He was even suggesting the erection of a position of National Comptroller to oversee this judicious sharing of budget (with a post facto role of COA, still in place).
In his work for the ASEAN integration in finance, Yap also cited that most progressive nations in the region, most of their elective officials have a 5-year term with no extension limits. He feels our present 3-years and 3 term caps do not always work to the advantage of the constituency.
The elective official here is sometimes too busy paying political debts and preparing for the next polls than to effect more sustainable growth through well-crafted projects,
RICE IMPORTATION CONTROVERSY
The last term representative did not want to delve into the personnel controversy of the rice importation.
However, when pressed for comment by FINEX as he was once chief of agriculture, Yap said that it is preferable to have the private sector do the importation of rice and NFA should just be on stand by to provide the buffer stocks of 15 to 30 days to regulate the vagaries of market forces that agitate prices.
Many economists opined that in a government to government purchase of rice, this could turn out to be more expensive since the foreign government does not grow palay but buy from their own farmers. Directly buying from their farms by the Philippines erases some price aberration and will spare the government the funds to finance NFA purchases.
Currently, the NFA is saddled by P47-Billion in debt.
REQUEST FOR PUBLIC PARTICIPATION
Rep Yap made a strong appeal to FINEX and the general public to directly contact him and his office if any suggestions are plausible to make the country stronger financially and having more people participating in its national growth.