Diokno details policy tools for sustained growth at Post-SONA briefing

Finance Secretary Benjamin E. Diokno engaged in in-depth discussions on policy reforms in the pipeline which are necessary to sustain the Philippines’ growth momentum during the Post-State of the Nation Address Philippine Economic Briefing (Post-SONA PEB) on July 25, 2023 at the Philippine International Convention Center (PICC) in Pasay.

“Higher economic activity and increased investments will bring us to even greater heights. The policy environment for foreign direct investments is the most open and liberal it has ever been,” Secretary Diokno said during the opening fireside chat with Euben Paracuelles, Chief ASEAN Economist of Nomura.

Economic liberalization bills such as the Retail Trade Liberalization Act, Foreign Investments Act, and Public Service Act, as well as the opening up of the renewable energy (RE) sector to full foreign ownership have made the Philippines’ conducive to investments.

Apart from these structural reforms, Secretary Diokno said that the government is also improving the public-private partnership (PPP) mechanism to enhance the quality and pace of infrastructure development in critical sectors.

The proposed PPP Act or Senate Bill (SB) No. 2233 is currently pending second reading. The bill provides for a unified legal framework for all PPPs covering all types of PPP arrangements at the national and local levels, increases approval thresholds for national PPP projects, and improves the framework for unsolicited proposals, among others.

Just recently, the President signed into law the Maharlika Investment Fund (MIF) Act, creating the country’s first sovereign wealth fund designed to serve as a ‘vehicle for growth.’

According to Secretary Diokno, the MIF is expected to widen the fiscal space and reduce reliance on official development assistance (ODA) in funding big-ticket infrastructure projects in areas such as green and blue projects, rural development, digitalization, sustainable development, and healthcare.

The Department of Finance (DOF) is also pursuing the passage of the proposed tax revenue measures under the Medium-Term Fiscal Framework (MTFF) such as the Passive Income and Financial Intermediary Taxation Act, value-added tax (VAT) on