Philippines moves to shore up investor sentiment hit by corruption scandal
It plans for reforms that cover the tax bureau, to minimise discretion by personnel and prevent ‘abusive audits’, among others
[MANILA] Philippine economic managers rallied business executives and assured them of reforms at a private forum on Friday (Jan 16), seeking to restore investor confidence shaken by a massive government corruption scandal.
Finance Secretary Frederick Go said that during the closed-door gathering, President Ferdinand Marcos Jr’s Cabinet officials presented “a series of big, bold reforms” to the business community, to remove roadblocks in doing business and reduce the cost of investing in the South-east Asian nation.
“This is a clear signal that the Philippines is moving forward decisively and not being distracted,” Go said. “Despite the challenges of the past year, our long-term fundamentals remain strong and intact.”
Those reforms cover the tax bureau, which will move to minimise discretion by personnel and prevent “abusive audits”, as well as the customs agency where red tape will be cut, said the finance chief.
The state has also finalised funding to fulfil commitments to the carmakers, he added.
Go said that the private sector cheered the government’s move to waive visa requirements for Chinese tourists and business guests, which he described as an effort to “further improve relationships” with the Philippines’ largest trading partner.
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The government’s new target of at least 5 per cent economic growth this year “should not be dismissed as a doomsday scenario”, he added.
Marcos’ economic team is pushing to bolster business confidence, after the allegations of widespread corruption in flood infrastructure slowed economic growth and soured investor sentiment.
The graft scandal – among the biggest in recent Philippine history – has sparked mass protests and a broad foreign investor exodus, building pressure on Marcos to implement sweeping reforms as his popularity declined.
At the same briefing, Secretary Vince Dizon said that the public works department – the agency at the centre of the scandal – will undertake the upkeep of roads and bridges this year, to boost government spending while ensuring that the public funds are used properly.
Reginaldo Cariaso, president of Rizal Commercial Banking, who attended the forum, said it was useful as the government laid bare what it has accomplished and what it needs to work on.
He added: “It’s good for transparency, good for building confidence, good for being honest... It seems (like) there’s real sincerity.”
The Philippine peso has hit record lows since July, when Marcos revealed that many of the government’s flood mitigation projects worth billions of dollars were being used as money-making schemes.
The Philippine central bank has sustained its easing cycle to support the economy.
“We’re intervening but very measured,” said Bangko Sentral ng Pilipinas governor Eli Remolona on the sidelines of the business forum, when asked if the central bank was intervening to support the currency. He added that the Philippine peso’s weakness is mostly US dollar driven. BLOOMBERG
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