[Acknowledgments]

Magandang hapon po sa inyong lahat.

First of all, thank you to the Chinese Filipino Business Club for this opportunity to assure our micro, small, and medium enterprises (MSMEs) that despite the apprehensions surrounding the threat of the Omicron variant, our country has the upper hand this time to fight against COVID-19. This is because of our high vaccination rate and the new medical treatments, combined with our country’s strong economic fundamentals and effective strategies for ensuring business continuity. It was a really a difficult balancing act between lives and livelihood.

As of 15 January 2022, a total of 55 million Filipinos have completed COVID-19 shots. Kulang pa, we still want more of the unvaccinated to be vaccinated. In August 2021, we only have about 9 million people at that time with their second dose. We all know the government’s push to protect the people through vaccination since the start of 2022.

Now, we are at the point where we have made significant progress of this objective. As of yesterday, 16 January 2022, 98.4% all the current COVID-19 cases in the country are either mild or asymptomatic. Despite the 39,000 that we are hearing, a lot of them are mild and asymptomatic, and the story of the current wave of infection is not over yet but there is a reason for hope in the current healthcare capacity for the critical ICU and ventilators. You and I would know by this time that the picture is really different. In the middle of September last year, the picture was 61% utilization rate for ventilators.

Yesterday, despite the over 30,000 cases it was still only at 27%. If you look at the number of the severe and the critical, it remained below 2,000 as of my last check. I think the number few day ago was about 1,700 thereabouts.

The higher vaccination rate is working as expected and the Omicron variant, thankfully, is generally mild and some people are asymptomatic. I also contracted one again last week and just recovered yesterday, thankfully, it was really mild. I always say its everywhere. People I know, our friends, our siblings—in fact four of our five siblings got it last week. It’s almost everywhere. I’m sure your friends and family members could have gotten one but I hope they have recovered, are only experiencing mild symptoms, and hopefully, they are also vaccinated.

In this particular situation, the DTI and the national government are continuing to balance the need to protect lives and livelihood. We aim to ensure continuity in business and jobs at any alert level and that’s the reason that you have noticed that we moved to the Alert levels System. We made sure that many of the businesses, even the MSMEs will continue to operate with just adjusting the operation on on-site capacities. There are some exclusions for high-risk non-essential establishments.

Obviously, you’ve seen how we changed the approach. We are not automatically going into lockdowns. In fact, we shifted to granular lockdown. Now we are talking of more home lockdown or shall we say, home isolation, self-regulation. When you go out in the street it’s not too traffic. There are less cars in the street, less people in the mall parang nag self-regulation, individual lockdown ang ginawa. Either many contracted Omicron or they quarantine because their relative, their household member contracted it. A lot of reasons why people are less in streets.

In general, at least, we allow the healthy to work and that’s the reason why we have not escalated to Alert Level 4. I, in particular, together with some of the Secretaries, objected to raise it to AL 4 for the same reasons we cited. Nowadays, we just have to look at the severe and critical, the ICU and if these numbers have not changed, we will not impose a lockdown because of the flu or cough and cold. That’s the reason why we have kept it until now at Alert Level 3. There is less probability for a total halt of operations and measures are increased to further increase business operating capacities.

This time we’ve changed the approach in terms of giving more preference to the fully vaccinated workers and employees. Those with Safety Seals are added 10% points in terms of operating capacity. If the city is over 70% in terms of vaccinated population like Metro Manila, you add another 20% operating capacity. If the allowed indoor capacity is 30%, you add 10% for Safety Seal, and 20% since you’re in NCR with high vaccination rate. In effect, you can still operate indoors at 60%, that how it goes. Basically, only vaccinated will be allowed in this indoor and right now, even outdoor activities in the 3C’s, especially the dine-in restaurants.

Just to clarify, unvaccinated are allowed to work but you notice how we make it difficult for them. They will be required to conduct RT-PCR test at their own expense, things like those.

We are confident that we can avoid large scale lockdowns nowadays and this will boost business stability and sustain our recovery efforts. This is really important nowadays. We will do since most of the cases are mild, we encourage now more home isolation. In fact, you’ve heard of the triage, people are not readily admitted in the hospital because most in the hospitals are mild cases so they are asked to go back and do home isolation. The new protocol is if you have symptoms, you just isolate, you don’t have to do a test. Just test after you’ve recovered just to double check if you are still infectious or not.

The government taskforce is aiming for home isolation. If you are in home isolation, more home-based antigen testing should now be allowed. We are asking antigen test kit manufacturers to register with the FDA so that they can be sold to the consuming public. With the home testing, I’ve been a proponent of home testing since last month, and to me, this is an additional layer of protection. In fact, even before we went to our gathering last Christmas, we did our own respective antigen test at home so that we are sure that we are not the carrier or infectious during that day. This is what we see as the new normal.

We also have some changes, as you know, we made shorter the quarantine isolation from 14 days to 10 days and now down to 7 days. We’ve shortened quarantines even for cross borders. Green countries before needed to adapt the yellow cross border, in other words, there is a facility quarantine but not anymore right now. We brought back low facility quarantine for vaccinated travelers from green countries and under yellow countries—seven days only and test on five days. We’ve liberalized, made shorter the quarantines even for cross borders and is, basically, to facilitate the travel but still preventing transmission.

There are antiviral medicines. Our task also now is trying to push for more accessibility in these medicines. We’re encouraging manufacturers to register their emergency use authorization (EUA) and also adapt a different kind of EUA. We have asked the IATF to study how we can, even with an EUA, make this more accessible to the people making them available like in drugstores. Because under the EUA, you are only allowed to entertain government procurement and make it available in hospitals. Given that many people may be home-based doing home isolation, this medicine should be made more available other than the DOH-accredited hospitals. This is an effort to lower the price and also to remove the black market out there.

Aside from all these new developments to show how we are adjusting our quarantine, the way we manage COVID-19—because we know the virus will be here to stay—you’ve seen how our economy has recovered fast in 2021 although we are still behind 2019 numbers. Year-to-date (YTD) 2021 in the third quarter, the last report of GDP, our GDP growth YTD was 4.9% or almost 5%. 5.5% would be the striking distance that means we have to hit about 7% for fourth quarter to hit the 5.5% full year. Remember, up to December last year we were Alert Level 2 with less restrictions, people are moving around, even the children, regardless of age, we think that we have a strong fourth quarter.

For many businesses, the report to us maybe 80% to 90% of pre-pandemic level so we’re bullish that the fourth quarter would be a strong one. That would make our 2021, if that is 7% for fourth quarter, maybe 5.5% full year. If full year 5.5% for 2021, we only need 4.8% growth in 2022 to hit the 2019 level where we were before the pandemic. If the Omicron variant is not that bad, momentum continues we’re looking at 6% to 7% growth just like our growth before the pandemic. We were growing 6.5% before the pandemic so its very realistic and that is where we are headed. Definitely, if we hit that beyond the 4.8% we can say that we’re be back to 2019 level and have recovered the economy.

Some good signs for 2021, if you look at foreign direct investments (FDI), we hit the last report 8.1B year-to-date October and that is 48% higher than the year before. This is even 23% higher than 2019 pre-pandemic. It is really encouraging how foreign investors put their trust and confidence in the country.

Export was also growing 15%. We hit 68B year-to-date November and 15% growth over last year and also higher than pre-pandemic 2019 by 5%. Naka-recover ang ating exports, ang ating FDI. With all this liberalization going on as with CREATE, Retail Trade Liberalization Act (RTLA), Foreign Investment Act (FIA), Public Service Act (PSA), we know that all these can encourage more investments and more jobs. More jobs would mean more income for our people. They will become a larger consumer base for all our businesses. That is very encouraging. Many MSMEs in the country can only mean a bigger market. More jobs brought about by all these investments and growth and exports.

We continue to be very bullish, we stay the course. We can cite what happened last year. When CREATE was passed, the corporate income tax rates have been lowered 30% to 25% for large companies and down to 20% for MSMEs. As you know before, for micro you can even be exempted from tax by registering under the Barangay Micro Business Enterprise (BMBE). This lower corporate income tax rate could be a big boost to a lot of businesses for net income that can be reinvested back in business.

Part of CREATE would be the incentives package regime that would make a lot of sectors eligible. We just refer to the Strategic Investment Priorities Plan (SIPP). The good thing now, basta ‘yung industries are in the SIPP, they don’t have to be export oriented. It can be for domestic and you can still be eligible for these incentive package. The incentives can range for four years to seven years income tax holidays to be followed by 10 years of special corporate income tax rate of 5% gross income if you are export oriented. Instead of 10 years, additional five years for domestic oriented companies. A much more liberal incentive structure under CREATE.

If there are more retailers available and more investments in this field, our micro SMEs will have a lot of outlets to sell to. In other words, these can hold more competition, more outlets where they can sell their products. Maraming opportunities that can be gleaned from these developments.

The Foreign Investment Act is also one that will encourage more value, more high technology businesses that we encourage to come in. Public Services Act will open up other public utilities, public service, investments regardless of ownership. We are talking of telco, exportation that can make these companies more competition, make companies more competitive, better quality, and lower cost to the consumers. We always complain about telcos and the high cost of internet, low MBPS, low speed, and all the issues with connectivity. With competition, all these would be addressed. We can be at par with our neighboring countries.

On FTAs, we continue to develop more free trade agreements because more FTAs is an attraction to investors. That means investors will manufacture here because they know they can sell their products on these FTA partners. Better market access, zero duty with our products and for those market so more FTA would be good for more investors. Right now, we have many FTAs with ASEAN, better market access in EU because of the GSP+, US because of the GSP where about 6,000+ products and they’re duty free in the US market. In the EU, about 3,000+ products.

We continue to work on more FTAs like with South Korea. In the near future, with UAE as well. More FTAs and investment promotion and protection agreement that can encourage more investments from these countries.

The topic for discussion on RCEP will be presented and this is a much larger FTA. I would tell you immediately that I have no fear because many of our products right now have been liberalized so our entry into RCEP is not a new thing but it will benefit our local economy in terms of greater market access. Mas napalawak—wider market access for our products but at the same time we kept the agriculture sector protected. Hindi pa rin sila na-expose. ‘Yung fear ng mga agri sector are addressed here, but at the same time for manufacturers group, you have better access to your imported inputs especially coming from RCEP countries. This will be explained in a while and what it brings is if you are part of the RCEP, more investors will come into the country kasi they see that you are part of this big system and they’ll be part of it once they operate it. In the Philippines, they know that we have a business-friendly environment. They know that you are rules-based. They follow the rules as agreed in this FTA. It’s not unilateral imposed by any government. It is market-based.

These are definitely good signs of the way we manage the economy and it is encouraging for investors if you are part of this that is why we are hoping that the Senate will soon ratify the RCEP and we are looking hopefully this month to be ratified. We have asked the President to certify as urgent the ratification of RCEP so that we can fast track the ratification of RCEP this January. We have asked other Secretaries among economic managers to join in endorsing this to the President. It’s now in the Office of the President.

Amidst this pandemic, the Philippines has also been proactive in enhancing strategic bilateral and regional relations with other trade partners. We will continue to strengthen those. This will lead into more trade activities and more investment activities that will create more jobs.

These are just some of the key indications for 2022. We remain bullish. As mentioned, we are looking into 6% to 7% growth for 2022. We will not change that despite Omicron. This faster growth will create a bigger consumer base, more employment, more income for the people, and a brighter future MSMEs once we have these growing economies. While the pandemic remains to be challenging, we are already seeing signs of recovery.

For the policy aspect, there is a need for targeted health protocols rather than a blanket approach. This means being more geographically focused on our stringent lockdowns while empowering those who are less vulnerable, particularly those that have been vaccinated, to continue economic activities.

Likewise, in terms of health care system capacities, it is in our strategy to continue to increase this with or without pandemic and despite whatever alert levels we are in. The healthcare infrastructure should be continued. This is going to be part of our SIPP. This is in preparation not only for COVID019 but for future pandemics. This entails continuously boosting our vaccination supplies, inviting more manufacturers for vaccines and medications, supporting the research and development, as well as procurement of COVID-19 medicines.

As President Rodrigo Roa Duterte has said in his New Year’s message, the year 2022 will give us Filipinos a fresh start and an opportunity to aim higher and do things better.

Thank you once again to the Chinese Filipino Business Club, and more power to the MSMEs!

Maraming salamat po at mabuhay tayong lahat! ♦

Date of Release: 19 January 2022