30 November 2020 via RunTheWorld
[Acknowledgments]
First of all, I’d like to thank everyone for inviting us to this HORASIS Asia Meeting; thank you for giving us the honor to speak before this gathering of the region’s most senior leaders in business and government.
Definitely, the present pandemic has caused significant economic, political, and social disruptions that have affected peoples’ lives and livelihood, as well as economic activities around the world. Because of this, many governments had implemented health and safety measures, in the realm of trade, we saw many non-tariff restrictions applied.
In a report by the UN Conference on Trade and Development (UNCTAD), nearly 80 countries and territories took some action to ensure that goods in high demand—such as medicine, food, and medical supplies—would keep flowing to their citizens. Meanwhile, the International Trade Center (ITC) reported that during the pandemic, 139 economies had issued a total of 295 trade-related measures, of which 156 were restrictions on the export of medical supplies.
For the information of the body, the Philippines did not implement any export restrictions even at the height of the pandemic in the country. Likewise, in our own survey, we surveyed 235 Philippine exporters two months into the pandemic. Of this number, 42% said their businesses were greatly affected by the pandemic despite being allowed to operate under the Philippines’ own community quarantine lockdowns. This was because the lockdowns implemented also by other nations and this had caused cancellation of orders for many Philippine exporters, which affected them financially.
These disruptions call for a collective course of action to strengthen and enhance economic cooperation even as we revitalize business activities and communities. We just have to stay the course.
One thing that can aid in this action is the historic signing of the Regional Comprehensive Economic Partnership (RCEP) Agreement by the 10 ASEAN Member States, as well as Australia, China, Japan, Korea, and New Zealand. This modern, comprehensive, high-quality, and mutually beneficial agreement and this will definitely also complement the reforms we are doing in the country. We are into a very aggressive infrastructure program, the “Build, Build, Build”, as well as continuing liberalization in many sectors. About a year or two years ago already, we even liberalized a very sensitive sector, that is the rice sector. We liberalized it totally removing all import restrictions and this is basically to allow a freer flow of goods and essentially have a better supply, prices, and food security in our country.
We continue to do structural reforms in the country. Just recently, about last week, our Senate has finally passed a more aggressive and relative tax reform measure that would essentially lower tax rate in the Philippines from 30% to 25% and eventually to 20% corporate income tax rate, as well as provide other improvements in the incentives regime.
Other reforms that we will continue to follow through would be in the retail trade and public service. The Philippines is trying to liberalize other sectors so that we can encourage more free flows of investments, whether local or foreign. Good thing is that recently, we are in a good run—about four consecutive months of increasing foreign direct investments (FDIs). The pandemic really affected our economy but we are seeing some signs of recovery, including GDP and unemployment that have started to pick up as we reopened more sectors. Even our export sector that dropped by almost 50% at the start of the pandemic during the lockdown, it already went up 2.2% last September.
We are quite relieved but definitely, it will take more time to go back to the pre-COVID levels. There are still risks factors that we are looking at but the signs of recovery are giving us a bit of cautious optimism moving forward.
Thank you. ♦
Date of Release: 01 December 2020