FINANCE Secretary Carlos G. Dominguez III urged legislators to pass “as soon as possible” a stimulus package bill and a bank bill facilitating the transfer of banks’ bad loans to asset Management Companies (AMCs).
In a Senate hearing, Mr. Dominguez said the executive department is counting on the prompt passage of the P568-billion Philippine Economic Stimulus Act (PESA) bill and the Financial Institutions Strategic Transfer (FIST) bill.
“There are several pending pieces of legislation that we would encourage the House and the Senate to pass, of course, there’s the stimulus package called PESA, (and) then here is the FIST measure,” Mr. Dominguez told Senate leaders late Wednesday.
The FIST bill was approved at House committee level last week. The bill lays down the regulatory framework for transferring bad loans to AMCs to keep bank balance sheets healthy and ensure their continued viability during an economic downturn.
The PESA bill consolidates 10 House bills aiming to pump-prime the economy as it recovers from the fallout of the coronavirus pandemic.
“We would like to encourage consideration of these bills as soon as possible,” Mr. Dominguez said, adding that he will write to legislators with “some comments” on the measures.
The PESA bill is much larger than the proposed P173 billion recovery program that the economic team proposed earlier.
Other components of the recovery program are known as Bayanihan II and the proposed Corporate Recovery and Tax Incentives for Enterprises Act (CREATE), which is a reconfigured form of the previous the Corporate Income Tax and Incentives Reform Act or CITIRA, a measure seeking to progressively lower corporate income tax.
The CREATE bill, also deemed urgent, is being repurposed as a stimulus measure and accelerates the timetable for bringing down corporate tax to 25% by July from 30% currently.
“Our proposal for the CREATE bill is the first ever proposal that is revenue eroding so we realize the needs of the times and we are willing to drop the tax rates from 30 to 25% in one big jump, that in itself is a big stimulus, because essentially that puts in the pockets of businessmen more money than they would otherwise have,” Mr. Dominguez said.
He also asked the Senate to include CREATE in package 2 of the tax reform program, which is currently pending in the Senate.
Last week, he asked Congress to pass the package 2 bill before the regular session ends on June 3. — Beatrice M. Laforga