Significant reforms for economic growth
The year 2024 brought about challenges for the Philippine economy which grew by 5.6 percent, below the government’s target of 6-6.5 percent. A January 2025 Social Weather Stations survey found that “increasing job opportunities” is the top issue influencing Filipino voters. Hence, there is an urgent need to ramp up initiatives that will bring in foreign direct investments and create more jobs.
Top four pertinent bills to increase investments and create jobs
Four important bills have reached advanced stages in Congress and can be considered as “low hanging fruits.” The Konektadong Pinoy (KP) bill and An Act Liberalizing the Lease of Private Lands to Foreign Investors, can be approved and immediately ratified when the legislators return briefly in June. The Accelerated and Reformed Right of Way Act and Lifelong Returning and Development Act should be included as part of the legislative priority agenda for the 20th Congress.
1. Konektadong Pinoy (KP) bill
This was certified as urgent by the President on 27 Jan. 2025 and passed on third reading by both Houses. This bill will simplify the approval process for data transmission companies by removing the need for a congressional franchise, making it easier for new and existing providers to expand.
KP is expected to drive investments in digital infrastructure, particularly, in data centers, which are critical for artificial intelligence development and other emerging technologies. It will help strengthen digital connectivity, support innovation, and create more opportunities for private sector participation in the country’s digital economy.
2. An Act Liberalizing the Lease of Private Lands by Foreign Investors
This has been approved on third reading by both Houses and is pending bicameral conference discussions.
The reform measure seeks to extend land lease limits to foreign investors from 50 years to 99 years and allows the lease for agriculture, agroforestry, and ecological conservation purposes including carbon farming, tree plantation development, and ecotourism. It will help foreign investment without allowing land ownership, which would need a constitutional amendment.
3. Accelerated and Reformed Right-of-Way Act
This bill has passed the House of Representatives and is pending for second reading approval in the Senate.
The bill aims to make right-of-way acquisition more efficient and ensure just and timely compensation to affected property owners. This can attract more infrastructure investments which, in turn, would make market access and distribution of goods more efficient, boosts productivity of both business and workers, reduces transportation costs, etc., thereby leading to increased economic growth.
Congress should maintain economic growth enhancing foreign assisted public works projects in the list of programmed appropriations in the National Budget with assured funding instead of transferring these to unprogrammed appropriations with no definite sources of financing.
4. Lifelong Learning Development Framework Act
This bill has passed second reading in the Senate, but it is still at the committee level in the House of Representatives. This is a priority bill under the Second Congressional Commission on Education.
Executive measures
The Executive Department should rigorously implement reforms related to the ease of doing business and improved agricultural production and productivity These include:
1. Proper implementation and promotion of the CREATE MORE Act. Some key amendments in CREATE More Law include: reducing corporate income tax to 20 percent from 25 percent; extending maximum income tax holiday to 14 to 17 years from four to seven years; and clarifications on provisions on VAT refund.
2. Improving non-fiscal incentives. Beyond implementing the Ease of Doing Business Law, the government should adopt a customer service-oriented approach. Dubai’s “Golden Visa” program exemplifies this, assigning government personnel to assist investors for a smooth, fast, and streamlined process. A similar system, implemented by bodies like Anti-Red Tape Authority, would greatly benefit investors.
3. Public-private collaborations in agriculture. This will help improve agricultural production through providing financing, inputs, technology, and capacity building to help equip farmers with business skills. They can also invest in post-harvest handling and processing facilities, such as building cold storage warehouses, processing plants, and packaging facilities.
In summary, Congress has a brief period from June 2 to June 13, to pass the reforms, which are up for bicameral deliberations, like the KP Bill and extending land lease to 99 years, before it adjourns. For the other pending bills, the President and the 20th Congress should prioritize their immediate passage to help the government reach its economic growth target.
The President should also pursue reforms that can be done through executive action such as promoting improved fiscal incentives, enhancing non-fiscal incentives, and implementing public-private partnerships to improve the growth of the agriculture sector.
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Gary B. Teves had served as finance secretary under the Arroyo administration.
