State of the Nation Address, Year 2

PHILIPPINES - In Brief 24 Jul 2017 by Romeo Bernardo

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The President's speech today leaves little doubt that package 1 of the comprehensive tax reform proposal, which the lower house approved in late May, will also hurdle Senate review. With Senators squirming in their seats, the President stressed that he wants passage "in full", presumably referring to the executive's proposed combination of measures that is estimated to yield around 1% of GDP in net revenues. Given the President's strong push, we think the bill may be approved as early as October to give the executive time to prepare the implementing rules and regulations that will put the taxes into effect by the new year. During the two-hour speech, the President also talked at length about the peace and order situation, the continuing drug war, the threat of ISIS ideology and the end of peace talks with communist insurgents. His strong words against "unbridled and irresponsible" mining, threatening to tax mining companies "to death," harkens back to his former environment secretary's controversial postures and raises anew questions about the industry's future. He also talked about specific legislations proposed by the Legislative-Executive Development Advisory Council (LEDAC), including the National Land Use Act and Rightsizing the National Government.What we found surprising was that he did not mention the Bangsamoro Basic Law, or the Muslim issue beyond commenting in passing the need to talk about federalism at some point (mentioning it together with the issue of the West Philippine Sea). Many had hoped that following the declaration of martial law and the destruction of Marawi as well as the refugee crisis it produced, the President would put the full weight of hi...