IMPROVE MACROECO POLICY BY RATIONALIZING
FISCAL INCENTIVES- ANGARA

Senator Edgardo J. Angara today said that while granting fiscal incentives will encourage direct investments in the country, there is a need to set the parameters of fiscal incentives to prevent abuse.

"I am in favor of granting fiscal incentives to encourage direct investments in the country, especially if it will develop the country's economy. Pero minsan inaabuso na tayo. That's why we have to set the parameters of fiscal incentives in the country," said Senator Angara.

Angara, who chairs the Senate Committee on Banks, Financial Institutions and Currencies, stressed that in order to cope with the challenges of a slowing global economy and escalating food and fuel prices, government must strengthen its macroeconomic policies both by rationalizing fiscal incentives and curbing tax evasion.

This includes the rationalization of the incentive schemes and review of the tax waivers and tax breaks that the government give away every year. He added that the country is losing a quarter of billion pesos from tax waivers and breaks.

He further called on for the review of industries that do not need tax breaks and the redirection of revenues from income-generating agencies such as Philippine Amusement and Gaming Corp., the Philippine Charity Sweepstakes Office, the Ninoy Aquino International Airport Authority, and the Philippine Tourism Authority, among others.

Their income can amount to over a billion pesos, and these can build all the schools and buy all the books that we need, he added.

Angara is also pushing for the removal of the automatic guarantee by the national government of loans secured by government-owned and controlled corporations. He cited NFA as having about 50 billion in outstanding loans and the NFA officials do not care on how to find ways of repaying the loan because the government has guaranteed it. Under the present system, GOCCs credit worthiness is not reviewed prior to approval of the loan.

"If you improve tax administration coupled with the improvement of the financial system, your tax base would become broader and your tax effort will be on autopilot. By being wise and discriminating about granting fiscal incentives, we encourage direct investments in the country which will bolster the country's economy," said Angara.