Pre-SONA 2024: How did the government fare in its legislative agenda?

As President Ferdinand “Bongbong” Marcos Jr. prepares to deliver his third State of the Nation Address (SONA) on July 22, 2024, all eyes are on the administration’s legislative scorecard.

With inflation challenges, economic growth, and a host of priority bills in the balance, the question remains: How much has the government delivered on its promises from last year’s SONA?

In his 2023 SONA, the President identified and laid down his priority bills and appealed for congressional support. Listed below are the priority measures he mentioned, and the status of these policies so far. Out of the 16 priority bills, three have already been signed into law.

Most have been filed in the Senate as part the priority list of LEDAC (Legislative-Executive Development Advisory Council), a high-level advisory body that facilitates consensus-building and collaboration between the executive and legislative branches of government, as well as key stakeholders.

1. Excise tax on single use plastics

Among the measures being proposed is the PHP 100.0 excise tax for every kilogram of non-recyclable single-use plastic bags sold to retailers, indexed to inflation at 4% annually beginning on its third year of implementation.

In terms of incremental revenues, the Department of Finance (DOF) projects that the said proposed tax measure will increase tax collections by an average of PHP 7.7 billion annually from 2025 to 2028, totaling PHP 30.9 billion over the period.

Status:

Approved by the House of Representatives on November 14, 2022
LEDAC priority for 2025: Top priority

2. VAT on digital service providers

The proposed 12% VAT on digital services does not impose new taxes but rather expands the tax base to include non-resident digital service providers (DSPs) to level the playing field for local players. According to the Department of Finance (DOF), the proposed measure is estimated to bring an average of PHP 19.7 billion annually in incremental revenues from 2025 to 2028, totaling PHP 78.8 billion over the period.

Status:

Approved by the Bi-Cameral Conference Committee on June 25, 2024
LEDAC priority for 2025: In advanced stages

3. Rationalization of the mining fiscal regime

The bill on the rationalization of the mining fiscal regime aims to simplify the tax structure within the industry, making tax obligations more predictable for investors as opposed to the current regime where obligations may vary depending on the mining agreement.

The DOF estimates that this tax measure is estimated to bring an average of PHP 6.3 billion in incremental revenues annually from 2024 to 2028, equivalent to a total of PHP 25.1 billion over the same period.

Status:

Approved by the House of Representatives on September 25, 2024
LEDAC priority for 2025: Top priority

4. Motor vehicle user’s charge/road user’s tax

The proposed changes to the motor vehicle road user’s tax provides a more structured tax schedule based on the type of vehicle and gross vehicle weight, from the current tax schedule that is solely weight-based.

Based on DOF projections, the proposed tax measure is estimated to bring in an additional PHP 8.9 billion in revenues annually from 2026 to 2028, totaling PHP 26.7 billion over the period.

Status:

Approved by the House of Representatives on December 12, 2023
LEDAC priority for 2025: No

5. Military and uniformed personnel (MUP) pension

Under the proposed military and uniformed personnel (MUP) pension reform, mandatory pension contributions will be deducted from the monthly pay of MUP, in contrast with the current pension system which is fully funded by the government.

The proposed reform is a response to the government’s ballooning pension obligations which may arise should the current system continue.

Status:

Approved by the House of Representatives on September 25, 2024
LEDAC priority for 2025: Second priority

6. Anti-agricultural Economic Sabotage act

The proposed amendments to Republic Act No. 10845 aim to level the playing field for local farmers through the introduction of harsher penalties for smugglers, profiteers, hoarders, and cartels in the agricultural and fisheries sectors.

Status:

Approved by the Bi-Cameral Conference Committee on May 22, 2024
LEDAC priority for 2025: Yes, in advanced stages

7. New Government Procurement Act (NGPA)

The NGPA, which amends Republic Act No. 9184 of 2003, creates a more streamlined and transparent procurement system to promote greater efficiency in the implementation of government projects.

Status:

Approved by the Bi-Cameral Conference Committee on May 22, 2024
LEDAC priority for 2025: Yes, in advanced stages

8. New government auditing code

The proposed new government auditing code aims to amend Presidential Decree no. 1445 of 1978 to keep the government’s auditing code in line with recent technology and digitization.

Status:

Approved by the House of Representatives on December 12, 2023
LEDAC priority for 2025: Yes, in advanced stages

9. Amendment of the Fisheries Code

The proposed amendments to the Fisheries Code aim to incorporate and strengthen science-based approaches for identifying fishing areas in view of supporting the fisheries sector.

Status:

Filed in the House of Representatives
LEDAC priority for 2025: No

10. Amendment of the Cooperative Code

The proposed amendments to the Cooperative Code aim to streamline the creation of cooperatives in view of fostering greater productivity in the labor sector.

Status:

Approved in the House of Representatives on December 12, 2023
LEDAC priority for 2025: No

11. Anti-Financial Accounts Scamming Act

The anti-financial accounts scamming act aims to address the proliferation of financial scams with the increase of digital transactions. This enforces regulations on the use of financial accounts and identifies money mulling activities, social engineering schemes and economic sabotage as illegal offenses.

Status:

Approved by the Bi-Cameral Conference Committee on May 22, 2024
LEDAC priority for 2025: Yes, in advanced stages

12. Tatak Pinoy Law

The newly legislated law establishes the Tatak Pinoy Council, a policy and advisory body to the President which will develop the Tatak Pinoy Strategy. It is aimed at enhancing the Filipino brand and increasing the global competitiveness of Filipino products and services. The Implementing Rules and Regulations have already been published by the Department of Trade and Industry on May 22 and should have taken effect after 15 days.

Status:

Signed into Law on February 26, 2023 (Republic Act No. 11981)

13. Blue Economy Act

The proposed legislation adopts a blue economy framework for equitable and sustainable development of maritime zones in the country, including the management and conservation of marine and costal resources and ecosystems.

Status:

Approved in the House of Representatives on December 12, 2023
LEDAC priority for 2025: Second priority

14. Ease of Paying Taxes Law

The ease of paying taxes law updates the tax system in the country and streamline the process in filing and remitting taxes. It also provides more support to micro and small enterprises including providing withholding tax exemptions to micro-enterprises.

Status:

Signed into Law on January 10, 2024 (Republic Act No. 11976)

15. Automatic Income Classification of Local Government Units Act

The recently passed law updates the classification of local government units including provinces, cities and municipalities according to income ranges and enforces automatic reclassification, amending the Local Government Code of 1991.

Status:

Signed into Law on October 26, 2023 (Republic Act No. 11964)

16. Philippine Immigration Act

The Philippine Immigration Act updates the governing law of the Bureau of Immigration (BI), repealing the Commonwealth Act No. 613 and its amendments. It aims to update the bureau’s functions, modernize the systems in the bureau and update existing legal framework for immigration policies in the country.

Status:

Approved in the House of Representatives on May 29, 2024
LEDAC priority for 2025: Second priority

The legislative scorecard above certainly reveals some progress. But with new cabinet members in place and continuing challenges, it remains to be seen how these priorities will evolve and translate into meaningful action.

MARIA KAILA BALITE is a Research Officer of the Research and Market Strategy Department, Institutional Investors Coverage Division, Financial Markets Sector, at Metrobank. She provides macroeconomic research, forecasts, and insights, as well as regular and ad hoc economic reports for both internal and external stakeholders. She holds a Master’s degree in Applied Economics and also majored in Financial Economics for her Bachelor’s degree, both from De La Salle University Manila. Prior to Metrobank, she was an Economist at the Office of the Chief Economist of the Department of Finance. Outside of work, her interests include thriller movies, K-dramas, and dogs.

MARIAN MONETTE FLORENDO is a Research Officer of the Research and Market Strategy Department, Institutional Investors Coverage Division, Financial Markets Sector at Metrobank. She provides macroeconomic research for the bank. Her academic background is in Mathematics and Economics. She loves solving puzzles and watching mystery movies.

MACKENZIE CHUA is an intern at Metrobank. He is also a student at De La Salle University Manila, taking up Bachelor of Science in Management of Financial Institutions.