Senate Bill No 1414 “All Heart, All Out.” “Pag-ASA: Alaga, Sustento at Angat sa -Senator Panahon ng COVID-19 Crisis”

An Act Establishing the Emergency Response and Recovery Package to Counter the COVID-19 Pandemic or “Pag-ASA: Alaga, Sustento, at Angat sa Panahon ng COVID-19 Crisis” amounting to PHP750 billion.

The proposed bill will seek to provide the President with financial authority and administrative flexibility:

Emergency response Recovery package

ALLOCATION OF THE PAG-ASA BILL

ALAGA SUSTENTO ANGAT PHP250 billion PHP250 billion PHP250 billion • Provide protection and • For the social protection • An aggressive stimulus care for frontliners, workers and financial/tax for the economy safeguard food relief to micro, small, and supplies, and expedite medium enterprises the manufacture and (MSMEs) importation of masks, alcohol, testing kits, etc

*Pending in the Senate Committee for Economic Affairs

Prepared by the Office of the Undersecretary for International Economic Relations Source: Senate of the Philippines Senate Bill No 1449 -Senator Sonny Angara Economic Rescue Plan for COVID-19

An Act Appropriating the Sum of Three Hundred Seventy Billion Pesos (PHP370,000,000,000) for the 2020 Fiscal Stimulus Package to address the economic impact of COVID-19. The propose bill seeks:

• To institutionalize a fiscal stimulus package to ensure worker retention and payroll maintenance through business continuity

• Industrial policy measures shall be reviewed to remove or revise rules and regulations that do not support the goal of business continuity post COVID-19. • Such policies include immediate adoption of zero tariff rates on essential imported raw materials and the temporary suspension of the export percentage requirements for export enterprises • Proposes to suspend deadlines for all payments and submissions due within the ECQ period and extend due dates accordingly

• Streamline the process of applying for registration such as reducing timeliness for requirements and reducing the permits necessary

ECONOMIC RELIEF MEASURES

• PHP110 billion to private businesses • PHP1 billion payment for sick leave to whose operations were disrupted during employees who contracted COVID-19 the ECQ but continue to shoulder payroll through SSS and GSIS costs

• PHP100 billion to government financial • PHP50 billion to MSMEs which includes institutions to expand current loan and grants for education, training and advising; loan guarantee programs to assist expansion existing loan programs for MSMEs, ECQ non-essential businesses, MSMEs and agribusiness establishments and other affected sectors through SBC, ACPC, and PGC

• PHP43 billion to all sectors in the tourism • PHP 66 billion to exporters or importers, industry through incentives for domestic particularly in manufacturing sector tourism, interest-free loans, participation in tourism fairs and other forms of tourism promotions *Pending in the Senate Committee for Economic Affairs

Prepared by the Office of the Undersecretary for International Economic Relations Source: Senate of the Philippines Senate Bill No 1449 -Senator Sonny Angara Economic Rescue Plan for COVID-19

INTER-AGENCY TASK FORCE mandated to manage the Fiscal Stimulus Package

National Economic Development Authority (NEDA) • The bill also requires NEDA to submit to Congress a long-term plan for building economic resilience.

• The Economic Resilience Plan (ERP) shall include: • Strategy for measuring and monitoring economic resilience; and • Identification of structural reforms needed to increase the ability of the economy to withstand shocks.

*Pending in the Senate Committee for Economic Affairs

Prepared by the Office of the Undersecretary for International Economic Relations Source: Senate of the Philippines Senate Bill No 1417 -Senator Sonny Angara Economic Rescue Plan for COVID-19

An Act Appropriating the Sum of One Hundred Eight Billion Pesos (PHP108,000,000,000) for the 2020 Fiscal Stimulus Package to address the economic impact of COVID-19.

Creation of an Inter-Agency Task Force for the 2020 Stimulus Package:

ALLOCATION OF PHP108 BILLION

PHP43 billion PHP15 billion PHP50 billion

Assistance for promotion of Assistance to displaced Assistance to businesses the tourism sector workers, emergency including but not limited to employment assistance, and loan packages and subsidies transportation vouchers *Pending in the Senate Committee for Economic Affairs

Prepared by the Office of the Undersecretary for International Economic Relations Source: Senate of the Philippines Senate Bill No 1431 -Senator Imee Marcos Economic Recovery Act of 2020

An Act Establishing An Economic Recovery Package to Businesses in the Hardest Hit Sectors by the Coronavirus Disease 2019, Appropriating Fund Therefor, And for Other Purposes

ECONOMIC RECOVERY ACT OF 2020 AIMS TO:

Support business and Labor retention and Zero tariff rates on workers business protection imported raw materials -Supporting employment, -A direct wage subsidy of 75% -Measures to ensure that minimizing economic losses, of actual payroll cost to businesses response to cope and renewing business employees of affected with the incoming effects are confidence through an businesses in the hardest hit unimpeded such as temporary economic recovery package sectors adoption

Suspend deadlines Streamline the process of Submission a long-term applying for registration plan to Congress -For all payments and submission of tax business -Such as reducing timelines for -A long-term plan that includes a payments, until 6 months without requirements and reducing strategy for measuring and penalty permits necessary before the monitoring economic resilience commencement of operations and identification of structural reforms needed to increase the ability of the economy

*Pending in the Senate Committee for Economic Affairs

Prepared by the Office of the Undersecretary for International Economic Relations Source: Senate of the Philippines Senate Bill No 1474 Philippine Stimulus Package, Aid and -Senator Response to Coronavirus Act

An Act Providing An Economic Stimulus Strategy For the Effects of the Coronavirus Disease (COVID-19) and Appropriating Funds Therefor. The proposed bill will seek to:

Strengthen the capacity of the Investment on health Philippines healthcare system programs and measures to to respond to outbreaks and mitigate and contain the epidemics spread of COVID-19 ECONOMIC MEASURES

Protect the incomes of workers Regulatory relief includes non-tax through granting wage subsidies to and non-duty fees and charges businesses highly affected by imposed on enterprises COVID-19

Tax relief measures include income tax exemption to self- Intervention and assistance in employed, other professionals, severely affected sectors such as MSMEs and their employees for 1 MSMEs, agri-fishery and tourism year, and 3 years for highly affected

Enhanced “Build, Build, Build” Adopting a flexible monetary policy Infrastructure Program focusing on to include lower policy interest rates, improved healthcare infrastructure cut reserve requirement ration, and facilities purchase treasury and corporate bonds

Objectives of SBN 1474: Bolster the capacity of the Improve capacities to test, Reduce the adverse impact of Philippine healthcare system I. trace, isolate and treat II. III. COVID-19 on the socio- to combat disease and COVID-19 cases economic well being of pandemics Promote ease of doing business, Mitigate the economic cost and Build economic resilience IV. V. reduce the cost of business VI losses grounded on economic operations and provide relief and . inclusivity and collective growth assistance

Prepared by the Office of the Undersecretary for International Economic Relations *Pending in the Senate Committee for Economic Affairs Source: Senate of the Philippines *Approved at the House Committee Level (Defeat COVID-19 Ad- Philippine Economic Stimulus Act (PESA) hoc Committee) on 26 May 2020

The PESA is a PHP1.3 trillion economic stimulus package. WHO WILL BENEFIT FROM PESA?

41 million workers nationwide, 29 million of which are 1 million formal MSMEs and approximately 4.5 affiliated with ECQ non-essential (“critically impacted”) sectors million informal MSMEs such as tourism, manufacturing and services sector, retail and wholesale trade, accommodation, education, among others PESA INTERVENTIONS PHP568 billion will be allotted for 2020, PHP80 billion in 2021, and another PHP650 billion in the next three years starting 2021.

Subsidies for massive Wage subsidies Cash for work Assistance to students COVID-19 testing thru PHP110B PHP30B PHP15B LGUs and agencies 2020 - PHP10B; 2021 – PHP10B

Zero interest loans PHP50B; Assistance to Assistance to MSME+ P10B Loan guarantees industry and service loans for MSME+ 2020 – PHP40B; sectors 2020 – PHP50B; 2021 – PHP20B P44B 2021 – PHP25B

Assistance to tourism Assistance to agri-fishery; National Assistance to transportation PHP58B condonation of loans of Development Corp. industry PHP70B Agrarian Reform beneficiaries 2020 – PHP25B; Enhanced Build, Build, Build PHP56B 2021 – PHP25B PHP650B (3 years starting 2021) Prepared by the Office of the Undersecretary for International Economic Relations Source: PESA-driven Economic Recovery by Cong. Stella Luz A. Quimbo *Approved by Congress second reading on 28 FINANCIAL INSTITUTIONS STRATEGIC May 2020 TRANSFER (FIST) ACT

• Seeks to help financial institutions in their bad debt resolution and management of their non-performing assets (NPAs) • Encourages financial institutions to sell their non-performing assets to asset management companies

Who will benefit from this act? Financial institutions (public or private) that have:

o Non-performing assets (NPAs) - can be loans or real and other properties acquired (ROPA) o Non-performing loans (NPLs)- can be secured or unsecured loans, receivables and other financial assets of similar nature, including restructured loans, which are considered credit-impaired

What are FISTCs? FISTC or FINANCIAL INSTITUTIONS STRATEGIC TRANSFER CORPORATION o Asset management o Stock corporation organized in companies that specialize in accordance with Republic Act the resolution of distressed no. 11232, otherwise known as assets “The Revised Corporation Code of the Philippines” and for the purpose of this Act o The Financial Institutions Strategic o Bangko Sentral ng Pilipinas, Transfer Corporation (FTISC) will Government Financial Institutions and acquire land, with at least sixty Government Owned and Controlled percent (60%) of its outstanding Corporations may create an FISTC capital stock owned by Philippine subject to their respective charters nationals pursuant to Republic and the approval of Governance Act. No. 7042 (Foreign Investment Commission for GOCCs. Act).

Prepared by the Office of the Undersecretary for International Economic Relations Source: House of Representatives FINANCIAL INSTITUTIONS STRATEGIC TRANSFER (FIST) ACT

POWERS OF FITSC

A. To invest in, or acquire NPAs of FIs;

To engage third parties to manage, operate, collect and dispose of NPAs B. acquired from an FI;

C. To rent, lease, hire, subject to security interest, mortgaged, transfer, sell, exchange, usufruct, secure, securitize, collect rents and profits, and other similar acts concerning its NPAs acquired from an FI; D. In case of NPLs, to restructure debt, condone debt and undertake other restructuring related activities;

To take, transfer shares or buy shares issued by the borrower purpose of E. business reorganization or rehabilitation of borrower, subject to the provisions of the Revised Corporation Code of the Philippines in respect of the shareholders of the borrower company, and apply any other measures or restructuring techniques with the approval of the Commission; F. To enter into dation in payment arrangements, foreclose judicially or extra- judicially and other forms of debt settlement involving NPLs;

G. To spend funds to renovate, improve, complete or alter its NPAs acquired from an FI;

H. To issue equity or participation certificate or other forms of IUIs for the purpose of acquiring, managing, improving and disposing of its NPAs acquired from an FI;

I. To borrow money and issue other instruments of indebtedness for the purpose of paying operational and administrative costs;

J. To guarantee credit, accept or intervene for honor the bills of borrowers; To advance funds to borrowers where required by an acquired asset or any K. debt restructuring agreement pursuant thereto, or under any court order or rehabilitation plan; and To engage the services of a third-party asset servicing company for the L. collection and receipt of the debt payments for debts under debt restructuring or business organization, management and disposition of assets of the FIST.

Prepared by the Office of the Undersecretary for International Economic Relations Source: House of Representatives *Pending in Congress (no information on Corporate Recovery and Tax Incentives status at committee for Enterprises (CREATE) level)

WHAT ENHACEMENTS TO CITIRA ARE IN CREATE? I. Faster reduction of the Corporate Income Tax Rate and longer NOLCO for losses of small business in 2020 PROVISION CITIRA CREATE Corporate income 1 percentage point IMMEDIATE drop to 25% by July 2020 tax rate reduction per year (30% to 20% by 2029) 1 percentage point per year from 2023 until 2027 (30% to 20% by 2027) Longer NOLCO for NONE For non-Large Taxpayers, losses in 2020 can be carried over the losses incurred in next 5 years, rather than current 3 years. 2020

II. Flexibility in the grant of incentives, including non-tax incentives

PROVISION CITIRA CREATE Non-fiscal (or NONE The FIRB may recommend to the President the grant of non-tax) support appropriate non-fiscal support, based on the Strategic to businesses Investment Priority Plan (SIPP), for highly desirable projects or very specific industrial activities. Power of the Modify the period of Modify the mix, period or manner of availment of incentives President manner of availment of for highly desirable projects or specific industrial activities to incentives. create high-value jobs and attract significant foreign capital or investment. Availment of up to 40 years.

III. Longer sunset transition period for firms currently enjoying the GIE incentive PROVISION CITIRA CREATE Transition Transition period (years)/ # of years that has Transition period (years)/ # of years that has firm period for firms firm has been under GIE regime: has been under GIE regime: enjoying special 2 = more than 10 4 = more than 10 rate of 5% on 3 = 5 to 10 5 = 5 to 10 Gross Income 5 = below 5 7 = below 5 Earned (GIE) 7 = 100% exporters; with at least 10,000 9 = 100% exporters; with at least 10,000 employment, footloose projects or activities employment, footloose projects or activities Effectivity of the January 1, 2020 January 1, 2021 new fiscal incentives regime

Prepared by the Office of the Undersecretary for International Economic Relations Source: Department of Finance Matrix of Proposed Bills:

SBN SBN SBN SBN SBN HB PESA CREATE 1414 1449 1417 1431 1474 6622 Wage Subsidy (assistance ✔ ✔ ✔ ✔ ✔ ✔ to displaced workers) - - Assistance to MSMEs, Agri-business and Tourism ✔ ✔ ✔ ✔ ✔ - ✔ - industry Trade Policy (Zero-tariff ✔ ✔ ✔ rates) - - - - - Regulatory relief (extension of payments, ✔ ✔ ✔ ✔ ✔* ✔ ✔ ease of opening a new - business

Creation of separate IATF - ✔ ✔ - - - - -

Long-term plan for ✔ ✔ ✔ ✔ ✔ recovery - - - Build, Build, Build for ✔ ✔ health ------

Monetary policy measures ✔ - - - ✔ ✔* - ✔

Reactivation of special ✔ purpose vehicle (SPV) ------

Empowerment of LGUs - - - - ✔ - ✔ -

Improve healthcare system ✔ - - - ✔ - ✔ -

*Tax Incentives and Exemptions

Prepared by the Office of the Undersecretary for International Economic Relations