Ramos signs crucial economic reforms into law

Ramos signs crucial economic reforms into law

MANILA (AFP): President Fidel Ramos signed into law here yesterday several key economic reforms including tax reforms and a bill letting foreign firms participate in local infrastructure projects.

Ramos said the passage of the acts, despite numerous delays and opposition by certain legislators, showed that both congress and the executive had "the political will to push needed programs to a national consensus that will speed up Philippine progress."

Chief among the legislation passed is the expansion of the value-added tax system, which Ramos said would make collections more equitable, raise an additional 8.3 billion pesos (US$296 million) and reduce the fiscal deficit.

This bill's passage had been a condition for the approval of a pending $650 million credit program with the International Monetary Fund (IMF), which Manila needs to open talks on debt rescheduling and new loans with its foreign creditors.

Another bill will make it easier for foreign companies to construct infrastructure projects in this country under the "build-operate-transfer" scheme the cash-strapped government has been promoting.

Under this scheme, private firms can build an infrastructure project, operate it for several years until they make a profit, then transfer it to the government.

In the past, rules governing this schemes were too restrictive to attract many foreign firms but Ramos said that "we anticipate a groundswell of investor support," for such infrastructure projects due to the bill's passage.

Ramos also increased the tax on stock transactions, saying this would raise some 600 million pesos ($21.5 million) even as he brushed aside fears that it would dampen interest in the stock market.

Another crucial bill, also being awaited by the IMF, would allow more foreign banks full commercial operations in this country, but this has been delayed in congress and numerous restrictions have been included in its provisions.