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.