THE GOVERNMENT should seek to grow the economy to ease its debt burden by offering incentives for agricultural and manufacturing projects, following the failure of its efforts to attract foreign direct investment (FDI), the Freedom from Debt Coalition said on Wednesday.
“Rather than relying on FDI inflows, which have not materialized despite the passage of investor-friendly legislation such as CREATE (the Corporate Recovery and Tax Incentives for Enterprises), government should focus on reviving and strengthening the domestic economy by providing support and incentives to key sectors such as agriculture and manufacturing,” the coalition said in a statement.
These industries, it added, have been neglected for decades due to “ill-advised policies such as the infamous Rice Tariffication Law which failed to deliver its promise of cheaper rice even as it resulted in bankruptcy of millions of farmers.”
The coalition also called for significant investment in human capital by ramping up spending on education, healthcare, housing, and nutrition.
“The current obsession with chasing after investors at the expense of people’s needs could backfire if we end up with lower human capital stock than before the pandemic, jeopardizing our long-term development prospects,” it said.
The national debt was P12.5 trillion at the end of May, putting the government under pressure to curtail spending, particularly on social services, and impose additional taxes, the coalition said. “Both moves risk further widening the inequality that was only exacerbated by the pandemic.”
Other issues that need to be addressed include inflation and the expansion of the current account deficit, it added. — Alyssa Nicole O. Tan