BALANGA CITY – Bataan 2nd District Representative Jose Enrique S. Garcia III has filed new legislative measures to respond to existing and projected challenges resulting from the COVID-19 pandemic.
Citing the need to initiate reforms in both our public health and economic systems, Garcia has filed the following bills in Congress: the Philippine Centers for Disease Control and Prevention Act, the Use of Electronic Money Act, and a bill repealing the use of Value-Added Tax (VAT) within the current tax regime.
“This crisis has highlighted existing vulnerabilities in our health systems and even our economic systems. I think it is clear that we cannot go back to the way things were before if we want to better respond to similar problems in the future,” Garcia shared.
Strengthening Infectious Disease Surveillance and Response, Garcia believes that one of the first priorities should be strengthening existing governance structures to better respond to infectious diseases in the future. Citing consultations done with public health experts, Garcia explains that one of the main reasons why certain countries have had more success than others in dealing with the disease is the presence of a Center for Disease Control and Prevention.
“Countries that have shown greater success in the fight against this disease hinged their strategy on extensive testing and early detection of outbreaks. This was possible because they set up a government agency dedicated solely to disease prevention and monitoring,” he explained.Garcia’s bill will establish the Philippine Centers for Disease Control and Prevention (CDC) as an attached agency of the Department of Health (DOH) that will be headed by its own Executive Director.
The backbone of a CDC, he furthers, is the existence of a laboratory network with facilities possessing proper biosafety accreditation, with the center serving as overseer and regulator. This will open the doors for expanded testing capabilities.
Garcia’s bill aims to expand the Philippines’ laboratory network in the country. This expansion entails the establishment of one Biosafety Level (BSL) 4 laboratory and at least five additional BSL 3 facilities, similar to the Research Institute for Tropical Medicine (RITM). A facility’s BSL determines a laboratory’s capacity to handle dangerous viruses, with BSL 4 facilities handling the deadliest pathogens.
The expansion of the country’s laboratory network will allow for the establishment of more Biosafety Level 2 (BSL 2) facilities, the minimum requirement necessary to test or detect the presence of viruses.
“We need more surveillance and testing centers across the country. If we can set up our own CDC, then it will be possible for us to have facilities like RITM in at least all of the major islands in the Philippines. Local surveillance will be key in early detection, prevention, and response.
Exploring Alternative Modes of Transactions
With restrictions in movement because of heightened health and safety risks, the pandemic has also highlighted the need for alternative modes of economic transactions. Through “the Use of Electronic Money Act”, Garcia hopes to promote electronic money (e-money) transactions as a safer and more efficient alternative to traditional cash based modes.
Under Garcia’s bill, government agencies and local government units will be mandated to adopt e-money transactions as a possible mode of payment for government services. Merchants or businesses will also be required to be e-money enabled in order to secure a business permit from their respective LGUs.
Garcia believes that by institutionalizing this in institutions and organizations that people regularly interact with, the use of e-money in the wider population will be accelerated. He also shares that it may also lead to easier and more efficient means of disbursing social assistance benefits to constituents in need who are currently mostly unbanked.
“If the wider population is e-money enabled, then we will not need to resort to traditional, physical means of distribution that are especially dangerous during the crisis we are facing now,” he explains.Garcia also sees an alignment of opportunities with a law he principally authored, the Community-Based Monitoring System (CBMS) Act. The CBMS Act mandates all LGUs to collate and consolidate local data for planning purposes, down to the individual and household level. With the data coming from the CBMS, it will be easier to identify recipients of subsidy programs.
Repealing VAT
Supplementing other proposed legislative measures to support the economy, Garcia is pushing for a repeal of the government’s current use of Value-Added Tax (VAT). A long-time advocate of this policy, the lawmaker believes that a shift to a sales-tax based computation scheme will plug current gaps in revenue generation as a result of the use of VAT in the existing tax regime.
The solon adds that the pandemic-induced damage to the economy and government budgetary limitations highlight the need for the timely passage of this measure. Maximizing revenue generation from proper tax policy may strengthen government capabilities to roll out responses to the crisis such as providing cash subsidies, tax breaks, deferred rent and loan payments, reduced reserve requirement, and incentives.
“The current crisis has shown how important it is to place the proper economic safeguards for our people. The current tax regime is something that has placed a heavy burden both on government revenues and on tax payers who are already struggling to make ends meet as it is,” he shared.
Garcia believes that the input tax deduction mechanism has produced loopholes in the system that has made it vulnerable to corruption. Repealing the VAT and replacing it with the sales tax system, he shares, eliminates the loophole and ushers in a simple, straightforward, and easy to administer consumption tax.
“At the same time, the sales tax system eases the cost of doing business benefitting employers while equally favoring consumers due to the lower tax rate of 4%, translating to lower prices of goods and services and a lower inflation rate,” he adds.
“This constitutes a tax break to consumers whose purchasing power could be severely impacted by the disruption of economic activities which may even lead to unemployment and/or cuts in pays. If taxpayers are financially challenged, a lower consumption tax rate is definitely a welcome tax relief.”
The Way Forward
Ultimately, Garcia believes that the country’s new normal must not be limited to just pandemic survival mechanisms.
“The new normal should also involve the institutionalization of policy reforms that should allow us to mitigate similar risks in the future and create a better future for our constituents,” he shares.