Insurance executives laud the measures carried under the proposed Tax Reform for Acceleration and Inclusion Act (TRAIN), saying these help boost the likelihood for Filipinos to save. Such savings allow for the purchase of financial products as insurance that, in turn, provide the investment tools for the industry.
According to Insurance Commissioner Dennis B. Funa, House Bill (HB) 5636 or TRAIN will help improve financial inclusivity in the country and help pave the way for more investment opportunities for insurance companies.
“The TRAIN, which is characterized by low rates and a broader base, will enable the public to [deploy] resources [for] financial products, such as insurance. Filipinos would enjoy more disposable income that will enable them to avail of insurance products, be it microinsurance or regular, and consequently contribute to the improvement of financial inclusion in our country,” Funa said in a statement.
The TRAIN should also help create a favorable environment for insurance firms in terms of their investments, according to Funa.
“This means that there will be an increase in insurance density or the amount spent on insurance by each individual in the country,” he quickly added.
Insurance companies should likewise infuse fresh funds to support the increase in infrastructure spending by the government.
“The boom in infrastructure sector could present higher yields for insurance companies compared to equities and fixed-income securities,” Funa said.
He added the companies can either buy infrastructure-related financial instruments, such as corporate or Public-Private Partnership (PPP) Program bonds, or invest directly in the stocks of companies involved in
infrastructure projects.
“We are expecting there will be a development and improvement of investment instruments and products, including infrastructure-related financial instruments and projects. Thus, we are keeping an open mind in terms of approval of these investments,” he said.
The proposed TRAIN is a consolidation of the original tax-reform bill under HB 4774 filed by Rep. Dakila Carlo E. Cua, and 54 other tax-related measures. The TRAIN is the first package of the DOF proposed Comprehensive Tax Reform Program.
During the “1 with the 99: A Forum on Tax Reform” event at the Edsa Shangri-La hotel in Mandaluyong City on Wednesday, Finance Secretary Carlos G. Dominguez III said the TRAIN should end decades of unjust taxation that has polarized wealth rather than distribute it.
“Beyond that, the proposed reforms in our tax policy will help us reshape our economic growth so that it becomes more inclusive. It will help us end the pattern of wealth concentration that characterized our growth so far,” Dominguez added.