The last two weeks saw a number of critical bills being signed by the President into law. These laws are to change the economic, political and social landscape of the country as we enter the initial stages of reaping the demographic dividend. As the share of the working age population of the country increases, the need to ensure that everyone can have a chance at accessing the benefits that will come out of the dividend becomes imperative.
Among the laws are Telecommuting Act; Social Security Act of 2018; Department of Human Settlements and Urban Development; Mobile Number Portability Act; Liberalizing the Importation, Exportation and Trading of Rice; Expanded Maternity Leave Act; New Central Bank Act; Tax Amnesty Act; Universal Health Care Act; and the Revised Corporate Code of the Philippines.
If we are to summarize the essence of these key legislations, their common thread is essentially inclusivity or increasing access of everyone to basic services and improving governance. We will not be able to discuss all the merits of these laws, but let us focus on three and their salient features:
The Social Security Act of 2018 intends to improve the long term viability of the Social Security System (SSS) by increasing the contribution rate from 12 percent in 2019 to 15 percent in 2025, retaining the employer-employee ratio of 2/3 and 1/3 sharing. There is also a provision for compulsory coverage of self-employed and overseas Filipino workers. Another key addition is the provision of unemployment insurance or involuntary separation benefit for those who lose their jobs, but have contributed at least 12 months in the 18 months preceding the involuntary unemployment. The insurance that will be given will be a maximum of two months at 50 percent of the average monthly salary credit.
The Liberalization of the Importation, Exportation and Trading of Rice, or the Rice Tariffication Act, is intended to address the rice supply gaps that is translated into the broader economy as higher inflation rate. Rice represents roughly 10 percent of the average consumer basket and as such can significantly affect the overall inflation rate if supply is lacking. The experience last year, and as was in 2009, was that tight supply of affordable rice contributed significantly to rising inflation. This law removes quantitative restrictions in the importation of rice and replaces it with tariffs following our commitments in Asean and the World Trade Organization. The National Food Authority is given the task of maintaining a buffer stock of rice but they are to source it from local suppliers. The law also provides protection for the local rice industry through a special safeguard duty in the event of large fluctuations of the rice prices, provision of a Rice Competitiveness Enhancement Fund amounting to P10 billion from the tariff generated. This Fund will be used to help modernize and improve the local rice industry through technology improvement, credit assistance, extension services, among others. Furthermore, excesses in the P10-billion tariff will be channeled to farmer financial assistance, titling of lands, crop insurance and crop diversification. Finally, the law mandates the drafting of a Rice Industry Road Map to improve competitiveness of the sector.
The Universal Health Care (UHC) Act automatically
includes every Filipino citizen into the National Health Insurance Program. It
mandates the Philippine Health Insurance Corp. to implement within two years a
comprehensive outpatient benefit service which is currently not part of the
benefits provided by PhilHealth. The
Department of Health and local government units are tasked to develop a
comprehensive health care delivery system through an affordable primary care
provider for every citizen. The national
government will finance all population-based health services and these will be
provided free of charge for all citizens.
These health services have the minimum component of primary care
provider
network, epidemiologic surveillance system and health promotions program.
These three laws alone can significantly alter the usual way of doing things in the country. The SSS and the UHC ensure better social protection for the citizen. The introduction of the unemployment insurance and the health insurance for all will allow for income protection against unexpected challenges brought about by changes in the economy for the working class and catastrophic health conditions without compromising the need for personal responsibility by the citizen. The Rice Tariffication Act, meanwhile, open to business the responsibility to find cheaper rice abroad. The imposition of tariff ensures that the difference will not be detrimental to the local rice industry and the tariff itself will be used to help strengthen it. The winner will be all consumers, including the rice farmers themselves, since we would have ensured a steady supply of rice to meet local shortfall at affordable prices.
What is critical at the moment is how the implementing rules of these laws are being crafted considering that new institutions will be created, others will be downgraded and in the case of the UHC, a national system needs to be set in place. All told, these laws still require our participation in the crafting of their implementation. For certain, their impacts will not be immediate and will be subject to reviews and adjustments. Their financing and capacity requirements should make the government carefully think about making them work and not get stuck with the euphoria of their passage.