The CMDC is a joint public-private sector council composed of the Department of Finance, Bangko Sentral ng Pilipinas, Securities and Exchange Commission, Financial Executives Association of the Philippines, Insurance Commission, Philippine Stock Exchange, Bankers Association of the Philippines and the Investment Houses Association of the Philippines.
In a press briefing yesterday, CMDC chairman Chit Manabat said the government should give priority to key economic bills such as the Securitization Bill, DST (Documentary Stamp Tax) Bill, VAT (Value-Added Tax) , the Personal Equity Retirement Account (PERA), the Pre-Need Plan Code, the Investment Company Code, the Corporate Recovery Act and the amendments to the Securities Regulation Code.
The CMDC has expressed concern that the present investigations being conducted by both the Senate and the House of Representatives on the Jose Pidal account and the failed Oakwood mutiny involving young military officers have slowed down the progress of legislation on certain priority economic reform bills now pending before them.
The group is likewise worried that the coming elections may further delay the passage of economic reform bills if the same is not done at the soonest possible time.
While recognizing that the remaining legislative calendar is already short, the CMDC has expressed confidence that the bills on securitization, DST and VAT will be passed into law before the 12th Congress adjourns in Feb. 2004.
Finance Undersecretary, Eric Recto said the CMDC has already done its part and it’s now up to legislators to act on the proposed bills. "Most of the work has been done. It’s up to them to do their job," he said.
The securitization bill was drawn up to provide a better tax treatment on asset-backed securities (ABS) and other similar instruments. It is expected to alleviate transactions costs as it seeks to remove taxes. An equally important feature of the proposed rule is the promotion of a secondary market for ABS through the creation of a Secondary Mortgage Institution (SMI).
PERA, on the other hand, would create personal tax-free retirement accounts and encourage investment in tax-deferred retirement plans, thus promoting long term savings and easing burdens on the social security system.
Meanwhile, the Pre-Need Code is intended to provide adequate protection to pre-need planholders as it seeks to impose higher capitalization for pre-need plans and stiffer penalties and sanctions against erring pre-need plan firms.
The proposed amendments to the src, meanwhile, involve the abolition of the broker-dealer segregation provision in view of recent technological advances that will allow better monitoring and surveillance of possible fraudulent activities.
The CMDC is also seeking the removal of the DST on the secondary trading of debt and equity instruments. This will significantly facilitate and reduce the cost of trading of equity and fixed-income instruments in the secondary markets.
The CMDC is also calling for the establishment of a proper regulatory framework that will open up the mutual funds industry to a wide variety of foreign investment companies and ensure investor protection.
Competition from foreign investment companies will not only provide investors with greater investment opportunities but indirectly force existing investment firms to improve their performance and services to prevent loss of market shares.
The CMDC likewise is actively promoting corporate governance reforms aimed at giving minority shareholders additional protection and strengthening professional practices for accounting and reporting.