Back in February last year, Finance Secretary Carlos Dominguez sought the Korean government’s assistance in implementing the Tax Reform Program of President Rodrigo Duterte’s administration. The Department of Finance (DOF) wants to establish a “Pilot Electronic Invoice and Sales Reporting System” that is patterned after the successful model of Korea. This project aims to help improve tax administration and compliance, leading to better revenue collection and increased taxpayer satisfaction.
Tax reform is needed to accelerate poverty reduction and sustainably address inequality in the Philippines. By making the tax system simpler, fairer, and more efficient, additional and more sustainable revenue streams would be available for meaningful investments on people and infrastructure.
Recognizing the utmost importance of this initiative, the Korean Government has decided to support the project through Official Development Assistance (ODA) from the Korea International Cooperation Agency (KOICA). Secretary Dominguez and I will soon sign the Record of Discussions for KOICA’s $7.29 million grant for the project’s two-year implementation. This ODA grant will be followed by $40 million of Korea’s Economic Development Cooperation Fund (EDCF) soft loan.
Upon the project’s target completion in 2021, we expect that the DOF and Bureau of Internal Revenue (BIR) would have the new electronic system running for the initial targeted taxpayers. The Korean government’s support to tax reform does not end with this. We are willing to provide additional assistance for the planned full-scale implementation of the system.
The Korean government has been actively supporting the governance sector of the Philippines. Aside from helping the DOF on tax administration, KOICA is also upgrading the criminal investigation capability of the Philippine National Police (PNP). We will turn-over 142 motorcycles to the PNP on Sept. 26 to improve the mobility of policemen. This is in addition to the 130 patrol vehicles and 120 forensic kits that we have already provided under our $6.6 million project.
Korea’s ODA to the Philippines totaled $578 million and there are plans to increase the assistance in the coming years. By the year 2022, the Korean government aims to double the amount of ODA in ASEAN countries and India. The Korean government’s efforts to help enhance equitable growth in the Philippines also led to the establishment of the Korea-Philippines Vocational Training Center in Davao, a $8 million project in total (2003-2005 and 2011-2015), which has provided useful vocational training in various fields, including heavy-equipment or machine operation, food processing, information-technology skills, etc. Korea will continue its efforts to contribute to the equitable and sustainable growth of the Philippines.
This year marks the 70th anniversary of the establishment of the diplomatic relationship between the Philippines and the Republic of Korea. I firmly believe that development cooperation has strengthened our bonds. And now, our grants and loans to the country are expected to increase in line with Korean President Moon Jae-in’s “New Southern Policy.” Under the NSP, Korea will enhance bilateral cooperation with the Philippines under the pillars of 3Ps – emphasizing the welfare of People, promoting mutual Prosperity, and building Peace.
These ideals have always been at the core of the long-standing relationship between Korea and the Philippines. I am hopeful that when President Duterte meets President Moon in November for the special Korea-ASEAN summit in Busan in celebration of the 30th anniversary of the ASEAN-ROK dialogue relations, the 3Ps will provide the foundation for a deeper and more meaningful discussion of issues affecting both countries and will continue to do so beyond the 70 years that they have already shared. After all, we are on the same boat navigating a long journey, and I know that Korea will continue to remain a very close friend and ally of the Philippines as it pursues its own goals.
(Han Dong-man is the Ambassador of the Republic of Korea to the Philippines.)