INTRODUCTION
We sign into law today landmark legislative achievements that will tremendously boost our efforts towards structural reforms in our country.
VAT AMENDMENT
R.A. 7716, which restructures the Value-Added Tax (VAT), is the cornerstone of our 1994 Tax Reform Program. It broadens the coverage of goods and services which would be subject to it. Its passage is the culmination of a series of discussions, consultations, studies and reflections on how we can make our vat more equitable and effective.

This new law is a milestone reform measure because it makes the tax system progressive, simpler and revenue-productive: progressive, because it will result in a more equitable tax distribution; simpler, because it has replaced more than 80 tax impositions which clutter our tax system; and revenue-productive, because this will yield for government an estimated p8.3 billion in recurring revenues.

The VAT we had since 1988 exempted many items consumed by high-income families, thus, putting a heavier burden on poor and middle-income families. Broadening the coverage ensures that those who have the greater ability to pay will assume a proportionate burden of financing our development requirements.

Let me make it clear that we are not imposing a new tax. We are abolishing instead several other taxes in favor of a tax system which is simpler and easier to understand and comply with. By such, we enhance the overall tax effort through wider tax compliance and better tax administration.

Most importantly, this amended VAT narrows our fiscal deficit through its significant revenue-raising potential. It is expected to usher in an era of low deficit, greater public investments, and improved services and facilities for our people. All these will facilitate the development of necessary physical and social infrastructures needed to move us into NIC-hood in the 21st century.

It may be recalled that, as early as the People’s Economic Summit held in September last year, the executive and legislative branches had already identified the amendment of the VAT as among the vital pieces of legislation that should be adopted soon to raise revenues for our development programs. Congress then promised to speed up the passage of this and other important bills, and I am happy that, congress has once more shown its commitment to collaborate with the executive in pursuing our developmental plans and programs.

I join the leaders of congress in allaying fears that this new law will increase prices and hit the poorer sectors most of all. Basic consumption items of disadvantaged families such as food, fuel, light, water, education, medical services, and socialized housing are exempt from VAT. Unless unscrupulous businessmen take advantage of the broadened VAT to hike their prices, we should not expect the new VAT law to significantly affect prices. I thus direct the Department of Trade and Industry (DTI) to undertake measures to forestall possible abuses arising from this law. I also direct the department of finance (DOF) and the DTI to jointly conduct intensive information campaigns among traders and consumers to explain the provisions and mechanics of this law.

There is a perception that the imposition of VAT on companies newly-registered with the Board of Investments (BOI) may discourage new investments. This law, in fact, is expected to promote exports because exporters can claim a refund on the VAT they paid on their inputs, including capital equipment. To help our exporters, I hereby direct the Bureau of Internal Revenue (BIR) to streamline procedures so that exporters can claim their VAT rebates soonest.
STOCK TRANSFER TAX
Still in pursuit of our tax reform package, we are signing RA 7717 — the restructuring of the stock transaction tax — to raise some p600 million in additional revenues. The main objective of this law, however, is to make our tax system more equitable. In effect, this law complements the vat law not only in raising revenues but also in leveling the playing field as far as the different economic groups are concerned.

Adjusting the stock transaction tax slightly upward also conforms with our vision that any additional imposition should be borne by those who have the capacity to pay, because they have been the biggest beneficiaries.

Those who fear that the new tax rates on stock transfer would dampen activities in the stock market should remember that several other factors other than taxation influence the growth of our capital market. The recent unification of the two bourses now plays a major role in stimulating investments. Moreover, stable interest rates and lower inflation rates plus greater confidence in the Philippine economy have more direct effects in increasing stock market investment.
THE AMENDED B-O-T LAW
We also sign into law an important reform measure to develop our infrastructure in consonance with our growth needs. The enactment of the Amended B-O-T Law (RA 7718) ensures a more vigorous pursuit of infrastructure development by providing an improved scheme to finance the construction, operation and maintenance of infrastructure projects as well as by limiting government interference in such projects. This will certainly encourage more private sector participation, both domestic and foreign.

RA 7718 is an improvement of RA 6957, signed July 9, 1990, which was passed in cognizance of two factors:

1) that the provision of adequate infrastructure is not only an essential part of government’s social responsibility to the people but also a basic component of economic growth and development; and,

2) that the government’s available resources are not enough to meet the present and future infrastructure needs of the populace; hence, the need for the private sector, which has vast capital resources and expertise, to help the government undertake financing and technological requirements.

While RA 6957 conveyed the signal that the government intends to liberalize this function, the law itself did not provide an environment conducive enough for private sector participation.

The amendments to the present B-O-T law make it more flexible and to broaden its scope. This new law expands the provisions on B-O-T of RA 6957 to include, as part of “private sector infrastructure schemes,” all its other variations such as the build-transfer (B-T) and the build-own-operate (B-O-O).

This new law provides guarantees for certain projects, in cases where partial financing comes from Official Development Assistance (ODA). It also covers new proposals for national projects that are not covered by the medium-term development plans of concerned agencies, under certain conditions.

With the passage of RA 7718, we anticipate a groundswell of investor support for infrastructure and services projects and consequently the speedier attainment of our growth targets through expanded private sector participation.
VOLUNTARY BLOOD DONATION
On the other hand, RA 7719 augurs well for national health. It is also a part of our program of reforms to ensure that the Filipino people will have a healthier life.

This law promotes voluntary blood donation, improves health education services on blood transfusion, enhances our campaign against communicable diseases, and regulates and upgrades the practice of blood banking in the country.

With this law, our public may now be assured of a safer supply of blood for transfusion. This law should allay the fears of many about diseases such as aids and other sexually-transmitted diseases, and hepatitis-b, which may be transmitted through unsafe blood.
SANTIAGO CITY AND THE CAGAYAN VALLEY
Finally, we also sign RA 7720 into law which involves a positive change in the political structure and economic. Landscape of the province of Isabela and of Region II.

The transformation of Santiago into a city makes Region II a more attractive investment area and thereby augments measures for its development. The previous discovery of natural gas in the Cagayan Valley and its development for power generation purposes is a positive factor for Region II, exemplified by the switching on of a 3-megawatt natural gas power plant in Isabela two months ago.

Region II used to be our only region without a city. With Santiago City, the region can now look forward to a faster pace towards progress.
CLOSING
The passage of these five new laws should indicate that despite initial major and minor differences which were resolved in the process of democratic consultation and debate, both the legislative and the executive have the political will to push needed programs to a national consensus that will speed up Philippine progress.

My deep appreciation and warm congratulations go to the principal authors and sponsors, from both houses, of these five laws as well as all others involved in their passage. This I say in behalf of our government and people.