Personal Finance

Yesterday, just short of a month after assuming office, new Philippine President Rodrigo Duterte delivered his first State of the Nation Address. During his 100-minute speech filled with his plans for the government (and spontaneous ad libs on issues he is passionate about, like federalism and the war on drugs), Duterte made some notable remarks on how he would handle things in the economic front. Those statements, combined with prior plans bared by his top appointees, paint a picture on how the man they call Digong can affect your wallet.

1. Lower income taxes means more money to spend/save

The president may have dedicated just a couple of paragraphs to specific monetary policies, choosing to concentrate on the infrastructure part of the economy (such as railroads and free Wi-Fi). But none was heard more clearly than this sentence from Davao City’s former long-time mayor: “We will lower personal and corporate income tax rates.”

There have been proposals filed years ago to reduce employees' income taxes. And now, Duterte is looking forward to approving them. You should look forward to that, too, because lower tax rates translate to higher take-home pay that you can either spend on needs and wants or add to your savings and investments. 

As for lower corporate tax rates, that means more earnings that companies can keep. Those extra moolah can then be spent on growing businesses and hiring more people. Or maybe even on padding the head honchos’ salaries and bonuses (and hopefully yours too). Either way, #changeiscoming.

2. Burrying red tape means easier time in starting a business

Duterte wants to enhance local business environment by addressing bottlenecks in business registration and processing, streamlining investment application pro…” *falls asleep*

CliffNotes version: Duterte wants everything to be done in three days. Not weeks, not months. Days. If the president has his way (and he sure does a lot of times), the steps for issuing permits, licenses and all that paper should be bundled in one list. He also wants every necessary document to be computerized, so that an applicant does not have to go from office to office.

When that plan becomes a reality, an aspiring entrepreneur can then spend less time chasing document papers and more time raking in paper money.

3. Duterte is good for your travel plans

During the SONA, the president also urged Congress to amend the 1996 Passport Law to extend the validity period of passports to 10 years from the current 5 years. Duterte probably has the interests of the overseas Filipino workers in mind, but that also translates to about ₱1,000 in savings every five years. “You are the ones who will pass the law, even if you make [the passport] good for 30 years, okay ako. Bahala kayo (I’m OK with it. You guys figure it out),” Digong jokingly told the solons.

But wait, there’s more. The Department of Tourism recently said that it is considering the removal or reduction of the travel tax. You know, the additional queue you line up for that takes around ₱2,000 from you before your backpacking trip to Japan or wherever. That’s extra money you can spend on travel insurance, which you can also check at GoBear. *wink*


4. Gain perks when getting a retirement plan (thanks to a forgotten law)

The Bureau of Internal Revenue, long perceived as a strict tax collecting body, now wants to help you start a retirement savings plan. Or even five.

This weekend, the agency quietly released rules that aim to implement the Personal Equity and Retirement Account (PERA) Act of 2008(!), a law that allows people to set up voluntary personal savings and investments. These rules set the tax incentives that employees and their companies can get when they set up their own PERA (up to five accounts per person) and pay into it the same way they do for SSS and PAGIBIG contributions, via salary deductions and corresponding payment from the employer. Now that’s one wise way to use the extra money you’ll get when your income tax shrinks.