USAID Facilitating Public Investment | Monthly Newsletter 1
GPH President Rodrigo Duterte
signs TRAIN Package 1 into law President Rodrigo Duterte signed into law
the Republic Act (R.A.) 10963 or the Tax Re-
form for Acceleration and Inclusion (TRAIN
Package 1) bill last December 19, 2017, the first
comprehensive tax policy reform in the Philip-
pines in 20 years. The TRAIN Law is expected
to generate P130 billion in revenues for the gov-
ernment. 60 percent of which will go to infra-
structure programs; 27% will be allocated to
social protection programs including the uncon-
ditional cash transfer to the 10 million poorest
Filipino families, health, nutrition, and anti-hunger
programs; and about 13% will be for military
modernization.
TRAIN Package 1, the first of a series of 5
tax packages, is expected to increase govern-
ment revenues by 0.7% of GDP in 2018, in-
creasing further to 1% in 2020, and finally by
0.8% in 2022. Moreover, TRAIN will reduce
the tax burden of over 90% of wage earners,
broaden the VAT base, adjust upward outdat-
ed tax rates on tobacco, oil products, mining
and coal, introduce taxes on diesel, sugar-
sweetened beverages, and cosmetic proce-
dures. Through TRAIN Package 1, relief
amounting to PhP 2,400 for the first year and
PhP 3,600 for the next 2 years, will be provid-
ed to about 10 million families that are antici-
pated to be affected by the temporary in-
crease in inflation.
The following table summarizes the
impact of TRAIN once it is implemented by
January 2018:
President Rodrigo Duterte signed into law the
Republic Act (R.A.) 10963 or the Tax Reform
for Acceleration and Inclusion (TRAIN Package
1), the first comprehensive tax policy reform in
the Philippines in 20 years.(Page 1)
After the painstaking scoring and selection pro-
cess led by DAI/USAID FPI Project team, five (5)
civil society organizations were awarded
USAID’s Extractive Industries Transparency
Initiative Grant that is worth over US$270,000
out of 16 applications for RFA 004, entitled
“Strengthening Transparency and Accountability
in the Extractive Industries at the Subnational
Level.” The proposed projects will run from
December 1, 2017 to May 31, 2018 (Page 2)
Facilitating
Public
Investment Monthly Newsletter
December 2017
IN THIS ISSUE
President Rodrigo Roa Duterte leads the Ceremonial Signing of TRAIN Package 1 at the Malacañan Palace (Photo courtesy: Presidential
Communications Operations Office).
Summary of Impact (In billion PhP) 2018 2020 2022
Personal Income Tax – adjustment of brackets and rates
-138.2 -166.7 -201.2
Self-employed and Professionals – simplified regime
-11.5 -13.8 -16.7
VAT – expansion of base 37.2 58.2 45.9
Oil 55.2 120.2 124.4
Automobile 14.4 16.2 18.2
Sugar-sweetened Beverges 54.5 61.5 68.8
Mining and Coal 3.9 9.3 10.7
Tobacco 4.3 7.9 7.0
Other tax 62.5 73.0 96.9
Other non-tax 38.9 34.0 41.4
% to GDP 0.7% 1.0% 0.8%
USAID Facilitating Public Investment | Monthly Newsletter 2
The additional revenues generated by
TRAIN are critical to fulfilling an increase in in-
frastructure spending dubbed as the “Build, build,
build” program and in maintaining a sustainable
budget deficit level projected at -3.1% of GDP in
2018, -3.4% of GDP in 2020, and -3.4% of GDP
in 2022.
USAID-FPI provided holistic technical
assistance consisting of impact analyses of the
various proposals, communications support with
nation-wide roadshows, stakeholder surveys and
focus-group discussions, and provided timely
technical assistance to the Department of Fi-
nance’s SERG team led by Undersecretary Karl
Kendrick Chua.
Package 2 Corporate Income Tax and
Fiscal Incentive Rationalization
FPI’s assistance to the design and formu-
lation of the second tax reform package began in
mid-2017 in the DoF sponsored small-group
consultation attended by key government offi-
cials and experts from the academe, private sec-
tor, civil society, and the FPI team.
Package 2 promises to lower the corpo-
rate income tax rate to be more aligned with the
Philippines’ ASEAN peers, while expanding the
tax base by enacting rules that will make the
government more judicious in granting tax incen-
tives. Furthermore, Package 2 will also strength-
en the government’s ability to detect and deter
abuses coming from related party transactions.
Primary among this is to provide a working defi-
nition of related parties, for the purpose of im-
plementing the tax law.
Beginning in December 2017, FPI started
assisting the DoF with 3 key studies including a
cost-benefit analysis, estimates of leakage from
abusive related party transactions, and the tax
expenditure accounts estimation. The DoF plans
to submit the second reform package within the
first quarter of 2018. ###
Stakeholder Participation in Small Scale
Mining Governance in Benguet”
Project location: 13 municipalities of Ben-
guet Province
Grant amount awarded: USD 76,326 (Php
3,816,366)
3. Concerned Citizens of Abra for Good
Government (CCAGG) - Abra
Project Title: “Building-up for Transparency
and Accountability Initiatives on Mining in
Abra and Kalinga Provinces”
Project location: municipalities of Licuan-
Baay and Malibcong, province of Abra, and 3
IP communities (Banao tribe) of Balbalan,
province of Kalinga
Grant amount awarded: USD 54,311 (Php
2,715,513)
4. The Roman Catholic Bishop of
Kabankalan, Inc. – Negros Occidental
Project Title: “Augmenting Government’s
Environmental Protection Mandate for the
Extractive Industry in Southern Negros
Occidental”
Project location: Municipalities of Hinoba-an
and Cauayan, Cities of Sipalay and Kabanka-
lan in the province of Negros Occidental.
Grant amount awarded: USD 36,593 (Php
1,829,652)
5. Foundation for the Development of
Agusanons, Inc.(FDAI),
Project Title: “Caraga Mining Governance
Project: Empowering Local Stakeholders in
Managing Mineral Resources Of Agusan Del
Sur, Surigao del Norte and Surigao del Sur
Provinces”
Project location:
• Province of Agusan del Sur
• Municipal Government of Rosario,
Agusan del Sur
• Province of Surigao del Sur
• Municipal Government of Carrascal,
Surigao del Sur
• Province of Surigao del Norte
• Municipal Government of Claver, Suri-
gao del Norte
Grant amount awarded: USD 43,694 (Php
2,184,710)
The proposed projects will run from
December 1, 2017 to May 31, 2018. ###
USAID-FPI awards EITI Grants to CSOs
for subnational EITI implementation FPI also continues its work on the Extrac-
tive Industries Transparency Initiative, which is
also an Open Government Partnership commit-
ment of the GPH for its 2017-2019 National
Action Plan launched in August 2017. With the
theme “Strengthening Transparency and Ac-
countability in the Extractive Industries at the
Subnational Level,” FPI awarded five (5) civil
society organizations (CSOs) EITI Grants Fund
out of 16 grant applications.
Of the 16 grant applications that were
received and initially screened by the FPI Grants
Coordinator, only seven (7) received merit ap-
proval for evaluation by the Selection Commit-
tee of which six (6) met the minimum number of
points (60) and were included in the financial
review.
EITI's Grants Selection Committee for
RFA 004 which was convened on November 7,
2017 to evaluate and score the technical pro-
posals was composed of the following FPI pro-
ject personnel as members: Bruce Hutchins, Jem
Armovit, and Raelita Legaspi. The committee
evaluated the proposals based on the following
criteria:
•Minimum 3-year track record in undertak-
ing similar projects (20 points);
•Organizational capability to undertake the
tasks (20 points), with the following indica-
tors: project team composition and qualifi-
cations, and current reach of organizations
to network with IPs;
•Quality of proposal as demonstrated by
their understanding of the problem (10
points);
•Appropriateness of methodology to the
Scope of Work (15 points); and
•Feasibility of plan given timeframe and plan
to disseminate outputs (15 points)
After the painstaking scoring and selec-
tion process, FPI Finance and Operations Manag-
er, Remedios Dungca, and the FPI-EITI Grants
Coordinator, Carlos Tulali, conducted technical
and financial reviews as part of the pre-award
responsibility determination. Five CSO applicants
that were awarded EITI grants after the DAI/
FPI’s in-depth selection and review process:
1. BAN Toxics, Inc. - Southern Leyte
Project Title: “Project CLEAR (Creating
Local Engagements in ASGM communities
through Research and Capacity-Building)”
Proposed project location: municipalities of
Jose Panganiban, Labo and Paracale, prov-
ince of Camarines Norte; and Pinut-an, San
Ricardo, province of Southern Leyte
Grant amount awarded: USD 65,177 (Php
3,258,872)
2. Jaime V. Ongpin Foundation, Inc.: -
Benguet
Project Title: “Strengthening Multi-