The government is currently implementing administrative and regulatory procedures to entice foreign investors to invest into the country

The government is currently implementing administrative and regulatory procedures to entice foreign investors to invest into the country. One initiative is the enacting into law of Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion (TRAIN) that took effect in January 2017. TRAIN is the first of up to five tax reform packages of the Comprehensive Tax Reform Program (CTRP) that will be employed during the Duterte administration to make the country’s tax environment more competitive with other ASEAN nations. This tax reform act will exempt individuals from paying personal income tax whose annual taxable income is Php 250,000 (US$5000) and below. This will reduce the personal income tax bracket rate from 32 to 25 percent and corporate income tax from 30 to 25 percent. The purpose of which is to increase the net income of workers thereby increasing consumption, savings, and investments that will benefit the country’s economy. This will also increase the current tax to GDP ratio from 14 to 15 percent thereby improving the government’s overall fiscal capacity to finance public investment such as the massive infrastructure building program and help sustain economic growth. Seventy percent of the additional revenue collection will be allocated to the infrastructure projects and the remaining thirty percent will be for social services. Aside from the problem of inadequate infrastructure, other contributing factors that impede foreign investment in the country includes tax regulations and foreign ownership restrictions discourage investment corruption, instability, threat of terrorism, high power costs, and lack of juridical security.
Although economic development is rapidly enhanced, growth is not inclusive that the poor does not feel or experience the rippling effect of such economic growth. The strong economic growth does not bring better social well-being to the Filipinos. There are several imbalances that existed in the present economy. These imbalances care from productivity across sectors, between large firms and small and medium enterprises (SMEs) in terms of share in output, and heavy concentration of production in national capital region where only 13 percent of the population resides. In order to promote more inclusive growth and address income inequalities, regional growth and socioeconomic class disparities, the Country Operations Business Plan (COBP) of 2017-2019 was adopted to focus on the four interrelated priority areas of stainable and climate-resilient infrastructure, good governance and finance, inclusive employment and education, and regional integration.
Although the economy has been helped by a stable macroeconomic environment, the country still needs to address the issues of poverty, unemployment, and poor infrastructure. Poverty reduction efforts in the country have been insignificant since 2006. Poverty is very much linked to unemployment. Latest survey shows that the number of Filipinos who are below the poverty line and suffered involuntary hunger rose in the last quarter of 2017 by 4 percentage points to 15.9%, an estimated 3.6 million families. High unemployment, natural calamiites and the imbalance in productivity are the main contributors to the disheartening poverty incidence in the country. Only a quarter of the Filipinos that enter the labor force are able to find good jobs in the country, and the rest of them find jobs overseas, leave the labor force, or end up becoming unemployed. Though jobs are being generated, there’s a need to generate jobs at a much faster rate, to be able to bring down the unemployment rate. However, the unemployment rate in the Philippines dropped to 5.3 percent in the first quarter of 2018 from 6.6 percent in 2017 (see Figure 5). With this occurence, the number of persons that are unemployed decreased by 441 thousand to 2.32 million while the number of employed increased by 2,408 thousand to 41.76 million.