By Karen Lema
MANILA (Reuters) - The Philippine Congress approved late Wednesday a tax reform bill President Rodrigo Duterte needs to push ahead with his economic agenda.
Duterte, who took office more than 17 months ago, has promised to usher in a "golden age of infrastructure" by raising annual spending on it to more than 7 percent of gross domestic product from less than 3 percent before he began his term.
Although his presidency has been defined by his bloody war on drugs, the firebrand leader has thrown his weight behind the tax bill to help fund his six-year $180 billion "Build, Build, Build" program.
The bill, called the Tax Reform for Acceleration and Inclusion (TRAIN), is one of the five tax packages Duterte is pushing to increase state revenues and make the tax system fairer and simpler.
"I was informed...that the bicameral conference committee report on the TRAIN was duly ratified," Congress Majority Leader Rodolfo Farinas told reporters.
The bill will be sent to Duterte for signing before the year ends.
A briefing note sent to reporters put the amount at around additional revenue to be raised via the bill at 130 billion pesos ($2.6 billion) during the first year of implementation.
The reforms will lower personal income taxes, expand the value added tax base, raise taxes on petroleum products, automobiles and on some sugar-sweetened beverages, among others.
The government's tax reform initiative was one of the reasons cited by Fitch Ratings when it upgraded the Philippines' sovereign credit rating on Monday, aligning it with those of peers Standard & Poor's and Moody's Investor Services.
"We estimate the bill to be net revenue positive," Fitch said in a statement, adding it bodes well for progress of other reforms over the next couple of years.
Lawmakers said 70 percent of the revenue that would be generated from the tax measure would go to infrastructure, while the rest would be used for social services.
Congress also approved on Tuesday the government's proposed $3.77 trillion pesos budget for 2018.
Duterte's government is pinning his economic growth plans on infrastructure projects to create jobs, stimulate the economy, and attract foreign investors put off by high power prices and transport bottlenecks.
Duterte aims to lift the Philippines' economic growth to as much as 8 percent in his six-year term ending in 2022.
The Southeast Asian nation beat expectations to post economic growth of 6.9 percent in the third quarter, buoyed by strong domestic demand and higher government spending.
($1 = 50.4750 Philippine pesos)