The Department of Finance (DOF) has urged Congress to enact reforms aimed at lowering the country’s deficit and debt levels.
“You already know the drill. None of these crucial measures will come to fruition without your help and backing. I, therefore, call on our friends in Congress to partner with us in securing the immediate passage of these reforms,” Finance Secretary Ralph G. Recto said during the 2024 Philippine Economic Outlook Briefing and Luncheon at the Admiral Hotel, Manila.
The briefing was conducted to help senior staff of legislators get a better grasp of the Department of Finance (DOF)’s priority bills and clarify any misconceptions they may have before sessions begin in Congress.
Resource persons from the DOF’s offices and attached agencies discussed the priority bills’ salient features, fiscal impact, and target legislative timeline.
Recto also acknowledged the Philippines’ strong economic performance, which he said has regained its momentum from the downturn brought about by the pandemic.
As of the third quarter of 2023, the Philippines grew by 5.9 percent, making it the fastest-growing and strongest among major economies in Asia. The country outpaced Vietnam (5.3%), Indonesia and China (4.9%), Malaysia (3.3%), and Singapore (0.7%).
Furthermore, the inflation rate has been decelerating and unemployment numbers have reached record-low levels, while external accounts remain robust.
Diokno said that the government has a reliable flow of revenues, while its current National Government debt-to-GDP and deficit-to-GDP ratios are within the parameters of the Medium-Term Fiscal Framework (MTFF).
Data from the Bureau of Treasury showed that the 11-month fiscal deficit reached P1.111 trillion, down by 10.09 percent from a year earlier. This also represented 74.10 percent of the P1.499-trillion deficit programmed for 2023.
Under the MTFF, the fiscal deficit is projected to decline from 7.3% in 2022 to 3% of GDP in 2028.
However, Recto stressed that the country must continue to decisively address inflation and further grow its revenue collections to finance economic development and people’s needs.
“[F]iscal sustainability can only be achieved if we install a system that guarantees fairer and more efficient tax administration,” he said.
Among these reforms include Package 3 of the Comprehensive Tax Reform Program (CTRP) or Real Property Valuation Reform (RPVAR); VAT on Digital Service Providers (DSP); the Rationalization of the Mining Fiscal Regime; the Single-Use Plastic (SUP) Bags Tax Act; and Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE).
“These reforms will not only finance development but will reduce the deficit and our dependence on debt,” Recto said.
He added that the DOF is currently improving its proposals and expressed his intent to visit the Senate soon to personally discuss the reforms.