MANILA – The country’s economic managers on Tuesday asked President Ferdinand R. Marcos Jr. to certify as urgent four tax measures, as part of efforts to maintain the country’s economic resilience amid the global economic slowdown.
The recommendation was made during a sectoral meeting convened by Marcos at Malacañan Palace in Manila, Finance Secretary Benjamin Diokno said in a Palace press briefing.
Diokno said the economic team wants the proposed Package 4 of the Comprehensive Tax Reform Program (CTRP) and the three bills imposing value-added tax (VAT) on digital service providers, and excise taxes on single-use plastic bags, sweetened beverages, and junk food to be certified as urgent.
Based on his presentation during the briefing, certifying the proposed measures as urgent would help “ensure sufficient government financing of the proposed budget and attain the 5.1 percent deficit-to-GDP (gross domestic product) target for 2024.”
The three measures — Package 4 of the CTRP, the VAT on digital service providers, and the excise tax on single-use plastic bags — are currently in the advanced stages in the Senate Ways and Means Committee. These are expected to generate PHP32 billion or 0.1 percent of the GDP.
On the other hand, the proposed excise tax on sweetened beverages and junk food would yield PHP75.7 billion or 0.3 percent of the GDP.
Diokno could not say if Marcos is inclined to certify the four legislative measures as urgent.
“In general, okay naman ‘yung reform (the reform is okay). It’s like a brief on the state of the economy. So, I am not expecting the President to have a specific reaction to that,” he said when asked about the President’s reaction to the economic team’s proposal.
Lowest external debt-to-GDP
Citing the country’s economic performance, Diokno said the Philippines remains to be one of the “fastest growing economies in Asia.”
He noted that the Philippines has the lowest external debt-to-GDP ratio, an indication that the country has a “relatively strong external position as it is less vulnerable to adverse external shock.”
“So, if you notice, the Philippines has an external debt of 27.5 percent. Compare that with Indonesia’s 30 percent and then Thailand’s 40 percent, and then Malaysia is more than 60 percent,” Diokno said.
“So, in terms of external debt, we don’t face adverse external shock. And this is supported by the investor credit rating. So, this is the most recent investor credit ratings from Fitch, JCR, S&P, Moody’s, R&I of Japan.” (PNA)