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By Angelo S. Samonte, Reporter
THE World Bank is dangling a near
threefold increase in its lending assistance to the Philippines
should the government sustain its recent fiscal gains.
The Washington-headquar-tered
lender, however, wants any further improvement in the country’s
fiscal position to come from higher tax collections, and not from
the sale of state assets.
The bank recently approved a
$250-million loan.
“We are providing $200 million
of direct budget support for the government. And the decision to
move forward with that reflected the judgment and confidence in the
economic policies the government was pursuing,” James Adams, the
lender’s regional vice-president, said.
“So we hope over the next
couple of years to be able to continue this sustained development
policy lending and to maintain lending at approximately $600 million
a year,” he added.
In the last two to three years,
World Bank assistance has fallen to between $100 and $200 million a
year. This year, the lender expects to provide over $600 million in
support to the government, Adams said.
The most important part is that
for the first time in eight years, “the WB is doing what we call
development policy lending,” he said.
The $600-million loan includes
$250 million in development policy loan, $83 million for the
Mindanao rural development phase II and the recently signed $11
million for the Bureau of Internal Revenue.
The bank also released $50
million for the national program support for environmental
management and another $200 million for national roads management
and improvement.
“We expect a continuing good
policy environment where the government would continue to implement
its fiscal target and fiscal plans to commit both the $600 million
and we discussed that at the Philippine Development Forum a few
weeks ago. The government has already presented some priority
projects to its partners,” the lender said.
Joachim von Amsberg, World Bank
country manager for the Philippines, however, said that the
government should look at more sustainable taxation initiatives
rather than give inordinate emphasis on nontax revenue programs.
“We’re not in favor of heavy
reliance on privatization because this is not sustainable. That’s
why the World Bank is extending assistance to the government to help
it build efficient taxation machinery,” von Amsberg said.
The $11-million assistance for
the BIR is meant for the National Program Support for Tax
Administration Reform Project (NPSTAR), which involves taxpayer
registration data base clean up, strengthening of audit capabilities
and legal enforcement.
The program is expected to
enhance collection enforcement and arrears management to eventually
increase revenues.
“The government must increase
collection to also increase expenditures that would eventually lead
to more investments, and that’s what the country needs,” von
Amsberg said.
He added that the government has
successfully gained credibility in recent years and must do more to
sustain it.
“Credibility is hard to build
but it is very easy to erode,” he said.
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