The Department of Finance (DOF) said the Philippines’ fiscal position remains formidable with deficit as of last year equivalent to a mere 0.6 percent of gross domestic product (GDP), which should allow the government to ramp up spending this year, especially on infrastructure.
In a statement issued on Monday, Finance Secretary Cesar Purisima said the government expects the country’s fiscal headroom to be scaled up further with growth-enhancing revenue reforms to support long-term growth.
The DOF reaffirmed its commitment to introduce reforms and measures that will maintain the economy’s fiscal health.
“We are confident that our consistent and measured approach at buttressing global volatility will reap great returns each time the country confronts global economic forces, ensuring that the Philippines stands on solid footing,” he said.
Purisima said the government will also continue to expand the fiscal space to accommodate public investments in infrastructure and social services, and to provide social safety nets for the vulnerable.
“To expand our tax base, as well as to create a more efficient and equitable tax structure, we will work closely with Congress for the passage of key legislation to further boost our economic standing,” he said.
Among key legislations the DOF is pushing for swift passage is the Tax Incentives Management and Transparency Act (TIMTA), or House Bill 2492.
The proposed law is expected to create a Tax Expenditure Account (TEA) in the national budget, from which tax incentives will be drawn by all Investment Promotion Agencies, and will require agencies to submit their projected amount of tax expenditures for the succeeding three years to the Department of Budget and Management.
In line with the government’s priorities on fiscal prudence and transparency, tax expenditures will be reported annually in the national budget to facilitate analysis of the cost and economic impact of incentives granted, according to the DOF.