By Chino S. Leyco
The Department of Finance (DOF) assured the two major international credit ratings agencies that the Duterte administration is prepared to pursue “difficult and necessary” reforms to improve revenue collection efficiency.
On Monday, the DOF, along with its attached agencies — the Bureau of Internal Revenue (BIR), Bureau of Customs and the Bureau of the Treasury — presented the government’s fiscal update and plans before the Fitch Ratings and Standard & Poor’s representatives.
During their separate meetings at the Bangko Sentral ng Pilipinas (BSP) headquarters, Finance Undersecretary Gil S. Beltran assured the two debt-watchers that the Duterte administration is committed to medium-term fiscal sustainability.
Beltran told Fitch and S&P representatives that the government “will continue to exercise fiscal responsibility and maintain sound fiscal policies to support higher and more inclusive growth.”
The fiscal deficit will remain manageable, Beltran assured, noting the budget gap ceiling of 3 percent of gross domestic product (GDP) is programmed for this year until 2022.
With the manageable deficit, the DOF official also told the credit rating agencies the government’s debt-to-GDP ratio is expected to continue its downward trajectory path in the medium-term.
“Let me say that our fiscal position is strong. That strength encourages us to be bold in projecting we will lead Southeast Asia in growth for the next few years and even as we reshape our growth to be more inclusive,” Beltran said.
Other agencies that had meetings with Fitch and S&P were officials of the BSP, the National Economic and Development Authority (NEDA), as well as the Department of Budget and Management (DBM).
“The Administration is ready to pursue difficult and necessary legislative and administrative reforms to improve revenue collection efficiency and broaden the revenue base,” Beltran told the Fitch and S&P.
During the meetings, the Finance department highlighted that public finances have strengthened significantly since 2012, noting that state revenue-to-GDP was up by almost a full percentage point, and general government revenue rose 2.1 percentage point of the economy.
Beltran also noted that sin tax collection remains a stable source of revenue generation.