Govt. must “prioritise” spending within budget

28 Jun 2022

President-elect Ferdinand “Bongbong” Marcos Jr.’s government needs to prioritise spending within the set budget, but adopt measures to generate further funding if required, said the National Economic and Development Authority (NEDA).

“We have to live in a time where there are more risks and uncertainties so the most important is to prioritise within our budget. And if it is not enough, then we pursue the fiscal consolidation plan as proposed by the government to increase revenues from potential new taxes,” stated NEDA chief Karl Chua.

“And we also grow the economy so that we can increase the income of the people which of course translates to additional taxes, which we can use to fund more priorities,” Chua added.

Previously, the Development Budget Coordination Committee (DBCC) in the Philippines allocated a P5.268 trillion ceiling for next year’s national budget, which must be adhered to in order to keep the country’s finances on track, CNN reports.

However, secretary designate Amenah Pangandaman said the aforementioned priorities must be in line with the government’s principal objectives: to reduce the deficit to 3% of GDP; reach upper middle-income country status; and lower poverty to single digits.

In addition, outgoing central bank governor Benjamin Diokno has stated the onus should be placed on improving tax collection and making sure growth exceeds the country’s debt.

In Q1, the Philippines economy grew 8.3%, surpassing market forecasts. This followed 7.8% growth in Q4 2021, bringing growth for the full-year to 5.7%.

That said, the Philippines debt stock has soared to 63.5% of GDP in Q1 this year, a further increase from 60.4% at the end of last year.