Business Skinning Left, pagematch: , sectionmatch: 1

Business ( Leaderboard Top ), pagematch: , sectionmatch: 1

Yearender : Gov’t embarks on ambitious infra program

Beltran

MANILA, Philippines — An inclusive economy with a thriving middle class is the vision of the Duterte administration for the Philippines.

To achieve this goal, President Duterte has launched a massive infrastructure program to spur economic growth and address the country’s  needs.

The government’s unprecedented infrastructure program, dubbed Build Build Build, is projected to require up to P9 trillion in investments and will prioritize 75 game-changing projects nationwide.

Being the steward of the country’s fiscal policies, the Department of Finance (DOF) and its attached agencies have the crucial task of ensuring there are sufficient funds for an infrastructure program of such magnitude.

The DOF vowed to beef up the state coffers and provide sufficient financing sources for the Build Build Build program.

Among these initiatives is the push for the Comprehensive Tax Reform Program (CTRP), which is broken down into five packages, according to Finance Undersecretary Gil Beltran.

Business ( Article MRec ), pagematch: 1, sectionmatch: 1

The first package has recently hurdled the bicameral conference committee in the Congress, as contained in the Tax Reform for Acceleration and Inclusion (TRAIN) Act. It is up for implementation next month after it gets the approval of President Duterte.

“First, we are pushing for the tax reform. We just finished the first package and there are four which we are preparing for discussion in the next few years,” Beltran said.

According to the 2018 General Appropriations Act, the projected revenue under the TRAIN Act is projected to reach P134 billion in the first year of its implementation. However, the final ratified version approved by both chambers in Congress is estimated to yield only about two-thirds of the amount.

But Beltran expressed confidence the government would be able to make up for the lost opportunity to generate more revenue through the subsequent packages under the CTRP.

“Yes we still have four packages left, and we will try to generate more from the packages. And the packages that are left are no so controversial unlike the first one. In the first quarter we will submit the second package,” he said.

Aside from tax reform, Beltran said the DOF and its attached agencies, particularly the two largest revenue-generating offices, the Bureau of Internal Revenue (BIR) and Bureau Customs (BOC), are instituting tax administration reforms.

In particular, Beltran said both agencies are pushing for modernization to help improve their efficiency in collecting taxes.

“We are computerizing both bureaus, connecting them to databases that will enable them to improve tax administration,” he said.

These tax administration reforms, according to Beltran, helped boost the BIR and the BOC’s revenues in the first 10 months.

Based on data from the Bureau of the Treasury (BTr), the BIR’s collection from January to October rose 11 percent to P1.44 trillion from P1.29 trillion in the same period last year. The BOC, for its part, collected P366.7 billion, up 14 percent from P321.3 billion last year.

According to Beltran, the tax administration measures are expected to improve the share of the BIR’s tax collection to the country’s gross domestic product by 0.2 percentage and the BOC by 0.1 percentage points.

Over the long term, he said the improvement in tax administration is projected to boost tax effort by one percentage point.

On the other hand, the government’s tax reform measures, over the long term, is seen to generate an additional two percentage points in the share of the government’s tax collection GDP. Tax administration and tax reform, combined, would result in three percentage points increase in the tax effort.

“Since we are now at 14 percent (tax effort), we will be at about 17 percent by the time the term of the administration ends,” Beltran said.

Meanwhile, the DOF official said non-tax revenue also play a vital role in the DOF’s revenue-generation schemes.

“We are also looking at other non-tax revenues. We are encouraging government offices to review their fees and charges. We have a committee in the National Tax Research Center that does this. They assist government offices in reviewing their fees, and we recommend adjustments if the actual cost of providing those services is higher than the fee that is being paid,” Beltran said.

“We are also trying to improve the earnings from our investible funds and government assets. We want to make sure that government assets are used efficiently. So we are trying to get an inventory of all the government assets and manage them better,” he said.

In terms of other financing schemes, the DOF official said the Duterte administration has been striving to attract more investments from the private sector through public-private partnerships (PPP) and loans from other countries and institutions through official development assistance (ODA).

“The administration is more open (to PPPs) because it is open to unsolicited proposals from the private sector. A private sector entity that wants to set up a PPP can submit its proposal through the PPP Center,” Beltran said.

The country’s improving friendship with its Asian neighbors also resulted in investment and loan pledges.

For instance, both China and Japan have pledged $9 billion worth of investments and development assistance each, while South Korea also committed to extend $1 billion in concessional loans over the next six years to finance key infrastructure projects in the country.

Meanwhile, other multilateral agencies, such as the World Bank and Asian Development Bank also continue to provide funding assistance for the country’s priority programs.

All of these efforts and financing schemes, Beltran said, would contribute to the Philippines’ infrastructure development thrust and benefit the public due to lower borrowing costs.

Based on a list provided by Beltran, 48 of the 75 flagship infrastructure projects of the Duterte administration are being eyed for ODA financing. Of the 48, three are confirmed to be funded by China, three by Japan, two by Korea, and one by the World Bank.

Two other projects were identified under the PPP scheme, while 14 will be funded by the government through the General Appropriations Act (GAA). The government has yet to determine the financing scheme for the 11 remaining projects.

Business ( Article MRec ), pagematch: 1, sectionmatch: 1
  • Follow Us:
Business Skinning Right, pagematch: , sectionmatch: 1