Marcos admin vows to borrow less

MANILA, Philippines — The Marcos administration has committed to borrow less, saying that the government has the fiscal space to finance its ambitious projects.

During the post-State of the Nation Address economic briefing yesterday, Finance Secretary Benjamin Diokno said the government’s fiscal consolidation strategy would still grow the economy and meet its macroeconomic targets by exercising fiscal discipline.

Diokno said the Philippines has the fiscal space and his optimism is rooted in the sound tax system that the Duterte administration left behind.

The Marcos administration remains hesitant to impose additional tax burdens and instead prefers to focus on better tax administration to raise revenues that will be used to finance programs.

“The implication is clear: we do not have to borrow as much as we did during the crisis years,” Diokno said.

The national government debt stood at P12.5 trillion as of end-May, largely bloated by pandemic obligations.

“What we inherited from the Duterte administration is a much better tax system. They did a lot of reforms so that itself will give us additional revenues, plus we have additional measures,” Diokno said.

He said that improving tax administration would allow the government to increase its revenues, while making government spending more efficient at the same time.

Diokno is also banking on the move to rightsize the government to ensure that it will be in a much better shape by doing more with less resources and gaining efficiency.

Further, reforms such as the Public Service Act is expected to boost investments in the country, which in turn would grow the economy.

“We feel that this is our moment. The economy moves much faster this time compared to other stages in our economy and a stronger economy means more revenues for us,” Diokno said.

Nonetheless, Diokno admitted that the operating environment remains uncertain and difficult, with many challenges that need to be addressed even as economic growth continued to be robust.

This, as inflation remains elevated and that the effects of the pandemic will linger while the global political economy remains unpredictable.

The Marcos administration has bared its eight-point socioeconomic agenda aimed at responding to global risks and steering the economy back to its growth trajectory.

In the near term, the plan seeks to address the immediate challenges of rising prices, scarring from the pandemic, and ensuring sound macroeconomic fundamentals.

Over the medium term, the goal is to create more jobs through higher investments in infrastructure, human capital development and digitalization.