‘Boost spending to make Philippines economy stronger’

MANILA, Philippines — There should be a concerted effort to boost spending on all sectors to improve further the country’s 7.6 percent gross domestic product growth in the third quarter of this year, administration lawmakers stressed yesterday.

“At this point, the best defense against inflation is domestic output expansion. The government has been providing fuel and fertilizer subsidies to boost agricultural production,” Rep. Stella Luz Quimbo (Marikina) said.

“We should consider expanding this program to better support our producers,” the senior vice chairperson of the appropriations committee of the House of Representatives, which is headed by Rep. Zaldy Co (Ako Bicol party-list), said.

The Marcos administration, through the Department of Budget and Management, earmarked P206.5 billion worth of subsidies and cash aid (ayuda) under the 2023 budget in a bid to support vulnerable sectors amid surging commodity prices brought about by global inflation.

She said providing assistance to these sectors is a way for government to “boost spending.”

“This enables greater consumption and well-being, especially when targeted to the most vulnerable sectors. We see the relevance of providing immediate assistance to qualified Filipinos through programs such as the Assistance to Individuals in Crisis Situations program of the DSWD,” Quimbo noted, referring to the Department of Social Welfare and Development.

She reckoned that in the long run, there is a need to improve the productivity of the domestic agricultural sector and invigorate Philippine industry to reduce the country’s exposure to volatile global prices and supply shocks.

Another economist-lawmaker, Rep. Joey Salceda of Albay, revealed earlier the plan of President Marcos to waive value-added tax on electricity and toll usage revenues, for purposes of cushioning the impact of soaring inflation and high interest rates.

The instruction, on the other hand, is just to have the issue studied in the light of inflation.

“The government has asked my committee to study the VAT measure, along with a host of other options, including a cap on systems losses, energy efficiency measures, targeted subsidies, among others,” the chairman of the House ways and means committee said.

“The instruction was to study the measure, along with other alternatives,” Salceda said.

The former socioeconomic secretary made it clear, however, that he is opposing the Makabayan bloc’s House Bill 5504 scrapping VAT on the importation and sale of bread, noodles, canned goods and other basic commodities.

“I am generally lukewarm to the idea of revenue-negative measures given our fiscal space. A credit rating downgrade will throw a wrench at the exceptional economic growth the Marcos administration is poised to achieve this year,” Salceda warned.

“The Makabayan bloc’s measure is revenue-negative. And most of the tax benefits will accrue to those who consume more (i.e. higher-income households),” the former Albay governor explained further.

“It will cost a total of at least P187 billion in forgone revenues, and that will certainly hamper our fiscal and economic recovery efforts, without a corresponding or equivalent revenue measure to make up for it,” he said.