The Department of Finance (DOF) expects that incremental revenues from the proposed priority tax measures will be lower than the initial estimate of P213 billion until the end of the administration’s term, as the current finance chief opted to recalibrate some of these proposals.
“I don’t have the numbers with me right now, but they will be lower,” Finance Secretary Ralph Recto said on the sidelines of the 2024 Annual Reception for the Banking Community held in Manila last Friday.
Recto earlier said based on his review of the existing proposals, some key provisions were reconsidered.
“This is in consideration of the economic situation, where some proposals might have unintended consequences in terms of inflation or in terms of possibly hindering growth in some sectors,” Recto said.
Recto said the tweaked measures include the Reform on the Motor Vehicle Users’ Charge and the Passive Income and Financial Intermediary Taxation Act.
“Those are the two. All the others will probably be the same, like the mining tax, the single use plastics, value added tax on digital services, more or less the same,” Recto said.
Meanwhile, in the same event, Recto said interest rates could possibly go down in the second semester of 2024.
“We expect interest rates to go down in the second half, it depends on the external environment but so far the market consensus is inflation and interest rates will go down globally, in the US and the Philippines,” the finance chief said.
“Borrowing costs will go down for the government (with lower interest rates), but more importantly, there will be more investments coming in, it will be easier to borrow. Not only coming in, but domestic investments also,” he added.
Meanwhile, Recto recently presided over the second board meeting of the Maharlika Investment Corp. (MIC) in his capacity as new chairperson to discuss its strategic direction.
During the meeting, Rafael Jose Consing Jr., MIC president and chief executive officer, reiterated the sectors that will be tapped by the Maharlika Investment Fund to achieve multigenerational commercial, economic and social development value creation.
The industry focus includes infrastructure; oil, gas and power; agroforestry industrial urbanization; mineral processing; tourism; transportation; and aerospace and aviation.
The third MIC board meeting is scheduled sometime in February, following the secretariat’s consultation on the availability of the board of directors.
