The current administration is on track with its Medium-Term Fiscal Framework (MTFF), at more than one year in office, Finance Secretary Benjamin Diokno said that
“At this time, we compare ourselves with our MTFF, which we prepared one month after the President was elected. And I can say that we’re on track with our MTFF. In fact, we’re better than on track,” Diokno said in a televised interview with ABS-CBN News Channel yesterday.
The MTFF is a comprehensive plan that aims to sustain the country’s post-pandemic economic recovery and support accelerated growth. It also serves as a roadmap for developing the government’s annual National Expenditure Program.
The finance chief said that the debt-to-gross domestic product (GDP) and the deficit-to-GDP ratio are much lower than anticipated, while the government is doing well in terms of revenue generation.
Diokno said that, even as the national government’s debt hit P14.1 trillion as of end-May, he considers the public debt to be “manageable.”
“The right metric is public debt as a percent of the GDP and ours is in the neighborhood of 60 to 61 percent. That’s not bad compared to most other countries, especially after the pandemic,” Diokno said.
“I would calculate that, given the pandemic, I think the reasonable debt-to-GDP ratio should be around 70 percent… and in fact in our MTFF, our target debt-to-GDP ratio last year was around 62.3 percent, and it was much lower than that. So we’re on track,” Diokno said.
The finance chief also highlighted that the country’s inflation rate has gone down for five consecutive months this year, and it is expected to be within the target range of two to four percent by the fourth quarter of this year.
“In fact, we expect to overshoot the inflation target to below two percent by the first quarter of 2024. But for the whole year of 2024, we expect inflation to be right smack in the middle of our target, which is three percent,” Diokno said.
Diokno also said the government is seeking the simplification of the tax system on mining to boost and ensure the competitiveness of the industry.
Diokno said one of the priority bills expected to be passed within the year is a measure to improve the country’s mining tax system.
“We will just have one tax. We will simplify the tax system and some royalty tax also. But we will try to make the tax system of the Philippines on mining competitive with other countries. That’s the gist of that proposal,” Diokno said.
He said the government is also exerting efforts to unify the mining policies and with the expected passage of a law on the mining tax system for mining and the ongoing trade roadshows being conducted abroad, “there will be renewed interest in the industry.”
He said investors have shown interest in the Philippine mining sector during the economic team-led roadshow in Canada.
Miners have opposed a proposal bill that will raise mining tax from current 38 percent to 51 percent. The measure also calls for the implementation of a 5 percent royalty tax on the market value of gross output of large-scale mining operations; a minimum government share of 60 percent of net mining revenues, including all taxes and charges; and a 10 percent export tax on the market value of mineral ore exports to encourage domestic processing of mineral products. – With Jocelyn Montemayor
