MANILA – President Ferdinand “Bongbong”Marcos Jr. in his Monday’s State of the Nation Address (SONA) said tax administration reforms will be in place to increase revenue collection as the economy is expected the grow by 6.5 to 7.5 percent this year.
“Expenditure priorities will be realigned, and spending efficiency will be improved to immediately address the economic scarring arising from the effects of Covid-19 (coronavirus disease 2019), and prepare for future shocks,” he said.
Marcos said the country’s tax system will be adjusted to catch up with the rapid developments of the digital economy, including the imposition of value-added tax on digital service providers.
He said the initial revenue impact will be around PHP11.7 billion in 2023 alone.
“Tax compliance procedures will be simplified to promote ease of paying taxes. We will pursue measures to determine possible undervaluation and/or trade misinvoicing of imported goods. Through information and communications technology, the Bureau of Customs will promote streamlined processes,” he added.
Marcos said disbursements for 2022 to 2023 will be maintained at above 20 percent of gross domestic product (GDP) at PHP4.95 trillion and PHP5.08 trillion, respectively, to ensure continuous implementation of priority programs.
Disbursement will further increase over the medium-term from PHP5.402 trillion, or 20.7 percent of the GDP in 2024 to PHP7.712 trillion or 20.6 percent of GDP in 2028, he said.
Marcos said the Medium-Term Fiscal Strategy of his administration seeks to attain short-term macro-fiscal stability while remaining supportive of the country’s economic recovery and to promote medium-term fiscal sustainability.
“Furthermore, and more importantly, fiscal policy aims to bring together the National Government’s resources so that these are mobilized and utilized in order to gain the maximum benefit and high multiplier effects for our economy,” he said.
Marcos said the Medium-Term Fiscal Strategy (MTFF) being submitted to Congress once adopted will become an anchor for the annual spending and financing plan of the national government and Congress when preparing the annual budget and undertaking related appropriation activities.
“It is therefore a forward-looking document that extends beyond the traditional three-year horizon to reach six (6) years, coinciding with the six-year coverage of the Philippine Development Plan (PDP) 2023 to 2028,” he said.
Marcos said the MTFF also promotes transparency and credible commitment to pursue the indicated socio-macroeconomic goals that optimize the government budget.
As the country promotes productivity-enhancing investments, Marcos said the country is also capitalizing on the Corporate Recovery and Tax Incentives for Enterprises or the CREATE law and economic liberalization laws, such as the Public Service Act and the Foreign Investments Act.
Ecozones will be fully supported to bring in strategic industries such as those engaged in high-tech manufacturing, health and medical care, and emerging technologies. This is also seen to facilitate economic growth outside of Metro Manila,” he said.
Marcos has ordered concerned government agencies to work on the next PDP and complete it before the year ends.
“I have instructed the NEDA (National Economic and Development Authority) to coordinate with other agencies and work on the Philippine Development Plan for 2023 to 2028 and to submit to me the complete blueprint and progress of its implementation not later than year-end,” he said.
The PDP serves as the government’s overall guide in development planning for six years.
It reflects the government’s socioeconomic policies, strategies, and programs in support of and consistent with the development agenda of the President, and is geared towards the attainment of development goals and objectives in the long-term development plan.
Marcos enjoined the crafting of the new PDP amid the lingering Covid-19 pandemic that has beset the macroeconomic environment with challenges and a series of external shocks.
He said inflation has accelerated in recent months due largely to significant increases in international prices of oil and other key commodities.
“Still, the economic growth momentum remains firm as demonstrated by the strong 2022 first quarter GDP (gross domestic product) growth at 8.3 percent. However, the recovery process from the impact of the pandemic is still ongoing amid elevated uncertainty in the international economic environment,” he added.
Marcos said revisions in the macro-economic assumptions incorporate these challenges and most recent economic developments.
“The economy is expected to grow by 6.5 to 7.5 percent this year as we continue to reopen the economy while considering the recent external developments,” he said.
In the first quarter alone, Marcos said the country’s GDP saw an increase in household consumption and private investments, along with a robust manufacturing industry, high vaccination rate, improved healthcare capacity, and an upward trend in tourism and employment.
“This is expected to continue for the rest of the year. This strong economic growth is projected to be sustained and expanded further to 6.5 to 8 percent from 2023 until 2028,” he added. (PNA)