To keep the momentum for economic growth, the Department of Finance (DOF) is pushing for the passage before yearend of three revenue bills which will help the government generate P32 billion.
Finance Secretary Benjamin E. Diokno announced on Tuesday they have asked President Ferdinand R. Marcos Jr. to certify as urgent the passage of Package 4 of the Comprehensive Tax Reform Program (CTRP), Value Added Tax on Digital Service Providers and Excise Tax on Single-Use Plastic Bags.
The measures are currently in advanced stages in the Senate Ways and Means.
If passed into law next month, the said measures will help the government finance its P5.768-trillion 2024 General Appropriations Act (GAA) and attain a 5.1-percent deficit-to-gross domestic product (GDP) target next year, Diokno noted.
Another P75.7 billion in government revenue can be generated next year if Congress will also pass the proposed bill imposing Excise Tax on Sweetened Beverages and Junk Food, according to DOF.
The DOF chief said they are banking on the 2024 GAA so they can continue with measures to sustain the country’s high GDP, which includes protecting vulnerable sectors, including the agriculture and transport sectors, from high inflation.
He said their anti-inflation drive will include improving production and filling the domestic supply gap “through timely and adequate importation based on ex ante supply and demand analysis.”
In a press briefing in Malacañang, Diokno said, “Because in the past, there was no science in the importation. You import [goods] and then it arrives during harvest. So it happens at the wrong time.”
They will be employing satellites to monitor the country’s crops, deploy immediate response typhoon-hit areas and implement El Niño mitigation and adaptation plans.
Government economic managers have also recommended an extension of the validity of Executive Order (EO) No. 10 imposing a tariff reduction for pork, corn, rice and coal and the timely completion of transmission projects.
“We should continue our anti-inflation drive because lower inflation means more purchasing power for consumers,” Diokno said.
DOF is confident the country can still achieve a 6 percent Gross Domestic Product (GDP) growth this year despite think tanks saying it will slow down to 5.6 to 5.8 percent due to inflation.
“That’s the lower end of our growth target of 6 to 7 percent this year and we will continue to grow at around 6.5 percent to 8 percent for the rest of President’s Marcos’ term,” Diokno said.
The projection, he said, is based on the improvements across all sectors and robust domestic demand, which have made the country the fastest-growing economy during the third quarter of the year at 5.9 percent.
Also supporting the country’s strong economic position is its 27.5 percent external debt, according to Diokno.
With the additional revenue from the proposed legislations, he noted they are now preparing interventions to maintain the growth by offsetting the impact of the economic headwinds next year. These include domestic risks like high food prices, natural disasters including El Niño, infectious animal diseases, waning of pent-up demand, limited rate hikes, limited absorptive capacity of local government units.
Diokno said the economy can also be threatened by external risks including elevated international commodity, lower global growth and possible US recession, geopolitical tension and the pneumonia and property crisis in China.