October 4, 2022

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Diokno sees no need for spending cuts

2 min read

THE INCOMING Marcos administration will not reduce government spending to address the ballooning budget deficit, Finance chief-designate and Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said.

“There should be no cut in our expenditure plan. I think we should really focus on raising enough taxes. I’m confident that because of the tax system that the Duterte administration will leave… we will be able to raise enough taxes to ensure we will meet our deficit targets,” he told ABS-CBN News Channel on Monday.

Mr. Diokno, who was picked by President-elect Ferdinand R. Marcos, Jr. to head the Finance department, said they will stick to the plan to bring down the government’s budget deficit to 3% of gross domestic product (GDP) by 2028.

For this year, the budget deficit ceiling is set at P1.65 trillion, which is equivalent to 7.7% of GDP. Economic managers set the budget gap ceiling at 6% of GDP for 2023, 5.1% for 2024 and 4.1% for 2025.

Asked if he will support proposals to impose new taxes, Mr. Diokno said the recent tax reforms would provide the next administration with enough room to generate enough revenues.

The Bureau of the Treasury earlier estimated the government needs to raise P249 billion every year in incremental revenues to avoid new borrowings to pay the P3.2-trillion additional debt incurred during the coronavirus disease 2019 (COVID-19) pandemic.

Finance Secretary Carlos G. Dominiguez III has proposed a fiscal consolidation plan that involves imposing new tax measures, repealing some tax exemptions, and deferring the personal income tax reductions.

Mr. Dominguez has said the government cannot cover the existing debt by borrowing more or reducing spending every year.

The National Government’s outstanding debt stood at a record-high P12.76 trillion at the end of April.

Meanwhile, Department of Finance (DoF) Chief Economist Gil S. Beltran said the country’s outstanding debt would have ballooned to over P15 trillion this…

Neil

2022-06-06 12:34:37

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