MANILA, Philippines–The Department of Finance (DOF) aims to further shore up revenue collection while continuously reducing the share of the government debt to the economy next year to sustain the inroads made this year.
“The DOF achieved a great deal in 2014. With Secretary [Cesar V.] Purisima at the helm, the country’s macro-economic fundamentals are in their best shape ever. Inflation is on its way down. Interest rates net of inflation remain one of the lowest in Asia despite the QE [quantitative easing] tapering in the US. The exchange rate is stable on account of strong BOP (balance of payments) inflows, and the fiscal position is at its strongest,” Finance Undersecretary Gil S. Beltran said in a speech before DOF employees on Monday.
“In 2015, we should work harder to push the revenue effort further up by at least one-half percentage point of GDP [gross domestic product], reduce the government debt ratio by at least a percentage point, and further expand fiscal space for infrastructure and social services,” Beltran said.
According to Beltran, the gains made so far are sustainable, citing that the government’s revenue effort went up by one-half percentage point as of end-October, while the public sector debt ratio hit its lowest in three decades—66.3 percent for the consolidated public sector, 52 percent for the non-financial public sector, and 38.1 percent for the consolidated general public sector.
At end-September, the tax-to-GDP ratio improved to 14.08 percent or closer to the target of 16.6 percent.
Latest DOF data also showed that revenue collection jumped by 12.6 percent as of end-October. This year, the government targets to collect P1.88 trillion in taxes on top of P138.1 billion in non-tax revenues.
As for the national debt-to-GDP ratio, the DOF earlier reported that the country’s debt burden stood at 37.3 percent at the end of the first half, six percentage points better than the 44.3 percent posted in 2010, or the year President Aquino assumed office.
Besides improvements in the fiscal space, the DOF is also aiming at better access to financing among more Filipinos next year, especially those in disaster-prone areas, Beltran said. “We will expand the clientele of our microfinance products further, introduce new microinsurance products, and reduce risks of disasters.”