PH sees P2-trillion fiscal buffer as Train chugs forward

The tax reform and the programmed wider budget deficit in the medium term would give the government fiscal space of nearly P2 trillion until 2022 to be spent on infrastructure and development programs, economic managers said.

“The fiscal space to be generated will be equivalent to about 2 percent of GDP (gross domestic product) annually in the next four years,” Budget Secretary Benjamin E. Diokno said in a speech during the Philippine Economic Briefing in Tokyo last week.

Diokno’s presentation showed that the higher budget deficit ceiling combined with the net revenues from the Tax Reform for Acceleration and Inclusion (TRAIN) Act and the proposed package 1B, which would include general tax amnesty and other tax administration improvements, would bring about P300 billion this year alone. If things go as planned, fiscal expansion may reach P369 billion in 2019; P434 billion in 2020; P456 billion in 2021; and P474 billion in 2022.

“The expansionary fiscal policy is necessary to finance the government’s investments on public infrastructure and human capital development,” Diokno said.

Separately, the latest Bureau of the Treasury data presented by Finance Secretary Carlos G. Dominguez III showed total government revenues from January to May jumped 19 percent to P1.2 trillion from P996.5 billion in the same period last year.