FILE PHOTO: Benjamin Diokno. INQUIRER FILES
MANILA, Philippines — Economic managers of the incoming administration of Ferdinand Marcos Jr. are aiming to lower the country’s deficit-to-GDP (gross domestic product) ratio to 3 percent by the end of the President-elect’s term in 2028.
Incoming Finance Secretary Benjamin Diokno revealed this recently, asserting that such a target is doable under the present tax system which the Duterte administration will leave behind.
“To me, the tax system as it is now will give us the right level of revenues. I agree with the outgoing administration that we need what is called a fiscal consolidation plan. There should be a plan to reduce the deficit-to-GDP ratio, which right now is around the neighborhood of 7-8 percent,” he said in an interview over One News’ The Chiefs on Thursday night.
“Ang target namin is by the end of the term of President Marcos, the deficit-to-GDP ratio will be in the neighborhood of 3 percent. That’s where we were before the crisis and doable ‘yon given the present tax system, sa tingin ko lang,” Diokno added.
The current Department of Finance had proposed new and higher taxes plus a three-year deferral of income tax reductions scheduled for individual taxpayers to pay off the country’s debts.
READ: Higher taxes pitched to repay Duterte’s COVID-19 debts
But Diokno earlier said he does not favor raising taxes even as the incoming Marcos administration is set to inherit a huge pile of debt.
He nevertheless said the incoming economic managers will still look at the suggestion of the outgoing administration and “figure out which are doable and not doable.”
In order to achieve a debt-to-GDP ratio of 3 percent, the country’s economy should grow at 7 percent this year and 6 percent for the next six years, according to Diokno.
“So ganun ang plano namin then we will accomplish our plan, which originally adopted na, we will achieve the upper-middle income country ang Pilipinas by maybe in a year or two and another target that was disrupted because of the pandemic, that we will get A rating,” he said, pointing out that the country is currently at B to B+ rating.