Fiscal discipline trimmed debt – DoF

THE national government’s debt would have reached P15.4 trillion this year had the Duterte administration not exercised fiscal discipline in responding to the pandemic, Department of Finance (DoF) chief economist Gil Beltran said.

“As we have said over the past few years, the government has consistently exercised fiscal prudence in responding to the Covid-19 pandemic. We spent what we had to, but not more than what we could afford. In fact, had we acquiesced to pressure for us to spend more, our debt would have increased by P2.2 trillion more and reached P15.4 trillion,” Beltran said in a statement on Monday. ์นด์ง€๋…ธ์‚ฌ์ดํŠธ

According to a report by the DoF-Domestic Finance Group (DFG), the passage of proposed Covid-19 stimulus bills and other revenue-eroding measures would have led to additional spending or revenue losses of at least P2.2 trillion.

This would have increased the overall debt level to P15.4 trillion.

Examples of the bills included in the calculation of the DoF-DFG are the proposed value-added tax exemptions for oil, liquefied petroleum gas, electricity and other commodities and abolition of other taxes; various Covid-19 stimulus bills and subsidies; proposed exclusion of the 13th month pay, performance-based bonus and other income from taxable income; and the appropriations for new departments or government entities proposed by various legislators.

Beltran said that the government’s pandemic response strategically targeted the most vulnerable sectors.

Financing for the two Bayanihan Laws 1 and 2 (Republic Acts 11469 and 11494, respectively) focused on ensuring that the most essential health interventions and emergency economic relief measures for populations most adversely affected by the pandemic were funded fully.

“Aware of the effects of additional spending on our borrowings, the DoF worked closely with legislators to limit the interventions under Bayanihan 2 to P140 billion despite the objections of many other stakeholders,” Beltran said.

“The government did not support several stimulus bills, each proposing hundreds of billions of additional appropriations, precisely because we understood that this would translate into further increases in the deficit and debt,” he added. ์•ˆ์ „ํ•œ์นด์ง€๋…ธ์‚ฌ์ดํŠธ

Beltran said that to deal with the effects of the pandemic in a strategic and cost-efficient manner, the government secured additional financing from multilateral partner institutions to procure an adequate supply of vaccines.

“The accelerated vaccination program, along with shifting to the alert level system with granular lockdowns and increased public transport capacity, enabled us to aggressively reopen the economy and restore jobs,” he said. ์นด์ง€๋…ธ์‚ฌ์ดํŠธ ์ถ”์ฒœ

He noted that other fiscally sustainable economic recovery programs enacted during the Duterte administration include the Financial Institutions Strategic Transfer (FIST) Act, which helps banks extend credit to more sectors by allowing them to offload non-performing assets and non-performing loans to FIST corporations; and the Corporate Recovery and Tax Incentives for Enterprises (Create) Act which reduced the corporate income tax rate and rationalized fiscal incentives.

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