DBCC expects higher revenue in medium-term due to tax reform measures
The interagency Development Budget Coordination Committee (DBCC) has revised upward the government's medium-term revenue and disbursement programs due to the impact of the tax reform measure.
In a press conference after the DBCC meeting Tuesday in Manila, Budget Secretary Benjamin Diokno said with the effect of Package 1A and 1B of the Comprehensive Tax Reform Program, the expected revenue for 2018 was increased at P2.846 trillion, higher by P57.3 billion from initially approved P2.789 trillion.
DBCC, the highest economic policy-making body of the government, sees tax measures to contribute P124.9 billion for 2018 and P215.8 billion in 2022.
In total, Diokno said, revenues are projected to rise from 16.3 percent of the country's gross domestic product in 2018 to as much as 17.5 percent in 2022, or a nominal amount of P4.485 trillion.
With favorable revenue projections, Diokno said the target disbursements for 2018 was increased to P3.37 trillion, up from the previous level of P3.313 trillion.
As share of GDP, disbursements are targeted to rise from 19.3 percent of GDP in 2018 to 20.5 percent of GDP in 2022. In nominal terms, disbursements are projected to reach as high as P5.259 trillion come 2022.
“The improved fiscal program of the government, particularly the Build Build Build initiative, is expected to boost economic expansion from 2018 to 2022,” Diokno said.
The DBCC also revised its other macroeconomic targets, such as the foreign exchange rate, which is now expected to hit 50-53 pesos to the US dollar in 2018 until 2022.
It also changed the borrowing mix for 2018 to 65-35 percent, in favor of domestic borrowings from 81-19 percent.
Diokno said the revision on the borrowing mix was due to "good (interest) rates" being given by donor agencies, such as Japan and China.
The government will then adhere to a 75-25 mix from 2019 to 2022 as the government is diversifying its investor base and tapping to new markets to meet its financing requirements at the most cost efficient manner, DBCC said.
The DBCC has maintained the government's economic growth target in the medium-term at 7- 8 percent. Celerina Monte/DMS
