Diokno will turn over DOF to incoming finance chief on solid footing
Outgoing Finance Secretary Benjamin Diokno will turnover the Department of Finance (DOF) on solid footing to incoming finance chief Deputy House Speaker Ralph Recto
Diokno has expressed his confidence in Recto, saying, “I am pleased to announce that I will be turning over my seat as Finance Secretary to Deputy Speaker Ralph Recto.”
“I am proud knowing that I will be leaving my post at a time when the Philippine economy, in general, and the DOF, in particular, are in a better state of affairs than when I inherited them,” Diokno said.
Since taking the helm at the DOF on July 1, 2022, Diokno has committed to pursuing the Marcos, Jr. administration’s goals of reducing the deficit-to-GDP ratio to 3 percent, achieving upper middle-income status by 2025, and bringing down poverty incidence to single-digit by the end of the President’s term.
Diokno led the economic team in crafting the Philippines’ first-ever Medium-Term Fiscal Framework (MTFF) during the Marcos administration’s first month in office.
Improving revenue generation and boosting government spending are at the core of the MTFF.
For the first 10 months of 2023, the National Government (NG)’s actual revenue collection rose to P 3.2 trillion, higher by 9.4 percent compared to the same period last year.
Revenue collections also exceeded the target for the period by 5.2 percent due to better collection performance by the Bureau of Customs (BOC) and income from the Bureau of the Treasury (BTr).
Digitalization, which Diokno strongly advocated for, played a significant role in the improved revenue collection performance.
For instance, the Bureau of Internal Revenue (BIR) bolstered its Digital Transformation (DX) Program which provided taxpayers with modern, convenient, and accessible tools to elevate taxpayer experience, thereby increasing taxpayer compliance as well as transparency.
Similarly, the BOC has so far digitalized 161 out of 166 customs processes, resulting in a 97-percent digitalization rate. These efforts allowed the Bureau to enhance its trade facilitation.
The Development Budget Coordination Committee (DBCC) projects revenue collections to reach P 3.8 trillion by the end of 2023 and further rise to P6.6 trillion in 2028 due to the anticipated implementation of priority tax measures over the medium term.
In the past year, Diokno has advocated for the passage of key reforms under the MTFF to boost revenue generation and tax administration.
Diokno previously vowed to broaden the tax base to ensure fairness where everyone can contribute their fair share of taxes.
These are Package 3 of the Comprehensive Tax Reform Program (CTRP) or the Real Property Valuation and Assessment Reform (RPVAR), Package 4 of the CTRP or the Passive Income and Financial Intermediaries Taxation Act (PIFITA), excise taxes on pre-mixed alcohol, sweetened beverages and junk food, and single-use plastics (SUPs), as well as the rationalization of the mining fiscal regime and the Motor Vehicle Road User's Tax (MVRUT).
He also proposed to improve Philippine tax laws to be at par with international standards.
Diokno led the DOF in its proposal to impose a value-added tax (VAT) on digital service providers (DSPs) to level the playing field between foreign and local digital service providers.
In the spirit of unity, Diokno has led the economic team to work closely with Congress, the private sector, and civil society towards achieving long-term economic growth.
The majority of the priority measures are in advanced stages in Congress and were prepped to help finance this year’s national budget and attain the government’s 5.1 percent deficit-to-GDP target for the full year 2024.
NG deficit-to-GDP ratio for the first three quarters of last year decreased to 5.7 percent, which is below the 6.1 percent full-year deficit target for 2023.
Likewise, the debt-to-GDP ratio decreased to 60.2 percent, which is below the full-year target of 61.2 percent for 2023, signaling the overall effectiveness of the fiscal consolidation program. DOF Information Management Service
