Budget and Taxes

*  BusinessWorld , April 19, 2023. ------------- Last week, the country’s economic team went to Washington DC to hold the Philippine Economic Briefing (PEB) and joined meetings with multilateral agencies and corporate investors and lenders. The economic team has one important goal — to attract more investments and create more businesses and jobs here as more liberal economic policies are implemented. Also last week, the IMF released the World Economic Outlook (WEO) 2023. I was curious about the economic expansion of the Philippines and other countries over the past four decades, so I checked the database and got the excel file. I show here different countries’ gross domestic product (GDP) size, both nominal (current GDP values in national currency multiplied by average exchange rate with the US$) and by purchasing power parity (PPP) values, which attempts to remove price level differences of goods and services between countries. In PPP values of GDP, China overtook the US in 2016 with

*  BusinessWorld  April 12, 2023. ----------- The Philippine Statistics Authority (PSA) released today an update on causes of deaths in the Philippines for the period January-November 2022. I expanded the data backwards until 2017 so six years and saw some interesting trends. One, COVID deaths, both with identified and unidentified virus, have shrunk greatly, from 13.8% of total deaths in 2021 — when it was the second biggest cause of death next to ischemic heart diseases — to only 2.8% in 2022. Two, cancer deaths declined significantly, from 11.1% of the total in 2019 to only 7.8% in 2021, then up to 10.2% in 2022. Three, pneumonia deaths also declined significantly, from 10.1% of the total in 2019 to only 4.2% in 2021 — wow! It was up to 4.8% in 2022. Four, lower respiratory plus tuberculosis (TB) deaths combined declined from 7.9% in 2019 to only 4.9% in 2021, then up to 6.1% in 2022 (see the Table). My suspicion is that the number of COVID deaths were exaggerated — by labeling many

*  BusinessWorld  April 10, 2023.  ------------ After four months of Philippine inflation at 8% and above, dipped to 7.6% in March, a welcome development. But this is more of European level than East Asian as East Asians had inflation of only 1% to 6.3% in February. On April 12, the Philippines’ economic and infrastructure teams will hold another Philippines Economic Briefing, this time in Washington DC. The economic team is composed of Finance Secretary Benjamin E. Diokno, Budget Secretary Amenah F. Pangandaman, National Economic and Development Authority Secretary Arsenio M. Balisacan and central bank Governor Felipe M. Medalla. The US-Canada-Europe economies are generally in bad shape, suffering from high inflation and low, decelerating GDP growth. I computed the average first quarter or January-March inflation rates of countries in 2020-2022, and the US and UK lead in this very bad trend. Many businesses there would experience losses or flat revenues and will consider moving to eme

*  BusinessWorld  March 29, 2023. ------------- Yesterday, Department of Finance (DoF) Secretary Benjamin E. Diokno held a press briefing with the Malacañang press corps and shared his presentations in a meeting with President Ferdinand R. Marcos, Jr. Two big announcements, two big issues were discussed in one briefing. One is the proposed merger of the Land Bank of the Philippines (LBP) and the Development Bank of the Philippines (DBP) with LBP as the surviving entity, the other was the military and uniformed personnel (MUP) pension reforms. Both the LBP and DBP are under the Finance department while getting money to fund the MUP pension is a DoF function, or headache. At the onset, I support these two important reforms and I hope the public will also support them. There are at least four reasons that the LBP-DBP merger will be favorable to the public. One, the merger will create a bigger, stronger, more resilient government bank while contributing to the reduction in the size of the

*  BusinessWorld  March 27, 2023. ------------ Among the good news in public finance so far this year is that the government has generated a budget surplus of P45.75 billion in January vs. a budget deficit of P23.38 in January last year. The key was the big jump in revenues, from only P278.08 billion in January 2022 to P348.17 billion in January 2023, an increase of P70 billion even without any tax hike, just through the opening up of the economy from the horrible authoritarian lockdown of the previous administration. The bad news is that financing or new borrowings remain high — from P437.2 billion in January 2022 to P366 billion in January 2023. There is a need to control National Government spending while revenues must continue rising via continued economic opening and better tax administration. Recently, President Ferdinand Marcos, Jr. announced a postponement in full devolution of certain functions to local government units (LGUs), from 2024 to a later period as a result of the im