Budget and Taxes

High growth imperative and fiscal consolidation April 2, 2024 | 12:02 am My Cup Of Liberty By Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2024/04/02/584959/high-growth-imperative-and-fiscal-consolidation/ The Development Budget Coordination Committee (DBCC) composed of the Departments of Finance and Budget and Management (DoF and DBM), the National Economic and Development Authority or NEDA, plus the Bangko Sentral ng Pilipinas will announce the GDP growth targets for 2024 to 2028 this week. They will decide, among others, whether to keep the 6.5% to 7.5% growth targets made in the November 2023 meeting or revise them to 6% to 7%. Personally, I wish that we would target 8-9% yearly growth because of our low per capita income — we need to raise it high enough in a short period. I believe 8-9% is becoming realistic as the global economic environment is not improving, it seems to be worsening. The continued high interest rate policy is not conducive for large business ex...

On a huge budget surplus and long-term privatization revenues March 19, 2024 | 12:02 am My Cup Of Liberty By Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2024/03/19/582568/on-a-huge-budget-surplus-and-long-term-privatization-revenues/ A number of good economic reports came out last week. See for instance these stories in BusinessWorld: “US firms to invest over $1B in PHL” (March 12), “PHL secures $4B in German pledges” (March 14), “Philippines’ budget surplus at $1.58B in January” (March 15), “PHL to grow 6.4% this year — Fitch” (March 15), and “GOCC subsidies down in 2023, PhilHealth top recipient” (March 17). I checked the Bureau of the Treasury (BTr) data on the latest cash operations report (COR) of the National Government. The January 2024 data showed that the National Government (NG) experienced a budget surplus of P88 billion. That is huge. So I checked the January data of previous years — turns out that this year’s budget surplus could possibly be an all-time h...

Why we need to grow by 8-9% yearly March 14, 2024 | 12:01 am My Cup Of Liberty By Bienvenido S. Oplas, Jr.  https://www.bworldonline.com/opinion/2024/03/14/581526/why-we-need-to-grow-by-8-9-yearly/ The Development Budget Coordination Committee (DBCC) is considering revising the Philippines’ annual growth target until 2024, from 6.5% to 7.5%, down to 6-7%. I think this is a practical adjustment because the global and regional economic environment is deteriorating, not improving, as shown by the generally lower growth of countries in 2023 compared to 2022, and with high inflation persisting in many countries this year. I updated my table monitoring the GDP growth of major economies in the world, those with a GDP of at least $700 billion in purchasing power parity (PPP) values projected for 2023. Several countries were not included because there was either no GDP data or it was incomplete. These countries are Bangladesh, Pakistan, and the United Arab Emirates. Some countries revised t...

High budget deficit and wage subsidy March 5, 2024 | 12:02 am My Cup Of Liberty By Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2024/03/05/579338/high-budget-deficit-and-wage-subsidy/ Last week, on Feb. 29, the Development Budget Coordination Committee (DBCC) released the full year cash operations report (COR) for 2023. The good news from it is that revenues have expanded significantly despite the absence of a major tax hike, from P3.55 trillion in 2022 to P3.82 trillion in 2023, and that the actual collection was higher by P95 billion than the target or programmed P3.73 trillion. The bad news is that the actual budget deficit of P1.51 trillion was higher than the programmed deficit by P13 billion because expenditures have expanded significantly. Last year’s actual spending of P5.34 trillion was P108 billion higher than the programmed spending of P5.23 trillion. The average budget deficit has increased from P609 billion/year in 2018-2019 to P1.542 trillion/year in 2020...

The economic impact of 2 years of war in Ukraine, and the Philippines fiscal situation February 27, 2024 | 12:02 am My Cup Of Liberty By Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2024/02/27/577880/the-economic-impact-of-2-years-of-war-in-ukraine-and-the-philippines-fiscal-situation/ Last Saturday, Feb. 24, marked the second year of the Russian invasion of Ukraine. Immediately after that, the US and EU allies imposed more economic sanctions against Russia, on top of existing sanctions imposed when Russia annexed Crimea in 2014. The most severe sanction was the freezing, if not confiscation, of Russia’s foreign reserves worth $300 billion. Important questions to ask: Did those punitive sanctions vs Russia really weaken it? And were those that imposed the sanctions better off? To help answer these questions, I again checked the economic performance of the major players — the US and G7 countries plus other major EU countries on the one hand, and Russia and its economic ...

NAIA privatization is good, legislated minimum wage is bad February 20, 2024 | 12:02 am My Cup of Liberty By Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2024/02/20/576609/naia-privatization-is-good-legislated-minimum-wage-is-bad/ LAST FRIDAY, the Department of Transportation announced the winner of the competitive bidding for the solicited project to upgrade, maintain, and operate the Ninoy Aquino International Airport (NAIA). The San Miguel Corp. (SMC)-SAP Co. Consortium won. The government will get a P30-billion upfront payment and P2 billion/year from then on, plus a share of the revenue from operations: a projected total of P36 billion/year. It was indeed good news. The country will have a more modern international airport at no cost to taxpayers, and the government will even earn more yearly. Proof of another dynamic market-oriented policy reform. Cynthia C. Hernandez, the executive director of the Public-Private Partnership (PPP) Center, aired her optimism, She ...

Low inflation, low unemployment, high growth — this is the Philippines February 13, 2024 | 12:02 am My Cup of Liberty By Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2024/02/13/575175/low-inflation-low-unemployment-high-growth-this-is-the-philippines/ Last week, the Philippine Statistics Authority (PSA) released two important monthly reports, on the country’s unemployment rate for December 2023, and the inflation rate for January 2024. They show really good results — unemployment is at a 19-year low, inflation at a three-year low. See these stories in BusinessWorld: “Inflation sharply drops to 3-year low” (Feb. 7), “Jobless rate hits record low in 2023” (Feb. 8). I am updating this column’s monthly monitoring of global and regional inflation and unemployment data. I have put together in Group A the G7 industrial countries, in Group B are the big South Asian nations, and in Group C are the big East Asian countries (see the table). Budget Secretary Amenah F. Pangandaman ...