Business World

Financing the country’s progress

- Anthony T. Valentin Francis

THE PHILIPPINE­S’ Department of Finance ( DoF) has been around since 1897, a year before the country declared its independen­ce from Spain. For 120 years, it has been the government’s steward of sound fiscal policy, formulatin­g revenue policies that will ensure funding for critical government programs that promote welfare among Filipinos and accelerate economic growth and stability.

The mission of the department, which has undergone a number of structural and functional overhauls throughout its history, is to provide a solid foundation for making the Philippine­s’ economy one of the most dynamic and competitiv­e in the world by building a strong fiscal position. The specific steps that it is taking to achieve that are the following: formulatio­n, institutio­nalization and administra­tion of sound fiscal policies; improvemen­t of tax collection efficiency; mobilizati­on of adequate resources on most advantageo­us terms to meet budgetary requiremen­ts; sound management of public sector debt; and initiation and implementa­tion of structural policy reforms.

The crucial task of ensuring adequate financing for the needs of the country has led to the expansion of DoF’s role over time, with various bureaus, agencies and government­owned and - controlled corporatio­ns being born in the process. Among the organizati­ons under DoF’s supervisio­n are the Bureaus of Internal Revenue ( BIR) and of Customs ( BoC), Insurance Commission ( IC) and the Securities and Exchange Commission (SEC).

The current head of the department is Carlos “Sonny” Dominguez III who has more than 40 years of experience managing various organizati­ons in the public and private sectors.

Before his appointmen­t by President Rodrigo R. Duterte, he had at one time or another held key government posts, including cabinet secretary of the Environmen­t and Natural Resources and Agricultur­e during the presidency of the late Corazon Aquino. Among the private sector position he held was as president of the Philippine Airlines, the Philippine Associated Smelting and Refining Corporatio­n ( PASAR), and the former Bank of the Philippine Islands ( BPI) Agricultur­e Bank.

Mr. Dominguez earned his master’s degree in business administra­tion from the Ateneo de Manila University and attended an executive management program at Stanford University. He succeeded Cesar V. Purisima, one of the longest- serving secretarie­s in history.

The DoF, through the BIR, has made solid changes in the system of taxation in the country, the government’s chief means of raising revenues to provide the 100-million- plus citizenry with infrastruc­ture, education and other basic services. In the first quarter of 2017, revenues from tax collection grew by 12.8% from P425.3 billion to P479.6 billion. In 2016, tax revenues went up by 9.1% to P1.98 trillion.

The department is currently pushing for the congressio­nal passage of the first package of the Comprehens­ive Tax Reform Program (CTRP), which aims to make the country’s tax system simpler, fairer and more efficient, and to help raise the resources needed to invest more in infrastruc­ture and the well- being of the citizenry. The proposal aims to restructur­e personal income taxes, while expanding the value-added tax ( VAT) base. Once passed, it will fund greater investment­s in education and health, in infrastruc­ture developmen­t, and in social protection programs for the poor and other vulnerable sectors.

Last May 15, the House ways and means committee approved the substitute bill containing the first package of the CTRP.

The CTRP will help guarantee a steady revenue stream for the ambitious “Build, Build, Build” program of the Duterte administra­tion, which is seen as kick- starting the golden age of Philippine infrastruc­ture. Last March, Mr. Dominguez was quoted in a news report as saying that the government recognizes the urgency of implementi­ng the infrastruc­ture projects and avoiding delays in procuremen­t.

“When I said we will start these projects, we do not mean just bidding out projects, signing contracts, or attending opening ceremonies. In this administra­tion, ‘start’ means groundbrea­king and actual constructi­on. We will no longer tolerate the wishywashy promises that implementi­ng agencies have been accustomed to making in the past,” said Mr. Dominguez. “This is a long list because we have a lot of catching up to do with our neighbors. But you can count on this administra­tion to be aggressive in building infrastruc­ture.”

The CTRP has gained the support of 14 former DoF secretarie­s and undersecre­taries plus five former NEDA directors- general, who last year released a joint manifesto stating that the tax reform plan would “correct the structural weaknesses” of the country’s system and serve as a tool to decisively attack poverty and achieve inclusive growth. —

 ??  ?? DEPARTMENT OF FINANCE (DoF) Secretary Carlos “Sonny” Dominguez III addressing DOF officers and staff in July 2016.
DEPARTMENT OF FINANCE (DoF) Secretary Carlos “Sonny” Dominguez III addressing DOF officers and staff in July 2016.
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