Financing the country’s progress
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. —