DOF assures...

clients, which was participated in by over 70 financial market players from Manila, Hong Kong, Singapore, and Europe.

The deficit-to-GDP ceiling of three percent set by President Rodrigo Duterte’s economic team is a percentage point higher than the two-percent limit observed under the previous administration.

The new economic team cited plans to significantly boost government spending on infrastructure, which Dominguez described as the country’s next pillar of growth, and social services for the decision to raise the deficit ceiling.

Infrastructure spending will cover the sub-areas of logistics and transportation, information technology, telecommunications, and power. It will also focus on areas outside Metro Manila to achieve a more geographically broadbased economic growth.

Significantly higher government spending is indispensable, they said, if the government is to make economic growth truly inclusive and if the goal of reducing poverty incidence in the country, from 26.3 percent in the first semester of 2015 to just 17 percent by 2022, is to be realized.

A deficit-to-GDP ratio of three percent is still very comfortable based on international standards, according to the economic managers.

To make sure the breaching of the deficit ceiling is avoided despite aggressive spending plans, Dominguez said the DOF and its attached agencies have set their eyes on revenue-generation measures.

These include the strengthening of anti-tax evasion efforts, such as by pushing for relaxation of the Bank Secretary Law and lobbying for inclusion of tax evasion among predicate crimes for money laundering.

At the same time, the DOF is keen on addressing red tape, including in its attached agencies — the Bureau of Internal Revenue (BIR) and the Bureau of Customs — in order to make it easier for individuals and businesses to pay taxes and customs duties.

Dominguez shared with the conference call participants the DOF ’s recent move to create an anti-red tape team headed by Finance Undersecretary Gil S. Beltran. The team is tasked to streamline processes in the DOF, BIR, and BOC to encourage payment of proper taxes and duties.

Also, the strengthening of anticorruption drive within the BIR and the Customs is expected to help shore up tax collection.

“We will improve efficiency of our revenue collecting agencies… and move quickly to reduce corruption,” Dominguez told the financial market players.

In the same conference call, National Treasurer Roberto B. Tan said that with the targeted budget deficit ceiling of three percent of GDP, the government will be able to sustain the drop in the country’s debt ratios.

Tan said the outstanding debt of the national government is projected to settle at 42.66 percent of GDP this year and 40.86 percent in 2017. The debtto-GDP ratio is projected to sustain the yearly decline until falling to about 35 percent by the end of the Duterte administration.

The national government debt as a proportion of GDP had continually dropped from 52.4 percent in 2010 to 44.8 percent by the end of 2015.