DOF Secretary Outlines Fiscal Strategy at FEF Fellows Meeting

DOF Secretary Outlines Fiscal Strategy at FEF Fellows Meeting

On September 04, 2024, the Foundation for Economic Freedom (FEF) held its monthly Fellows Meeting, during which Department of Finance (DOF) Secretary Ralph Recto presented the government’s outlook on the country’s fiscal strategy. 

Recto emphasized that amidst rising geopolitical tensions and global pressures, there is a need to revise the Philippines’ midterm fiscal programs to ensure they are both realistic and adaptive to external challenges, while promoting sustainable growth.

Recto outlined the refined medium-term fiscal program, which focuses on gradually reducing debt and deficits, creating more and better jobs, increasing incomes, and reducing the poverty rate. He highlighted that the DOF must collect ₱11.7 billion daily to support the government’s ₱15.8 billion daily expenditures, with the deficit resulting in a need to borrow ₱4.10 billion per day.

To alleviate the financial burden on Filipinos, according to Recto, the government is strategically maximizing non-tax revenues. This includes increasing the Government-Owned and Controlled Corporations (GOCC) dividend remittance rate from 50% to 75% and disposing of non-performing and idle government assets.

Recto reassured the fellows that the government is on track to meet its fiscal goals for 2024. The DOF’s refined revenue measures are designed to maximize gains and minimize pains through initiatives such as the Value-Added Tax (VAT) on digital service providers, Package 4 of the Comprehensive Tax Reform Program (CTRP), an excise tax on single-use plastics, the Motor Vehicle User’s Charge, and rationalizing the mining fiscal regime.

“We aim to handle realities on the ground with foresight, prudence, and consideration of the larger picture,” Recto said. “That is our job at the DOF – to raise money for the government in the most cost-effective manner and ensure it is used and spent judiciously,” he added.

He further emphasized that any government measures to source financing are undertaken with the primary goal of addressing the people’s needs, particularly in areas such as health care. He concluded his speech by calling on members of the foundation, referring to them as the “country’s economic freedom fighters,” to continue supporting the nation’s highest good.

Attended by FEF Fellows, thought-leaders, decision-makers, and members of the business community, the Fellows Meeting serves as a platform to discuss pressing economic issues in the country.

by Jam Magdaleno