MANILA - House Committee on Ways and Means Chairman Joey Salceda on Friday enumerated ways on how the Philippines could raise new revenues to pay for its COVID-19 debt, which was earlier estimated to need P326 billion annually.
In an interview with ANC, the Albay 2nd District Representative said the majority of the money should be generated from new sources and should be recurring instead of one-off sources.
For 5 years, the country should be able to raise P1.6 trillion in fiscal expansion, he said, to cover the principal and interest of the debt.
The Bureau of Treasury said the total outstanding national government debt hit P12.68 trillion in March. Likewise, the country's debt-to-GDP ratio rose to 63.5 percent in the same month.
"Definitely the first approach is to look at organic flows…P900 trillion n'yan (of that) should come from organic flows and the rest should come from privatization," Salceda said.
"Tinitingnan ko kasi kasi kailangan balanse (it has to be balanced), I don’t know if this is the official stance of the DOF but the COVID deficits essentially financed," he continued.
Salceda proposed the following low-hanging fruits or pending measures to generate income for debt payment.
• Amendments to the motor vehicle usage charge, which has not been adjusted since 2004 and could raise about P200 billion in 5 years, according to Salceda
• Enactment of digital sales vat intended for services offered online, which Salceda said could raise P30 billion per year
• Amendments or proper implementation of mining tax that can raise P40 billion
• E-sabong regulation to generate about P42 billion in new revenues for the country annually. President Rodrigo Duterte recently stopped e-sabong operations following reports of gambling addiction and the disappearance of around 30 cockfighting enthusiasts
• Proposed excise tax on plastic bags which is seen to collect P27 billion
• Ease of Paying Tax which has provisions for admin taxes that can raise P73.1 billion
• Deferment of the Tax Acceleration and Inclusion Law (TRAIN) personal income tax cut in 2023 which will result in P46 billion in income. Another option is to look into the exemption of pick-up trucks in the TRAIN law which raised excise taxes on vehicles
• Gambling tax that can generate P93.6 billion
• Conspicuous consumption taxes or taxes on high-end luxury goods, which Salceda could add P12 billion in revenues
• Repeal of the excise tax on products with alcohol content
"Basically these are taxes that are pending in Congress which have been approved in the Lower House [and are] now pending the Senate," Salceda said.
The Philippines borrowed heavily in the past few years to finance its COVID-19 response and recovery approach as well as the ambitious Build, Build, Build infrastructure program.
The country has kept its investment-grade rating even during the pandemic due to its fiscal prudence despite the escalating debt level. Economic managers have identified debt management among the top priorities of the next administration, aside from inflation.