Debt and taxes…and uncertainty
It's only downhill from here, right?(Image from freepik)
Bureau of the Treasury figures show that the country's outstanding debt stock hit a fresh, all-time high of ₱12.76 trillion as of end-April. The latest tally—which represents a 16.1% annual growth—surpassed the previous ₱12.68 trillion record set in March.
The Treasury said 70% of total national government loans were sourced locally. Domestic borrowings in April rose 0.8% month-on-month and 14.4% year-on-year. Foreign debt, which accounted for the remaining 30%, also increased 20.4% from April last year. Compared to March 2022, this climbed 0.4%.
The government's guaranteed obligations stood at ₱413.43 billion in April, down 4.9% annually but up 0.6% from the month prior.
"The increment in the level of guaranteed debt was due to the net availment of both domestic and external guarantees amounting to ₱6.16 billion and ₱0.12 billion, respectively," the Bureau said.
The country's debt-to-gross domestic product ratio was already at 63.5% as of the first quarter, breaching the international threshold of 60%, with authorities incurring more loans during the COVID-19 pandemic.
Despite the all-time high, Bangko Sentral ng Pilipinas Gov. and incoming finance secretary Benjamin Diokno said this shouldn't be a cause for concern as long as the economy grows 6-7% on a "sustainable basis."
Not exactly a record we can be proud of but as Diokno pointed out, there’s no need to worry…for now.
Got gas? Ayuda?
Following the latest oil price hikes, lawmakers called on the next Congress to immediately pass a law suspending excise taxes on diesel, gasoline, cooking gas, and other oil products.
Deputy Speaker Rufus B. Rodriguez and House Deputy Minority Leader and Bayan Muna Rep. Carlos Isagani T. Zarate said the next Congress should pursue the proposal to suspend excise taxes on petroleum products. Especially since prices are expected to go up because of the European Union’s decision to ban 90% of its oil imports from Russia by the end of the year.
The House leader said he would refile his bill that would shelve the collection of fuel taxes for four years—the period he expects the economy to recover from the pandemic and the effects of the Ukraine-Russia war on the economy.
“The suspension will bring immediate relief to our people,” Rodriguez said. He explained that enacting the bill will cut pump prices by P6 per liter for diesel, P3 per kilogram for liquefied petroleum gas, P5 for kerosene, and P5.65 per liter for gasoline.
However, Sen. Win T. Gatchalian, incoming Ways and Means Committee chairman, has rejected calls to suspend excise tax on oil products. “I do not favor that because that spells a big loss to government coffers,” Gatchalian said, adding the move “will do more harm, because public services will suffer” as the government faces a P200-billion loss.
The Senator said he would rather focus on targeted ayuda (subsidy) for affected sectors like drivers of Public Utility Vehicles or tricycles. The ones most in need should be directly helped, Gatchalian said.
In addition, Gatchalian suggests that the government should “look at vices and non-essentials, i.e., gambling.” The senator also cited the need for digital payments to have speed, saying: “If e-sabong can be paid via G-cash, what more ayuda?”
If it weren’t left up to our government to make the decisions, which one would you rather have, an act on rising fuel prices or ayuda?
