NextGen Day

While the country’s debt levels are still manageable, the House Ways and Means Committee chairwoman said on Tuesday that the government should invest more in long-term, growth-generating projects rather than debt payments.

Representative Joey Salceda of Albay underlined the importance of improving infrastructure and long-term investments over debt repayment.

He did note, however, that capital outlays for the fiscal year 2022 amount to PHP1.019 trillion, or 20.3 percent of the national budget, or roughly 5.6 percent of GDP (GDP). This is in contrast to debt payment, which accounts for about 5.9% of GDP.

“Debt repayment should be prioritized over infrastructure and long-term investments… The remarks of all of the major presidential candidates who wish to keep the Build, Build, Build initiative reassure me “he stated

According to the most recent Bureau of the Treasury (BTr) figures, the national government’s outstanding debt was PHP11.73 trillion at the end of December 2021, down 1.7 percent from the PHP11.93 trillion debt level at the end of November 2021.

He also suggested that the government keep interest payments low.

“With or without a crisis, the Philippines’ current Treasurer has been quite successful in maintaining the average interest rate on government debt very low. The future President’s appointment of the next National Treasurer is one issue to keep an eye on “he stated

According to him, the next president must both raise additional taxes and improve tax administration in order to ensure that enough money is available to pay debts and provide adequate social services.

“During the pandemic, the wealthy have become even wealthier, which is a frequent occurrence. According to a study of the effects of five pandemics between 2003 and 2016, income inequality in affected countries increased on average over the five years following each event, with the effect being greater when the crisis resulted in a contraction in economic activity, as in the case of Covid-19. As a result, the wealthiest will have to bear the brunt of our next round of tax rises “he stated

He claims that President Rodrigo Roa Duterte’s administration is on track to become the best tax collector since previous President Fidel V. Ramos in terms of tax collection as a percentage of GDP.

“We should be in a far better position to cope with our debt if our tax planners in the future government can maintain the kind of tenacity and decisiveness with which our committee conducted tax reform,” he said.

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