NextGen Day

Benjamin Diokno, secretary of the Department of Finance (DOF), refuted Tuesday rumors that the nation is on the verge of a debt disaster.

Diokno reassured the Committee on Ways and Means that there is no financial crisis in the Philippines.

“With the situations involving Sri Lanka and some of these downgrades, there has been a lot of concern surrounding our debt. Perhaps some comfort from our finance officials, economic managers, that we would not go that route and that the debt is still at a sustainable level?” Sonny Angara, a senator, asked Diokno.

The head of the DOF claimed that the nation has always been cautious about taking on debt and credited Congress’s tax reform legislation as “essential” to sustaining the economy in the face of the Covid-19 outbreak.

“You can be confident that we won’t follow Sri Lanka’s example. We take great care when borrowing money. The treasurer even stated that I believe the majority of our loans are long-term “Diokno credited Carlos Dominguez, his predecessor, with ensuring that the nation borrows money at the lowest interest rates feasible.

“I believe that in the future, we should be able to repay any loans we took out. I can guarantee you that the medium-term budgetary framework is intended to prevent us from making the same mistakes as Sri Lanka “Added he.

The Tax Reform for Acceleration and Inclusion (TRAIN) Act, tax amnesty programs, and “sin” tax laws generated about P68.4 billion in revenues in 2018, PHP134.7 billion in 2019, PHP144 billion in 2020, and PHP228.6 billion in 2021, according to a DOF report released in May, or a month before the end of the Duterte administration.

TRAIN, which was signed into law in December 2017, offers significant income tax reductions to the vast majority of Filipino taxpayers while also generating additional revenue to help finance the government’s accelerated spending on its “Build, Build, Build” infrastructure and social services programs.

After 20 years of no adjustments to the tax rates and brackets, the DOF stated that “this tax reform package corrects a longstanding imbalance of the tax system by decreasing personal income taxes for 99 percent of taxpayers.”

The Sri Lankan government recently declared that it would stop paying payments on its debts, making it the first sovereign country to do so since the pandemic began.

In addition, it had exhausted its cash reserves, which caused a lack of food, gasoline, medications, and electricity. As a result, President Gotabaya Rajapaksa was compelled to resign and leave the country after widespread protests.

Schools have been canceled, and employees are being requested to work from home, to help conserve supplies.

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