Manila – Philippine economic managers have requested President Ferdinand R. Marcos Jr. to certify four tax measures as urgent to bolster the country’s economic resilience in the face of a global economic slowdown.
Finance Secretary Benjamin Diokno, in a Palace press briefing following a sectoral meeting at Malacañan Palace, detailed the economic team’s recommendation. The proposed measures include Package 4 of the Comprehensive Tax Reform Program (CTRP) and three bills aimed at imposing value-added tax (VAT) on digital service providers, excise taxes on single-use plastic bags, sweetened beverages, and junk food.
According to Philippines News Agency, certifying these measures as urgent is critical for ensuring sufficient government financing for the proposed budget and achieving the target of a 5.1 percent deficit-to-GDP (gross domestic product) ratio for 2024. The Package 4 of the CTRP and the VAT on digital service providers, along with the excise tax on single-use plastic bags, are already in advanced stages in the Senate Ways and Means Committee. These are projected to generate PHP32 billion or 0.1 percent of the GDP.
The proposed excise tax on sweetened beverages and junk food, meanwhile, is estimated to yield PHP75.7 billion or 0.3 percent of the GDP. Diokno did not specify whether President Marcos is inclined to certify these legislative measures as urgent, stating that the briefing was more of a general overview of the state of the economy rather than expecting a specific reaction from the President.
Highlighting the Philippines’ economic performance, Diokno noted that the country remains one of the fastest-growing economies in Asia. He emphasized the Philippines’ low external debt-to-GDP ratio, which stands at 27.5 percent, compared to higher ratios in neighboring countries like Indonesia, Thailand, and Malaysia. This low ratio indicates a strong external position for the Philippines, making it less vulnerable to adverse external shocks. Diokno cited the country’s favorable investor credit ratings from various international rating agencies, reinforcing the strength of its external debt position.