By Kenneth Christiane L. Basilio, Reporter
THE GOVERNMENT needs to further improve tax administration to minimize the debt bill after borrowing for next year was projected at P2.535 trillion, a legislator said on Monday.
Such improvements need to include further easing the process of paying taxes to keep the budget deficit contained. The deficit is expected to come in at P1.5 trillion next year, Marikina Rep. Stella Luz A. Quimbo said.
She said current measures such as the Ease of Paying Taxes Act and a proposal to levy a digital services value-added tax (VAT) on non-resident companies could help narrow next year’s budget deficit.
“For now, of course, the most important thing is to improve tax administration,” she said during the House of Representatives plenary deliberation on the proposed national budget for next year.
“We should continue improving tax collection. As much as possible, we don’t want new taxes because there are already many existing taxes that we just aren’t collecting efficiently,” she added.
The government’s spending plan is pegged at P6.352 trillion for next year, with revenue collection projected at about P4.644 trillion. The P1.537-trillion budget deficit will be financed via debt, according to the 2025 Budget of Expenditures and Sources of Financing.
Broken down, 80% of the borrowings will come from domestic sources while the remaining 20% will be sourced from foreign lenders.
Gross domestic borrowing was set at P2.04 trillion for 2025, up 5.91% from the 2024 program of P1.92 trillion. Gross external borrowing for next year was set at P507.41 billion, down 21.46%.
Pending priority tax measures, including the rationalization of the mining fiscal regime, the digital services VAT, and the excise taxes on single-use plastics are expected to yield P28 billion in 2025, should they be passed into law, according to Budget department estimates.
The government needs to direct borrowed money to programs which will have a “multiplier effect” in jump-starting the economy, Ms. Quimbo said.
“To revive the economy, we need the government to keep spending (with an eye towards) multiplier effects,” she added.
The national debt will keep rising in subsequent years due to the need to further stimulate economic growth, according to Ms. Quimbo.
“By the end of 2025, we expect a debt of P17.3 trillion. By the end of 2026, we expect the total debt to be P18.8 trillion. By the end of 2027, we anticipate the debt to be P19.8 trillion. And by the end of 2028, we expect it to reach P20.7 trillion,” she said.
“That’s how it goes. But despite the increasing debt stock, we also expect our economy to grow,” she added.
Outstanding debt hit a fresh high of P15.69 trillion at the end of July.
