THE INCOMING Philippine government needs to raise about P326 billion in new revenues annually to pay for debts incurred for the coronavirus response, according to the House Ways and Means Committee chairman.
“If you annuitize the debt service due to deficit spending from Jan. 2020 to March 2022, you will have around P144 billion in principal payments over the next twenty years, and around P181 billion in interest payments,” Albay Representative Jose Ma. Clemente S. Salceda said on Monday.
“That will of course vary per year, and some years will need lower debt than others. But if you want to stretch out the payment schedule, that’s the kind of fiscal space you need to cover the COVID-19 debts without incurring budget cuts,” he said.
Mr. Salceda said presumptive president Ferdinand “Bongbong” R. Marcos, who won the “biggest election victory since 1961,” must use his political capital to immediately roll out effective fiscal measures within his first 100 days in office.
These measures include new packages of tax policy reforms, setting up a digital taxation service, and overall improvement in tax payment procedures, among others.
Mr. Marcos “can use his supermajority in both mandate and Congressional alliances to enact smart, efficient tax and economic policies to address this debt overhang,” the Albay representative said.
The earlier the next administration begins with the fiscal expansion program, the better it will be for investor confidence, the country’s credit ratings, debt overhang and future growth prospects, the solon said. — Alyssa Nicole O. Tan