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Govt borrowings down in June – BTr B BY MAYVELIN U. CARABALLO
ORROWINGS made by the national government dropped to P53.70 billion in June as it borrowed less from domestic sources, according to the Bureau of the Treasury (BTr).
Data released by the bureau on Wednesday showed that the
amount was a 66.4-percent decrease from P159.98 billion in the
‘Economic cost from alcohol to hit P256B’ THE economic cost of alcohol consumption could reach P256 billion by 2022, according to the Department of Finance (DoF). Citing a 2009 study, Finance Undersecretary Karl Kendrick Chua said this cost was estimated to hit P190.8 billion this year, which could balloon to P211.2 billion by 2020, P232.7 billion by 2021 and P256.8 billion by 2022. “[The economic cost] is basically those [resulting] from deaths [and] sickness, [because] if you are sick you cannot work, and if you are disabled you need someone to take care of you,” Chua explained in an interview late on Tuesday. “And because of [these deaths, there is] grief, [which has a] social cost. [There is also] the social cost of having a drunk person beating someone, [or sexually
abusing someone] and all,” he said. This big economic cost could be reduced if the excise tax on alcohol products is increased, according to the Finance official. For instance, he said next year’s estimated 30,000 deaths caused by alcohol consumption would be reduced by half because of higher tax rates. “[Deaths] are the main driver of the economic cost. And then if you have [fewer] deaths, then it reduces the opportunity cost, because instead of you dying, you can still live and work. And [higher tax rates] also reduces bingedrinking….” Chua said. “So I think we can reduce the cost by half, given the DoH (Department of Health)-DoF proposal,” he added. Chua is referring to Package 2 Plus
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CTRP Package 2+ and the pending mining tax bills
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ITH the passage of Republic Act 11346, which increases the excise tax on tobacco products to P45 per pack by 2020 from the current P35, Congress is quickly working on the passage of the other bills comprising the so-called Package 2+ of the Comprehensive Tax Reform Program (CTRP). Package 2+ of the CTRP includes proposed reforms on mining and sin taxes, all aimed to generate additional revenues, and make the tax system simpler, fairer, and more efficient. The goal is also to align with President Duterte’s priority programs on social and environmental protection. Last Tuesday, the House of Representatives passed by third and
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EUNEY MARIE MATA-PEREZ final reading House Bill (HB) 1026 which seeks to amend the Tax Code (Republic Act 8424, as amended) by raising the excise tax rates on alcohol products, heated tobacco and vapor products. The Committee on Ways and Means Chairman, Rep. Joey Salceda, the principal author of HB 1026, said the excise taxes on vapor products will generate P800 million in revenue to the government.
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Doing ecozones right T ROUGH HE Philippine Economic Zone Authority (PEZA) and the Department of Finance (DoF) have been at odds for months over the latter’s proposal, contained in the second package of the comprehensive tax reform program (CTRP) currently stalled in Congress, to rationalize fiscal incentives. Because somebody at PEZA does not know how to do basic math, the conversation has now shifted from the specifics of adjusting tax perks to business locators to a more general assessment of the real value of economic zones. PEZA, which relies on its authority to offer tax incentives to lure businesses to the Philippines,
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is of course against the proposed rationalization, saying that it would drive away investors. Under the reform measure, the process of granting incentives would be streamlined and centralized, and incentives would generally be reduced. The DoF says that this is necessary because the government is losing too much potential tax revenue — P1.12
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same month last year. A reduction in borrowings means the debts the state needs to pay in the future would be smaller. Domestic borrowings, which accounted for 73.2 percent of the total, slid by 74.5 percent to P39.34 billion from P154.58 billion a year ago. The bulk was raised from the
issuance of fixed-rate Treasury bonds, which amounted to P20 billion. The rest were sourced from Treasury bills. External financing surged by 166.3 percent to P14.36 billion from P5.39 billion a year ago. Program loans reached P10.34 billion, while project loans raised P4.02 billion.
Year-to-date, government borrowings rose by 82.4 percent to P840.83 billion from P460.82 billion in the same period in 2018. Domestic borrowings increased by 101.7 percent to P615.36 billion from January to June, while external financing accelerated by 44.7 percent to P225.47 billion in the same period.
Outstanding debt stood at P7.868 trillion in June, compared with over P46.89 billion a month earlier because of net repayments of both domestic and foreign loans and foreign exchange fluctuations. Last year, the government borrowed P897.55 billion to creditors, a 0.4-percent decrease from P901.67 billion in 2017.
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