The Senate Finance Committee on Tuesday started scrutiny of the voluminous P3.35-trillion national budget for 2017 submitted by Malacañang for congressional approval to bankroll President Duterte’s “Real Change” agenda to spur investments, create more jobs and disperse wealth.
“As we express our support to the administration’s programs, your Committee on Finance will, likewise, ensure that it will scrutinize the national budget of 2017 in a manner that is transparent and consultative,” Sen. Loren B. Legarda, panel chairman, said in opening the Senate’s budget hearings on Tuesday.
In attendance were ranking Cabinet officials sitting in the Executive’s Development Budget Coordinating Committee that included Finance Secretary Carlos G. Dominguez III and Budget Secretary Benjamin E. Diokno, who briefed senators on the thrusts and priorities of the proposed 2017 national government budget.
At the outset, Legarda assured Duterte administration officials that the Senate Finance Committee will “work closely with the country’s economic managers and all our government agencies, and consider our constituents’ concerns to ensure that the national budget for 2017 will, indeed, be ‘a budget for real change.’”
She added that the panel will also support the administration’s main thrusts to “prioritize and improve education, ensure that more citizens have access to quality and efficient social services, and increase public spending in terms of infrastructure.”
Legarda said in endorsing Senate plenary approval of the money measure, the Finance Committee will align the 2017 national budget with the government’s Sustainable Development Goals (SDGs), which, she notes, are attuned with global aims to end poverty and hunger, improve health and education, make cities more sustainable, combat climate change, promote peace and justice for all, and protect the environment and biodiversity, among others.
In turn, Dominguez presented to the committee the funding program to fulfill President Duterte’s inclusive-growth agenda, which, he said, includes the implementation of a comprehensive tax-reform package. It includes lowering personal and corporate income taxes and simplified tax processes “while accelerating spending on infrastructure and investments in human capital formation and social protection.”
“Obviously,” he told the senators, “we need to put together a truly transformative tax-reform program.
Dominguez added: “Just to make the challenge more interesting, the tax-reform package must be designed not just to raise revenues but support inclusive growth. It must be a revenue package that coheres with the goals of maintaining the sustainability of our program, and more important, attracting investments, creating meaningful jobs and eradicating poverty.”
According to the finance chief, “the country is at a critical juncture [and] the next six years can either continue along the path of high economic but high socioeconomic inequality,or chart a different path toward shared prosperity that will uplift all.”
He reminded lawmakers at the hearing this was the reason it was important to fund Mr. Duterte’s 10-point socioeconomic agenda, which, Dominguez explained, revolves around the need to maintain sound macroeconomic and fiscal policies, invest in people and address the binding constraints to investment and job creation. “This is why we need tax reform,” he added.
Dominguez assures that the revenue erosion from lowering income-tax rates would be offset by reform initiatives that include broadening the tax base, reviewing fiscal incentives that have not been indexed to inflation, adjusting the fuel excise tax, imposing taxes on unhealthy food items and reduction of existing value-added tax exemptions.
“Today, the Philippines has among the highest tax rates in the region and among the narrowest tax bases,” the finance chief said, adding “this is a condition tax reform should reverse. We should bring down tax rates, while at the same time, broadening the tax base.”