Incoming Marcos Economic Team Hopes to Turn the Philippines Into an 'Upper-Middle Income Country' in 'Year or Two'
President-elect Ferdinand "Bongbong" Marcos Jr. and his economic managers hope to lower the country's debt-to-gross domestic product (G.D.P.) ratio to three percent by the end of the president's term. How will they do it?
In an interview on The Chiefs on Thursday, June 2, incoming Department of Finance (DOF) Secretary Benjamin Diokno said his team is already thinking of ways to cut the deficit down.
“Ang target namin is by the end of the term of President Marcos, the debt-to-G.D.P. ratio will be in the neighborhood of three percent. That’s where we were before the crisis and doable ‘yon given the present tax system, sa tingin ko lang,” Diokno shared.
To achieve a debt-to-GDP ratio of three percent, the next D.O.F. chief recognizes that the economy should grow by seven percent this year and should maintain a six-percent growth over the course of their administration. His team also plans to turn the Philippines into an "upper-middle income country" in a year or two.
The DOF had earlier proposed new and higher taxes, including a three-year deferral of income tax reductions scheduled for individual taxpayers to cope with the Philippines' debt. Diokno has, however, stressed that he is not in favor of doing so. The former Bangko Sentral ng Pilipinas governor said that the present tax system would suffice.
“To me, the tax system as it is now will give us the right level of revenues. I agree with the outgoing administration that we need what is called a 'fiscal consolidation plan.' There should be a plan to reduce the deficit-to-G.D.P. ratio, which right now is around the neighborhood of seven to eight percent,” he shared.
But Diokno welcomed the recommendation from the outgoing administration, saying that the next set of economic managers are going to see which of their plans are doable and which aren't. Diokno also reassured the public that the Philippines won't fall into a Sri Lanka-like debt trap. He also expects to see the country lower its poverty level to "one out of 10" Filipinos by the end of Marcos Jr.'s term.