LA UNION, Philippines - President Gloria Macapagal-Arroyo does not see the need to raise new taxes given the governments improved fiscal situation and increased private sector involvement in needed infrastructure projects.
"With firms like PLDT (Philippine Long Distance Telephone Co.) taking on a large part of the burden of building vital infrastructure, there is no need for new taxes. We have plenty of room to increase revenues by enhancing tax administration. That is how we will address the short-term challenges we face in meeting our revenue-generation targets," Mrs. Arroyo said at Tuesdays launch of the Asia America Gateway.
"Thanks to private infrastructure spending like this international gateway, for the first time in a generation, our budget is under control; we are lowering our deficit and raising unprecedented amounts of revenue," Mrs. Arroyo added.
"We are both comfortable and confident that our discipline will allow us to continue on a balanced path of targeted investment and overall restraint.
"Balancing the budget remains a very important priority that will not be abandoned. We will do this while also investing in much-needed infrastructure and social services."
In the same speech, the President said improved tax collection efficiency had made raising new taxes unnecessary.
"Our surplus in April more than doubled year on year due to higher tax collection. Our cumulative budget deficit from January to April fell to P25.8 billion. Im confident we will be able to sustain progress on the budget front," she said.
Earlier this month the Finance department reported an April budget surplus of P25.8 billion, the highest since 1986.
The April surplus was more than double the P12 billion recorded last year. Revenues went up by 21% to P122 billion, mainly due to collections by the main tax office.
The government reported a P9.4-billion deficit in 2007, a significant improvement from the targeted P63-billion fiscal gap. Tax collections remained problematic but privatization efforts which hit P90.6 billion took up the slack.
The governments fiscal gap has been on a downtrend since it hit P210.74 billion in 2002. It dipped to P199.87 billion in 2003, P187.06 billion in 2004, P146.78 billion in 2005 and P64.79 billion in 2006. The state expects to balance the budget this year.
Budget Secretary Rolando G. Andaya, Jr. said the pledge of no new taxes involves the rest of Mrs. Arroyos term which ends in 2010.
But the balanced budget goal, he added, could be set aside given the need to help Filipinos cope with rising prices of goods.
"When these targets were set, there were no problems on oil and rice prices yet. So these things came into play now and it would be wrong if the government will be inflexible," he said. - Alexis Douglas B. Romero, BusinessWorld