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Karen Davila, netizens react to PH needing P326 billion in revenues a year to pay off debt

Albay Rep. Joey Salceda suggests a tax policy reform through “smart, efficient tax and economic policies to address this debt overhang.”

For the Philippines to fulfill the principal and interest payments it incurred in debt during the apex of the pandemic, the succeeding administration may need at least P326 billion in new revenues each year.

Albay Rep. Joey Salceda suggests a tax policy reform through “smart, efficient tax and economic policies to address this debt overhang.”

“Unless we can raise that kind of revenue, we will have to downscale our public spending or borrow again to pay the debt … And of course, the P326 billion figure relies on current interest rates. To keep them at this level, we need to show our creditors we are in good fiscal standing. So tax policy reform is really our best option,” Salceda said on Monday.

The lawmaker said the government is burdened by P144 billion in principal payments for the next 20 years, and P181 billion in interest payments.

“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,” Salceda said.

He advised that president-elect Ferdinand Marcos Jr. could use his allies in Congress to “enact smart, efficient tax and economic policies to address this debt overhang.”

“It’s the biggest election victory since 1961, so I think there is plenty of political capital for difficult but necessary reforms,” the lawmaker said.

“You need money for the most important campaign promises: cheaper rice, more efficient government services and improved agriculture. So, I would suggest quick and effective fiscal measures being undertaken in the first 100 days,” he added.

Salceda wants to see the digital environment get taxed more. The industry grew by 16 percent during the health crisis.

“Tax revenues from digital sources have remained practically unchanged, based on BPI numbers. We can do that on both the policy side and the tax administration side,” he said.

Karen Davila and other netizens gave their take on the matter.


Written by paulie walnuts

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