Govt eyes sources of additional revenues

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The government is currently exploring possible sources of additional revenues to mitigate the impact of an expenditure program on the country’s fiscal deficit.

“Right now, we are in discussions with the leadership in Congress regarding Bayanihan 3.
Together, we are exploring additional sources of revenue to mitigate the impact of an expenditure program on our fiscal deficit,” Finance Department Secretary Carlos Dominguez 3rd said during the Sulong Pilipinas 2021: Partners for Progress, a Pre-State of the Nation Address Economic Development and Infrastructure Clusters’ Forum on Monday.
“The other avenue we are exploring is the possibility of cutting down nonessential government expenditures. So we are looking at that too,” he added.

Dominguez said the government is also looking at increasing the dividend rate of government-owned and controlled corporations (GOCCs) from 50 percent to 75 percent.
“Again, this is part of the first alternative, which is additional revenue sources or an additional stimulus program,” he said.

In a letter sent to House Speaker Lord Allan Velasco after their recent meeting to discuss funding sources for a possible third economic stimulus measure, Dominguez said he agrees that “fiscal stimulus measures need to be backed up by adequate revenue sources.”

”As mentioned, we are currently looking at the possibility of increasing the dividend rates remitted by government-owned or -controlled corporations to the national government (NG),” Dominguez said in his letter to the Velasco, a copy of which was sent to members of the media.

The recommendations of the Department of Finance (DoF) would require amending several provisions of Republic Act (RA) 7656, or the “Dividend Law.”

“We are continuously studying the matter and we will be providing you with an updated version as soon as available. Let us continue to work together as we build back the best possible future for the Filipino people,” he added

The DoF’s proposed amendments to the Dividend Law cover net earnings of GOCCs starting 2020.

Instead of imposing fines or the penalty of imprisonment for violating the provisions of the Dividend Law, the DoF also proposed that “government corporations not in compliance with the provisions of this Act as determined by the Department of Finance shall not be entitled to any form of performance bonus or incentives.”

Recommendations to be studied

During the Sulong forum, Dominguez also accepted stakeholders’ Top 10 actionable recommendations on how to help the Philippine economy recover from the pandemic.
The recommendations presented by Philippine Chamber of Commerce and Industry (PCCI) President Benedicto Yujuico include providing farmers with financial aid, farming implements, and marketing of local produce; improving learning outcomes and encourage innovation; making transactions easier amid the pandemic; improving health and emergency response; and having a transportation system that efficiently moves people and goods, and promote interconnectivity.

Other recommendations include addressing the adequate supply of quality construction materials in line with the Build, Build, Build program; ensuring effective policy enforcement; attracting regional investments; enabling women with young children to work and providing them access to jobs, and improving urban mobility infrastructure.

“These suggested actions, we believe, would help the country to quickly recover from the negative impact of the Covid-19 pandemic and grow at a much faster pace even beyond this administration,” said Yujuico.

Dominguez, for his part, said the government will take the recommendations into consideration, and do its best to achieve most of them within the remainder of President Rodrigo Duterte’s term.

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