Congress, DOF eyeing fiscal plan post-SONA

THE incoming 19th Congress and the Department of Finance have agreed on the need to craft a medium-term fiscal plan and identify key economic priorities, which Congress will institutionalize in a Joint Resolution, a leader of the House of Representatives said on Monday.

Under the plan, Albay Rep. Joey Sarte Salceda said the government will aim to grow the real GDP by 6.5 to 8 percent of GDP annually until 2028, and 5 to 6 percent of GDP in infrastructure spending.

Salceda added that they also aim to reduce national government debt-to-GDP to 52.5 percent by 2028.

Salceda, whom the House majority leadership has blessed to retain his post as House Ways and Means chairman, said the goals will be institutionalized through a Joint Resolution of Congress, similar to the Joint Resolution 1, 2018 on the Military and Uniformed Personnel Salaries.

To optimize growth, Salceda said that the government will identify key economic priorities, such as agricultural development, reduction of logistics and transport costs, reduction of energy costs, sound fiscal management, health, education, social protection, and government efficiency.

Salceda said he and Finance Secretary Benjamin Diokno had discussions on the country’s fiscal management strategy in a recent meeting.

“Secretary Diokno and I have agreed on the need for a medium-term fiscal plan that takes into account revenue as well as expenditure projections until 2028, the end of PBBM’s [President Marcos] term,” Salceda said.

“The medium-term fiscal program will basically be a path for revenues to go from 15.3 percent of GDP to 17.6 percent of GDP; and for expenditures to go from 22.9 percent of GDP to 20.6 percent. In other words, the plan will aim to narrow the deficit to just 3 percent by the end of PBBM’s term,” Salceda explained.

That, of course, Salceda said, will depend highly on the country’s growing its GDP, and outgrowing its debt.

“It will commit the government to a set of specific objectives and targets, and will guide the fiscal and spending policies of Congress and the national government,” he said.

According to Salceda, the Committee on Ways and Means is also prepared to provide the needed legislative support for the revenue base under the Joint Resolution. “I have committed to file the Joint Resolution on the matter, awaiting the incoming Speaker’s instructions,” he added.

Besides the Joint Resolution on the medium-term plan, Salceda also asked the incoming House leadership to immediately constitute the Committee on Rules and the House delegation to the Commission on Appointments, so that “the Cabinet could be confirmed as soon as possible, and so that they can get to work immediately.”

He said the government is “in good, steady, competent hands, and will ride on strong economic reforms enacted under President Duterte.”

“The new administration will be able to benefit from CREATE, the investment liberalization laws, and the investments made by PRRD in big ticket programs and projects, the useful life of a lot of which will begin during the Marcos administration,” he said.  CREATE, or the Corporate Recovery and Tax Incentives for Enterprises, was enacted at the height of the pandemic to address the twin concerns of allowing the battered economy to recover while still pushing through tax reforms.

“PBBM has also hired some of the best and the brightest in their respective fields. You have experts in crucial agencies such as Environment, Energy, and of course the economic team,” he added.

Image credits: Robinson Ninal Jr./Malacañang Presidential Photographers Division via AP