Upmanila lecture11dof
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This document outlines the development of Philippine fiscal policy. It defines key concepts like fiscal policy and consolidation. It describes the Department of Finance's mandate to formulate fiscal policies and manage government finances and debt. It also summarizes the country's fiscal accounts, budget cycle, and reform agenda, highlighting the roles of government agencies and the private sector in fiscal policy.
Upmanila lecture11dof
- 1. Development of Philippine Fiscal Policy
- 2. OUTLINE OF PRESENTATION Definition of Concepts DOF Mandate Fiscal Accounts Reform and Advocacy Agenda The Budget Cycle Role of the Private Sector
- 4. Definition of Public Policy: - generally the principled guide to action taken by the administrative or executive branches of the state with regard to issues in a manner consistent with law and institutional customs.
- 5. Public Policy (Continued): - a system of courses of action, regulatory measures, laws and funding priorities promulgated by a governmental entity or its representatives.
- 6. Fiscal Policy : - a government policy with regard to its resource generation and spending activities.
- 7. Fiscal Consolidation: - a determined effort to bring down the budget deficit.
- 8. Two Components of Fiscal Policy: Revenue component – Obtaining funds for government operation by collecting taxes, fees and charges and/or borrowing 2. Expenditure component – Spending of funds to provide goods and services
- 9. DOF Mandate
- 10. Formulation, institutionalization and administration of fiscal policies; Generation and management of the financial resources of government; Supervision of the revenue operations of all local government units; Review, approval and management of all public sector debt, domestic or foreign; Rationalization, privatization and public accountability of corporations and assets owned, controlled or acquired by the government. Under Executive Orders 127, 127A and 292
- 11. Two Major Fiscal Agencies: The Department of Finance (DOF) is responsible for the preparation of the annual and medium-term revenue program of the government . The Department of Budget and Management (DBM) manages the expenditures side.
- 13. Basic Elements of Fiscal Accounts Revenues Expenditures Financing
- 14. EXPENDITURES: ( interest payments, personnel services, infra, allotment to LGUs) FINANCING: External (official development assistance, commercial loans) Domestic (T- Bills, T-Notes, T-Bonds, Bank Loans) Components of Revenues, Expenditures and Financing (Philippine Fiscal Accounts) REVENUES: Tax Revenues : BIR, BOC, Other Offices (e.g. Environmental Tax, Immigration Tax, Travel Tax) Non-Tax Revenues : ( privatization, fees and charges, dividend from GOCCs, grants for projects/programs )
- 15. Modes of Financing Domestic Borrowing Central Bank (monetization) Bank Financing ( mostly gov’t corporate sector borrowings) Non-bank Financing (e.g. gov’t. securities: T-Bills; T-Notes & T-Bonds) Foreign Borrowing Official (Bilateral); Multilateral (IMF, World Bank) and Commercial Loans
- 16. FISCAL DEFICIT Creates Macroeconomic Impact - Depends on how it is financed Inflation Interest Rates “ Crowding Out” Effect External Position reduced reserves, increased debt, potential BOP problem
- 17. 2012 NG Fiscal Program 17 In Billion Pesos 2010 2011 2012 Growth Rate Actual Program Program (2012/2011) Total Revenues % of GDP 1,207.9 13.4% 1,411.3 14.2% 1,568.5 14.2% 11.1% Tax Revenues % of GDP 1,093.6 12.1% 1,273.2 12.8% 1,445.5 13.1% 13.5% BIR BOC Other Offices 822.6 259.2 11.8 940.0 320.0 13.2 1,066.1 365.1 14.2 13.4% 14.1% 7.6% Non-Tax Revenues % of GDP 114.3 1.3% 138.1 1.4% 123.0 1.1% -10.9% BTr Income Fees and Charges Privatization Grants 54.3 58.6 0.9 0.4 70.0 62.1 6.0 0.0 51.8 69.3 2.0 0.0 -26.0% 11.6% -66.7% Expenditure 1,522.4 1,711.3 1,854.5 8.4% Surplus / (Deficit) % of GDP (314.4) -3.5% (300.0) -3.0% (286.0) -2.6% -4.7%
- 18. Consolidated Public Sector Financial Position In Billion Pesos 2010 Actual 2011 Program 2012 Program Growth Rate (2012/2011) Total Surplus/(Deficit) % of GDP (362.8) -4.0% (241.4) -2.6% (234.0) -2.1% -3.1% NG (314.5) (300.0) (286.0) -4.7% CB Restructuring (7.7) (6.1) (6.1) -0.2% 14 MNFGCs (71.0) (42.0) (28.0) -33.3% SSIs 39.3 39.2 30.9 -21.2% BSP (63.7) 1.0 1.0 0.0% GFIs 7.9 11.2 11.6 3.5% LGUs 33.5 36.9 40.3 9.2% Adjustments 13.3 18.4 2.4 -87.1%
- 19. Consolidated Public Sector Financial Position % of GDP Program Program P Billion -2.6
- 20. NG Outstanding Debt P Billion % of GDP Actual Jan-Apr Program Program … will decrease to 50.2% of GDP 50.2 50.9 5,053.4 Sovereign Credit Ratings: MOODY’S: Upgraded to Ba2 (June 15, 2011) FITCH: Upgraded to BB+ (June 23, 2011) S&P: Upgraded to BB (November 12, 2010)
- 21. NG Financing Program Actual Jan-May Program Program ..increasingly focus more on domestic sources
- 22. Reform and Advocacy Agenda
- 23. Policy Reforms Deficit-Neutral (PAYGO) Bill Fiscal Incentives Rationalization (FIR) Sin Tax Reform + Universal Health Care NFA Reform PAGCOR/PCSO Privatization Anti-smuggling Law Rationalization of VAT Exemptions
- 24. Good Governance Advocacy: BIR -- Run Against Tax Evaders (RATE) BOC – Run After The Smugglers (RATS) DOF – Revenue Integrity Protection Service (RIPS) BIR – Oplan Kandado
- 25. The Budget Cycle
- 26. Budget : Action plan of government activities and programs Financial plan which reflects and supports national objectives, strategies and programs
- 27. Budget Cycle Budget Preparation Budget Accountability Budget Execution Budget Legislation
- 28. Allocation by Sector, 2008-2010 (In billion pesos)
- 29. Role of the Private Sector
- 30. Private Sector Participation in Promoting Socio-Economic Development Improve tax compliance Provide inputs in monitoring the use of taxes Work closely with government
- 31. Thank you…
- 32. Development of Philippine FiscalPolicy By RICARDO P. TOQUERO Fiscal Policy and Planning Office DEPARTMENT OF FINANCE Manila A presentation for UNIVERSITY OF THE PHILIPPINES mANILA August 3, 2011
Editor's Notes
- #32: While the global economic outlook for next year appears to be increasingly better, recovery remains fragile and therefore should not encourage complacency. But rather, we should act more decisively in implementing the necessary reforms to achieve higher growth over the coming years. Thank you!