Saturday, July 25, 2020

Interview with ABS-CBN on huge public debt

Last July 7, I got an invite from Ms. Kristine Sabillo of ABS-CBN for an interview re the Philippines' high public borrowings, reference to their story last July 3,

I accepted the interview, done last July 8 via Zoom. I thought it won't be shown anymore because of the final decision of Philippine Congress not to renew ABS' franchise for another 25 years. But they showed it via their facebook page the other day, July 23,

Other interviewees there were Sonny Africa of Ibon Foundation, Rene Ofreneo of Freedom from Debt Coalition (FDC), and DOF ASec Tony Lambino.

These were my 3-slides notes when she was interviewing me. 

(1) PH government outstanding debt was P6.6 trillion in 2016, still under an Aquino budget and borrowings regime, the Duterte admin came in the second half of the year. Then it quickly jumped to P8.2 trillion by end 2019, a P1.6 trillion increase in just three years, no economic crisis or pandemic.
By May 2020, pandemic-lockdown period, the debt further rose to P8.9 trillion.

(2) The budget deficit was -P353 billion in 2016, expanded fast to -P660 billion by 2019, again no economic crisis nor pandemic. By May 2020, the deficit was already at -P562 billion.

(3) More borrowings mean more taxes and regulatory fees, next year and the succeeding years. Taxpayers should be prepared for that. Under the TRAIN law of 2017, the big tax hikes came from higher excise tax rates in oil/petroleum, coal, tobacco, alcohol/beverages, automobiles, sugary drinks. Then expanded VAT coverage to more sectors, doc stamp tax. There was some revenue loss from personal income tax due to higher tax exemption, a good move by TRAIN law but was negated by higher taxes elsewhere.

Thank you Kristine, for the opportunity to briefly argue some points in your report.

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