This morning I was interviewed by Orly Trinidad of DZBB, topics about high inflation, smuggling, public debt. Starts at 31 minutes and ends at 46 minutes mark, https://www.facebook.com/watch/live/?ref=watch_permalink&v=327305166515246
Interview in Filipino, I said the following, among others:
1. Mataas nga inflation, average 6.6% January-Sept 2023, vs economic team’s target of 5-6% full year 2023.
2. Main sources of high nflation in Aug-Sept. are (a) food and non-alcoholic beverages, (b) tobacco and alcoholic beverages, (c) restaurants and accommodation services.
3. Among the proposals to control high food inflation is to remove the fuel excise tax, diesel from zero in 2017 to P6/liter under the TRAIN law plus VAT, about P6.70/liter additional rise in cost for tractors, harvesters, irrigation pumps, trucks, agri production and transportation.
4. I support the proposed fuel tax suspension, about P200+ B/year revenue loss but there should also be P200+ B of spending cut, or control tax leakages from smuggling.
5. Annual borrowings natin from P0.8 trillion in 2019 tumaas na sa P2.2 trillion/year in 2020, 2021 and 2022. This year until August nasa mga P1.6 trillion na new borrowings. So pag inalis pa ang P200+ B fuel tax revenues, magiging P2.4 trillion borrowings this year pag walang spending cut or new revenues elsewhere.
(Orly mentioned petroleum smuggling, that he heard we collect only about half of expected revenues)
6. Yes kasama yan petroleum smuggling, tobacco smuggling, other agricultural smuggling. Sa tobacco smuggling ang mga estimates dyan, according to Cong. Joey Salceda nasa P30B/year of tax losses, 2021 estimate pa nya yon. Kay former Cong Koko Nograles, nasa P50-60B/year, at kay BIR Commissioner Lumagui baka abot pa P100B/year.
7. Assuming tobacco smuggling is P50/year of tax losses for government, ma control lang ito by half, govt can collect some P25B/year new revenues, so hanapin na lang ang P175+ B/year in other tax leakages like petroleum smuggling, sakali ituloy ang suspension of fuel tax.
8. Interest payment natin, P582 B this year, and projected at P670 B next year, hindi pa kasama principal amortization, interest pa lang. Kaya dapat ma control ang deficit, ma control ang borrowings, bawasan spending habang itaas revenue collections.
9. Sa spending cut, potential candidate ay ang free tuition in state universities, nasa mga P100B/year na dati nasa mga P30B/year lang. Dapat itigil ang free tuition, partial subsidy lang dapat.
10. Yong confidential funds, sa budget ng OVP, dati kay VP Leni nasa mga P0.7 to P0.9 B/year lang, hindi umabot P1 B/year budget ng OVP kay Leni for 6 years. Pag dating kay VP Sara, akyat agad mga P2.3 B/year. Maliit pa rin ito in a scheme or total of P5+ trillion total budget pero kumpara sa previous OVP, halos 3x increase.
11. Inflation rate projected to decline, bumaba sa next 3 months of 2023. Kasi ang inflation today ay compared to prices year ago, so inflation in Sept 2023 compared to prices in Sept 2022, may base effect. Mataas ang base level in Oct, Nov, Dec 2022, so inaasahan bumaba ang inflation sa next 3 months 2023.
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