The incoming finance minister of the Philippines wants to put his county back on the path of growth and pressure on economic issues such as its huge debt.
“I will have a slightly different role as finance secretary,” said Benjamin Dioccano, who is currently the governor of the central bank. “I will lead the economic team. We really want to get back on our growth path before the crisis,” he told CNBC’s “Squawk Box Asia” on Wednesday.
“It’s our plan to continue the growth momentum because I think it will solve a lot of our problems right now, including the ballooning-to-GDP ratio and, of course, the debt-to-GDP ratio,” said Diacono. Said, who is the governor of Bangkok Central in Pilipinas.
The Philippine government’s national debt reached 12.76 trillion Philippine pesos (about $232.11 billion) at the end of April, Data released by the Treasury showed,
in February, Finance department announced A fiscal consolidation plan for the next administration, which focused on the need to reduce the country’s pandemic-induced debt.
Benjamin Diacono, Governor of the Central Bank of the Philippines.
VJ Villafranca | Bloomberg | Getty Images
In 2019, before the pandemic began, The Philippines was one of the fastest growing economies.around the world – but its services and remittances-led economy was badly hit by Covid-19.
The government had to resort to emergency borrowing to cover the huge cost of its COVID response and the corresponding drop in revenues as a result of mobility restrictions and the economic slowdown.
“The debt-to-GDP ratio is about 63% right now. It’s not really scary, in fact, it’s quite manageable,” Diocco said. “By the time we grow at around 6-7% for the next six years, it will easily go below 60%.”
The governor said the new administration has no intention of implementing the tax hike, at least not within the first year. He is fine with the tax reform package dropped by the previous administration’s President Rodrigo Duterte.
“During the tax reform program we pushed [the] The Duterte administration has two remaining sections. These last two measures are considered revenue neutral,” he said.
“But they will significantly simplify the tax system. So we will continue to push them. And I hope it gets approved this year and then we will implement it next year.”