FINANCE Secretary Carlos G. Dominguez III told senators the government’s economic team is open to supporting potential revenue-raising measures that can fund Bayanihan 3.
Speaking before the Senate Committee of the Whole on Tuesday, Dominguez said they are still currently looking for funds to finance the proposed stimulus package without further increasing their estimated fiscal deficit this year.
For this year, the government expects the country’s fiscal deficit to reach a new record high of P1.78 trillion or 8.9 percent of GDP, even higher than the P1.37 trillion or 7.6-percent deficit-to-GDP ratio it recorded last year.
“We are looking at additional collections over and above our budget…. If there are any potential revenue-raising measures that the House and the Senate will propose, then we are also open to that, but the principle is, we have to keep our fiscal deficit at the point that it is now, which in our estimate is 9.3 percent,” Dominguez said.
The House of Representatives has already endorsed for Senate approval the proposed P401-billion Bayanihan to Arise as One Act or the Bayanihan 3.
However, Dominguez told reporters on Wednesday that the Department of Finance (DOF) “has not proposed any tax hikes to increase revenue collections.”
He said, “If we are going to have another round of Bayanihan stimulus package this year, the economic team will work with Congress on looking for funding sources to ensure that it will not further widen our deficit.”
Apart from the President’s order directing all agencies to identify savings from their respective appropriations under the 2020 national budget, Dominguez reiterated that they have taken actions to increase the dividend remittances of government-owned and -controlled corporations (GOCCs) to generate more funds.
The DOF earlier proposed increasing the mandatory dividend remittances of GOCCs from the current 50 percent to at least 75 percent of their net earnings to raise funds for future fiscal stimulus measures.
“As of end-May 2021, collections from dividend remittances have already reached P31.38 billion. We target to collect P47.17 billion in remittances for this year,” he said.
“These steps will ensure that any additional stimulus package would be adequately funded and backed up by available financial resources,” he added. The government’s economic managers expect the country’s fiscal deficit to gradually taper off starting next year to 7.5 percent of the GDP or P1.67 trillion. They also expect the fiscal deficit to further decline to 6.3 percent of GDP (P1.53 trillion) and 5.3 percent of GDP (P1.4 trillion) in 2023 and 2024, respectively.