Fiscal reforms to unlock GDP gains for Philippines – World Bank
The Philippines could generate fiscal gains equivalent to as much as 7.1 percent of gross domestic product by improving tax collection and making public spending more efficient, according to the World Bank.
The Philippines could generate fiscal gains equivalent to up to 7.1 percent of its gross domestic product (GDP) through improvements in tax collection and more efficient public spending, according to a World Bank report. The Bank's report, titled "Building on Reform: Public Finance for a Rising Philippines," presented three reform packages aimed at enhancing fiscal sustainability and inclusive growth.
The first package, which covers fiscal space at hand, includes procurement consolidation, tax simplification, corporate income tax rationalization, budget discipline measures, and the establishment of an independent fiscal council. Procurement reform alone could save the country between 435 billion and 870 billion Philippine pesos annually.
An independent fiscal council would promote transparency by facilitating deliberations on revenue forecasts and impacts. The implementation of these reforms in this package could yield an additional 2.2 to 4.4 percentage points of GDP in fiscal savings and revenues.
The second package focuses on closing fiscal gaps through the deployment of integrated financial management information systems, public investment management systems, and human resource and management information systems. Additionally, modernizing revenue administration to track expenditures and improve public investment is recommended. These measures, once implemented, could yield an additional 1.4 to 3.1 percentage points of GDP in fiscal savings.
The third and final package targets human capital and aims to promote pro-poor health assistance, registry-based targeting in social assistance programs, and allocation of education resources for foundational learning. Implementing this package is deemed cost-neutral. Zafer Mustafaoğlu, the World Bank's division director for the Philippines, Malaysia, and Brunei, emphasized that these recommendations are timely, especially as the country's recent ascent to upper-middle-income status raises expectations for sustaining growth and ensuring its inclusiveness.
Written by urgent.news from Philippine Star Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
