By: Chino T. Copuyoc
The Money Market Association of the Philippines (MART) had its First General Membership Meeting last April 15, 2010, at the Grand Ballroom of Intercontinental Manila, Makati City.
The Guest of Honor & Speaker for that night was Department of Finance Secretary Margarito B. Teves. His speech was entitled “2010: The Fiscal Management Turnover”. He talked about which aspects of the fiscal system were directly affected by the global financial crisis we have encountered during the 2nd half of 2008 to the year 2009 and what remedies and/or changes the next administration should focus on. During 2009, the Philippines felt the global turmoil on its borrowing cost, which reached an all-time high of PHP 298.5 billion mainly because of a decline in our tax revenue collection, a sharp downturn on its real economy – slowing down of the annual GDP growth and exports falling 40 percent, and a slight increase in the country’s unemployment.
For the remainder of his speech, he mentioned the factors and steps he would want the next administration to implement in order for the country to be on track towards economic recovery.
Secretary Teves stated that the next administration should prioritize tax reforms in order to increase 2010 revenues and in effect boost the country’s growth. He would want RP’s next leaders to increase value-added-tax (VAT) rate from the current rate of 12% to 15% mainly because of a declining revenue base and an increased pressure on the deficit, the DOF Secretary said. On the onset, he also asked for the reduction in the corporate and income tax rate. In addition to these modifications, Teves recommended that the next congress should pass bills rationalizing fiscal incentives, restructuring excise taxes on tobacco and alcohol products, and simplifying net income taxation, generating around P8 billion, P20 billion, and P5 billion respectively.
He reiterated in his speech during the assembly that the next government should strongly support, among other things, the passage of revenue enhancement measures. At the end of the day, the message that was projected was that our country has to implement modifications and make sacrifices in order to achieve long-term stability and progress.
As mentioned by Joan Policarpio, President of the Money Market Association of the Philippines, in her opening speech quoting BSP Governor Amando Tetangco Jr., our theme for 2010 should be ‘Staying Ahead’. That’s exactly what Secretary Teves had in mind when he discussed the changes he wanted the next government to implement for the year 2010.