Diokno: Govt to finance big-ticket projects under better tax system, mix of funding sources

Published Aug 8, 2022, 8:25:25 PM

Metro Manila (CNN Philippines, August 8) — The Marcos administration will be able to finance its priority infrastructure projects through its efforts to improve the tax system and use multiple forms of funding amid the tight fiscal space it's in, a top economic official said.

"We're confident that with the combination of financing, ODA (official development assistance), through the (national) budget, and through local governments' PPP (public-private partnerships), I think we will do all what we want to do in the next six years," Department of Finance (DOF) Sec. Benjamin Diokno told CNN Philippines' Pinky Webb in an interview aired Monday.

Diokno said the projects are budgeted under the medium-term fiscal framework, which were supported by tax reforms under the Duterte administration.

"The Duterte administration left behind a much superior tax system than what he inherited from the previous one. We can actually increase our revenues through better tax administration and a better tax system," said Diokno, who was Budget secretary and central bank governor during this period.

During his first State of the Nation Address, President Ferdinand "Bongbong" Marcos Jr. vowed to continue his predecessor Rodrigo Duterte's Build, Build, Build program. He also pitched further development of the country's railway system.

Diokno said the government will focus on the mass transit system, with a large chunk of disbursements also heading to more airports, seaports, and bridges that will interconnect provinces outside Luzon.

The official also counts on higher contributions from sectors like agriculture and mining to strengthen economic growth.

"As the economy grows, our revenues will also increase and that will be used to finance our projects," said the Finance chief.

Diokno reiterated his thrust for a more efficient tax system, pushing for computerizing the Bureau of Internal Revenue and Bureau of Customs transactions to reduce person-to-person ones.

"When you simplify the tax system, you also help the taxpayers — make it user-friendly — and also you need less people," said Diokno, adding that "there's more room for corruption under a more complicated tax system. "

The Marcos administration also wants to tax digital transactions and single-use plastics.

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