Philippines : taxes on the rise to preserve the note – The Echoes

Carlos Dominguez, the philippine secretary of Finance, is putting the finishing touches to a new fiscal package, which should increase the revenue of 163 billion pesos (3.05 billion euros). After a first rejection in September, motivated by the increase of taxes on fuels and the automobile, the Parliament will have to examine, before the end of the quarter, a new version of the text. the ” It is a game of poker; we’ll have to find a ‘common ground’, recently indicated that the Finance secretary.

Supposed to compensate for the promises of concessions made by Rodrigo Duterte during his election campaign , this tax package has a strategic dimension. He must avoid the country to be demoted into the category ” speculative “, a risk which weighs heavily on the Philippines if the parliament had again rejected the text. Gold Manila wants to avoid this descent in the rankings for two reasons. Already, because the Philippines has obtained, for the first time in their history, to the rank of” investment ” credit rating agencies under the presidency of Benigno Aquino , the predecessor of Duterte. Secondly, and most importantly, because the authorities need to raise funds to finance the $ 160 billion of infrastructure projects that the country wants to accomplish in the next five years. This, while maintaining the budget deficit below 3 % of GDP. In the absence of new tax revenues, expenditure related to infrastructure will need to be pushed in the time. The schedule is tight, because the financial situation of the archipelago remains tense. S & P was launched last week, a first alert.

mine Closure

Even if the economy is not in danger – the growth is in a range of 6.5% to 7 % -, the directions of the new administration are less likely to significantly alter the recipes by depriving the budget of a portion of the fees it collected until then.

This is the case, in particular, with the closure of several mines. The Philippines come to revoke the licenses of four mining projects deemed harmful to the environment, including that of a nickel mine on Mindoro island, in the centre of the archipelago. The minister of the Environment and natural Resources, Regina Lopez, had already cancelled three projects of nickel mines last month, with the support of president Rodrigo Duterte. During his inauguration, in June, found that the Philippines, the world’s largest nickel producer, could survive without the mining industry, highly polluting. At this stage of the campaign, the government’s environmental powers, especially the uncertainty on the ore production of the archipelago, which explains in part the rise in the world price of nickel.