Fiscal framework resolution stalls on questions about binding provisions


THE SENATE suspended debate on the adoption of a concurrent resolution supporting the National Government’s 2022-2028 medium-term fiscal framework (MTFF), with the minority expressing concern that its provisions may be legally binding.

The MTFF calls for the alignment of all economic recovery programs and measures with legislative priorities.

Senate Minority Leader Aquilino Martin D. Pimentel III, at a plenary session on Tuesday, said the resolution “is a heavy commitment for those who will vote in favor of this… noting that it “appears to be more than an expression of sentiment but a document which will bind those who sign it and vote for it.”

Senator Juan Edgardo M. Angara, who chairs the finance committee and is the resolution’s primary sponsor, called it “an expression of support” for the government’s economic program, “but I don’t think it’s a legally binding document, meaning I don’t think anyone can hold any members of this chamber into account if he wishes not to support any of the measures mentioned here.”

Mr. Pimentel had questioned whether voting for Concurrent Resolution 3 automatically binds Senators to vote in favor of the MTFF agenda items and the resulting expenditure.

“In broad terms, we support it. It would mean a support for these measures, but again, once these measures get to the floor, there is no binding effect on our colleagues,” Mr. Angara said.

“It would be too much of an expectation on our part because it is just a general fiscal framework,” he added. “If that is the case, then we might as well dispense with the debate on these specific measures, but I think we can expect very robust debate on most if not all of these measures going forward.”

“Those who vote in favor might disappoint other people in the future if that is the case,” Mr. Pimentel said.

Under the resolution, the near-term socio-economic agenda seeks to protect purchasing power while mitigating the scarring effects of the pandemic on families and consumers. It seeks to ensure food security; reduce transport and logistics costs; reduce energy costs to families; tackle health concerns; strengthen social protection; safely reopen physical classes; make the bureaucracy more efficient through digitalization; and pursue sound fiscal management through tax reforms and improved revenue allocation.

The medium-term socioeconomic agenda, on the other hand, focuses on enhanced job generation, while ensuring better pay and quality of work, as well as sustainability. To achieve this, the executive plans to promote the Philippines as an investment destination; improve infrastructure, enhanced by public-private partnerships; ensure energy security; enhance employability through better-quality education and training opportunities; expand and improve digital infrastructure; encourage research and development and innovation; adopt a “green” and “blue” mindset to managing the economy; and establish liveable and sustainable communities.

“To be clear, the details on how the government intends to pursue these agenda items still needs to be fleshed out,” Mr. Angara said. “We hope to get a better picture of the general plan once the PDP 2022-2028 is published by the end of the year,” he added, referring to the Philippine Development Plan.

“But while it is good that we keep our heads high up in the clouds, we still need to have our feet firmly planted in the ground — especially in the face of tight government revenue and an economy that is still trying to recover,” he added. “This is where the MTFF helps us, by setting the fiscal limits and bounds (within which) we can think about the future of our country.”

The Department of Finance has said that the MTFF will serve as the blueprint for reducing the fiscal deficit, promoting fiscal sustainability, and enabling robust economic growth after the COVID-19 pandemic.

The MTFF sets the macroeconomic growth targets for the coming years, including 6.5% to 7.5% gross domestic product (GDP) growth in 2022 and 6.5% to 8% annual GDP growth from 2023 to 2028, against the 5.71% posted in 2021.

It also seeks to bring the poverty rate to 9% by 2028 from the 18.1% recorded in 2021; lower the National Government deficit to 3% of GDP from the current 6.5%; reduce the debt-to-GDP ratio to under 60% from the current 62.1% by 2025; and make the Philippines an upper middle-income country with a GDP per capita goal of $4,256 from the current $3,643.

Priority legislative measures identified under the MTFF include a value-added tax on digital service providers; the taxation of social media influencers; and excise taxes on single-use plastics. It also asks Congress to pursue the remaining tax reform packages of the previous administration which are the Real Property Valuation and Assessment Reform Act, and the Passive Income and Financial Intermediary Taxation Act.

Mr. Angara said that the MTFF was not “merely symbolic as it is a framework.” “Everything we do can be included in this framework, but as to the specific parts… it does not bind us as to what we want to pass.”

“To me, we are just committed to the generalities provided here,” he added. “There is a buy-in, definitely, but it’s more of a moral suasion kind of thing rather than a legal because no one can take us to court… I don’t think we are tied in that respect.”

The economic managers hope to have the resolution passed before the Senate tackles the national budget, Mr. Angara said. — Alyssa Nicole O. Tan

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Most Popular

Your daily news source covering investing ideas, market stocks, business, retirement tips from Wall St. to Silicon Valley.

Disclaimer:, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice.
The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 TheProficientInvestor. All Rights Reserved.

To Top