The next administration needs to make great efforts in reducing the poverty incidence in the country after it accelerated amid the more than two year-pandemic, the Department of Finance (DOF) said.
Finance Secretary Carlos G. Dominguez III, the government’s chief economic manager, said the next elected leader of the Philippines would takeover a country where at least 23.7 percent of the population is considered poor.
Dominguez said “next presidency should strive to reduce poverty incidence” after it increased because of the pandemic.
Poverty incidence in 2015 was at 23.5 percent, and the Duterte administration was able to bring down to 16.7 percent by the beginning of 2019.
Based on the first semester 2021 family income and expenditures survey (FIES), the number of poor Filipinos increased to 26.14 million from 22.26 million three years ago before the COVID-19 pandemic struck.
Before the pandemic, the Duterte administration had targeted to end 2022 with a lower poverty rate of 15.5 percent to 17.5 percent.
High poverty rate is just among the major problems that the next administration will inherit.
Last week, Dominguez also said the next president will pay the loans secured by the Duterte administration for the country’s pandemic response.
“Looking realistically our situation, we have to pay for COVID. I mean, we cannot just have COVID and not pay for it,” Dominguez said. “You don’t know how much we spent just for the vaccines.”
As of Jan. 14, 2022, the government borrowed a total of $22.55 billion, or roughly P1.15 trillion, in budgetary support in relation to its COVID-19 response.
Dominguez, however, declined to elaborate when asked if the next administration will need to increase taxes to payoff these debts incurred during the pandemic. He said the DOF is in the process of completing a fiscal consolidation plan for the country’s next leaders.
Dominguez is also hopeful that whoever succeeds President Duterte will find their fiscal consolidation plan “useful in continuing the dynamic recovery of the domestic economy over the next few years.”
“We commit to a seamless transition and stand ready to assist the next administration as it takes over the reins of leadership. The fiscal consolidation plan is just one of the many measures that have to be undertaken by the next administration,” he said.
Dominguez said that outgrowing debts is first on the list that should be addressed by the next presidency at the soonest possible time in order to lower its share in relation to the gross domestic product (GDP).
In 2021, the government’s debt-to-GDP ratio rose to 60.5 percent from a historic low of 39.6 percent in 2019.