DOF begins transition to Marcos admin
The Department of Finance (DOF) has begun the discussion with the team of presidential frontrunner Ferdinand “Bongbong” R. Marcos Jr. for a smooth transition of power.
Finance Secretary Carlos G. Dominguez III said on Tuesday, May 10, that the transition process has started, describing the initial dialogue with the team of Marcos “so far so good.”
Dominguez, however, declined to name the people they were talking with from the Marcos camp. “Let’s await their disclosure.”
A smooth transition at the DOF is crucial for the Marcos leadership, as his economic team will have to deal with rising consumer prices, and high debt load.
The finance chief also oversees the Bureau of the Internal Revenue (BIR), an agency that demands the payment of unpaid estate taxes of the Marcos heirs.
In April, Dominguez said that President Duterte’s successor should avoid accumulation of additional government debt, and should prioritize policies that will entice more economic activity.
Dominguez said the debt problem incurred during the more than two-year Covid-19 crisis will be the biggest challenge for the next administration.
Dominguez pronouncement comes after the DOF revealed that it would take up to 40 years to payoff all the additional foreign debt, amounting to at least P1.3 trillion, incurred by the Duterte administration since 2020.
“The biggest challenge for the next administration is really to grow out of the debt that we incurred during the pandemic,” Dominguez said.
During the pandemic, the government resorted to borrowings to cover the massive cost of Covid-19 response and the corresponding drop in revenues due to economic slowdown spawned by the global pandemic.
“The next administration will have to design policies and stick to very strict fiscal discipline to grow out of this debt problem,” he added.
In particular, Dominguez said the Philippines’ economy, as measured by gross domestic product (GDP), should grow by at least six percent over the next five to six years to bring down the debt ratio.
In 2021, the government’s debt-to-GDP ratio rose to 60.5 percent from a historic low of 39.6 percent in 2019.
Based on the Bureau of the Treasury data, government debt jumped 32 percent from P8.22 trillion to P12.152 trillion between 2020 and 2021.
Meanwhile, sources said that two bankers close to Marcos have declined the DOF position, but a former finance secretary who is also a good standing Lakas-Christian Muslim Democrats (CMD) member may also stage a comeback.
Lakas CMD supported the UniTeam presidential-vice presidential tandem of Marcos and Davao City Mayor Sara Duterte.