House Ways and Means Committee chairman and Albay 2nd district Rep. Joey Salceda refuted on Monday, June 6 the claim made by the Department of Finance (DOF) that had Congress proposals pertaining to Covid-19 stimulus and subsidies been enacted, national debt would have climbed up to P15.4 trillion.
This, after DOF Chief Economist Undersecretary Gil Beltran released a statement on Sunday, June 5, claiming that the national debt would have increased by P2.2 trillion if not for the Duterte administration’s “fiscal discipline".
Read more here: https://mb.com.ph/2022/06/06/fiscal-discipline-lowers-debt-by-p2-2-t/
Salceda raised three points countering to counter Beltran’s claims.
“Frankly, I don't see the point. First of all, it was Congress that also decided to pursue the kind of stimulus measures that we funded, and what we did not pursue,” Salceda began in a statement to reporters.
“Second, the figure counts proposals of very similar nature, so I think some double counting may have been done. The only major proposal was 1.4 of which P800 was in net lending (assets) not current outlay (outflow). Obviously an overstatement at best,” the economist-lawmaker continued.
If there was no double counting on the DOF’s part and if Congress’ proposals would have actually incurred a P2.2-trillion debt increase, Salceda posed the question: “Would GDP have collapsed by as much as it did if we acted with a bigger, more comprehensive stimulus package?”
“Remember, we declined larger than anybody did in 2020. And as the economy declines, so too does revenue collection. So, debt-to-GDP and the deficit would likely not have been as big as simply adding the cost of the proposed stimulus,” he added.
“Third, it's not fair to lump together all revenue-eroding bills or spending bills as if Congress would have enacted all of them without deliberation. Lest we forget, the Committee on Ways and Means routinely removes tax exemptions and extra tax incentives in proposed bills, and instead aligns them with the tax code. The Committee on Appropriations, which I am vice chair of, also routinely deletes special appropriations from revenue-negative bills,” he explained.
The Albay solon also explained that the national debt–which currently sits at about P12.76 trillion–is not the issue; but rather, if national debt is growing faster than the country’s economy.
Read more here: https://mb.com.ph/2022/06/02/govt-debt-stock-hits-p12-76-t/
“We are at around 61 percent debt-to-GDP. That's high, but not too high, especially given our recent GDP growth rate...Our debt-to-GDP level is expected to decline every year from 2023. And credit rating agencies have suggested that as long as our fiscal conditions do not deteriorate, we should be okay,” Salceda concluded.