Press Releases

Salceda hails approval of Medium-Term Fiscal Framework; House tax panel chair calls framework ‘an international best practice’

August 1st, 2022

House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) cited the approval of House Concurrent Resolution No. 2, supporting the Marcos administration’s proposed Medium-Term Fiscal Framework (MTFF), as a “step towards following international best practices on tax policymaking,” and “codification of the Marcos administration’s covenant with the Filipino people on key economic and fiscal objectives.”

Salceda, who sponsored the measure in the House floor today, called it “a good way to set the tone for the upcoming budget discussions.”

The MTFF provides for certain fiscal and economic goals that will “guide the legislative agenda” of Congress.

The goals include 6.5-7.5 percent real GDP growth in 2022, 6.5 to 8.0 percent real GDP growth annually in 2023-2028, single digit or 9 percent poverty incidence, 3 percent deficit-to-GDP ratio by 2028, lower than 60 percent debt-to-GDP ratio by 2028, and USD 4,256 per capita income towards the attainment of upper-middle-income status by 2024.

“These are attainable goals, but we need to discuss in the budget framework how we can achieve the goals this year and every year since,” Salceda said.

“We also need to raise the necessary revenues through both tax reforms and through tax collection efficiency and better enforcement. The implicit assumption behind the MTFF is that by 2028, we can achieve 17.6% revenue-to-GDP,” Salceda said.

“I am already discussing with the economic managers the possibility of enacting tax reforms now but deferring implementation to when we begin exceeding our pre-pandemic growth momentum.”

MTFF an “international best practice”

In his sponsorship speech, Salceda said that the MTFF is an international best practice.

“Some of our best neighbors and comparators are already doing that. Indonesia, Thailand, and Korea have it in their statutes. Malaysia, Singapore, and Japan do it regularly in their budgets.”

“The ultimate purpose is to touch base. This helps us find common ground and a macrofiscal ‘north star’ as we navigate the budget deliberations,” Salceda concluded.

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