83% of Build, Build, Build funding to come from borrowing not TRAIN, says Angara

MANILA, Philippines — Sen. Juan Edgardo Angara emphasized on Monday that the government's ambitious infrastructure program would not be severely affected if the Department of Finance's version of the tax reform bill would not be passed by Congress.

According to Angara, around 84 percent of the funds needed for the government's Build, Build, Build! infrastructure program would not come from revenues to be generated by tax reform, contrary to the "exaggerated claims" of some officials of the executive department that the projects would be severely affected if the Senate's version would not be close to the House-approved measure.

During the plenary debates on SB 1592, it was revealed that P5.6 trillion of the P8.3 trillion needed to fund the government's infrastructure projects over the next five years would come from local and foreign borrowings such as official development assistance and private-public partnerships.

Sen. Bam Aquino said that of the P8.3 trillion target for Build, Build, Build! only P1.2 trillion was dependent on the passage of the tax reform bill while the remaining P7.2 trillion would come from yearly budget increases and other funding sources.

"Hindi talaga puwedeng sabihin na si build build build is equated to TRAIN because 83 percent of build build build requirments, we will get even without TRAIN," Aquino said during his interpellation of Angara, the sponsor of the measure.

Senate Bill 1592, the chamber's version of the Tax Reform for Acceleration and Inclusion Act, is estimated to generate P59.9 billion in its first year of implementation, way below the projected revenue programmed in the 2018 national budget.

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According to Department of Finance Undersecretary Karl Kendrick Chua, SB 1592's projected revenue is 55.23 percent lower than the P133.8 billion estimated to be generated by House Bill 5636, which has already been taken into consideration in next year's general appropriation.

The DOF said that fresh funds to be generated by the TRAIN would be used to fund the government's massive infrastructure program over the next five years.

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According to Angara, the chairman of the Senate Ways and Means Committee,  it seems that the DOF computation is constantly changing.

"Even the revenue impact of House Bill 5636 was reduced to P119 billion from earlier estimates of P133.8 billion," the senator said.

He said that the DOF supplied all the figures the committee used for the chamber's version of the tax reform bill, and as far as Angara's committee's computation is concerned, the revenue impacts of the Senate and the House version are the same.

"The committee sought to come up with a version that would provide tax relief to 99% of individual taxpayers and, at the same time, meet the revenue target so as not to impair the government’s capability to finance its programs and projects," he said.

He said that the detailed estimates provided by the DOF to the committee had changed although the senator underscored that there was still room for compromise especially on the Value Added Tax exemptions.

" There are previously discussed exemptions which have little revenue impact before, but are now presented as sizable revenue items," he said.

Angara said that their version of TRAIN would result in a higher take-home pay for as many as 99 percent of workers without sacrificing the goal of raising revenues to boost growth.

Under the Senate version, the first P150,000 annual taxable income will not be taxed while retaining the P82,000 tax exemption for 13th month pay and other bonuses and the maximum P100,000 addition exemption for up to four dependents.

This translates to an approximate tax-exempt monthly of P25,000 for workers with four dependents.

“Finally, after 20 long and arduous years, our workers will have more take-home pay. We want more Filipinos to have higher purchasing power… join the ranks of the economically well-off,” Angara said in his sponsorship speech.