Dominguez: No new taxes under consideration yet

MANILA, Philippines — The government is not yet seriously considering impo-sing new taxes or selling its assets to shore up revenues, which suffered due to the impact of the pandemic, according to Finance Secretary Carlos Dominguez.

“We are not really seriously considering any taxes. Taxing our citizens when their incomes are down is not a good idea,” Dominguez said in an interview with Bloomberg TV.

“As to selling assets, we are not that desperate yet. And besides, I tell you, most of our assets are in real estate and in mining operations. And quite frankly, the real estate market is uncertain at this point. Although it has been holding quite well,” he said.

Earlier, Dominguez said the government may look into new sources of revenues before the end of the Duterte administration to help pay for the debt it incurred due to the coronavirus pandemic.

However, Senate minority leader Franklin Drilon opposed the measure, and called on the government to privatize the gaming industry instead of imposing higher or new taxes.

In response, Dominguez said the government was prepared to work on the privatization of the gaming operations of the Philippine Amusement and Gaming Corp. and the Philippine Charity Sweepstakes Office.

The finance chief also said the DOF, together with the Privatization Management Office, is looking at selling government-owned mining assets to revive the industry.

Meanwhile, Dominguez told Bloomberg that the DOF does not see the need to tap the central bank for additional borrowings at the moment.

“But that’s in our reserves,” he said, adding that the government is open to tapping the BSP again in 2021.

For now, the government will prioritize commercial borrowings over the BSP credit, he said.

“We believe that our current borrowing program and our current revenue flow, which incidentally is eight percent over our latest estimates for tax revenues is going to hold us a bit. We’re keeping the balance of the credit line with the central bank in reserve,” Dominguez said.

“If the economy doesn’t perform as we expect, we will go back to them,” he added.

Last Oct. 1, the BSP approved an advance credit to the national government amounting to P540 billion to boost its coffers. This amount is on top of the P300 billion short-term loan provided by the central bank through a repurchase agreement earlier this year.

Dominguez also reiterated that the Philippine government was in a good position to respond to the global health crisis, owing to the reforms implemented by the Duterte administration before the pandemic.

He said the government also does not see the need for a third pandemic relief measure, with the economy expected to recover as the government continues to ease up restrictions.

“As we open up we can see a very strong recovery through jobs. Our lowest joblessness rate was in May and that was 17 percent. But as we opened we lessened that to 10 percent joblessness rate. Our aim is to bring it down to around five or six percent,” he said.

However, he agreed with the assessment of the International Monetary Fund that recovery could take longer, which is why the government and private sector are preparing a lot of ammunition in their war chests.