IMF warns vs. general tax amnesty

The Washington-based multilateral lender International Monetary Fund (IMF) sees the narrowing of Philippine debt relative to the size of the economy being delayed until it reaches 60 percent, with the proposed revenue-generating general tax amnesty (GTA) among the measures seen as offering limited help.

- By DERCO ROSAL

Based on the IMF's latest report, national government debt is projected to post a gradual decline to “about 60 percent” of gross domestic product (GDP) by 2030—two years beyond the Marcos Jr. administration-driven by faster economic expansion than borrowing costs.

Slower growth in borrowing costs allows the government to manage and reduce its obligations relative to GDP.

It can be noted that the multilateral lender's projections still stand higher than the government's forecast, as indicated in the updated medium-term fiscal framework (MTFF), covering fiscal years (FYs) 2022 to 2030.

According to the MTFF, the government projects the debt-to-GDP ratio to eventually fall to 60.3 percent in 2028, 59.5 percent in 2029, and 25 percent in 2030. The Philippines closed 2024 with the ratio standing at 60.7 percent.

Under the IMF's assessment framework, meanwhile, it noted that the Philippines' debt position remains stable, with a low risk that the government will face serious financial or debt repayment problems.

"With no new tax policy measures, staff's baseline projections for 2027 to 2028 assume the consolidation will be achieved largely through lower spending," the IMF said.