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Manila reiterates vow to strengthen tax efforts


MANILA, Philippines - The Philippines reiterated vows to strengthen tax collections and enact measures to increase revenues, moves that will avoid possible negative ratings as warned by London-based Fitch Ratings, finance officials said on Wednesday. Manila will strengthen tax collection efforts through “vigorous and more effective" implementation of the action plans of the Bureaus of Internal Revenue (BIR) and Customs (BOC), Finance Secretary Margarito B. Teves said in a statement. The Department of Finance will continue to work closely with Congress for the enactment of proposed measures that will hike government revenues, the statement said. “We agree with Fitch that we need increased revenues to enable us to continue providing for the needs of our people as we cannot rely heavily on borrowings given our already huge debt stock," Teves said. James McCormack, head of Asia Sovereigns at Fitch, warned the government’s revenue base as a fundamental rating weakness. Fitch sees a wider fiscal gap of P271 billion, or 3.5 percent of the gross domestic product, than the country’s economic managers or P199.2 billion, or 2.5 percent. During the first quarter, the government already saw its budget deficit cornering more than half of the P199.2 billion ceiling due to higher spending and weaker revenues in the light of weak economy. With a much weaker economy and elections due next year, McCormack said the agency does not believe revenue enhancement will be a short-term policy priority. Fitch maintained its “BB" rating and stable outlook on the country’s credit ratings. “This supports our view that the country is well-positioned to weather the worst impact of the global financial crisis on the domestic economy through increased spending on infrastructure and social projects to help the very poor cope during these uncertain times and provide additional jobs," Teves said. "These will help the economy to continue growing and avert a recession as experienced by most developed economies and some of our Association of South East Asian Nations (Asean) neighbors," he added. - GMANews.TV
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