Senators have crossed party lines to commend the Department of Finance (DOF) under the leadership of Secretary Carlos Dominguez III for its competent and efficient management of state finances in the face of the massive public spending needed to mitigate the health and economic repercussions of the COVID-19 pandemic.
Senate Minority Franklin Drilon congratulated Dominguez for managing the country’s finances well, while Senator Christopher Lawrence Go thanked the Finance Secretary and the “hard-working men and women of the DOF” for their “diligence and perseverance” in keeping the domestic economy afloat amid the pandemic-induced global economic downturn.
“I express my full support to the Department of Finance, headed by a very capable financial manager in Secretary Carlos ‘Sonny’ Dominguez as the Philippines reels from the devastating effects of the pandemic, not just on public health but also on our economy and financial stability,” Go said during the recent hearing held by the Senate finance committee on the proposed DOF budget for 2021.
“I am sure that our country’s financial policies are in a very capable hands. I am positive that we will see this crisis through and emerge stronger than ever,” Go added.
Senator Sonny Angara, who chairs the finance panel, agreed with Go and said the rest of the Senate shares Go’s sentiments “regarding the many achievements of the DOF and the other (attached) agencies.”
Before addressing his questions to Dominguez during the budget hearing, Drilon said: “First of all, let me extend my congratulations to the (Finance) Secretary for managing our country’s finances well in the face of all these challenges that we face today because of Covid-19.”
In response, Dominguez thanked the majority and minority senators for their “appreciation of the team of the DOF and the economic managers.”
“Certainly all the heavy lifting is done by undersecretaries, the heads of attached agencies, assistant secretaries,” Dominguez said.
Dominguez said that while the DOF budget under the Duterte administration has steadily decreased since 2017, the Department continued to collect record-high amounts of revenues to support the implementation of the government’s priority programs and effectively fulfill its mandate of prudently managing the country’s finances.
From P21.5 billion in 2017, the approved budget of the DOF and its attached agencies declined to P19.32 billion in 2018, and to a lower P18.89 billion in 2019.
Even with declining budget levels, Dominguez said the DOF and its attached agencies pushed through with bold reforms in tax policy and administration, which resulted to a revenue effort of 16.1 percent of gross domestic product (GDP) last year—a significant improvement from the revenue-to-GDP ratio of 15.1 percent in 2015 and the government’s best performance in more than 2o years.
With the DOF instilling corporate discipline among government-owned and -controlled corporations (GOCCs), dividend collections from these state firms in 2019 reached P69.2 billion, which is 35 percent higher than the 2018 level and more than double the amount collected in 2015.
For the first 8 months of 2020, the DOF was able to collect the unprecedented sum of P128 billion from GOCCs, signifying the commitment of the department and the government corporate sector to contribute significantly to the COVID-19 response efforts, Dominguez said.
Another first under the Duterte administration is the DOF’s full-fledged implementation starting last year of a fuel marking program to curb oil smuggling.
Dominguez said these and other reforms, along with the DOF’s prudent fiscal management policies, sustained the strong performance of the economy in 2019 and enabled the government to quickly put together a four-pillar strategy with a combined value of at least P2.06 trillion (about 11 percent of GDP) to address the COVID-19 emergency.
He underscored the Philippines’ high investment grade credit ratings, the government’s historically low debt-to-GDP ratio of 39.6 percent in 2019 (down from 42.7 percent in 2015), and its 20.2 percent external debt-to-Gross National Income (GNI) ratio, which is the lowest among the ASEAN-5 countries–which also include Indonesia, Malaysia, Singapore, and Thailand–as among the results of the DOF’s prudent management of the country’s fiscal affairs.
The DOF was likewise able to secure financing support for the country’s COVID-19 response in the amount of $9.9 billion to date to help cover the revenue shortfall from the slowdown in economic activities brought about by the coronavirus-induced lockdowns.
Dominguez said the DOF, along with the Social Security System (SSS) and the Bureau of Internal Revenue (BIR), successfully implemented through the use of digital tools, a P46-billion Small Business Wage Subsidy (SBWS) Program that benefited over 3 million workers badly hit by the coronavirus-induced global economic crisis, among other key achievements.