IBON: Each Filipino owes P112,000 due to Philippines' P12.5-trillion debt
If the government’s running debt pile of P12.5-trillion will be divided among the country's 110 million population , each Filipino owes over P112,000 which will be paid in the form taxes, economic think tank IBON Foundation said Wednesday.
Data presented by IBON showed that the debt per Filipino amounted to P112,678 while each family owes P474,543 in debt if the debt is divided among 26.3 million families.
In his presentation during a forum, IBON executive director Jose Enrique “Sonny” Africa said the poor bore a “disproportionate burden of repaying debt” due to the “regressive” tax system.
Africa said the last administration’s Tax Reform for Acceleration and Inclusion (TRAIN) and Corporate Recovery and Tax Incentives for Enterprises (CREATE) laws were the “most regressive tax reforms in Philippine history.”
He said the laws transferred the tax burden from large corporations to the poor and middle class.
Africa said the CREATE law was expected to cause a revenue loss of P372 billion for 2021 to 2023 period, which will be translated into “additional profits given to corporations.”
The government’s outstanding debt stood at P12.49 trillion as of end-May, of which P8.66 trillion were sourced locally while P3.83 trillion were from foreign sources.
As of the first quarter of the year, the country’s debt-to-gross domestic product (GDP) ratio — the size of the state’s debt relative to the size of the economy — stood at 63.5%.
This is the highest debt-to-GDP ration in 17 years and above the internationally recommended threshold of 60% of the economy.
Asked to comment on IBON's analysis, Finance Secretary Benjamin Diokno indicated that it didn't follow.
"Non sequitur. A loan used for toll highway, airports, seaports and the like are paid for by those who use the facilities — called user fees. If you don’t use the facility, then you do not pay user fees," Diokno said.
"Loans used to construct highways for general use are paid for by land owners or businesses along the highways in terms of increased value of property and business activity that are then subject to higher taxes," he added.
"Loans used to buy vaccines for COVID-19 will be are paid out of revenues collected from taxpayers. Some pay more taxes than others; in general the rich pay more taxes than the poor. Yet, each individual is entitled to get vaccinated regardless of income class," Diokno said.
Diokno was the governor of the Bangko Sentral ng Pilipinas under the administration of former President Rodrigo Duterte.
Then presidential spokesman Secretary Martin Andanar said in May that the country's recent borrowings were for COVID-19 "response and resiliency efforts."
"We assure our people that the country’s borrowings, which put the county’s outstanding debt to more than P12 trillion, as of the end of March 2022, shall be put into good use and utilized effectively and efficiently,” Andanar said.
“Recent borrowings would be for our COVID-19 response and recovery and resiliency efforts. We need to sustain our country’s long-term socioeconomic growth and development,” he added.
To shift the “disproportionate burden” of repaying debt from the poor and middle class to the richest few of the population, Africa reiterated IBON’s wealth tax proposal.
He said that the estimated 2,919 billionaires in the country have a net worth of P8.04 trillion.
He added that a tax of 1%, 2%, and 3% for wealth of over P1 billion, P2 billion, and P3 billion, respectively can generate P470 billion.
“‘Yung hitsura ng debt crisis natin ngayon is the fact na ang nagbabayad ng utang na ‘yan ay ‘yung mahihirap at ‘yung middle class,” Africa said.
(Our debt crisis now is being paid by the poor and middle class.)
“If you make the tax system much more regressive, (there is) a disproportionate burden on them (to pay the debt)," he added.
"The problem is, (they did not benefit from that debt). The biggest part of the debt went to financing infrastructure projects and to debt service to creditors,” he added. -NB, GMA News