Suspend external debt payments, impose ‘wealth tax’ amid pandemic —advocacy group

The Philippine government should consider implementing people-centered fiscal measures to balance the economy amid the COVID-19 crisis, according to advocacy group Freedom from Debt Coalition (FDC).

FDC president Dr. Rene Ofreneo, during a webinar on Thursday, said stakeholders should seize this global phenomenon to introduce the people's economy and replace the neoliberal economic order.

"This is a historic opportunity to rebalance the economy," he said.

Among the immediate recommendations of the FDC to ensure that the country's war chest for COVID-19 response would not run out is to cancel the external debt service payments for 2020 and 2021.

"Funds previously allocated for debt servicing will give the government the necessary breathing room to finance pandemic response and recovery," Ofreneo's presentation read.

Suspending the value-added tax (VAT) on basic commodities and electricity bills of residential consumers was also proposed.

The FDC further suggested imposing a "wealth tax" to the top one percent of the population or those with assets above 50 million pesos.

"In order to raise additional funds to fight Covid-19, additional taxes can be levied on those who can clearly afford it," it said.

The Department of Finance, on the other hand, has previously thumbed down proposals to temporarily suspend the country’s debt payments to boost COVID-19 response funds.

"Debt moratorium has not crossed our mind. It was never entertained or will ever be a part of our crisis response measures," Finance Secretary Carlos Dominguez III said.

"If we lose our credibility among international lenders, we will lose our ability to access low-interest, concessional financing for our recovery and stimulus programs," he added.

The call to suspend the collection of the 12% VAT on electricity consumption has also been disapproved by the Energy and Finance departments.

"Tulong tulong po tayong lahat sa paghahanap kung paano po natin mapa-fund ang ating requirements... so mahirap po siguro kung ngayon tayo magsu-suspend ng VAT, baka wala tayong mapagkunan ng pera," Energy Secretary Alfonso Cusi said. —LDF, GMA News