Manila Bulletin : Diokno plans six-year fiscal framework

12 June 2022

By Chino S. Leyco | Manila Bulletin

Incoming Finance Secretary Benjamin E. Diokno wants to put in place a formal fiscal plan that will take control of government expenditures, set clear borrowing and revenue programs, as well as design policies to manage budget deficits in the next six-years.

Diokno, who is currently governor of the Bangko Sentral ng Pilipinas, said the Marcos administration will introduce the government’s first fiscal framework, a formal document that will require cooperation of the House of Representatives and the Senate.

Describing it as “state of the art,” Diokno explained that the fiscal framework will lay out the expenditure plans, revenue assumptions, budget deficit ceilings and financing programs over a three- to six-year period.

He noted that currently, the national government only has an economic development plan, but does not have a medium term fiscal framework.

Diokno had planned to draft a fiscal framework when he was the secretary of the Department of Budget and Management (DBM).

“I really wanted to do this even before I left the budget. Actually that’s state of art globally, it’s being done in other countries,” said Diokno who was President Duterte’s DBM chief before appointed to his current position as central bank governor in March 2019.

As early as now, Diokno disclosed that the fiscal framework proposal already secured the support of President-elect Ferdinand R. Marcos Jr.

“I told him [President-elect Marcos], we should think of a medium term fiscal framework, that’s six-years, that’s the entire term,” Diokno said. “Let’s complete the plan for the six-year term.”

He said “the first three-years [of the fiscal framework] is the most detailed part because this Congress only has a three-year term.”

Asked if the framework will also push forward new tax measures, Diokno said “it will include tax reform if need.”

Diokno also suggested to Marcos that his administration should complete the proposed fiscal framework before his first State of the Nation Address (SONA) or when the forthcoming 19th Congressional session begins in July.

“The President will present this immediately in his first SONA. It’s a broad sketch of how much we are going to spend and where are you going to put the money, how are you going to finance it, and the revenues for six-years,” Diokno said.

“It will be confirmed by Congress—the House and the Senate will agree to that, which will have a resolution that will be signed,” he concluded.