Moody’s warns PH: Beware of backsliding

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MANILA – Moody’s Investor Service cautioned the government and the people to be wary of the Philippines’ tendency to backslide as a new president takes office next year though political risks remained low in the country.

Moody’s emphasized the government’s revenue performance, noting that the country has only recently recovered from consistent erosion in revenues despite continuous increase in tax collection.

“In the ‘90s, we had a similar improvement in revenue generation. But subsequently, there was backsliding.

Only now are we recovering to levels of revenues,” Moody’s vice president and senior sovereign risk analyst Christian de Guzman said in an Inquirer.net report.

It can be noted that the Philippines has the highest tax rate in Southeast Asia. However, the country remained among the ‘lowest revenue generators among investment-grade countries.’ A call of lower taxes has since emanated.

Finance Secretary Cesar Purisima, in the administration’s defense, asserted that the country’s tax collection was equivalent to only around 13 percent of its gross domestic product (GDP) – espousing a balanced tax-to-GDP ratio.