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Increasing Public Sector Revenue in the Philippines; Equity and Efficiency Considerations


  • Kevin Fletcher


Public sector revenue has declined markedly in the Philippines over the past seven years. Most observers of the Philippine economy agree that rebuilding public sector revenue will be critical to reducing deficits and ensuring public sector debt sustainability. This paper reviews several of the main possibilities for raising public sector revenue, including increases in excise, VAT, and electricity rates. It argues that most of these proposals would raise revenue in a relatively efficient manner. Using household-level expenditure data, it also finds that most of these measures would be progressive, especially if they allow the government to avoid cuts in pro-poor spending.

Suggested Citation

  • Kevin Fletcher, 2005. "Increasing Public Sector Revenue in the Philippines; Equity and Efficiency Considerations," IMF Working Papers 05/22, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:05/22

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    References listed on IDEAS

    1. World Bank, 2001. "Philippines : Filipino Report Card on Pro-Poor Services," World Bank Other Operational Studies 14022, The World Bank.
    2. Devarajan, Shantayanan & Hossain, Shaikh I., 1998. "The combined incidence of taxes and public expenditures in the Philippines," World Development, Elsevier, vol. 26(6), pages 963-977, June.
    3. Nigel A Chalk, 2001. "Tax Incentives in The Philippines; A Regional Perspective," IMF Working Papers 01/181, International Monetary Fund.
    4. Kent Matthews & Jean Lloyd-Williams, 2000. "Have VAT rates reached their limit?: an empirical note," Applied Economics Letters, Taylor & Francis Journals, vol. 7(2), pages 111-115.
    5. Zee, Howell H. & Stotsky, Janet G. & Ley, Eduardo, 2002. "Tax Incentives for Business Investment: A Primer for Policy Makers in Developing Countries," World Development, Elsevier, vol. 30(9), pages 1497-1516, September.
    6. Benedict J. Clements & Sanjeev Gupta & Hong-Sang Jung, 2003. "Real and Distributive Effects of Petroleum Price Liberalization; The Case of Indonesia," IMF Working Papers 03/204, International Monetary Fund.
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    Cited by:

    1. David Locke Newhouse & Daria V Zakharova, 2007. "Distributional Implications of the VAT Reform in the Philippines," IMF Working Papers 07/153, International Monetary Fund.
    2. Emmanuel S. de Dios et al, 2005. "The economy on a cusp : the proposed VAT amendments and their larger significance," UP School of Economics Discussion Papers 200505, University of the Philippines School of Economics.


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