Unit 3. Fiscal Policy Flashcards
_____________ is the government’s policy on the generation of its resources through taxation and/or borrowing, as well as the setting of the level and allocation of expenditures.
Fiscal policy
The traditional view is that FISCAL POLICY performs three main FUNCTIONS: (3)
- allocation
- distribution
- stabilization
The ____________ function is the process of dividing total resource use between private and social goods and choosing the mix of social goods.
allocation
The ____________ function is the process of adjusting the distribution of income or wealth to ensure conformance with what society considers fair.
distribution
The ____________ function supports achieving the main macroeconomic objectives set by policymakers to ensure economic growth, price stability, and sustainable external accounts.
stabilization
Components of Fiscal Policy (3)
- Revenue Policy / Revenue Collection
- Expenditure Policy
- Debt Management Policy
Revenue generation must be _________ and ___________.
equitable; efficient
Revenue generation must be ______________________ to implement, and projections should be realistic.
administratively feasible
Revenues can be raised _______________ or ______________.
administratively; legislatively
The Philippine government generates revenues mainly through ___________ and __________ tax collection, but a small portion of non-tax revenue is also collected through fees and licenses, privatization proceeds and income from other government operations and state-owned enterprises.
personal; income
Non-tax revenues in the Philippines could be collected through: (4)
- fees and licenses
- privatization proceeds
- income from other government operations
- income from state-owned enterprises
Main tax revenues in the Philippines (2)
- Personal tax (for individuals)
- Income tax (for businesses)
_______________ is commonly referred as moving something from the public sector (government) into the private sector.
Privatization
_______________________: Funds are disbursed for the efficient delivery of services to the public and to help in economic growth by supporting priority sectors.
The government allocates funds in the most efficient and effective way to ensure rational and equitable resource allocation.
Expenditure Policy
The government allocates funds in the most __________ and ___________ way to ensure rational and equitable resource allocation.
efficient; effective
The government allocates funds in the most efficient and effective way to ensure __________ and ______________ resource allocation.
rational; equitable
It is the policy of the government to attain a manageable debt level. This is one where the country can afford to pay its maturing liabilities as scheduled.
Debt Management Policy
It is the policy of the government to attain a _____________ debt level.
manageable
This is one where the country can afford to pay its maturing liabilities as _____________.
scheduled
Normally, borrowings are incurred to finance ______________ projects.
development
Recently, however, borrowings are now used as budget support for various government programs and projects, such as the utilization of __________________________.
The government incurs borrowing therefore to fund __________ programs and projects.
Overseas Development Assistance (ODA); priority
Normally, borrowings are incurred to finance _____________ projects. Recently, however, borrowings are now used as _____________ for various government programs and projects.
development; budget support
NG Debt Before Pres. Duterte
P 5.95 trillion
NG Debt Before Pres. BBM (After Pres. Duterte)
P12.68 trillion
NG Debt During Pres. BBM (End of Feb 2023)
P 13.75 trillion
The ______________________ is the government’s steward of sound fiscal policy.
Department of Finance (DOF)
It formulates revenue policies that will ensure funding of critical government programs that promote welfare among our people and accelerate economic growth and stability.
Department of Finance (DOF)
It formulates revenue policies that will ensure funding of critical government programs that promote welfare among our people and accelerate economic _________ and ____________.
growth; stability
Current DOF Secretary
Benjamin E. Diokno
Animal in the DOF Logo
Merlion
Colors in the DOF Logo
Violet & Yellow
Other elements found in the DOF Logo (4)
- Balance Scale
- Key
- Sun (from Philippine Flag)
- Three Stars (from Philippine Flag)
The Top/Highest in the DOF Structure and Leadership
Office of the Secretary
Two offices under the Fiscal Policy and Monitoring Group (2)
- Fiscal Policy and Planning Office
- Policy, Research, and Liaison Office
The _________________________ is primarily responsible for forecasting and programming revenues of the national government (NG), cash programming, and monitoring of NG finances.
Fiscal Policy and Monitoring Group (FPMG)
FPMG also formulates and shepherds tax reform proposals and other fiscal policy recommendations as the __________________ arm of the DOF.
legislative liaison
Undersecretary of FPMG
Maria Cielo D. Magno
The _________________________ formulates long-range and annual projections of revenue needs, cash position, and borrowing capacity of the National Gov’t as a basis for the DOF’s policy decisions.
Fiscal Policy and Planning Office (FPPO)
________ supervises policy research and development on fiscal and tax measures undertaken by the operating bureaus and offices of the DOF.
Fiscal Policy and Planning Office (FPPO)
The ______________________ is primarily responsible for tax policy formulation, legislative liaison work on tax, financial and economic proposals, and information dissemination activities.
Policy, Research and Liaison Office (PRLO)
SOURCES OF GOVERNMENT FUNDS – The national budget is financed from the following fund sources: (3)
1) Revenues from both tax and non-tax sources;
2) Borrowings from both domestic and foreign sources;
3) Withdrawals from available cash balances
__________ refer to all cash inflows of the national government treasury which are collected to support government expenditures but do not increase the liability of the NG.
Revenues / Government Revenue
Revenues consist of ____ and ______ collections
tax; non-tax
A _____ is a compulsory contribution mandated by law and exacted by the government for a public purpose.
tax
The major tax collecting agencies of the national government are the ________________ and the ____________________.
Bureau of Internal Revenue (BIR); Bureau of Customs (BoC)
________ revenues refer to all other impositions or collections of the government in exchange for services rendered, assets conveyed, penalties imposed, etc.
Non-tax
____________ borrowings are funds obtained from sources within the country.
Domestic
_______________ of the national government are usually made through the auction of treasury bills, notes and bonds to the public.
Domestic borrowings
Domestic borrowings of the national government are usually made through the auction of __________, _________ and _______ to the public.
treasury bills; notes; bonds
_________ borrowings, on the other hand, are funds obtained from sources outside the country, such as Asian Development Bank (ADB), International Bank for Reconstruction, Development (IBRD), Overseas Economic Cooperation Fund (OECF), etc.
Foreign
Sources outside the country for Foreign borrowings (3)
- Asian Development Bank (ADB)
- International Bank for Reconstruction and Development (IBRD)
- Overseas Economic Cooperation Fund (OECF)
(T or F) Foreign borrowings can be obtained through loans secured from foreign financial institutions or through the flotation of government securities in the international market.
True
Two types of borrowings (2)
- Domestic borrowings
- Foreign borrowings
____________________________: Cash receipts from proceeds of investments, and other income such as interest income, dividends, mutual funds, etc.
Withdrawals from Available Cash
Cluster and Agencies under DOF (10)
Bureau of Internal Revenue (BIR)
Bureau of Customs (BOC)
Bureau of Treasury (BTr)
Bureau of Local Government Finance (BLGF)
Insurance Commission (IC)
National Tax Research Center (NTRC)
Central Board of Assessment Appeal (CBAA)
Philippine Guarantee Corporation (PhilGuarantee)
Privatization and Management Office (PMO)
Securities and Exchange Commission (SEC)
_________________________ - Assessment and collection of all national internal revenue taxes, fees and charges.
Bureau of Internal Revenue (BIR)
_________________________ - Assess and collect customs revenues from imported goods, Exercise border control to prevent entry of smuggled goods
Bureau of Customs (BOC)
________________________ - Assist in formulation of policies on borrowing, investment and capital market development; Formulate adequate operational guidelines for fiscal and financial policies
Bureau of Treasury (BTr)
________________________ - Assist in formulation and implementation of policies on local government revenue administration and fund management
Bureau of Local Government Finance (BLGF)
____________________ - To promote growth and financial stability of insurance companies; To safeguard the rights and interest of the insuring people.
Insurance Commission (IC)
_________________________ - To promote a tax system that will ensure a fair distribution of the tax burden among the Filipino taxpayers; To recommend necessary improvements in the tax system by conducting continuing quality research on taxation
National Tax Research Center (NTRC)
_______________________________ - To warrant observance of the due process of law clause mandated by the Constitution in the assessment and collection of real property taxes by the government
Central Board of Assessment Appeal (CBAA)
_________________________________ - provide accessible, reliable and efficient guarantee systems to enable credit for stakeholders in trade and investments, infrastructure, housing, agriculture, MSMEs and other priority sectors of the government
Philippine Guarantee Corporation (PhilGuarantee)
______________________________ - the marketing arm of the government with respect to transferred-assets, government corporations and other properties assigned to it by the Privatization Council (PrC) for disposition
Privatization and Management Office (PMO)
______________________________ - is the national government regulatory agency charged with supervision over the corporate sector, the capital market participants, the securities and investment instruments market, and the investing public.
Securities and Exchange Commission (SEC)
