Breaking Away from the Fiscal Bind: Reforming the Fiscal System

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In November 1993, the PIDS has launched the PIDS Review and Outlook of the Philippine Economy (PROPE) as part of its continuing analysis of the situation and outlook of the Philippine economy. For its inaugural presentation, the PIDS has focused on the country’s fiscal crisis as the special theme of the report, identifying it to be the period’s most critical concern and the one posing the biggest challenge to the country’s economic performance and aspects. This present volume deals with the special topic of the inaugural PROPE report on the Philippines’ fiscal position. Specifically, it analyzes the roots and effects of the current fiscal bind, provides estimates on the magnitude of leakages from the revenue system and offers opportunities and measures that can help release the fiscal bind that ties the hands of government fiscal planners and decision makers. By printing this part or special theme of the PROPE report as a stand-alone publication, thereby expanding its circulation to include sectors outside the formal policymaking circle, the PIDS hopes to impress to a larger audience the enormity and urgency of the problem-that if left unattended and understated, it may stymie all other efforts to improve and sustain the economy. Hopefully, by explaining the issue in more detail, more people will come to understand and advocate measures that will help resolve the situation.