Graduate Level Paper: MBA 259 Fiscal Policy

By: Jon Celso K. Apuyan, CPA

Wrap-up the knowledge and insights gained

The fiscal policy: which is the process of the government to balance the revenue over cost of a countrys operation thru economic growth; it is a plan of a state in economic way to meet its objectives such as, price stability, minimizing inflation, employment and economic growth in relation to taxation and gross national product. A criticism according to the fiscal policy employed by each president who putted into power to govern Philippines starting to President Marcos up to the present if the countrys truly or really benefited growth or suffered deficit under their respective term. The FISCAL POLICY IN THE WELFARE STATES- ECONOMIC under the report of Mrs. RENEE E. COPE; cited The Organization for Economic Co-operation and Development its purposes. She gives insight of the World Bank which provides financial and technical assistance to emerging market countries.

Continuation:
The FISCAL POLICY & GOVERNMENT DEFICIT SPENDING OF DEVELOPING COUNTRIES under the report of Mrs. Sonia Bandola, she differentiate developing country from newly industrialized country. She define also the deficit spending that occurs when a government, business, or individuals spending exceeds its revenue that result to bankruptcy and poverty. The FISCAL POLICY & THE COUNTRYS STRUCTURAL CHANGE reported by Mrs. Gay Inzon which structural refers to a longterm widespread change of the fundamental structure, rather than microscale or short-term output and employment. The main highlight of her report is the fiscal structure from the old constitution under Marcos cronies which defines the root cause of the never ending debt of the nation and the Aquinos administration after the people power revolution that converts the dictatorship to republican realm. DEBT MANAGEMENT FROM A MACRO PERSPECTIVE reported by Mrs. Mary Dagting It is the wise budgetary concept to balance the payment of currently maturing obligation of the country between the government expenditure of its operation and to stand still to support its citizens with having a scars resource.

The impact of this subject to my personality in relation to my work and personal life
This subject reshape my own personality, it changes me into a more mature human being under an economic way with a perception to help the growth of economy of my own nation before others. With the help of this subject my eyes was opened on the current events happening in our economy which leads me to become a solution maker rather than an additional burden in our government needed to be supported and train to know those facts. I am not an economist in profession, but as accountant I have a little knowledge about the details, as the contribution of this subject into my profession a gained sufficient idea that can enhance the practice of my profession.

My suggestion of fiscal policy of the current administration in regards to financial & economic condition of our country
The government must have an effective system of earning revenue to compensate those debt and to support the operation of the state like organizing a profit generating activities. Encourage foreign investor to invest in our local market. Establish our own manufacturing enterprises to increase the gross national product of our country. Higher the taxes but not too much that may lead to chaos because taxation has the ability to create and has the ability to destroy. Open a program to guide and train individuals to put their own businesses to higher the collection of taxes.

Current Fiscal Policy and Monetary Policies of our country.

Fixed capital formation, especially equipment, boosted GDP growth to astounding rates of 7.8% y/y and 7.9% y/y in Q1 and Q2 2010, respectively. Tax effort, defined as taxes as percent of GDP, is the most robust determinant of fiscal deficits, with higher tax effort associated with larger fiscal surplus or lower deficit. Private consumption will remain the main driver of the economy, underpinned by robust remittances, a firmer labor market, and stronger consumer confidence. Spending ahead of the presidential and local elections in May will also boost consumption in the first half of 2010. Exports will grow in line with the global recovery. While the trade deficit will persist, higher remittances and business process outsourcing income will swing the current account into surplus.

Recommendations and personal criticism

The government must attained a full employment by: a wide investment opportunity by opening a small medium enterprises. organizing a tourism area for each municipality as a whole. investing in social sectors and infrastructure. Reversing the structural erosion of the tax base and reducing the size of the government deficit to increase budgetary resources for development expenditure will require renewed efforts at tax reforms by the new administration. A rationalization of fiscal and investment incentives, as well as the indexing of excise taxes to inflation as part of the measures needed to strengthen its fiscal situation. Stop political war but rather solve financial crisis suffered by each Filipino citizen.