An assessment of fiscal policy in the Philippines, 1986-1988

The purpose of this paper is to review the conduct of fiscal policy in the Philippines in 1986-1988, the first three years of the Aquino administration. The approach that is followed in this study is to examine how well the policy actions undertaken in the period under study fit into the policy pronouncements that are embodied in the Medium-Term Development Plan (1987-1992). Section 2 examines the variations in the broad fiscal aggregates: government revenues, expenditures, the fiscal balance and its financing. It also attempts to evaluate the thrust of fiscal policy in terms of its impact on aggregate demand. Section 3 focuses on the tax reform initiatives while Section 4 examines the changing size and composition of the government budget. The public enterprise sector -- its rationalization as well as privatization issues -- meanwhile, is the subject of Section 5. Finally, Section 6 summarizes and highlights the major findings of the preceding sections.