US Treasury Backs Philippines’ Push for Tax, Customs Reform

The United States Department of the Treasury has pledged support to strengthen the Philippines’ tax and customs administration systems, following a meeting between Finance Secretary Ralph G. Recto and senior US Treasury officials on October 24, 2024, in Washington, D.C.

Led by Undersecretary Jay C. Shambaugh, US Treasury officials committed to bolstering the Philippines’ efforts to enhance revenue collection.

“The US Treasury has been a long-time partner, and we look forward to deepening our collaboration to boost fiscal management in the Philippines,” Recto said, following the meeting.

Since 2015, the US Treasury has provided technical assistance to the Philippines, particularly the Bureau of the Treasury, to improve liquidity in the domestic debt market and develop financial market infrastructure for government securities.

The partnership has resulted in the establishment of a modern primary dealer system and new liability management instruments.

The discussions also explored potential collaborations on debt-for-nature and debt-for-climate programs, aimed at redirecting debt payments toward environmental initiatives.

Since 2022, the Philippines has entered into two debt-for-nature swaps with the US worth USD 40 million, financing projects related to forest protection and biodiversity conservation.

Secretary Recto highlighted the country’s promising economic outlook and investment opportunities during the meeting.

He emphasized sectors like defense, following the passage of the Self-Reliant Defense Posture Revitalization Act, which seeks to modernize local defense industries and strengthen partnerships with allied nations.

Recto also underscored the Philippines’ strategic role as the US’ key security ally in the region, particularly with the Mutual Defense Treaty in place. He noted that the Trilateral Partnership between the US, the Philippines, and Japan positions the country as a prime hub for American businesses in high-value industries, including semiconductors, renewable energy, and telecommunications.

Joining Recto in the high-level talks were Undersecretary Maria Luwalhati Dorotan Tiuseco, National Treasurer Sharon P. Almanza, and other Philippine finance officials.