3- ppt on fiscal and monetary

8/12/2019 3- PPT on Fiscal and Monetary

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Reported by:

LOVE JOY PALLAYA-BALETA

Fiscal and Monetary

Policyand Issues


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INTRODUCTION

One major function of the government is to

stabilize the economy (prevent

unemployment or inflation)

Stabilization can be achieved in part by

manipulating the public budget-

government spending and tax collections-

to increase output and employment or toreduce inflation.


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FISCAL POLICY

refers to the measures employed by

governments to stabilize the economy,

specifically by manipulating the levels and

allocations of taxes and governmentexpenditures

is the use of government expenditure and

revenue collection to influence theeconomy.


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is used by the governments to influence

the level of aggregate demand in theeconomy, in an effort to achieve economic

objectives of price stability, full

employment and economic growth.


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Objectives of Fiscal Policy

Removal of unemployment -increases

govt. expenditure and reduces taxes.

Maintenance of economic development-

increase the rate of capital formation

Maintenance of price stability- reduce

aggregate demand by reducing exp.and

increasing direct and indirect taxes.

Reduction in economic inequality- more

taxes on rich


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History Fiscal Policy

(from different administration)Marcos Admin.

- primarily focused on indirect tax collectionand on government spending on economic

services and infrastructure development.

Aquino Admin.

- a large fiscal deficit from the previous

administration, but managed to reduce fiscalimbalance and improve tax collection through

the introduction of the 1986 Tax Reform

Program and the value added tax.


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Estrada Admin

- faced a large fiscal deficit due to thedecrease in tax effort and the repayment of theRamos administrations debt to contractors and

suppliers.

Arroyo Admin.

- the Expanded Value Added Tax Law wasenacted, national debt-to-GDP ratio peaked, and

underspending on public infrastructure and othercapital expenditures was observed.


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Monetary Policy

is the process by which the monetary

authority of a country controls the supply

of money, often targeting a rate of interest

to attain a set of objectives orientedtowards the growth and stability of the

economy.


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is one of the tools that a national

government uses to influence its economy.Using its monetary authority to control the

supply and availability of money, a

government attempts to influence the

overall level of economic activity


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is a tool used by the central bank to

manage money supply in the economy inorder to achieve a desirable growth . The

central bank controls the money supply by

increasing and decreasing the cost ofmoney, the rate of interest.


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Objectives of Monetary Policy

Economic growth -increase capital

formation

Exchange stability -stability of balance of

payment

Full employement -increase production

Price stability - to eradicate inflation anddeflation.


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Credit control -increase and decrease

interest ratesReduction in economic inequalities -

distribution of income and wealth.


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The Bangko Sentral ng

Pilipinas or BSP the central monetary authority of the

republic of the Philippines. It provides

policy directions in the areas of money,

banking and credit and exists to superviseoperations of banks and exercises

regulatory powers over non-bank financial

institution.


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It keeps aggregate demand from growing

rapidly with resulting high inflation, or from

growing too slowly, resulting inhigh unemployment.

primary objective of BSP's monetary policyis to promote price stability because it has

the sole ability to influence the amount of

money circulating in the economy.


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Main Source Of Revenue in the

Philippines

Taxes

Non-tax revenue

Domestic SourcesExternal Sources


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THANK YOU!!!

3- ppt on fiscal and monetary

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