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    Fiscal and Monetary Policies: A Clarification

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    marielkua
    This document discusses fiscal and monetary policies. It defines fiscal policy as a government's management of spending, taxation, and borrowing to influence the economy. Monetary policy refers to how a central bank controls money supply to impact inflation and economic growth. The document also discusses public finance processes like taxation, expenditure, borrowing, and accountability. It analyzes indicators and issues around debt policies, noting that debt service continues to burden budgets and crowd out development spending.

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    Fiscal and Monetary Policies: A Clarification

    Uploaded by

    marielkua
    11 views14 pages
    This document discusses fiscal and monetary policies. It defines fiscal policy as a government's management of spending, taxation, and borrowing to influence the economy. Monetary policy refers to how a central bank controls money supply to impact inflation and economic growth. The document also discusses public finance processes like taxation, expenditure, borrowing, and accountability. It analyzes indicators and issues around debt policies, noting that debt service continues to burden budgets and crowd out development spending.

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    This document discusses fiscal and monetary policies. It defines fiscal policy as a government's management of spending, taxation, and borrowing to influence the economy. Monetary policy refers to how a central bank controls money supply to impact inflation and economic growth. The document also discusses public finance processes like taxation, expenditure, borrowing, and accountability. It analyzes indicators and issues around debt policies, noting that debt service continues to burden budgets and crowd out development spending.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    11 views14 pages

    Fiscal and Monetary Policies: A Clarification

    Uploaded by

    marielkua
    This document discusses fiscal and monetary policies. It defines fiscal policy as a government's management of spending, taxation, and borrowing to influence the economy. Monetary policy refers to how a central bank controls money supply to impact inflation and economic growth. The document also discusses public finance processes like taxation, expenditure, borrowing, and accountability. It analyzes indicators and issues around debt policies, noting that debt service continues to burden budgets and crowd out development spending.

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    You are on page 1of 14

    FISCAL AND MONETARY

    POLICIES: A CLARIFICATION
    FISCAL POLICY
    • Fiscal policy is the means by which a
    government adjusts its spending levels
    and tax rates to monitor and influence a
    nation's economy. It is the sister strategy
    to monetary policy through which a central
    bank influences a nation's money supply.
    MONETARY POLICY
    • Monetary policy is one of the ways that the
    U.S. government attempts to control the
    economy. If the money supply grows too
    fast, the rate of inflation will increase; if the
    growth of the money supply is slowed too
    much, then economic growth may also
    slow.
    PUBLIC FINANCE
    • INCOME AND OUTGO OF
    GOVERNMENTS IN THE PURSUIT OF
    NATIONAL OBJECTIVES.
    • INFLOW OF FINANCIAL RESOURCES IN
    THE FORM OF TAXES AND OTHER
    REVENUES, AND THE OUTFLOW OF
    SUCH RESOURCES IN THE FORM OF
    EXPENDITURE TO FINANCE GOODS
    AND SERVICES.
    5 STEP PROCESS:
    • FORMULATION OF FISCAL POLICY
    • THE GENERATION OF REVENUE FROM
    TAXATION AND OTHER SOURCES
    • EXPENDITURE OF FUNDS THROUGH
    THE NATIONAL BUDGET
    • PUBLIC BORROWINGS
    • ACCOUNTABILITY
    • NATIONAL BUDGET EMBODIES THE
    DEVELOPMENT GOALS OF THE
    COUNTRY.
    • IT SPECIFIES THE SOURCES OF
    REVENUE, INCLUDING TAX AND NON-
    TAX REVENUES.
    BUDGET
    • INDICATES THE LEVEL OF
    BORROWING WHICH IS EXPECTED TO
    CLOSE THE GAP BETWEEN
    REVENUES AND EXPENDITURE.
    PRESIDENTIAL DECREE NO.
    1177
    • PRESCRIBES THE BUDGET PROCESS
    AND PROVIDES FOR THE AUTOMATIC
    APPROPRIATION OF AMONG OTHER
    THINGS, THE DEBTS SERVICE.
    IS THE DEBT CRISIS OVER?
    A DEBT AS A FOREIGN EXCHANGE IS
    BECOME MANAGEABLE

    DEBT AS A CRITICAL PART OF A FISCAL


    CRISIS IS FAR FROM RESOLVED.

    THE DEBT ISSUE REMAINS A FISCSAL


    POLICY PROBLEM IN VIEW OF THE FACT
    THAT PAYMENTS CONTINUE TO BE
    TERRIBLE BURDEN ON THE BUDGET.
    INDICATORS
    • TOTAL DEBT STOCK AS A
    PERCENTAGE OF THE GROSS
    NATIONAL PRODUCT AND AS
    PERCENTAGE OF EXPORTS HAS BEEN
    REDUCED
    • SHARE OF CONCESSIONAL DEBT TO
    TOTAL DEBT STOCK HAS INCREASED
    • FOREIGN EXCHANGE RESERVES
    HAVE REACHED A COMFORTABLE
    LEVEL
    • HUMAN COST OF PAYING THE DEBT IN
    FULL IS TOO HIGH
    • PROCESS OF PAYING THE FOREIGN
    DEBT IN FULL HAS PUT PRESSURE ON
    THE DOMESTIC DEBT WHICH HAS
    BALLOONED UNMANAGEABLE
    PROPORTIONS.
    • THE TREMENDOUS BURDEN THE
    DEBT SERVICE IMPOSES ON THE
    BUDGET, ANOTHER CLEAR
    INDICATION OF THE CONTINUING
    DEBT CRISIS IS THE FACT THAT
    NEGATIVE NET RESOURCE
    TRANSFERS CONTINUE TO BE
    PROBLEM.
    ISSUES ON DEBT POLICY
    • HONORABLE DEBTOR POLICY MAY
    HAVE RESULTED IN FLATTERING DEBT
    RATIOS, BUT THE COSTS TO
    DEVELOPMENT ARE HIGH
    • THE PREVAILING DEBT POLICY HAS
    RESULTED IN A FINANCIAL CRISIS,
    WITH DEBT SERVICE CONTNUING TO
    BE A MAJOR DRAIN ON THE BUDGET,
    THEREBY CROWDING OUT
    EXPENDITURE FOR ECONOMIC AND
    SOCIAL DEVELOPMENT.
    • NEGATIVE RESOURCE TRANSFERS
    CONTINUE UNABATED

    • DEBT TO JAPAN IS UNCONTROLLED


    AND SHOULD POSE SERIOUS
    PROBLEMS UNLESS MEASURES ARE
    UNDERTAKEN TO REDUCE IT.

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