By Joann Santiago
MANILA, Oct. 15 (PNA) — Finance Secretary Cesar Purisima on Thursday presented anew his proposal to have a global tax identification number (TIN), which he dubs as “Passport for Funds.”
In his speech before the delegates of the 14th International Association of Financial Executives Institutes (AIFEI) World Congress at Makati Shangri La, Purisima said “Passport for Funds” is similar to the idea of a country-specific mobile number code.
He said a tax ID number is needed for an orderly movement of funds not only within a country but across all countries.
He said other uses of the tax ID number is for mutual recognition and mutual acceptance as well as data sharing.
“If we have a passport for funds, money laundering, tax evasion, smuggling can be a thing of the past,” he said.
In an interview by reporters after the event, Purisima said it is important to have a system like Passport for Funds to properly manage capital flows.
The Philippines continue to attract foreign investors especially now that it has been rated as an investment grade economy.
Amidst the exit of funds from emerging economies as a result of the expected tightening of policy rates and eventual increase of interest rates in the US in the latter part of 2015, investors continue to put their money in the Philippines.
Bangko Sentral ng Pilipinas (BSP) data show that as of the week ending October 3, 2014, total inflows of foreign portfolio investments, otherwise known as hot money due to the speed its comes in and out of the economy, reached US$ 16.7 billion.
This is lower than year-ago’s US$ 22.09 billion because of the effects of the tapering of the Federal Reserve’s stimulus program.
During the same period, total outflows reached US$ 17.54 billion, lower than the US$ 19.34 billion same period last year.
To date, hot money posted a net outflow of US$ 852.62 million, a reversal from the US$ 2.74 billion net inflow in the week ending October 4, 2013.
Monetary officials target a US$ 2.1 billion net hot money for the Philippines for 2014, lower than the US$ 4.2 billion actual net inflow in 2013.
The target was lower than last year’s actual net inflow on account of the expected recovery of the US economy and the expected reaction of investors. (PNA)