The combined incidence of taxes and public expenditures in the Philippines

Of central concern to policy makers, the net incidence of fiscal policy is rarely calculated because of the lack of reliable data on the incidence of both taxes and expenditures. This paper calculates the combined incidence of taxes and certain public expenditures in the Philippines, using various short-cuts. We find that the incidence of indirect taxes is broadly neutral, because of general-equilibrium effects. Examining the regional allocation of expenditures and pattern of income distribution, we find that health, education and infrastructure expenditures are progressive. Our conclusion-that the net fiscal incidence in the Philippines is progressive-appears robust to sensitivity analyses. (C) 1998 Elsevier Science Ltd. All rights reserved.