 Expansionary

 Contractionary
1. Controlling Inflation
• Demand-pull Inflation
• Cost-push Inflation
2. Smoothing out the business
cycle
3. Ensuring Financial Stability
• Affects the long-term rate of inflation but
has little direct effect over the long-term
on the rate of unemployment or the
potential rate growth.
1. Low inflation makes the future more
predictable making it easier for the business
and individuals to plan and make decisions.
2. If the Central Bank is able to smooth out the
business cycle, recessions will be few and mild.
1. Control Over Short-Term Interest
Rates
2. The Discount Window
3. The Reserve Requirement
• The link between taxes and
incentives.
• Refers to the measures employed by
governments to stabilize the economy,
specifically by manipulating the levels and
allocations of taxes and government
expenditures.
• Income taxes
Annual Taxable Income
Less than ₱10,000
Over ₱10,000 but not over ₱30,000
Over ₱30,000 but not over ₱70,000
Over ₱70,000 but not over ₱140,000
Over ₱140,000 but not over ₱250,00
Over ₱250,000 but not over ₱500,000
Over ₱500,000
• TARIFFS AND DUTIES
Income Tax Rate
5%
₱500 + 10% of the excess over ₱10,000
₱2,500 + 15% of the excess over ₱30,000
₱8,500 + 20% of the excess over ₱70,000
0₱22,500 + 25% of the excess over ₱140,000
₱50,000 + 30% of the excess over ₱250,000
₱125,000 + 32% of the excess over ₱500,000
The E-VAT has exemptions which include basic commodities
and socially sensitive products. Exemptible from the E-VAT
are:
1. Agricultural and marine products in their original state (e.g.
vegetables, meat, fish, fruits, eggs and rice), including those
which have undergone preservation processes (e.g. freezing,
drying, salting, broiling, roasting, smoking or stripping);
2. Educational services rendered by both public and private
educational institutions;
3. Books, newspapers and magazines;
4. Lease of residential houses not exceeding ₱10,000 monthly;
5. Sale of low-cost house and lot not exceeding ₱2.5 million
6. Sales of persons and establishments earning not more than
₱1.5 million annually.
 Program and Project Loans
 Credit Facility Loans
 Zero-coupon Treasury Bills
 Global Bonds
 Foreign Currencies

Domestic Sources of Financing

 Treasury Bonds
 Facility loans
 Treasury Bills
 Bond Exchanges
 Promissory Notes
 Term Deposits