Israel’s fiscal policy is characterized by rather strict budgetary discipline, which is maintained by the significant power of the Ministry of Finance, a fiscal framework that sets limits on public deficits and annual increases in public spending, and the so-called Arrangements Law. The Arrangements Law is an omnibus law that is passed in parallel with each budget, consists of numerous restrictions and amendments, and is designed to secure the state’s financial goals.Israel’s comparatively strong fiscal position was maintained during the pandemic. In terms of the deficit, Israel posted a budget deficit (ILBUD=ECI) of 4.6% of gross domestic product by the end of 2021, down from 5.5% during the same period in 2020. The improvement came as an economic rebound that has led to higher-than-expected tax revenue. Over the past year, tax income is up 23.1% from the same period in 2020 (BOI 2021). Consequently, the increase of public debt has been relatively low in comparison to other OECD countries.The ILS 609 billion ($194 billion) spending plan for 2021 is the first budget Israel has passed since 2018. This delay was due to a prolonged political deadlock, which saw successive governments fall before they could bring a proposal to the Knesset. The 2022 spending plan stands at ILS 562.9 billion ($180 billion). The overall budget marks a major reorientation of Israel’s allocation of resources and financial priorities in the coming years. It is based on the principles of streamlining government operations, upgrading public services, boosting economic competitiveness, cutting regulations to support public and private sector growth, limiting Israel’s shadow economy, boosting transportation, housing, energy and technology infrastructure, and investing in human capital by training and integrating marginalized populations into the workforce (Ben David 2021).The Knesset’s approval of the 2021–2022 budget has reduced political uncertainty and risks to public finances, affirming the government’s capacity to advance legislation. Fitch Ratings increased Israel’s rating from A to A+. According to Fitch Ratings, “Israel’s A+ rating balances a diversified, high value-added economy, which proved resilient to the COVID-19 pandemic, strong external finances and solid institutional strength” (Fitch Ratings 2021).Citations:
Bank of Israel (BOI), “Economic indicators: Public Sector Activity,” 2021. Retrived from: https://www.boi.org.il/en/DataAndStatistics/Pages/Indicators.aspx?Level=1&IndicatorId=5&Sid=5Fitch Ratings (2021), “RATING ACTION COMMENTARY,” Retrived from: https://www.fitchratings.com/research/sovereigns/fitch-affirms-israel-at-a-outlook-stable-29-07-2021Kershner, Isabel (2021), “Israel Passes First Budget in More Than 3 Years in Lifeline for Government.” The New York Times, 05 of January 2022. Retrived from: https://www.nytimes.com/2021/11/04/world/middleeast/israel-budget.htmlKnesset 2021. “Knesset Plenum votes to approve 2021-2022 state budget and Arrangements Law” Retrived from: https://main.knesset.gov.il/EN/News/PressReleases/Pages/press51121q.aspxBen David, Ricky. 2021, “How much of a revolution? 13 key reforma in Israel’s new State Budget,” The times of Israel. Retrived from: https://www.timesofisrael.com/how-much-of-a-revolution-13-key-plans-in-israels-new-state-budget/
Strict budgetary discipline isn't the same as having a 60-40 policy which the Philippines has. Israel's very own Yuval Noah Haran says that they don't have equity restrictions. Yes, they have certain restrictions with strict budgetary discipline. That alone is very different from the Philippines' Article XII of the 1987 Constitution which says the following:
Section 10. The Congress shall, upon recommendation of the economic and planning agency, when the national interest dictates, reserve to citizens of the Philippines or to corporations or associations at least sixty per centum of whose capital is owned by such citizens, or such higher percentage as Congress may prescribe, certain areas of investments. The Congress shall enact measures that will encourage the formation and operation of enterprises whose capital is wholly owned by Filipinos.
In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos.
The State shall regulate and exercise authority over foreign investments within its national jurisdiction and in accordance with its national goals and priorities.
Section 11. No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines, at least sixty per centum of whose capital is owned by such citizens; nor shall such franchise, certificate, or authorization be exclusive in character or for a longer period than fifty years. Neither shall any such franchise or right be granted except under the condition that it shall be subject to amendment, alteration, or repeal by the Congress when the common good so requires. The State shall encourage equity participation in public utilities by the general public. The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital, and all the executive and managing officers of such corporation or association must be citizens of the Philippines.
Section 12. The State shall promote the preferential use of Filipino labor, domestic materials and locally produced
While Israel has strict budgetary control, it never has an ongoing policy of economic restrictions. That's why I'm laughing right now at the claim that the Philippines will progress through 60-40. Ironically, a Facebook page called 1987 Constitution Ang Magpayaman ng Bansa (The 1987 Constitution Will Enrich the Philippines) has its troll administrator saying, "If the charter change will be passed, I will move to Nordic countries." The Nordic countries are free trade and parliamentary. The Netherlands (where the late Jose Maria C. Sison died) was also a free trade zone. Sison was blatantly following obsolete Communist ideals that China and Vietnam have dropped.
I guess this shows decades of teaching Filipino First Policy in schools (read here) gave this disinformation. We're now in the information age. The book of the great late Lee Kuan Yew can now be bought online Hopefully, the book From Third World to First will be made more accessible to Philippine libraries and bookstores. It's because the Philippines can't afford to be left behind in the rising Asian Century.
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