The most important role that fiscal policy can play with regard to growth is to ensure macroeconomic stability. But despite two highly visible tax reform programs in less than two decades, the Philippines is now in the midst of a fiscal crisis. This has been brought about by pressures on the spending side of the equation. But the biggest contributor to the present fiscal crisis is the deterioration of the tax system -- its declining tax effort and growing unresponsiveness to changes in economic activity. The paper aims to describe analytically the similarities and differences of the 1986 Tax Reform Program and the 1997 Comprehensive Tax Reform Program (CTRP). In assessing the effect of the reform programs, the following questions were raised: Has the revenue mobilization capability of the tax system improved? Has the tax system become responsive to changes in economic activity? Has the share of corrective taxes to total taxes increased? There are lessons learned in managing the reform: tax reforms should be done at the start of an administration; they should be presented as a critical component of a comprehensive public sector reform program; in an environment where timely, upward, adjustment in existing tax rates are difficult to legislate, ad valorem taxation should be preferred to specific taxation; successful reforms require broad political support; and most importantly, the President must have the political will to do what is best for his country. Given the seriousness of the country's fiscal problem, the low-yielding, complicated and inflexible tax system needs a major overhaul, not minor tinkering. The next round of tax reforms should focus on broadening the tax base, increasing the tax yield, improving the system's responsiveness to changes in economic activity, and simplifying tax administration. The focus of the reform program should be: (a) heavier reliance on corrective or Piguovian taxes; (b) higher rate and broader VAT base, (c) rationalization of fiscal incentives, and (d) flat and lower income taxes.