POSTSCRIPT / August 29, 2004 / Sunday


Philippine STAR Columnist

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Show us first a road map to full recovery

DEBT & DEFICIT: President Arroyo herself has identified the biggest economic problem confronting the nation. She pointed to the ballooning budget deficit as “our most urgent problem.”

In layman’s language, the government has not been earning enough to finance the things it wants and needs to do. This year, the government expects a budget deficit of about P200 billion.

Since 1997, revenue and tax collections have fallen to alarming levels. From a high of 17 percent of the gross domestic product in 1997, revenues now account for only 12.5 percent (2003 figure).

To fill the widening gap between laggard earnings and runaway expenditures, the government has been borrowing heavily. We have mortgaged the future of our children and grandchildren.

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U.P. PAPER: In a paper published last week, academicians at the UP School of Economics probed deeper into the problem of rising debt and deficit. They noted:

“The national government’s total debt stood at P3.36 trillion as of the end of 2003, split almost equally between foreign and domestic liabilities. This was as large as 78 percent of GDP in 2003. The outstanding debt of the public sector as a whole (the consolidated public sector debt) was running at more than 130 percent of GDP. Both are on the uptrend.

“The two largest failures that have led to the present critical state of public finances are first, the failure of the tax structure and bureaucracy, and second, the inefficiency and lack of accountability on the part of public corporations.

“Between 1997 and 2003 the national government’s debt rose by P2.01 trillion, from P1.35 trillion to P3.36 trillion. Of this total increase, 43 percent was due to deficits incurred by the national government during the same period. It is significant, however, that more than one third (37 percent) of the buildup in debt is due not to accumulated deficits but is to ‘non-budgetary accounts’ and off-book items such as assumed liabilities and lending to corporations.”

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LOOMING CRASH: With the experts having identified and measured this problem threatening to result in the crash of the economy, Argentina-style, in two to three years, one would think that the next step would be just to apply the best solutions.

Also, having been the hands-on president for the past three years and having herself contributed substantially to the problem of rising debt and deficit, President Arroyo should be able to announce at this late hour what she intends do.

She has been talking of piecemeal measures the past few days, about raising taxes or imposing new ones, reducing the number of her convoy when she goes around, stopping the purchase of more government vehicles, looking for ways to phase down the country’s dependence on oil products, and the like.

But we see no cohesion, no total picture of the Big Solution that only the President, because she is the president, can prescribe.

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ROAD MAP: While these scattered ideas of the President may later prove useful, they do not by their separate selves constitute an integrated approach to the problem that grows by the day as government and the private sector delay remedial measures.

Pardon my sounding impatient, but I have been anxiously waiting for our economist President to rouse up this nervous nation and unfurl a Road Map to Economic Recovery.

I am waiting for her to tell us in clear, commanding terms where we are now (Point A) and where the point of recovery (Point B) is — and how she proposes to lead this nation from Point A to Point B

There will be the usual kibitzers, the status quo-clingers and the vested interests guarding their lucrative activities, but I would dare say the great masses of our people would listen to their President and follow any show of leadership by example.

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ECONOMIC ELEPHANT: As things stand now, we are not unlike the blind men touching the part of the elephant nearest them and then proceeding to describe it with contrived authority.

Except for the paper of the UP economists, there has not been much consolidated public presentation lately of the Economic Elephant that may break loose soon and rampage through the village.

Read the statements of politicians, and you will note that many of them are free-riders — the type who would rather not disturb the status quo as they maneuver to protect their interests while waiting for others to bite the bullet first.

Their haggling over their pork barrel, whether they should give up all of it or just a fraction of it, is nauseating.

In the first place, lawmakers should not have pork barrel. They should not dip into the sticky millions in the barrel over which they have control as to how they are to be used.

They plead that they have committed already part of their pork. Kanino — to their contractor friends?

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BASIC DUTIES: The constitutionally defined work of senators and congressmen is simply lawmaking. The building of public works and such infrastructure is the responsibility of the Executive, national and local, and not that of lawmakers.

There is the argument that denying lawmakers their pork would not necessarily result in savings since the same money could then be used by the Executive to pursue the same or similar projects. And probably get the commissions that should have gone to the lawmakers?

Yes, that is true, but by removing from legislators an executive function that they have usurped, we are putting things in their proper places.

We would then be on the right path proceeding to the next question of how to use the money that has been running out of late.

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PALACE PORK: Lawmakers counter: Okay, we’re ready to give up our pork barrel or part of it, but the President should also give up her intelligence and social funds.

It sounds naughty, but that is a good point. Now we are getting somewhere.

Intelligence funds are military and police funds used for, well, intelligence operations. Malacanang (as it is with a few privileged civilian agencies) has no basic business going into intelligence operations.

If the President needs intelligence inputs, there are a number of presumably competent intelligence agencies (the proper ones and not the political ones) to help her. In fact, the entire Executive department and more are at her disposal.

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CHILDISH ANTICS: As for the “social fund,” which is actually a presidential pork barrel of sorts, Malacanang can have this, by all means. But it should get this funding via the national budget that will be subject to the usual budgeting and auditing rules.

What is so secret and sensitive about the activities and doleouts of the President that cannot stand scrutiny? At least to show an example of true transparency, she should open her use of public funds to the usual auditing rules.

The President is saying that if the lawmakers will give up part of their pork, she is ready to respond accordingly. Sort of, you take off yours, and I’ll take off mine.

This is unfortunate. It should be the President, by her supposed moral ascendancy, setting the example. She should give up shady funds and then challenge everybody in government, especially Congress, to take a similar step.

They are all being childish. Their behavior is no different from the antics of a street bully drawing a line on the ground and daring the other guy to cross it.

The President should just do the right thing. The people will recognize leadership when they see it and will rally around a true leader.

By rallying around their President holding aloft a Road Map to Recovery, the people will exert enough pressure on Congress and the rest of the bureaucracy and the population to act with genuine love of country.

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(First published in the Philippine STAR of August 29, 2004)

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