POSTSCRIPT / September 7, 2004 / Tuesday


Philippine STAR Columnist

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GMA to unfurl finally a road map to recovery?

DEBT & DEFICIT: President Gloria Macapagal-Arroyo is scheduled to address this morning a media forum where she is expected to discuss, among other things, the Debt & Deficit crisis bedeviling the country.

Will she finally present a clear and comprehensive “Road Map to Recovery” instead of again scattering random ideas about how to raise money and cut expenses?

Our economist President has to produce pronto such a Road Map, since we look up to her to lead us out of the desert. Besides, she has to own some responsibility since she had contributed in a big way to the runaway public debt and budget deficit.

If you want to catch the good/bad news yourself, go before 7 a.m. to the Ristorante La Dolce Fontana on Annapolis St., Greenhills. It will be first come-first served, with the breakfast priced at no more than P140.

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AWKWARD MOMENT: It is now turning out, as POSTSCRIPT pointed out last Sunday, that the high-pressure solicitation from moneyed guests of the President flying with her to China did not sit well with some of the victims.

Some of them are now talking in private about how they felt being caught in a situation where it was awkward to have said No to Speaker Jose de Venecia extracting “voluntary” donations in the presence of the President.

Everybody knows the government overspent billions during the last presidential elections, but the resulting fiscal deficit will never justify such impudent solicitation for a national bailout fund.

The honorable thing to do now is return the money, call off all commitments made on that chartered PAL jet, and then, after a decent interval, wait for every potential donor to come forward on his own steam.

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LASTING SOLUTIONS: On the Debt & Deficit crisis, Malacanang quoted President Arroyo yesterday as saying:

“We commend the spontaneous response of well-meaning Filipinos to the crisis at hand as we are committed to implement lasting solutions.

“More than the monetary value of the pledges and donations, we are showing the world our unity and solidarity in facing the challenges of nation-building and reform.”

Good that the President is now talking of “lasting solutions.” She must have seen this crisis coming from way back, so we guess she should be ready with her Road Map at the La Dolce Fontana forum this morning.

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BORROW CAMACHO: If that is a tough agendum, the President might want to peek into what her then Finance Secretary Jose Isidro Camacho had warned about and suggested before he resigned in disgust a year ago.

Camacho did not have the total answer, but he had the apt background, the expertise and the insider’s view to be able to give valuable advice. He said then, and we quote now:

“WHAT must we do?

“1. We must moderate our trade liberalization policy without turning back on our international commitments. We must ensure that our trade liberalization initiatives truly benefit national interest and domestic industries are provided the support to be competitive.

“2. We must be more prudent in giving fiscal incentives ensuring that they are for most of the time, fiscally neutral. We must pursue the ongoing review of fiscal incentives to rationalize them.

“3. We must correct the existing deficiencies of our tax system. We must pass legislation to index the excise tax on tobacco and alcohol as well as petroleum products. We must pass the bill to rationalize the excise tax on automobiles based on value. We must resist attempts to defer again the value added tax (VAT) on professional services that we are now collecting after eight years of deferral. We must support the development of the domestic capital markets and, at the same time, plug a significant loophole on tax on special deposits.

“4. We must continue our review of all tax rulings of the Bureau of Internal Revenue that have granted tax exemptions in the past to ensure that they are still applicable and justified. Our current efforts are already bearing fruits.

“5. We must consider introducing new taxes especially on the more buoyant sectors of our economy.

“6. We must continue the enhancements in the operational capabilities of the BIR and the Bureau of Customs especially through the use of Information Technology Electronic registration, filing, payment, and payment confirmation should be the norm for all taxpayers.

“7. We must encourage Congress to adopt the proposed Fiscal Responsibility Act that will ensure that all future legislation creating additional expenditures or tax incentives are accompanied by revenue measures to make them fiscally neutral.

“8.We must take a second look at the Local Government Code and push for more substantial devolution of National Government functions. Local government units should be encouraged to exercise fiscal discipline and generate their own financial resources aside from the internal revenue allotment. Wasteful local expenditures such as luxury vehicles for LGU executives must be stopped.

“9. We must implement effectively the recently passed Government Procurement Reform Act. This will reduce corruption, leakage and wastage in government purchases and allow us to do more with less.

“10. We must motivate other revenue generating government agencies (aside from BIR and BoC) to maximize their revenue efforts by allowing them to retain a portion of their incremental revenues for their own budgetary requirements. This will bring fiscal discipline to the level of individual agencies.

“11. We must stay committed to streamlining the government bureaucracy so that we make it more efficient with less but better paid public servants.

“12. We must stay committed to the austerity measures instituted by President Arroyo as well as the more frequent monitoring of our revenues and expenditures.

“13. We must continue to impose good governance as the norm for both the public and private sectors. At the BIR we must push for the passage of the National Revenue Authority bill. This will allow us to transform the BIR into a more fiscally independent authority with better paid, better-equipped and more motivated personnel. We must continue our present mode of being more performance-based on our key personnel appointments. We must pursue to its natural conclusion the lifestyle checks that we are doing on BIR and BoC officials to rid the bureaus of the few bad eggs that damage the reputation of the bureaus and majority of the staff. We must be relentless in the BoC on our anti-smuggling campaign including the cleansing of customs bonded warehouses.

“14. Finally, fiscal discipline must continue to be the central focus of our economic programs together with market reforms and good governance. We have to make sure that everybody is keenly aware of the necessity and urgency of achieving a healthy fiscal program to sustain a stable macroeconomic environment, improve investor confidence to avoid a debt crisis and eventually have sufficient government resources to provide every Filipino with his basic needs.

“Fiscal deliverance — is it reachable? I believe that fiscal deliverance is certainly feasible for the Philippines. It is not only feasible — it is essential. The alternative is the road to crisis and this should be clear to any policymaker — past, present and future.

“It is for this reason that I believe that any future administration will have to remain committed to fiscal discipline and the necessary policy measures including legislative and administrative measures that are needed to take us on this road to fiscal salvation.”

For this archived item on Camacho, we thank Offie Mananquil Bakker of Manila, Singapore and The Netherlands.)

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(First published in the Philippine STAR of September 7, 2004)

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