GOVT TO BORROW P596 BILLION TO FINANCE BUDGET DEFICIT
MANILA, July 23 , 2004 (STAR) An administration lawmaker disclosed yesterday plans by the government to borrow P596.6 billion next year, or P1.634 billion a day, to finance the deficit and retire part of the country’s outstanding debts.
Camarines Sur Rep. Joey Salceda, the incoming co-chairman of the appropriations committee of the House of Representatives, said the government intends to apply a 21-79 percent foreign-domestic borrowing mix at P126 billion from foreign sources and P470.6 billion from domestic borrowings.
But because P385.1 billion of what would be borrowed will be applied to pay maturing principals, Salceda explained the government’s net financing level next year will be at P211.5 billion.
"In short, we will (be) borrowing to pay what we have borrowed," he said.
Even if the government will be able to raise an additional P100 billion next year — half in new taxes and the other half through improved tax collection efforts — Salceda pointed out this would not be enough to wipe out the deficit.
The Albay lawmaker said the situation has underscored the need to attack the deficit, not just from the revenue side but also from the expenditure side.
"We can only tax as much, the rest should be addressed by cost-cutting," Andaya said.
For his part, Tarlac Rep. Jesli Lapus, the incoming chairman of the House ways and means committee, said the recent studies showed the fall in tax collection to 46.5 percent is caused by bad revenue policy.
He said the same studies also attributed the failing revenue collections to the increasing cases of tax evasion at 46.2 percent as well as the country’s inherent weakness in economic structure at 7.3 percent.
Lapus also pointed out the country’s tax effort rate of 12.8 percent of its gross domestic product is among the lowest in Asia.
He said next year, interest payments alone on the national debt will increase by P33. 3 billion, from P277 billion this year to P310.3 billion next year.
Lapus said interest payments alone will eat up 34.4 percent of the proposed P901.3 billion of the country’s national budget for 2005. — Paolo Romero
Reported by: Sol Jose Vanzi
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