BSP CAPITALIZATION HANGS / OPINION: STATE OF STUPOR
MANILA, MAY 3, 2009 (STAR) By Des Ferriols - The Bangko Sentral ng Pilipinas (BSP) would have to wait until 2010 for its full capitalization as the government finally dropped a plan to pay up the remaining P40 billion of the central bank’s capital this year.
The BSP has been pressing government to meet its commitment but the last three administrations have failed to do so.
After long discussions with the BSP, Finance Secretary Margarito Teves said the government, in the end, decided to scrap the capitalization plan that was supposed to have been completed as early as 1993.
Teves reasoned that the Department of Finance had to drop the plan after being advised that raising P40 billion to fully pay up the BSP’s P50-billion capitalization would require appropriations cover by Congress.
The Arroyo administration had earlier agreed to fulfill the requirement for government to pay up an additional P40 billion prescribed under the BSP charter, after an initial capital outlay of P10 billion.
But the decision meant that the BSP would have to wait until 2010 to get much-needed capital because the newly-enacted P1.415-trillion national budget for 2009 did not include a provision earmarking the amount for the BSP.
Teves earlier testified before Congress that the P177.2-billion deficit target for 2008 already included the BSP’s capitalization plan but he later denied that this was ever included in the budget.
Teves said the undertaking would have required a supplemental budget. He said the DOF would seek to include the P40 billion in the 2010 national budget.
After repeated failure to meet its revenue target, the Arroyo administration shelved the capitalization plan since it would widen the budget gap that has already been adjusted twice to accommodate the impact of the slowdown in revenues.
The National Government has also withdrawn P20 billion of the P30-billion restricted deposit that was supposed to be kept until the BSP was capitalized.
But sources said the NG sought to be allowed to use part of this fund when it needed it to boost its cash position at a time when the BSP was also reporting losses of up to P87 billion when the peso was surging against the dollar.
Sources added the BSP only agreed to allow the restricted deposits to be touched because the NG needed the funds and Finance officials promised to complete the capitalization of the central bank.
Ultimately, about P20 billion was taken out of the restricted deposits which were then used to buy Treasury bills. The government depository earned from the interest on the government securities and the Bureau of the Treasury received the cash.
A source said the Treasury Department then eventually deposited the cash back to the BSP but this only turned the cash around and the BSP was not really recapitalized.
“Otherwise the BSP did not get incremental benefit from the whole process,” the source said. “That will happen when the central bank is recapitalized.”
State of stupor HIDDEN AGENDA By Mary Ann Ll. Reyes - Most Filipinos are in an extended state of stupor.
The word stupor is defined by Merriam-Webster as a condition of greatly dulled or completely suspended sense or sensibility, or a state of extreme apathy or torpor resulting from stress or shock. Synonymous to stupor would be daze.
From time to time, People are awakened from this story state. Take for instance today’s Pacquiao-Hatton fight. Or the time when we feared that the swine flu could take on biblical proportions. Or the time when Ted Failon’s wife died or the probability that she was killed and that Ted may have something to do with it.
Otherwise, very little shocks us. Not the investigations into possible wrongdoings of our government officials, not the inquiries into alleged rigging of public biddings, not the fact that many of our elected officials are more concerned about next year’s election and how they are going to win it than doing a good job now and letting their performance speak for itself.
This dazed state may stem from the fact that as one priest pointed out in his sermon, we are experiencing Good Friday and we know that Easter Sunday is coming. That when you’re at the bottom, there is no way to go but up. That a modern-day saviour will come to deliver us from the rut that we are in.
But let us not expect next year’s elections to be our Easter Sunday. Our elected officials can only lead us, but the rest is up to us. While there are external forces beyond our control that shape the way our economy or our society is acting up, we as a nation control our own destiny. We decide who our leaders will be. We don’t decide based on who is the lesser evil. We don’t settle for mediocre candidates.
I know of several people who had the best of intentions when they decided to join government or run for public office, only to find out that their intentions are not good enough. Most of the time, the better decision is not the more popular one. Many years back, one government official tried to break the syndicate operating inside his agency only to find out it is very difficult, if not outright impossible, to be working on a crusade alone. Not even his superior supported him. In the end, he left public service bitter and with a broken heart.
We badly need a rude awakening. Something that will rally all of us to a common cause.
From the readers
“I would like to call your attention about the new LTO policy regarding the issuance of the Certificate of Registration for motor cars since this January 2009. All Certificates of Registration now do not have any year model. I, together with several people, also those especially in the second hand car industry are alarmed why this is the policy. We are all in agreement that this is like issuing a passport without any date of birth. In the long run, this will cause confusion about how to value cars when they are resold. It will delay the transactions and what is the point to all this? I am asking your assistance in this matter. The public has a right to know about this new regulation or omission of a very important detail in the Motor Car Certificate of Registration by the LTO. Is their point to issue another certificate attesting to the year model of cars that are not new? There are instances too their staff make errors about names, etc. We go through the trouble already of making affidavits. Is this for another affidavit backed by their to be issued new certificates, of course for a fee? Before they wanted already a monopoly of the TPL insurance. But this issue surpasses the TPL insurance. This is all about the complete information about the car make which has to include the year model at all times. Why the omission? What is their agenda? I am sure it is not to simplify anything.” – Name withheld upon request
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