TRIBUNE EDITORIAL: YEARLY DEBT FIX
MANILA, AUGUST 24, 2009 (DAILY TRIBUNE) The chronic problem on debts, which currently stands at more than P4.2 trillion, would be the most enduring legacy of Gloria Arroyo to generations of Filipinos as well as government administrations to come.
Adjudging by the way Gloria’s economic pep boys are defending the debt addiction under her administration, the situation may have turned frantic that even the ablest debt managers won’t be able to keep up with the Gloria’s splurges as the election draws near.
There is no argument about Gloria going for a political juggernaut to extend her term anytime before the elections in May next year.
Her desperation to evade accountability once her term ends will push her to spend every resource at her disposal to realize her selfish goals.
One of the pep boys, Finance Secretary Margarito Teves, said the borrowings under Gloria, which would reach a staggering $3 billion next year that is both domestic and foreign, are necessary to pay off some debts incurred during past administrations.
While every administration is saddled with past debts, none of the debts incurred is anywhere near the debts incurred and still being incurred by Gloria and her administration, which has done hardly anything but take out loans, as if they were going out of style.
Teves brought up past borrowings obviously to deflect some of the blame to Gloria’s predecessors and to provide cover on her humongous debt appetite.
Yet it would be hard to imagine that the current predicament of the government in spending a fourth of the yearly budget in payments of interests alone, P272.2 billion last year, can be blamed on administrations previous to Gloria.
Data from the Bureau of Treasury showed that the country’s total debt doubled from the time that Gloria grabbed power in 2001 from popularly elected President Joseph Estrada. In 2000, total debts amounted to P2.16 trillion, comprising of P1.068 trillion in domestic debts and P1.098 trillion of foreign debts.
This progressively grew during Gloria’s eight year scourge to P4.2 trillion last May, made up of P2.4 trillion in domestic loans and P1.8 trillion in foreign borrowings.
What bothers the most is that most of the foreign debts under Gloria are now made up of sovereign bonds that carry commercial rates as against direct government borrowings that are usually obtained through concessional rates.
The only problem with government to government borrowings, as it is in the experience of Gloria, is that most of the kickbacks are extracted from these type of loans such as what was exposed in the National Broadband Network (NBN) and the Northrail scandals.
The piling up of debts under Gloria was the result of the inability of revenue agencies to hit targets, which are progressively raised as the budgets are increased each year.
Just this year, the collections of both the Bureau of Internal Revenue and the Bureau of Customs have lagged behind their takes from last year. In all, revenue collections were lower by P24.2 billion in the first half compared with the same period last year. BIR collections were down by P14 billion and Customs collections have a P12 billion difference from last year.
Expenses during the period, however, were P111 billion more compared with last year.
The fiscal situation under Gloria, thus, is a continuous cycle of ever-dwindling tax collections and a yearly growth in expenditures that had proved to be mostly the result of unrestrained spending by these current tenants of Malacañang.
The past eight years proved that fiscal control is not achievable under the current dispensation.
Gloria’s administration and fiscal management are contradictions.
But that is not surprising, since Gloria and good governance are contradictions, too.
HEADLINE NEWS - PHILIPPINE STAR:
Government to sell properties to plug deficit By Iris C. Gonzales (The Philippine Star) Updated August 24, 2009 12:00 AM
MANILA, Philippines - The government is selling at least P10 billion worth of real estate properties next year to plug its widening budget deficit, Finance Secretary Margarito Teves said over the weekend.
He said the properties that might be put on the auction block in 2010 include the Bilibid property in Muntinlupa, the government’s 18-hectare Ortigas property held by the Presidential Commission on Good Government and its real estate lot in Welfare Ville in Mandaluyong City.
He said the figure could even be bigger once the government is able to resolve administrative issues surrounding the properties. “I think the total will be larger than P10 billion but we have to tresh out issues among the properties,” Teves said.
Finance Undersecretary Crisanta Legaspi, for her part, said most of the real estate assets are held by the Privatization Management Office and the PCGG.
The sale of these real estate properties is necessary as the government has raised next year’s budget deficit to P233.4 billion from P208 billion previously.
Additional revenues would come from privatization, Teves said.
Originally, the government had hoped to raise only P2.5 billion from the privatization of government assets next year.
The Development Budget Coordination Committee (DBCC), the interagency group that sets the country’s macroeconomic assumptions, approved a wider deficit for 2010 from P208 billion previously but kept the revenue goals of the Bureau of Internal Revenue and the Bureau of Customs unchanged.
Instead, the DBCC said the wider-than-expected deficit would be financed through additional revenues from privatization of state-owned assets.
As such, the government is eyeing a total of P12.5 billion in revenue from privatization of state-owned assets.
According to documents from the DBCC, the BIR is tasked to collect P875.1 billion in 2010 from its P798.5 billion revenue goal this year or an increase of 9.6 percent.
The expected increase in the BIR’s tax take is due mainly to the expected improvement in the economy next year.
The Bureau of Customs, meanwhile, has been given a collection goal of P309.5 billion in 2010 or 13.2 percent higher than the revised revenue target of P273.3 billion this year.
Earlier, the DBCC also announced that the economy may grow anywhere from 2.6 percent to 3.6 percent in 2010, higher than the revised projected growth range for the year of 0.8 percent to 1.8 percent.
Chief News Editor: Sol Jose Vanzi
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