MANILA,  August 29, 2004
By Marichu VillanuevaArroyo vows to eliminate government extravagance. President Arroyo has declared war on extravagance in the executive department.

Faced by a looming fiscal crisis, Mrs. Arroyo made this new commitment to promote austerity in a statement she issued at the Palace yesterday.

"We will make sure that precious resources are saved and applied to the most basic and urgent needs of the people and that all forms of profligacy shall be abolished," she said.

Earlier this week, the President ordered government agencies to reduce their fuel and electricity consumption by at least 10 percent and banned the purchase of new and gas-guzzling vehicles.

The Presidentís statement appears to be her response to questions raised by some members of Congress over her plans for the savings that would be generated by their offer to reduce their pork barrel allocations and the proposed cuts in the internal revenue allotments (IRAs) of local government units (LGUs).

"We appreciate the offers of sacrifice from both Houses of Congress and we assure our people that the Executive Branch is prepared to do its share in concrete and meaningful ways," Mrs. Arroyo said. "Meeting the crisis will be a partnership of solidarity, sacrifice and patriotism among all our political leaders, backed up by the enterprising efforts of the private sector."

The President was silent on accusations by pro-administration Sen. Joker Arroyo that she made the fiscal crisis worse because of the foreign loans incurred by her administration, which have increased the countryís debt burden to more than P5 trillion.

But in the pulong bayan (town hall meeting) she hosted yesterday at the depot of Petron Corp. in Pandacan, Manila, Mrs. Arroyo blamed the $10-billion debt of the state-run National Power Corp. (Napocor) for much of the governmentís fiscal problems.

"The biggest source of the budget deficit is the losses of Napocor," she said.

Mrs. Arroyo explained that, until the privatization of Napocor is completed, the government must continue to subsidize Napocor to avoid the blackouts that plagued the country in the early 1990s.

"We have avoided brownouts but the government spends for these and this adds to our budget deficit," she said.

In a separate statement, Presidential Spokesman Ignacio Bunye reproached Senator Arroyo for blaming the President for the fiscal crisis.

"This is no time for blame-tossing," he said. "Action must take precedence over excessive debates."

Bunye said the administration was "willing to listen" to "constructive ideas on how to resolve" the crisis.

"What the country needs in the face of the crisis is a concrete plan of action to be supported by the leaders of both executive and legislative branches, the local governments and the public," he said.

In an earlier statement, Mrs. Arroyo said that, despite the offer by pro-administration senators to cut their individual "pork barrel" allocations of P210 million by half in the proposed 2005 budget, the administration still needed Congress to pass its eight "urgent" tax bills.

The proposed tax measures are expected to generate P80 billion in additional revenue for the government.

"We understand the need of legislators for resources to serve their constituents, especially the poor and downtrodden. But I am glad that many have begun to balance this need with the equally urgent imperative to sacrifice for the national interest," the President said. "Further down the road, I am confident that these moves will be backed up by the same measure of political will to pass urgent tax measures to shore up our capacity for national stability and survival."

Reported by: Sol Jose Vanzi

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