[photo at left - REPORT TO THE NATION: Speaking at a special breakfast forum of the Manila Overseas Press Club combined with the ‘Tuesday Club’ on a national and international television hook-up, President Arroyo yesterday reported on the achievements of her state visit to China, vowed to take on ‘entrenched interests,’ keep a tight lid on consumer spending, raise more revenues through new tax measures, and resolutely address the country’s fiscal crisis. To back up her presentation, the President summoned her key Cabinet members to participate in the forum held at the Ristorante La Dolce Fontana in Greenhills, San Juan. Shown hosting the event are MOPC chairman and concurrent Tuesday Club chairman Max Soliven (to the President’s right), while on her left is MOPC president Tony Lopez. Far left is MOPC special projects chairman Babe Romualdez, STAR columnist and Stargate president. – Photo by MIKE AMOROSO ]

MANILA,  September 8, 2004 (STAR) By Marichu Villanueva - President Arroyo vowed yesterday to take on "entrenched interests," keep a tight lid on consumer prices and go after profiteers to save the country from a looming financial crisis.

Calling herself a "non-political president," Mrs. Arroyo said she is prepared to make bold and tough decisions — even if they are unpopular — to avoid a possible fiscal crisis while pushing her anti-poverty program.

"Let there be no mistake: I will move this nation forward. I will take on whatever vested interests stand in my way. If these interests believe they can destabilize and sabotage our efforts, they better think twice," Mrs. Arroyo told a press forum of the Manila Overseas Press Club (MOPC) and the "Tuesday Club," both headed by STAR publisher Max Soliven, at the Ristorante La Dolce Fontana in Greenhills, San Juan.

When the moderator of the forum, Biznews Asia editor and MOPC president Tony Lopez, commented that Mrs. Arroyo sounded like she meant business, she replied: "I think I can do that, being a non-political president. In fact, I don’t even have to be popular."

Mrs. Arroyo did concede that "there are many generations of abuse and neglect (that) have to be weeded out."

"I don’t underestimate the obstacles to change," she said, citing the need to pass vital legislation, including additional taxes, to raise government revenues and spur growth in the face of warnings of a possible Argentina-style debt crisis in three years.

Rampant tax evasion, corruption, bloated state subsidies and protectionism have been blamed for the government’s fiscal woes.

As part of her campaign, Mrs. Arroyo said she would "provide more teeth to enforcement, to revenue agencies and regulatory institutions" and hire more investigators in order to fight corruption and rampant tax evasion.

Mrs. Arroyo also said she would launch an anti-corruption effort patterned after Hong Kong’s Independent Commission Against Corruption (ICAC).

She hailed the ICAC for the large number of investigators on its staff rather than having many people in administrative positions like in counterpart Philippine agencies.

"I’m peeling back the layers one by one, ever mindful of those who want to undermine my sincere efforts to bring our nation back into fighting form," Mrs. Arroyo said.

Mrs. Arroyo later identified smugglers and tax evaders as among the entrenched interests that she would be taking on as she promised to create "a truly modern, transparent and world class revenue and financial system."

Her statement echoed a warning by a group of renowned economists from the University of the Philippines that the country could experience a crisis similar to that in Argentina after it failed to control spending and debt.

The economists blamed falling revenues for the country’s worsening budget deficit picture, with tax collection falling to just 12.5 percent of gross domestic product in 2003 from a high of 17 percent in 1997.

"While the economy is not yet on the brink at this time, it can probably afford at most three years to avert such a crisis — with possibly a year to convince financial markets it is doing something to reverse the situation," said the economists, who include several former cabinet members.

Social critics have warned that in order to develop the economy, the Philippines must tackle widespread tax evasion, the control of industries by a few powerful families and the dominance of political dynasties that pass power on from one generation to another.

Repeating her call for Filipinos to unite, Mrs. Arroyo said her anti-poverty program, which she unveiled at her June inaugural, would have much better success if there is a concerted national effort to revitalize the economy.

"I need every single person, company and leader to continue to do their part with greater commitment to unlock the concealed wonders of this nation, create a new middle class and eliminate poverty," she said. "The road will not be easy but the bumps will lessen over time and the slope will be less steep."

Tight watch

Mrs. Arroyo’s spokesman, Ignacio Bunye, said officials will also maintain a "tight watch on consumer prices and keep profiteering down" as well as clamping down on calls for higher wages.

He said there was a need to preserve existing jobs "and maintain viability of enterprises to maintain employment capacity."

Mrs. Arroyo said last month said the Philippines was already in the midst of a fiscal crisis and introduced a drastic austerity program — including scrapping parties and gift giving by government officers and most foreign trips for government officials.

The President has cut the number of vehicles in her security convoy as her personal contribution to her administration’s efforts to reduce fuel consumption to deal with high oil prices as well as narrow the budget deficit.

The convoy had previously been made up of up to 15 vehicles, most of them fuel-guzzling sport utility vehicles, aside from motorcycle police outriders.

As part of other measures to save fuel, Mrs. Arroyo has already told government agencies to buy fuel-efficient vehicles and urged people have "car-less" days by opting for public over private transport.

Shopping malls and moviehouses have also been asked to shorten their business hours to save electricity.

Mrs. Arroyo wants to reduce the government’s fuel and electricity consumption by 10 percent over the year, which would yield P400 million in savings.

She also wants to cut the country’s annual oil import bill by 12 percent, translating into savings of some $784 million.

To help the country avoid a looming fiscal crisis, barangays have earlier offered to forgo their increase in the share of tax revenues collected by the government.

Several lawmakers said they will reduce their pork barrel or funds meant for development projects as their contribution to the government’s efforts to ease the budget deficit.

To match that, Mrs. Arroyo said she will cut her office’s funding for pet projects, known as the President’s Social Fund, to further reduce government expenditures and save on cost. — With AFP

Reported by: Sol Jose Vanzi

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