PUTTING  FISCAL  HOUSE  IN  ORDER:  GMA  REVAMPS  ECONOMIC  TEAM

MANILA, January 23, 2005 (STAR) By Marichu Villanueva - Determined to put the country’s fiscal house in order, President Arroyo announced yesterday that "urgent changes" are in store for her Cabinet this year, including a revamp of her economic team.

The President made this pronouncement as she accepted the resignation of Finance Secretary Juanita Amatong.

Presidential Spokesman Ignacio Bunye confirmed the resignation of Amatong, which she herself announced last Friday.

Amatong said her fellow economic manager, Trade and Industry Secretary Cesar Purisima, has accepted the offer to replace her at the finance department but there has been no word from Malacañang on who would replace Purisima.

Amatong took over the top position at the Department of Finance (DOF) in late 2003 following the resignation of Jose Isidro Camacho.

With Amatong out, Bunye conceded the Cabinet rigodon has already started. Bunye stressed that only Mrs. Arroyo knows who among the Cabinet members would be affected by what she called "urgent changes."

"As the President has repeatedly stated, Cabinet posts are subject to continuous reassessment, depending on the wishes of the appointees themselves, their performance and their capability to meet the President’s expectations," he added.

Bunye said Amatong "has been a valuable team player who played a key role in the fiscal program and there are others equally qualified in terms of patriotism and competence."

Amatong said pressures of the job had prompted her to resign. "I have hinted (to Mrs. Arroyo) that I am leaving as soon as possible. I don’t like this high-pressure job," she told reporters.

Amatong told The STAR yesterday that she would turn over her position to Purisima on Feb. 15.

A day after announcing her resignation, Amatong flew to her hometown of Dumaguete City. "Yes, I’m happy. You don’t know how it feels to be a ‘liberated’ person," she said.

Amatong conceded she was not sure if the President accepted her resignation which she submitted verbally two weeks ago.

"I told the President: ‘Ma’am, the position of the finance secretary is a high-profile job and my personality is not fit. I’m a very shy person," she said.

Amatong revealed Mrs. Arroyo agreed with her, quoting the President as saying" "Yes, Nits, you’re a technocrat."

The outgoing finance secretary, however, expressed satisfaction that she has made a large contribution to the fiscal reform efforts of the Arroyo administration.

Palace communications director Silvestre Afable said Amatong’s departure would be a great loss, remarking that "she is among the most experienced and has worked both in the Philippines and financial institutions abroad."

Afable recalled that Amatong "was the one who bore the brunt" of explaining to legislators and the public the necessity of passing Mrs. Arroyo’s eight controversial revenue measures needed to control the budget deficit and avoid the fiscal crisis.

Despite her efforts, only one of the revenue measures has been signed into law so far. Partly due to the failure to pass more of the measures, international credit ratings agency Standard & Poor’s on Jan. 17 cut the Philippines sovereign credit ratings by one notch.

However, controlled spending and improved collections during Amatong’s term resulted in the country’s posting a budget deficit in 2004 of P186.1 billion, well below an official ceiling of P197.8 billion.

This was equivalent to 3.9 percent of gross domestic product, also below the 4.2 percent ceiling targeted by the government.

The downgrade

For his part, Economic Planning Secretary Romulo Neri said Mrs. Arroyo was "satisfied" with the performance of her economic team which included himself as director-general of the National Economic and Development Authority (NEDA).

Neri pointed out the economy last year grew by more than 6.2 percent. He said this can be a gauge of the President’s satisfaction in her economic team’s performance.

Despite the downgrade by S&P, Neri said the country’s economy was not even affected as shown in the strong trading in the stock market and the strengthening of the peso against the dollar.

"I think the President is satisfied," Neri said.

Purisima, on the other hand, was designated by the President as her official economic spokesman as well as her chief economic manager in charge of shepherding the eight revenue generating measures for approval in Congress.

Aside from the pending tax bills, Purisima, a former top executive of the Sycip, Gorres and Velayo accounting firm, has been active in working with lawmakers on various administrative measures to raise P100 billion in non-tax sources of additional revenues to narrow down the ballooning budget deficit.

It was Purisima who presented the proposed fiscal reform package of Mrs. Arroyo last year to business leaders before it was submitted to Congress for enactment.

Bunye, for his part, did not say who would be appointed to the DTI once Purisima moves over to the DOF.

"The President’s decision on this matter will be for the best interest of the country," he said.

It was gathered however that Juan Santos, former chief executive officer of Nestle Philippines Inc. and former president of Management Association of the Philippines, is being eyed as the new trade secretary.

Executive Secretary Eduardo Ermita earlier hinted of the possibility of changes in the Cabinet within the year as he noted Mrs. Arroyo has been taking "a second look" at the appointments which are now subject to confirmation by the Commission on Appointments.

Ermita surmised that some "personal matters" were reason for the delay in the renewal of ad interim appointments of certain colleagues in the Cabinet, which he said, could only be between Mrs. Arroyo and the appointee concerned.

"So the others (Cabinet members) when things do not come out yet on time, we can always assume that the President is having her own assessment, taking her time to find out how things should be," Ermita said.

"In other words, out of respect for the President, give her time to think about those appointments," he said.

Amatong was among five Cabinet members whose ad interim appointments had not been signed by Mrs. Arroyo.

The others were Angelo Reyes of the interior and local government, Vicente Perez of energy, Manuel Dayrit of health and Florante Soriquez of public works and highways.

The trigger

Opposition lawmaker Sen. Aquilino Pimentel Jr. said the possible appointment of Purisima as finance secretary augurs well for the private sector.

Unlike Amatong who is a career government official, Pimentel said, Purisima came from the private sector and has better rapport with the business community and civil society groups.

"Maybe the President sees that politically speaking, Secretary Purisima is in a better position to solicit the support of civil society for the programs of her administration and maybe that made the President decide to sacrifice Secretary Amatong," he said.

Pimentel claimed Purisima has emerged as the top performer in the Cabinet in a recent survey among leaders of the business community.

"I sympathize with Secretary Amatong because she was really doing her best as finance secretary. As a career official, she had to be sidelined because of the President’s more compelling need for support from the private sector," he said.

A ranking administration lawmaker, on the other hand, said the latest credit downgrade by S&P on the country has necessitated Mrs. Arroyo to revamp her Cabinet.

Albay Rep. Joey Salceda, chairman of the committee on economic affairs at the House of Representatives and also a member of Mrs. Arroyo’s economic team, said the credit downgrade and Purisima’s possible appointment to replace Amatong are "not a coincidence."

"A revamp of the economic team is definitely a positive and proportional response to the downgrade," he said.

The Albay lawmaker who played a key role in crafting Mrs. Arroyo’s economic agenda in particularly addressing the fiscal crisis, said there has been "long crying need for a towering figure with both international and domestic stature" in the Cabinet to formulate and articulate a coherent and cohesive public policy and fiscal strategy. – With Jose Rodel Clapano, Paolo Romero, AFP


Reported by: Sol Jose Vanzi

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