OPINION: P100-BILLION FUND IS SHEER PROPAGANDA
MANILA, OCTOBER 27, 2008 (STAR) DEMAND AND SUPPLY By Boo Chanco - Don’t expect much from Ate Glue’s off-budget P100-billion infrastructure program supposedly to pump-prime the economy. It is nothing but sheer propaganda meant to capture a headline. It is also a way out for the President after she was embarrassingly rebuffed by both the IMF and the World Bank on her claim that there was a $10 billion regional rescue plan supposedly funded by these multilateral financial institutions that, as it turned out, they never actually committed to.
Finance Secretary Teves, after admitting his mistaken information feed to Ate Glue, said that fund is a good idea we should have ourselves ready to be used if the circumstances call for it. Well, Ate Glue’s ever loyal cabal of professional trade group leaders took the hint and broached the creation of such a fund.
All according to script, Ate Glue welcomed the idea supposedly proposed by the Philippine Chamber of Commerce and Industry. Half the proposed funding would come from government financial institutions and the rest from private banking and financial institutions. Nothing was said about how much PCCI and its members are contributing.
PCCI president emeritus Donald Dee was quoted by newspapers saying that the state-run Development Bank of the Philippines, Social Security System, and National Development Co. had each committed P10 billion each to the proposed fund. “That’s three already and we’ll look for more,” he said. “We’ll also ask the commercial banks [to contribute to the fund].”
Teka muna… how generous of Mr. Dee to volunteer the funds of SSS, as if it were his own! He did not explain how we, the workers who own the funds being managed by SSS, will benefit from this. Will we earn interest when we effectively provide funds to government to undertake projects rightfully financed by government through the regular national budget?
And why should the commercial banks contribute to the fund that according to press releases will finance the construction of expressways and other infrastructure? That’s effectively additional taxation on the banking system which is uncalled for at this time when our financial institutions need all the resources they can lay their hands on.
Sen. Mar Roxas is right. In a speech before the Financial Executives Institute of the Philippines (Finex), Roxas instead called for a realignment of the 2009 budget to redirect P100 billion in government spending to measures designed to neutralize the impact of a looming global recession.
Instead of seeking money outside the budget, relying on government financial institutions and private banks that might have their own need for cash, Roxas said, the government must work within its own budget. “We must revisit and rework the 2009 budget in light of the possible impact of the global crisis,” Roxas said. “We must be prepared and at the same time be strategic so as to take advantage of opportunities once the crisis subsides.”
The budget was prepared months before the global financial crisis took a turn for the worse. “Given global events since, it surely is obsolete,” Roxas said. I support Mar’s counter-proposal for a one-time income tax credit worth P5,000 be given to all of the country’s four million fixed income workers which he estimated would amount to P20 billion. “By putting more money into people’s pockets, it will stimulate consumer spending,” Roxas said.
It also makes sense to realign another P20 billion in the budget as additional catch-up investment in education and reforms in basic education. “Education still is the most important tool and capital asset,” Roxas said. Investing on our people in terms of education and health care will stimulate the economy now and deliver further dividends in the future. Human capital formation is key.
It is a pity that Mr. Dee refuses to relinquish effective leadership of the PCCI to a younger generation. He is using PCCI as a platform to ingratiate himself with whoever is in power in Malacanang. Hence, this lame brained idea that was designed purely to capture headlines and nothing more. He has even managed to acquire a politician’s propensity to win brownie points at the expense of someone else, in this case, the SSS. He should instead put his money where his mouth is and spare us the theatrics that rightfully belongs only to the Malacañang Press Office.
Actually, even the DBP and the NDC already have charters and responsibilities… roles to play in the country’s development. They should also not be sidetracked by grandiose ideas that merely dissipate what little resources our institutions have to carry out their mandates.
Oil prices It is so pathetic to see Energy Secretary Angelo Reyes on nationwide television express powerlessness as he tries to squeeze a higher rollback on oil product prices from oil companies. A top government official should have more dignity than that.
Actually, if the Energy Secretary only moved around more often, he would have noticed how a price war is now raging in some areas among local gasoline stations. If one dealer brings down his price, so would the others in the area. Everyone wants to keep market share.
For instance, here is something I picked up in the column of Jarius Bondoc last Friday.
“STAR reader Dr. Louis Limjoco, who regularly drives from Lucena to Manila, knows they’re lying. He cites as example the price war in Sept. among filling stations in that capital of Quezon. A station that sells generic diesel slashed pump rates by P2.50 a liter, prompting competitors to follow suit. Stations of the Big 3 — Petron, Shell, Chevron — resorted to promos lest they lose customers. To the benefit of motorists and transporters, the price cuts spread to surrounding towns like Candelaria, and all the way to San Pablo City in Laguna. As a result, the provincial rates, usually higher than Manila’s, ended by P1.50 lower per liter.”
This is why it is a wrong idea to sell out of Petron. I know for a fact, out of experience, that Petron can be used to bring down prices if government wants to do that. I remember the time when then Energy Secretary Ronnie Velasco failed to get Shell and Caltex to bring down their prices in friendly negotiations. So Velasco made Petron bring down its prices unilaterally. Shell and Caltex followed a couple of hours later.
The problem with the government appointed management and directors in Petron today is that after they started enjoying the generous perks that go with working for Petron, they forgot why they are there… to serve the people. They think they are oil moguls too. Petron could have been so useful in looking after the Filipino’s interest in times like what we have now.
But this silly government is selling out completely. It will lose valuable inside information on the oil business. They will be ineffective regulators because they are simply outsiders looking in. The oil business has little respect for outsiders, specially outsiders with no clout and no ability to understand the technical intricacies of the oil business. That’s what government will be after Petron is completely privatized.
New York marathon
Here’s a note to our readers in New York. Do find the time to cheer a good sized Philippine contingent scheduled to run this weekend at the New York marathon. There are about 20 Pinoys in the group, including Sen. Pia Cayetano (her second time), 71 year-old Eduardo Yruma and Rosan Cruz, one of my associates.
I don’t understand why they do it, considering that it is now typical fall weather in the low teens in New York. Just thinking of sweating profusely in that cold weather makes me think of pneumonia. But you have to admire the effort and the determination they put into the training that qualified them to run in a marathon at all. My son did it last year, running the San Francisco Marathon. Just walking up and down the steep hilly streets of San Francisco is more than enough for me.
Here’s hoping the Pinoys put up a creditable performance in New York.
Chief News Editor: Sol Jose Vanzi
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