Senators urge Arroyo to rethink fiscal strategy
Cut revenue targets, spend more to help poor
By Gil C. Cabacungan Jr.
Philippine Daily Inquirer
First Posted 06:53:00 07/08/2008
MANILA, Philippines—Senators Monday urged President Gloria Macapagal-Arroyo to change her budget strategy by lowering collection targets and allowing for more deficit spending this year to help marginalized Filipinos cope with surging food and fuel prices.
“Those who do not change their minds despite the big change in the situation are called foolish. It is utter foolishness to refuse changing one’s decision when that decision was made at a different time,” Sen. Manuel Roxas II said.
Sen. Francis Escudero concurred with Roxas, noting that it would be foolhardy to stick to a zero-budget deficit program this year when the assumptions made in the budget were “all wrong and inapplicable.”
Escudero said the 2008 General Appropriations Act pegged the peso at 42 to the dollar, crude oil at between $62 and $70 per barrel and inflation rate at single-digit levels.
“They should reassess and re-compute this mid-year for planning and program purposes for the remainder of the year,” he said.
Senate Minority Leader Aquilino Pimentel Jr. said the “times will be more difficult if President Arroyo refuses to suspend the value-added tax on oil.”
To make up for lower collections from the suspension of the VAT on oil, Pimentel said the government should avoid making “off-budget expenses” and slow down on “unnecessary projects.”
Albay Gov. Joey Salceda, an economic adviser to the President, conceded that there was a need to rethink the government’s fiscal strategy because global economic conditions had elevated social rebalancing as the most urgent and critical national imperative.
“Offhand, at the minimum, the budget does not reflect that,” he said.
But Salceda suggested other means to raise funds to bankroll increased subsidies instead of lifting the VAT on oil.
He said the government should review its balanced budget doctrine by allowing for more borrowings to finance direct subsidies to the poor.
“Keeping the status quo is grossly insensitive, worse negligent, imprudent, matched only by the captain of MV Princess of the Stars. But we should not destroy what we have achieved by lifting the oil VAT. This is why the President approved an economic stimulus program, which provides the basis and need for economic policy changes,” Salceda said.
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