Staying the course

It had been a difficult year for the Arroyo administration.

Last year, in helping prepare for President Arroyo’s 5^th State of the Nation Address (SONA) as an elected president, Congressman Danilo Suarez – as chairman of the House Committee on Oversight – adopted the phrase “Staying the Course” as the theme for the forthcoming administrative year.

In simple terms, it meant moving forward without too much deviation; in Suarez’s own words, “to sustain the growth momentum and stay on track despite repeated calls for more populist actions.” The President, he added, would rather be right than popular, and that she is not in power to please.

In the assessment report prepared by the Oversight Committee during the 2008 SONA, two agenda items – balancing the budget and healing the wounds of EDSA 1, 2 and 3 were rated exemplary.

Six agenda items received substantial compliance ratings. These were on education for all, decongesting of Metro Manila, developing Subic and Clark, jobs generation, decentralization through the use of transportation and digital infrastructure, and the goal for a just end to the peace process.

The automation of elections received modest compliance. The agenda item, water and electricity in every barangay, got split ratings, with the water targets given a minimal compliance rating and electrification receiving substantial compliance ratings.

During the last 12 months though, the crippling global financial crisis that had hit the US coupled with the debilitating effect of such seemingly illogical ups and downs in the price of oil had put a lot of pressure on the government’s resolve to stay the course.

Imbalanced act

In particular, the goal of achieving a budget balanced (previously accelerated for 2008, and later reset back to 2010) was premised on continued prudent government spending coupled with an efficient revenue system, both of which did not happen.

The government had to introduce its own stimulus package, which meant allotting as much as P75 billion to pump prime the economy, and if necessary, to spend for social welfare. Increased spending, however, was not compensated by improved collections as concerned government agencies failed to meet their targets.

It will be recalled that the Arroyo government was able to bring the fiscal deficit to its lowest in recent years, though mainly through a successful sale of state assets. As the government continues to dispose of all its remaining properties, the reality that the national budget will have to rely in future on tax collections is becoming more apparent.

Genuine tax policy reforms

In order to attain an efficient revenue collection performance, the government must continue to push for genuine tax policy reforms, including rationalization of fiscal incentives. Once this measure is passed, only those incentives that are key to improving the Philippines’ competitive advantage over its neighboring countries shall be retained, resulting in a broader tax base and more revenues.

The exemption of the Bureau of Internal Revenue and Bureau of Customs employees from the Salary Standardization Act should also be prioritized in order to minimize the lure of graft and corruption within said agencies. At present, seven out of 10 business establishments do not pay correct taxes.

Given this data, it would be reasonable to conclude that corruption among internal revenue officials is a major hurdle towards a more efficient and effective revenue collection. The government should put more effort into weeding out these corrupt officials as it becomes more dependent on tax revenue for funding of operations.

We will continue our discussion on the state of the nation in my next column, to coincide with the President’s SONA – presumably her last – on Monday.

Giving space for readers’ views

Since day one of my column more than seven years ago, I have always believed in bringing discussions on issues that affect Filipinos to the public fora.

I am privileged to have been given the space in this newspaper to voice my views. When a reader sends his thoughts, especially if this provides a new perspective to the issue, I feel compelled to share with others.

I have always regarded my column as an expression of public trust, and therefore, will remain committed to upholding this trust with utmost transparency.

Responding to a reader’s reaction

I would like, therefore, to respond to an email by Mark Lawrence Reyes ([email protected]) and take exception to the slur that Mark has made on my motives for printing readers’ views.

Here is part of Mark’s email commenting on the readers’ views published on July 6 and July 20:

“I have a nagging suspicion that three alleged letter senders, namely ‘Wilson,’ Boie Esguerra and George Bonglong, were apologists of IBM masquerading as ordinary Star readers.

“Worse, Wilson, Boie and George may be one and the same person because they basically had the same arguments in defending IBM and hitting GSIS… leading one to presume that the three letters were written by just one person – probably one who works for the corporate communications office of IBM.

“Let me illustrate: In Gamboa’s first column, he printed Wilson’s kilometric defense of IBM and attack on GSIS. In the second column, Gamboa printed Boie’s agreement to the first column. Also in the second column, Gamboa printed Wilson’s reaction to Boie’s own reaction.

“Alas! How could Wilson have possibly reacted to Boie and have that reaction printed by Gamboa on the same day, July 20, when Wilson had yet to read Boie’s letter?

“The only way for Wilson to have reacted to Boie was for Gamboa to facilitate an exchange of communication between Wilson and Boie, which should already raise questions on the motive of the columnist.”

Transparency and trust

First, let me put to rest Mark’s question on how Wilson could possibly have so quickly reacted to Boie’s letter, so much so that this column was able to print both on the same day. The answer is so simple: Boie sent me an e-mail on July 6 (with Wilson copied), which Wilson immediately replied to (this time, I was copied).

The letters were quoted in the column with careful editing but making sure though that the views and arguments of the letter senders are preserved.

I shall continue to give space to readers’ views on issues that are discussed in this column, and hopefully through transparency and mutual trust, the public will have a better appreciation of the various issues affecting their day to day lives.

Should you wish to share any insights, write me at Link Edge, 25th Floor, 139 Corporate Center, Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at [email protected]. For a compilation of previous articles, visit www.BizlinksPhilippines.net.