Next president to face record deficit of P400 billion, says Recto

MANILA, Philippines - President Arroyo’s successor could face a record budget deficit of P400 billion after lawmakers decided to increase pork barrel spending, former economic planning secretary Ralph Recto said yesterday.

“Their decision to cut debt service funds by P64 billion will definitely result in a deficit that is bigger than this year’s level, which is projected to hit more than P300 billion,” he said when asked to comment on the final shape of the proposed P1.541-trillion 2010 budget.

“P300 billion plus P64 billion is already P364 billion. The next president, who, from all indications would most likely be Noynoy (Sen. Benigno Aquino lll), will have a hard time grappling with this.”

Recto, a Liberal Party senatorial candidate, said Mrs. Arroyo should veto the P64-billion debt payment reduction to keep the budget deficit and interest rates down.

Senators and members of the House of Representatives know that under the law, debt payments are automatically appropriated and the government is bound to make these payments even if Congress reduces the funds for them, he added.

Recto said if Mrs. Arroyo does not veto the reduction and releases money for additional election spending, that would worsen the budget deficit when she leaves office.

The prudent course of action for Mrs. Arroyo to take is to lessen the gravity of the financial problem for her successor is to reject initiatives for bigger election spending, he added.

Over the weekend, Nueva Ecija Rep. Edno Joson said the small Senate-House conference committee on the budget “has clearly loaded the 2010 budget with election funds.”

Senate finance committee chairman Edgardo Angara and his House counterpart Quirino Rep. Junie Cua jointly headed both the expanded conference committee of more than 30 members and the smaller six-member panel.

Joson said the bulk of the P64 billion that the Angara-Cua panel cut from debt service funds has apparently been diverted to the congressional pork barrel.

 “It happened in January this year to the 2009 budget,” he said. “It was repeated less than year later to the 2010 budget.”

Senators and House members would most likely ask Mrs. Arroyo to release pork barrel funds hidden in the 2010 outlay early next year so they could be used during the election campaign, Joson said.

At the start of the budget conference last Tuesday, Angara and Cua said Mrs. Arroyo should “frontload” funds between January and March.

The combined presidential, congressional and local elections will be held on May 10.

The Senate and the House ratified the Angara-Cua report at about 6 p.m. last Friday.

Fewer than 30 House members attended Friday’s session and voted to approve the report even without seeing it.

They were not given nor did they ask for copies of the report. Cua refused to furnish copies to journalists.

Ratification of the document was clearly rushed. Some 15 minutes before it was put to a vote, Cua’s staff was still asking conference committee members to sign it.        – Jess Diaz