I realize Mr. Gil was never considered a serious contender, but you have to give him credit for knowing the country’s most urgent problem and for offering a "solution," no matter how outrageous. Eddie Gil, unlike the other candidates for president, zeroed in on what should really worry all Filipinos – our serious fiscal deficit problem. He also offered to "solve" that problem, once and for all, by paying for all of the country’s indebtedness himself.
Okay, that’s ridiculous, you would say and I agree. Where would he get all that money to pay the country’s total indebtedness? But that’s beside the point. It does not matter that his so-called gold certificates (or something like that) may just be in his head or if these are of any value. But at least, here is a candidate who knows our urgent need to pay for those debts somehow. We really need to reduce the burden of debt service as quickly as possible so we can move on and invest on our future.
FPJ barely talked about the fiscal deficit problem. Raul Roco acknowledged the problem and his solution is to bring back enough trust in government so that people will pay the proper taxes. Ping Lacson would cut graft and corruption in the revenue collection agencies and that’s the same promise Ate Glo’s been making and frankly, no one believes anymore that it is attainable.
Only Eddie Gil offered an imaginative "solution", one that is from way outfield. The gold certificates of Eddie Gil are probably a take off from the Yamashita gold treasure of the late President Marcos. Funny, you say? No, it isn’t funny as it betrays how hopeless we must be to clutch at straws.
The country’s hopelessly in debt and our politicians, except one who was laughed out of the contest, are not giving the problem its due concern. I understand that government debt is now equivalent to over 500 percent of what it could collect in any given year and we are being told that there is no cause for alarm.
The latest available figures from the Department of Finance, as quoted by the former National Treasurer, Leonor Briones, pegged the total public-sector debt at P5.16 trillion as of 2002. The year before that, the figure was P4.41 trillion, which means the total public debt ballooned by P750 billion in just one year. That is probably as much because of the peso’s devaluation as it is because Lito Camacho borrowed like crazy to meet payroll, interest expense and other needs that have nothing to do with educating our poor and taking care of their health.
Yes, you got it right – to pay payroll. Our government is borrowing money not only to pay its maturing debts, but also to meet the fast growing payroll of an extremely large bureaucracy, which apparently includes a faded superstar. Even if cutting the bureaucracy (essentially the paper pushers, not the teachers, doctors, policemen) by half would also improve efficiency as much as cut salary costs, no president has had the guts to trim the bureaucracy.
Or if they did initiate cuts, they also hired more replacements than the number separated, wasting the separation benefits taxpayers paid. A president worth our votes must be brave enough to say that the government cannot be the employer of last resort. Ooops...there goes the Gloria street brigades.
Only Brother Eddie Villanueva had the guts to promise drastically cutting the size of the bureaucracy if he is elected. It has to be one of the first steps the newly elected President must take. Because a bloated payroll takes priority, we are no longer able to invest in roads, bridges and other such capital-intensive infrastructure projects we need for economic growth. The easy way out of borrowing here and abroad is no longer tenable.
Cutting expenses is more difficult, but it is really the only way to go. I don’t think we can cut the fiscal deficit simply by collecting more taxes or even by passing new tax measures. Because the base of people who are taxed again and again is so small, imposing more taxes would just strangle business and the entrepreneurial spirit, causing more unemployment and social unrest.
And speaking of cutting expenses, you can’t deal with the fiscal deficit without confronting the reality of the Napocor deficit, projected to reach, if not exceed P100 billion this year. Thus far, Ate Glo not only ignored this Napocor deficit problem, she aggravated it when she capped the PPA last year.
No wonder then that the country’s fiscal deficit has remained, as Briones puts it, "at stratospheric levels." Ms. Briones says the public-sector debt is "already equivalent to 100 percent of the gross domestic product!" The figure I got is more along 77 percent of GDP although it approaches 93 percent of GDP if you include government’s contingent debts, like Napocor’s. IMF thinks 25 percent is the sustainable level for a developing economy like ours.
The Department of Budget and Management reported that the National Government’s budgetary deficit had reached P200 billion last year. The 2002 figure was even higher at P210.7 billion. However, the total consolidated public-sector debt, which also covers local governments and government corporations, peaked at an all-time high of P244.6 billion for 2003 alone.
Because we have already rejected Eddie Gil and his "gold certificates", we have to make do with more conventional ways of dealing with the fiscal deficit. The problem with conventional approaches is that we have tried them and got nowhere.
We have consistently and miserably failed to produce positive results in raising tax collections and in cutting expenditures and we are over borrowed. Worse, Ate Glo, under threat of an election campaign season, adopted populist measures that made our fiscal deficit problem worse. Will she now have what it takes to clean up her own mess?
What happens once foreign and domestic creditors start having second thoughts about the IOUs of the Bureau of Treasury? Will Ate Glo run to Mr. Gil and take him up on his offer to use his "gold certificates" as a last desperate move? Sabagay, knowing what we know about government’s finances, the time will come soon when we would be asking what’s the real difference between Mr. Gil’s "gold certificates" and a government IOU?
An elderly couple had been dating for some time. Finally they decided it was time for marriage. Before the wedding, they went out to dinner and had a long conversation regarding how their marriage might work. They discussed finances, living arrangements and so forth. Finally the old gentleman decided it was time to ask about their physical relationship.
"How do you feel about sex?" he asked, rather trustingly.
"Well," she says, responding very carefully, "I’d have to say I would like it infrequently."
The old gentleman sat quietly for a moment. Then over his glasses, he looked her in the eye casually and asked, "Was that one or two words?"
Boo Chanco’s e-mail address is bchanco@bayantel.com.ph