Reality check, Mr. President

In an ideal Philippine government, the democratically elected administration would be able to raise revenues by collecting the proper taxes from its citizens, corporate entities, businesses and fees for various public services, custom duties and tariffs on imports.

It would also be able to attract investors and investments in productive and strategic industries that would allow the country to generate gainful employment and produce goods and services that we can export to earn even more revenues that will be used for the development of the country.

Additionally, the government would ensure that our country is self-sufficient in the production of our basic food staples, such as rice, meat and vegetables, as well as basic material goods so that it can balance our import needs with what we would earn from the export of locally-produced goods and services.

Of course, since all accounting is never a zero sum equation, there will be instances when the government is not able to sufficiently fund its expenditures and will have to resort to borrowing domestically or from foreign sources.

The government, ideally, would be prudent in using the taxes, fees and duties it collects, as well as borrowed financing, to fund government health services for the people, including provision of vital infrastructure such as roads, bridges, airports, seaports and even low-cost housing, with no graft and corruption and wasteful expenditure from our elected and appointed government officials and lawmakers.

Unfortunately, ideal is difficult to achieve and the reality is nowhere near ideal. Our various governments messed up the economic growth plan decades ago and almost all succeeding governments still have not solved the growth puzzle.

What most of our government officials and lawmakers have perfected at a generational and doctorate degree level is corruption.

Monday’s State of the Nation Address by President Marcos, for me as a business journalist, failed to address the state of our country’s finances first and foremost to fund his ambitious announcements of a P20 per kilo rice, free PhilHealth coverage (even for a kidney transplant) when those who contribute rarely, if ever, enjoy free full coverage, free internet (that would piggy-back on private telecommunications providers) for public schools and discounts for the use of privately-owned light railway systems (who will likely have to absorb the cost).

While President Marcos promised to finally hold accountable provincial water districts and electricity providers and their joint venture partners for their failure to provide clean and sufficient water, and electricity services, he did not clarify exactly what actions he would take against them. Perhaps he should get his private sector partners instead to take over the operation of those provincial water and electricity utilities.

Even to those the President acknowledged may have pocketed funds for flood control projects, all he said was a weak admonition of “mahiya naman kayo!”

What President Marcos could not, and would not, clearly address in his fourth SONA was the culpability of our country’s lawmakers in continually botching the national budget, inserting and redirecting funds to inscrutable intelligence funds, community development funds, and the now favorite “ayuda” funds. The national budget increases yearly, but the misallocations continue and become more brazen without accountability.

While our Bureau of Internal Revenue and Bureau of Customs regularly announce their success in collecting taxes, customs duties and tariff fees, there has always been difficulty in plugging tax loopholes and leaks.

Complaints continue to abound of corrupt BIR and BOC personnel as the two revenue-generating agencies continue to fail to fully computerize their operations, especially as we enter the powerful era of artificial intelligence which could more efficiently and accurately compute and track tax payment compliance.

Strange, this failure to computerize when digital payments have become common and normal, and online gaming and online scams have become more sophisticated, proliferate, and infiltrate “secured” private systems.

The shortfall in revenue collection, and despite the hard-earned contribution of our hard-working and long-suffering overseas Filipino workers, has led the Department of Finance to creatively interpret and tap contribution funds from government-owned and controlled corporations such as PhilHealth and the Philippine Deposit Insurance Corp. for government’s expenditures.

Thus, even after all the brouhaha over the use of PhilHealth’s contribution fund, President Marcos is now talking about free kidney transplants at a time when healthy kidneys are now a highly priced commodity and the medical cost of such an operation can easily run into millions. (Maybe these will be the new budget allocations)?

The President continues to double down on the availability of a P20-per-kilo rice while failing to explain how much the government would have to subsidize the unrealistic P20-per-kilo staple, just to offer what would likely be a token availability to a chosen few buyers.

The President’s speech writer (or writers) clearly knew how to gain the sympathy of some (not all of course) of his audience by humbly acknowledging the government’s shortcomings. They also managed to capitalize on the goodwill generated by Philippine National Police Chief Nicolas Torre from the victorious (by default) boxing match with Acting Davao Mayor Baste Duterte who chose to fly away to Singapore.

I think that part of the President’s speech got the best applause and reaction. PNP Chief Torre was the much needed happy pill that the President provided to Filipinos who are easily appeased by a boxing match, and perhaps even with the promise of free use of government sports facilities, instead of actually setting aside and developing natural open area parks and not auctioning off government land to private developers.

Other major economic issues that were not tackled in his speech include the trade and tariff issues now facing us. The President apparently does not see the need to explain to Filipinos how trade is a vital part of our existence, especially since we do not produce most of what we consume and we likewise do not produce enough to export to earn revenues.

Instead, most Filipinos are blithely ignorant about our trade imbalance and how much we pay for our imported inputs.