It has to be a flaw in our cultural composition: in the face of immense peril, we trivialize.
I don’t think our social psychologists have focused on this propensity keenly enough. My own pet theory here is that trivialization is a coping device.
Either that or we as a people have a serious infirmity: an inability to be serious about anything.
When tragedy breaks, we joke about it. When danger lurks, we find something laughable about our fate. We have a highly developed sense of irony – although this, too, might be a method for coping with desperate circumstances.
Once, we brought down a dictatorship by peppering it with political joke. Three years ago, we kicked out a failed presidency by, well, laughing it out of office. A counterrevolution subsequently mounted by Estrada supporters failed because it was too grim.
The other day, one congressman resigned his elected post. He claimed, albeit in a most garbled manner, that nothing was being seriously done to avert a national calamity that will soon drag us the way of Argentina.
I am not really sure how the resignation of Rep. Antonio Diaz will help galvanize a meaningful response to the looming fiscal crisis – except that this resignation implies one less congressman to spend for.
The act, at least, has made this obscure congressman a hero for the moment. Should any of his congressional colleagues try to outdo this novel method of grandstanding at one’s own expense, they will have to commit to self-immolation.
On the underside, however, the act has made the congressman an icon of our most usual response: in the face of a large problem, we flee.
Now that he has resigned, Diaz has lost a unique vantage point from where he could have worked a little harder than usual to become part of the solution.
But let’s leave that incident to its own unseemly fate. The more important concern is whether we are making any headway in meeting the onrushing fiscal crisis in terms that match the magnitude of this problem.
We are not wanting in creative ideas about what we to do in order to avert a deterioration of the fiscal situation. A two-step increase in the VAT has been worked out. This is a viable approach since VAT is among the easiest taxes to collect.
There is no debate about raising "sin taxes", since specific taxes on these products have long been eroded by inflation. But while "sin taxes" are the least controversial, it also happens that there are extremely powerful lobbies sandbagging against any action on this front. This might explain why some of our legislators would rather cut their pork than impose just taxes on commodities with high social costs.
We could impose, as well, a small import surcharge. But this will have to be enforced evenly across the board so as not to cause distortions across economic sectors. All this requires is executive action.
We could cut our oil imports dramatically if a really serious executive order is issued by the President forcing the recycling of used engine oils. We have Filipino-invented technology that will allow us to reuse oil with zero waste and zero pollution. Weak enforcement of the laws has led to improper disposal of highly contaminating used oil and the importation of used oil to keep our recycling plants running.
Government could, for instance, allow the debt it owes contractors (running in the billions) to be securitized in the meantime. That will keep vital sectors running without government having to shell out payments too soon. But government will have to commit to a definite timetable of repayment sometime down the road. Otherwise securitization will not be possible.
Securitization will have double-edged benefits. It will plow money to companies that will otherwise be idle – causing no employment and paying no taxes. It will allow our banks, currently awash with cash and in want of borrowers, to put their liquidity to use.
This is important to keeping the economy moving and maintaining the growth momentum. The more we grow, the better we can manage our outstanding debts. With government spending less due to fiscal difficulties, every effort must be exerted to get help the private sector swing into action.
But the really hard (and really meaningful responses) are the easiest to do – except that they also require the greatest amount of political will.
The first step is to raise electricity tariffs to reflect real costs. That will mitigate the losses of the National Power Corporation and avert the ballooning of the consolidated public sector deficit this year.
Sure, this company has been mismanaged and is inefficiently run. But the cleanup of this company will take a much longer period. That cleanup, while necessary, must not be a precondition for pricing electricity correctly.
Grandstanding politicians are telling us that we should clean up this company first before adjusting prices. That is surely a popular thing to say. But it is not the wisest thing to do.
Next, we will have to raise toll rates to realistic levels. This will help avert losses that will force government’s contingent liabilities to kick in.
True, many GOCCs are losing money. Some of them are truly inefficient. Some of them – such as the NFA – are designed, by policy, to lose money. If we change the policy, we will avert the impending losses that will feed into the deficit as well.
All the things we can do immediately require vast amounts of political will. It will cause pain, no doubt. Political pain will have to be borne by the political leadership as a result.
We will have to bite the bullet to get through this episode of difficulty. The biggest bullet is that which the political leadership must bite – falling approval ratings and all.