Cushioning the impact

At the Manila Overseas Press Club (MOPC) forum last Tuesday, GMA made it clear that she is not going to concern herself with popularity anymore and that she is going to take on entrenched interests. Well and good. We hope she does so resolutely because this time it is a question of whether she breaks up the vested interests or they break her. GMA should just forget about the ratings in the latest SWS survey because what is important now is her political will to do what needs to be done to turn things around for this country. She should just concern herself with how history will judge her in the long run instead of minding short-term snapshots that are surveys. Reforms, taxes, and jobs are the only clear solutions to the fiscal crisis. Like the Philippine Chamber of Commerce and Industry (PCCI), we should advocate for increased tax collection and the implementation of non-inflationary or "sin and luxury" taxes to cushion the impact on those who have less in life. One way to do it is through the road users’ tax, specifically on the registration of SUVs and other luxury vehicles. To tax fuel would be problematic because it would be inflationary and have a domino effect that will ultimately affect the poor. Tax where it hurts most for those who can afford it the most.

There are elements of mental laziness, inertia, and denial with the legislators’ call for donations such as the Bayanihan Fund and Pondong Pinoy. They should get a grip on reality. Depending on dole-outs from the government employees or the private sector just isn’t a long-term solution because these donations will hardly make a dent on the national debt. Even GMA said so herself. What we need are jobs and livelihood programs to help the people start their own businesses and enable them to fend for themselves. Bayahihan should be held in abeyance until a master plan on how the funds should be disbursed is drawn up.

On top of the recent increase in Napocor rates, which some legislators said is just the first salvo, there was also the transport hike not only from buses and jeepneys and mass transit systems like the MRT and the LRT. Add to this the increase in the toll rates on the North and South Luzon expressways, the Skyway, as well as shipping and other transport costs that will undoubtedly make it even more difficult for the poor to cope.

As it is, there is a lack of basic services like water and electricity, there is malnutrition, the lack of education, and the lack of a population management program. The USAID, for example, no longer gives assistance for artificial contraceptive programs. Perhaps, business groups should take up the slack. These problems should be identified and prioritized in order for intelligently planned solutions to be drawn up. Businessmen can gather donations to put up a fund to address these to cushion the impact of needed reforms that legislators are shirking from: new taxes, reorganizing the revenue-collecting agencies, streamlining government, chopping off the pork barrel, and removing subsidies on services such as power rates and toll fees. It isn’t the government’s job to take and administer donations. As jobs and livelihoods are generated, tax collection should be improved.

I was told that a US-backed foundation has been organized to help alleviate poverty, ignorance, and intolerance in Mindanao because it is a breeding ground for terrorists. They’re gathering the right people and resources.

They’re identifying the problems and mapping out short to long-term solutions to address these before soliciting the funds.

The symptoms of a fiscal crisis are starting to show. Just this week, First

Savings Bank experienced a bank run. We saw the spectacle of irate depositors – mostly vendors and small-time storeowners – picketing a small thrift bank and demanding the release of their meager savings. Bank runs and riots happened in Argentina in 2001, when the government imposed the "corralito" or the little corral that restricted Argentineans from withdrawing more than 250 pesos a week from the banks. People couldn’t withdraw their money. As I recall it, Pres. Carlos Menem and his Economy Minister Domingo Cavallo who devised this in 1991. The system pegged the Argentine peso to the US dollar. Ecuador and El Salvador likewise "dollarized" their currency in 2000 and 2001, respectively. In this country today, there are already signs of a similar situation.

The guarantee fund drive started by PCCI to bail out the economy has so far reached P3-B worth of pledges. This is a viable solution to cushion the impact of a cash-strapped economy. The group is focused on creating jobs and jump-starting livelihood programs. The IMF will not look kindly at the reactionary donation fad. But at the end of the day, we just have to bite the bullet. That’s the only way that the IMF can give us some wiggle room.

Our friend Sergio Luis-Ortiz Jr.’s suggestions are sensible. This is better than listening to the self-serving and grand standing consumer watchdogs.

At the last MOPC forum, GMA showed signs of being more confident. She seems to be hitting her stride and her confidence level is extremely high. This is what people want to see and that seems to be the general feeling, including the diplomats who were present at the forum. She has come a long way from when she first took over. Judging from her remarks she knows exactly where she wants to bring this country. GMA admitted that she had to play politics when she first assumed office after EDSA 2 because those were difficult times. She needed to be popular because it was important for her to have a broader base of support and fend off challenges to her legitimacy. Now she said she will not be beholden to vested interests. This is what people want to hear. As Biznews Asia publisher Tony Lopez said, "If GMA can just do fifty percent of what she said, we will be happy." We hope her decisions will be guided less by politics and more by what is right for the country. Cushioning the impact relies heavily on GMA’s politics of No-Politics. If she doesn’t break up the entrenched interests, they will ultimately break her similar to what happened to her father 40 years ago.

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