The price we have to pay!

Let’s all pray for Ukraine and Russia. May Ukraine, the second-largest country by area in Europe with a population of more than 40 million, survive what was described as a barbaric, unjustified and unprovoked act of aggression in violation of international law.

Ukraine is an agricultural country that can feed 600 million people. The country is rich in mineral resources such as uranium, titanium, manganese, iron and mercury ores. It is highly industrialized and is among the top global manufacturers of rocket launchers, steel products and locating equipment. It is also one of the world’s largest exporters of iron, nuclear power plant turbines, defense industry products, ores and concentrates.

What makes Ukraine so attractive to invaders? It has the second-largest natural gas pipeline system in Europe after Russia. So, just imagine, when they are combined, these two countries will become the European Union (EU)’s top suppliers of natural gas.

On the other hand, may the people of Russia also survive Vladimir Putin, the now infamous strongman described by world leaders as a “paranoid dictator” and a “tyrant.”

Amidst the chilling threat on outside interference of consequences greater than any country had faced in history (perhaps, worse than Hiroshima), the western allies only went as far as condemning the now bloody act of war and announcing economic sanctions. Against perhaps the most powerful military force in the world, Ukraine would need more than condemnation and economic sanctions against its invader. Putin said there is a need to “demilitarize and denazify” Ukraine to stop alleged genocide and mistreatment committed by a fascist regime. Fake news?

Since Putin calls his military force inside Ukraine as “peacekeepers” helping the separatist regions, cannot NATO and its member-nations also send “peacekeepers” into Ukraine upon invitation of the government? Unfortunately, the president of Ukraine said the world leaders he talked to are, at least for now, “afraid” to fight with his country and that they are left on their own to defend their land. Is the US reluctant because the invasion of Iraq years ago appeared to have been based on fake news regarding weapons of mass destruction too? Is China maintaining a safe position because of its incursions on the West Philippine Sea and its own issue with Taiwan? Is the risk of escalating the conflict outside of Ukraine very high that the other great nations can only send their military forces to Poland and other neighboring countries?

I understand the United Nations may not do more than the emergency session of the Security Council because of the veto power of Russia. Poor Ukraine, how long will it last defending its sovereignty? Is this the price it has to pay for embracing democracy and being friendly to the western block? With nuclear arms, our planet cannot afford another world war. What will stop other countries from copying Russia? What if this happens to Taiwan or to the Philippines? Can smaller countries handle the big bullies? Let’s keep on praying!

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On the local front, the secretary of finance dropped a “bomb” by announcing the need for higher or new taxes to service our foreign debts. As reported, our government borrowed about P102 billion to address the COVID-19 pandemic, not to mention the other loans to fund the Build, Build, Build program. From the Bureau of the Treasury online report, the outstanding National Government Debt Stock as of December 2021 is P12.1 trillion with about P3.7 trillion in external debts. With only a few months left in the term of the present administration, the Department of Finance proposed that the next administration should consider, among others, the imposition of carbon emission taxes and levy on cryptocurrencies, the removal of value-added tax exemptions and the viability of further increasing excise taxes on sin products, such as cigarettes, alcoholic drinks and sugary beverages.

Regardless of how others interpret the Comelec decision in the BBM disqualification case, taxes are indeed the lifeblood of the government, and we need to pay this price for the infrastructure development and services we receive from our government (not to mention money siphoned by corrupt officials). The consolation is that we get to see and feel where our taxes go. While we can see government infrastructure projects all over, we should also feel and understand the zeal of the Senate in trying to uncover government cases such as the Pharmally deal for COVID supplies.

It is a double whammy for the people to pay higher taxes without seeing and feeling where and how the loans were spent. It is equally painful for Juan dela Cruz to witness the Comelec body allow a presidential candidate run in the May 2022 election knowing he was convicted by the Court for failure to file his income tax when he was a government official in the eighties.

Now, remember the behest loans before the EDSA revolution? Have we already paid the foreign debt that ballooned to at least $26 billion in 1986? Is part of the taxes we pay now still used to service the behest loans more than three decades ago? Some are saying that the outstanding government loans in 1986 was only about P528.3 billion, with P300.4 billion in external debts.

It is true that our government debts increased exponentially through the years, but Economics 101 tells us that we cannot just compare the total amount of loans in 1986 to any year thereafter and say the foreign loans during the Marcos regime were only minimal and not too burdensome. In theory, loans will not be much of a problem if used properly to increase productivity. I am not into economics but at least I understand the significance of considering the debt-to-GDP ratio, which measures the country’s ability to pay its debts. It is arrived at by comparing the amount of debt to the Gross Domestic Product and can be interpreted as the length of time the debts could be paid if theoretically the GDP will be used solely for the payment thereof. Ideally therefore, the debt should be lesser by a good margin than production because a higher debt-to-GDP ratio would suggest a greater inability to pay and a higher risk of default.

The total debt as percent of nominal GDP in 1986 was high at 78.3 percent compared to 56 percent in 2010 when the total debt stock was P5.2 trillion; 43.6 percent in 2016 when the total debt was P6.6 trillion; and 62.7 percent in 2021 with total debt of P12.1 trillion. In a way, these numbers may suggest how our government loans were utilized. While there were notable infrastructure projects during the Marcos regime, the 78.3 percent debt-to-GDP ratio betrays a gloomy economic picture.

It has been 36 years now since Marcos was ousted and yet we continue to pay his debt through our blood, sweat and tears until year 2025. The current President must intercede on Comelec’s decision in allowing Marcos to continue his candidacy. If the government wants the people to pay their taxes, shouldn’t all prospective candidates lead by example? Abangan!