Another populist template for deficit spending

The crux of the problem is that the national budget has been prepared by traditional politicians in the House and in the Senate, who mindlessly overruled the professionals in the executive's economic team, and twisted the allocations to favor hidden pork barrels and personal or partisan interests and ambitions. The president is the biggest politician of them all. This is a political budget, not a financial plan. The taxpayers will have to carry the cross to another year-long Calvary.

Unprogrammed funds are parked to be shifted to expenses still unknown. These should have been vetoed, but the president too is the number one politician. He has to play games with senators and congressmen. The just-signed Philippine National Appropriations Act for 2024 is another humongous financial plan to exacerbate the huge national debt and to burden the next generations to pay trillions of foreign and domestic borrowings. A big chunk of this budget is allocated for salaries and benefits of officials and personnel in an overly-large bureaucracy being funded by a shrinking sector of taxpayers. Another large portion is for debt servicing, and almost nothing is left for capital outlay and institution strengthening and infra building.

The technical notes prepared by the Department of Budget and Management and appended to the proposed national budget when it was transmitted to the Office of the President and the House and Senate was euphemistically bannered as an "Agenda For Prosperity - Securing a Future-Proof and Sustainable Economy". Well, to say it bluntly, this PR packaging is the biggest lie the DBM can ever concoct. What prosperity are we talking about when this budget shall further exacerbate the more than ?14 trillion or $250.5 billion Philippine national debt as of September this year? That debt is bound to escalate as it is carrying a compounded annual interest of 5% per annum at the very least. The 2024 national budget cannot be fully funded by internal revenue and customs collections. Half of it or even more will be funded by foreign and domestic borrowings again.

When the peso goes down in value compared to the dollar, that will be another disaster. This huge national debt amounted to no less than 61% of the country's gross domestic product as computed in the second quarter this year. But given all the negative signs in the world economic perspectives, this budget for 2024 is hopelessly based on illusions of an unreasonably-optimistic economic outlook. This was obviously packaged by prophets of boom whose eyes are closed to serious macro challenges in the global and regional financial horizons. The problem with this government is that it does not tell the people the whole truth. They paint rosy pictures of the past, present, and future to justify gargantuan budgets that will be funded by borrowings.

The DBM technical notes claim that the Philippine economy experienced a remarkable growth in 2022 at an alleged pace of 7.6%. The DBM makes an outrageous claim that such an increase was the best and fastest Philippine economic growth since 1976. Obviously, the DBM tries to deodorize the administrations of two Marcoses, father and son, and makes presidents Cory, FVR, Erap (never mind, Erap), GMA, Pinoy, and Duterte look inferior to the father and son.

Now, let me ask a jugular question to the DBM: If that is true, did that growth trickle down to the poorest of the poor? Or did it redound only to making the taipans and the tycoons bigger, while the working masses remained overworked, underpaid and underprotected?

The DBM notes made another outrageous medium-term macroeconomic forecast of real GDP growth at a mind-boggling rate of 7.6%. Well, forecasts are a dime a dozen. They would not be jailed if these rosy projections turn the other way. They could always cite such uncontrollable variables as disruptions of the global supply chain by wars like in Ukraine or in Gaza, or sudden peaks in oil prices or global natural disasters brought about by climate change. The government drumbeaters have a plethora of escape valves.

The bottom line is harsh and foreboding: This humongous ?5.678 trillion budget is not supported by money on hand. The government started spending funds on January 1 to be funded by foreign loans and domestic borrowings, and from taxes still to be collected by the BIR and duties by the Bureau of Customs. No, this country is not "isang kahig, isang tuka." We make "tuka" first long before we make "kahig". Iba ang Pinoy.