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MALACAÑANG and Congress leaders should get together and
recast the 2008 national budget’s spending priorities so
the government could effectively help people cope with
sharp spikes in fuel and food prices, and provide
immediate relief to victims of natural calamities, Sen.
Mar Roxas II recommended over the weekend.
“We must
review the budget and reallocate nonpriority spending to
fund urgent needs, particularly food security,” said
Roxas in an interview with dwIZ. “We should realign the
budget to address the short, medium and long-term needs
of our people and of the economy.”
This
developed as Senate Minority Leader Aquilino Pimentel
Jr. asked President Arroyo to explain how the
multibillion-peso calamity, social, contingent,
confidential and other discretionary funds under her
control have been spent by her government.
Pimentel
issued the call in the wake of widespread complaints
from areas ravaged by Typhoon Frank, particularly those
in Panay Island, of undue delay in the delivery of
emergency relief from the national government that has
aggravated the sufferings of disaster victims.
Roxas
advised the Arroyo government to “stop piggybacking on
the people’s pain” arising from the rapid rise in cost
of petroleum products and other basic food items, even
as he suggested an early review of its spending program
and prioritize funding for food security and relief.
“The
situation is very different now; the government should
not be in ‘business as usual’ mode,” said Roxas, and
argued that, “the situation must be addressed
immediately.”
He
cautioned that the Arroyo administration, in opting to
continue imposing the 12-percent value-added tax (VAT)
on oil products at this time of crisis, “chooses to
become part of the people’s burden.”
Roxas
insisted the VAT on oil should be removed or suspended
to give immediate relief to consumers. “While those in
the Middle East may have committed wrongdoings by unduly
making their oil expensive, the government is part of
the mischief because they are piggybacking on it;
they’re adding to the cost of expensive oil.”
In a
separate statement, Pimentel pointed out that even in
provinces and cities that received relief goods from
Manila, through the National Disaster Coordinating
Council and the Department of Social Welfare and
Development, the common gripe was that the quantities of
aid were too inadequate in proportion to the huge number
of victims and the enormity of the damage and losses
inflicted by the typhoon.
Pimentel
saw no reason why the government could not provide
adequate assistance to the typhoon-damaged areas and the
calamity victims, since the government is expected to
generate about P20 billion in incremental revenues this
year on account of the soaring prices of imported of
petroleum products, which are subjected to the
12-percent VAT.
Mrs.
Arroyo has an obligation to account for the funds
intended for calamities and other contingencies that
were entrusted to her office this year, including the
P9-billion calamity fund, P4.7-billion President’s
Social Fund (P1.7 billion from the Philippine Amusement
and Gaming Corp. and P3 billion from the Philippine
Charity Sweepstakes Office), P800-million Contingent
Fund and P650-million intelligence fund, he said.
Pimentel
added that Mrs. Arroyo also has the discretion to
disburse the P30-billion unprogrammed fund, the
P5-billion Kilos Asenso Fund and the P3-billion Kalayaan
sa Barangay Fund under the 2008 national budget.
“With
these ample funds under the disposal and discretion of
the Chief Executive, the government is capable enough to
extend emergency relief and rehabilitation assistance to
the communities battered by Typhoon Frank and other
calamities.”
Malacañang, responding to the many calls for the
suspension or removal of the VAT on oil, meanwhile, said
through Deputy Spokesman Lorelei Fajardo that “Congress,
particularly the Senate, should work with the Executive
to find other ways to bring relief to our people from
the growing world fuel-prices problem. Publicly calling
for the suspension of VAT on oil products may be good
publicity, but what we need is action, and the
government is doing exactly that. Action speaks louder
than words.”
She said
the senators’ call for a review of government economic
policies is unnecessary. “The President, together with
her economic managers, constantly monitors and reviews
our economic fundamentals to ensure proper fiscal
management and economic direction.”
Fajardo
said suspending the VAT on oil “at this time will have a
severe effect” on government revenues and, as such, the
proposed “cure may be worse than the ailment.”
At the
same time, Malacañang urged Roxas to clarify his
“contradictory” advice to the government—separately made
in the presence of the Cabinet and in public—on how best
to handle its current economic problems.
Cabinet
Secretary Ricardo Saludo said Roxas has urged that the
government assure the world it can maintain fiscal
discipline and rein in inflation despite external and
internal problems, yet is also calling for the abolition
of the VAT on oil and a freeze on interest rates, which
would erode investor confidence and drive up inflation.
Saludo
recalled that in the National Disaster Coordinating
Council meeting in Iloilo City last week, Roxas said
that “the government should give signals to the markets
that it would maintain fiscal discipline amid rising
expenditures for subsidies and now disaster relief” and
“even noted that the markets were already showing
concerns with the weakening of the peso, which
contributes to inflation.”
Yet, on
Saturday, said Saludo, “Senator Roxas repeated his call
for lifting VAT on oil, which would slash tax revenues,
swell the deficit and hurt investor confidence. He also
opposed interest-rate hikes, which the Bangko Sentral is
considering to fight inflation and shore up the peso.”
And, he
went on, “what would Senator Roxas’s investment-banking
friends say to his call for VAT lifting and
no-interest-rate increase?”
Inflation in the country hit 11.4 percent in June, the
highest since 1994, owing to soaring world oil prices
which have driven up living costs all around the world.
(With Mia Gonzalez) |
