“Saint Nicholas was a 4th-century Greek Christian bishop in the region of Lycia in Turkey. Nicholas was known for his generous gifts to the poor, in particular presenting the three impoverished daughters of a pious Christian with dowries so that they would not have to become prostitutes.”
“The modern character of “Santa” is based on traditions surrounding the historical Saint Nicholas. Santa Claus originated in Western Christian culture, who is said to bring children gifts of toys and candy or nothing, depending on whether they are “nice or naughty.”
Modern politicians—and especially during the campaign season —tend to model themselves more after “Santa Claus” than St. Nicholas. It is unlikely that any woman was saved from a life of prostitution by any candidate’s campaign for office.
However, the “Santa Claus” model holds strong. Notice: Bring “toys and candy or nothing,” depending on whether they are naughty or nice, “nice” being making sure the candidate is elected.
In the past two months we have heard promises—in no particular order—of government general ayuda, financial assistance to fisherfolk, farmers, small and medium-sized enterprises, and tourism-related businesses. Also, zero-interest loans to the lowest economic groups, Build, Build, Build in general, build hospitals in particular, and universal health care. To ease the financial impact to consumers because of the pandemic, reduce taxes on petroleum and electricity and give scholarships for students in medicine and allied courses.
Those are just some of the “gifts” and there is presumably a lot of candy if voters are nice.
The real Santa Claus accomplishes his gift-giving with the aid of elves, who make the toys in his workshop at the North Pole and flying reindeers who pull his sleigh through the air. The winning candidate will do the job at the Malacañang workshop with the aid of the Congress. The taxpayers are the reindeers that pull the Presidential Sleigh.
All those financial promises should be filed under “Good luck with that.” Because of reduced revenues and increased spending, the government budget deficit will be about 7.5 percent of gross domestic product, double pre-Covid.
Candidates were asked about the “Government Debt to GDP,” which has increased from about 39 percent to over 60 percent. However, that ratio is almost meaningless and is used only to try to quantify the reduced revenue and increased spending. Otherwise, it is only for “economists” to try to sound knowledgeable. Japan’s debt to GDP is 260; Argentina’s is 102. Which country do you think defaulted on its sovereign debt in 2020?
However, the Philippine government must recover its financial stability and strength just as it was forced to do after the 1997 Asian and the 2008 Global Debt crises. “Santa” will not have many gifts as both the elves’ and the reindeers’ wallets are drained.
It is easy to say “that the next administration could set its sights on relatively untaxed sectors. The viability of carbon tax, wealth tax, a levy on cryptocurrencies, removal of all exemptions from 12-percent value-added tax payments, as well as further hikes of excise taxes on cigarettes, e-cigarettes, alcoholic drinks, and sugary beverages.”
George Harrison had the normal politician’s “revenue enhancement” plan in 1966. “I’ll tax the street, I’ll tax your seat, I’ll tax the heat, I’ll tax your feet.”
Somebody, actually everybody, is going to be doing a lot of “belt-tightening” for the next two years, and that time frame is with fingers crossed. The reality is that there is no way that all those wonderful gifts are going to be delivered no matter how nice the election goes. Likewise, there is no way that the government is going to avoid increasing taxes and fees to generate revenues.
Be prepared by increasing your financial wisdom and decreasing your financial laziness. The coronavirus has caused “long Covid symptoms.” The pandemic response will cause “long lockdown pain.”
E-mail me at mangun@gmail.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis provided by AAA Southeast Equities Inc.