15 March 2010
Debt & Public Finance
– Enough of clichés and motherhood statements.
As presidential candidates revealed their respective tax policies in the light of the P290-billion deficit they will be inheriting from the Arroyo administration, the Freedom from Debt Coalition (FDC) today challenged them to reveal their concrete fiscal plans that will resolve the chronic deficit problem and address urgent social needs.
In the light of a looming fiscal crisis, FDC also unveiled its own 12-point fiscal agenda
that focus on debt payments, financing, spending and revenues, hoping to be adopted by whoever wins the presidential race.DOWNLOAD FDC'S 12-POINT FISCAL AGENDA HERE
“It’s 56 days shy of the May 10 elections, but we are yet to hear concrete fiscal proposals,” said FDC Secretary-General Milo Tanchuling. “At best, all we hear are ambiguous statements like ‘we will be curbing corruption or increasing revenue performance’. At worst, we just hear them say they will study so and so policy once they win.”
In a briefing with reporters, Tanchuling said that “the public is yet to hear a satisfactory answer to the question on how exactly will the candidates be able to finance their electoral promises this year, given that out of P1.196 trillion the government will be earning, P746 billion is to go to servicing of interest payments and principal amortization of debts.”
“Shouldn’t they be presenting as early as now a fiscal plan on how they are supposed to fund their platforms, on top of the P1.3 trillion expenses already identified by the Arroyo administration?” Tanchuling asked.Blind adherence
FDC however, warned that it is not enough for candidates to “simply state numbers which can pass as fiscal targets, as Arroyo technocrats are used to doing.”
“The candidates should not repeat Mrs. Arroyo’s blind adherence to the ‘balanced budget’ target, resulting in a fiscal plan that is completely divorced from social and developmental objectives,” Tanchuling said.
Tanchuling explained that a fiscal program must include an explanation on “what to spend on and who to tax, and by what economic or development strategy this is being done.”Fiscal measures
Tanchuling also unveiled yesterday its “12-point fiscal agenda” which aims to “strategically address the chronic debt and deficit problem.”
“To start the ball rolling, to start the public debate on a fiscal policy, we are asking the candidates to state their position on our 12-point fiscal agenda. We want to know if they posses enough political will to deliver these urgent measures,” Tanchuling said.
These policy recommendations
- Strike out the Automatic Debt Servicing Provision or Section 26(B), Book VI of Executive Order 292 or the 1987 Revised Administrative Code.
- Conduct an Official Debt Audit.
- Repudiate blatantly illegitimate debt cases.
- Rescind onerous contracts entered by the national government.
- Repeal the outmoded Republic Act 4860 or the Foreign Borrowings Act of 1966.
- Pass an Alternative Official Development Assistance (ODA) Act.
- Regulating borrowings by the Local Government Units (LGUs) by amending Sections 295 to 303, Book II, Title IV of Republic Act 7160 or the Local Government Code of the Philippines.
- Scrap the R-VAT law or Republic Act 9337 and explore passing a law rationalizing fiscal incentives and removing other tax incentives to corporations.
- Issue an Executive Order (EO) declaring moratorium on privatization of state assets pending a review of the privatization policy.
- Pass a law Automatically Appropriating Funds to Education pegged at 6% of the GNP as prescribed by the UNESCO.
- Pass a law Automatically Appropriating Funds to Health in order to ensure that total health expenditure is pegged at no less than 5% of the GDP as the standard recommended by the World Health Organization.
- Pass a law Automatically Appropriating 5% of the General Appropriations Act (GAA) to mass housing and settlement projects for the poor. (30)