Making sense of it all

It hit me at half past midnight and sent me straight to bed to dream about my column instead of working on it using that indispensable writing aid called the word processor. I refer to none other than the looming power crisis, by way of an unannounced, therefore thoroughly unexpected "brownout."

Crisis is the buzzword these days. Inundated by all this talk of crisis, emanating from no less than the President, ordinary citizens like us must try to make some sense of what is really going on.

To our political leaders and economic policy makers, the fiscal crisis means the people should accept the inevitability of more and higher taxes, higher prices, wage freeze, further cuts in social services, and shouldering the debts of government-owned and -controlled corporations (GOCCs) like Napocor and government financial institutions (GFIs) like GSIS [Government Service Insurance System].

We are told that the bulk of the government budget will go to servicing our public debt because there is no way we can get around it except to keep paying so that we can go on borrowing or else our fiscal crisis can become a full-blown financial crisis once our creditors decide to stop lending us the money to cover our budget deficit.

We are advised that external forces beyond our control are causing mayhem on the economy. The runaway price of oil and the sharp slide of the peso versus the dollar translate into a ballooning import bill. On the other hand, the future of our top export commodity, Filipino labor, is uncertain in the face of intense fighting in Iraq, Palestine and instability elsewhere in the Middle East, stiff competition from other similarly impoverished, labor-exporting countries and the heightened racial discrimination and state paranoia in the labor-importing countries generated by the so-called war against terrorism.

Finally we are assured that this period of enforced pain and self-abnegation will lead us out of the crisis and into a brighter future where the Arroyo government's promises of food on every table, jobs, a roof over one's head, education for our youth and health care for all those in need will be a reality rather than a promise tiresomely repeated during the President's yearly state-of-the-nation address.

Thanks, but no thanks. Many ordinary folk are beginning to ask questions the government will find consternating if not "destabilizing."

Instead of imposing new taxes on the people already burdened by a regressive tax system that taxes the poor and not the rich, why not collect the PhP100 billion lost annually since 1995 due to drastic tariff cuts resulting from the government's over eagerness in hewing to the trade liberalization regime of the IMF-World Bank and the World Trade Organization.

Instead of raising government fees including court and other legal fees, why not put a stop to excessive fiscal incentives and tax exemptions for foreign investments amounting to PhP179 billion lost yearly.

Rather than pass off the burden of bailing out GOCCs to consumers and taxpayers, why not run after the crook/s that approved onerous contracts and gave sovereign guarantees that reward profiteering and inefficiency of IPPs.

Why not get rid of the incompetent fat cats who run their GOCCs to the ground and enjoy hefty salaries and perks while they're at it? (By the way, may we ask why we continue to pay for what Senator Lorenzo Tañada called the Marcos "monument to folly," the mothballed Bataan Nuclear Power Plant?)

How about taking President Arroyo to account for deciding to cut the purchase power adjustment (PPA) to 40 centavos per kilowatt hour without any clear objective except to raise her popularity rating from an all time low.

What about the billions of dollars of ill-gotten wealth stashed away by the US-backed dictator Marcos and no less hefty sums of money plundered by the corrupt Estrada regime? Will these be "negotiated" away on the altar of reconciliation without justice?

Will government look the other way in the face of reported losses in revenue of up to PhP120 billion yearly due to graft and corruption? Whatever happened to the hue and cry over the scandal-ridden IMPSA IPP negotiated under the month-old Arroyo administration with a reputed kickback of $14 million and the billion-peso Diosdado Macapagal Avenue scam involving the Philippine Estates Authority and the GSIS?

Belt tightening says the government. But why not trim the fat off the President's pork as well and not just the notoriously venal Congress. Why not get rid of unaudited intelligence funds allocated to all sorts of agencies of government starting with the Office of the President, including- -- you won't believe this -- Pagcor.

Why lop off 2005 budgetary allocations for health, education and housing when total debt servicing is projected at a whopping PhP645.8 billion or more than half the government's total projected expenses in 2005? Put another way, why allow debt servicing to consume 85% of government's projected revenue next year leaving only 15% for everything else.

Why blindly continue the debt policies of all the governments that came after Marcos including that of not questioning, not repudiating nor renegotiating onerous debt incurred by the dictator with the connivance of the multinational banks? Why not a moratorium or at least a cap on debt service instead of the automatic appropriations of scant public funds for debt payments?

A thoroughgoing and transparent audit of the debts incurred from the Marcos time to the present is certainly in order. In particular, the Arroyo administration must answer some hard questions as to why the last two years of its first term saw the highest sustained borrowing in two-and-a-half decades making this government the most indebted in Philippine history with a total public debt of PhP5.9 trillion by September 2004.

Certainly, there can be no quick fix solutions to the current fiscal woes of the Arroyo government. The long running, deeply rooted and systemic underpinnings of the fiscal crisis in our backward, semi-feudal and pre-industrial economy that is at the mercy of foreign monopoly, especially finance, capital and subject to the vagaries of the international market economy, does not auger well for any solutions in the intermediate future either.

Yes, any real solutions will entail painful measures that will certainly be borne by all, including the mass of toiling people who have been carrying the brunt of sacrifice for ages.

For this reason, it is imperative to ensure that any prescription and harsh therapy will lead us out of the crisis of this rotting system towards a long-term cure, rather than merely tide us over, if at all, until the next major convulsion, the next acute exacerbation of our chronic socio-economic, political and moral crisis.

BusinessWorld
Oct. 1-2, 2004