quoting...
when we see that a storm is coming.
startling!
quoting an editorial piece of political matters, i let my thoughts wander to a relevant local current experience. it's a pity how those regarded as trusted custodian ended up as thieves.
is it not ringing in our eardrums? wringing our earlobes?
it has been said...
... practice what you preach
... walk your talk
... act on your word
the scene of our political environment, if we look very closely, reflects a reality within our reach. it conceals a microcosmic setback that is too big to contain. a white elephant hidden under a rug of the living room. so obvious, yet the owner barely notices.
there is a two-fold treatment for this: although this article may literally tackle the phenomenal societal problem, it conceals however, a particular truth in our own setting.
emailed to me by a friend...
since this concerns our hard earned money (in the form of taxes), we strongly agree with today's editorial in Inquirer.net as well as senator mar roxas' views on the subject. let's pass and relay to our representatives. we like leaders who care for our money!
Philippine Daily Inquirer Editorial
First Posted 23:32:00 10/19/2008
MANILA, Philippines - Especially in the last couple of years, Sen. Mar Roxas has become an extra-articulate exponent of populist economics. His ultimately untenable position on the suspension of the value-added tax at the height of the food and fuel emergencies, for example, surprised those who know his investment banking and management background. We have, in fact, quarreled with some of his policy proposals, but on his latest campaign we can only agree vigorously.
Because of the global financial crisis, the Arroyo administration must review the assumptions behind its proposed 2009 budget—and thus the budget itself. "It's foolishness not to act when we see that a storm is coming. We already said we will soon encounter problems, yet the Palace still says things are all right and won't do a thing. It's time to make hard decisions," he said in Filipino last week.
"We see the economy weakening, but the government's lukewarm to our call for the budget's revamp. It should realize that its actions are not enough to protect the people and their jobs."
The government's budgeting process began in earnest last May, with the formal National Budget Memorandum outlining the "policy guidelines and procedures [to be used] in the preparation of the [Fiscal Year] 2009 budget proposals."
Because assumptions shape the final budget, the budget department circulates these at the start of the annual budgeting process. The problem is, this year's set of assumptions were computed before the global financial markets began its meltdown last month.
Item. The original version of the 2009 budget assumes the country's gross domestic product will grow by 6.0 to 6.7 percent in 2008 and an even more impressive 6.5 to 7.3 percent in 2009. The global financial crisis, however, renders these assumptions computed as early as April or May this year overly optimistic.
True, GDP growth last year was a robust 7.3 percent, but it would be folly to assume that growth this year and next will continue at roughly the same pace. The budget working its way through the legislative mill still assumes that the economy will grow by 6.1 to 7.1 percent next year. Contrast this projection with that made by the Asian Development Bank, which recently cut its Philippine GDP forecast for 2009 from 6.2 percent to 4.7 percent.
Item. The original version of the 2009 budget assumes the inflation rate next year will hover somewhere between 2.5 and 4.5 percent. Last August, Economic Planning Secretary Ralph Recto said inflation would slow to 6 to 8 percent in 2009, from about 7 to 9 percent this year. But various price shocks, including food and fuel, drove inflation last July to 12 percent. It would only be prudent to assume, for budgeting purposes, a double-digit inflation rate next year. The ADB revised its inflation estimate to 10.5 percent for 2008. (Making this assumption, we must note, is emphatically not the same as determining the central bank's own inflation target.)
Item. The original version of the 2009 budget assumes that the peso-dollar rate this year and next will stay in the P40 to P43 range. This has since been revised to P42 to P45 per dollar. But the current exchange rate is better than P47, and since the turmoil in world financial markets is expected to continue for at least a few years, it may only be prudent to assume a higher exchange rate.
If the economy will grow slower than expected, then we should expect tax revenues to slow down too, even perhaps to stay flat. The biggest bulk of tax revenues comes from individual and corporate incomes; if the global financial crisis bites the real economy hard, as it is expected to do, such incomes will go down. Another major source of tax revenues are the value-added and excise taxes; slower consumption would mean a lesser tax intake.
The point is, the 2009 budget as currently proposed assumes economic conditions that no longer exists; like the rest of the world, the Philippines will find itself in more perilous economic circumstances because of the financial crisis. The least we can do is pass a budget that reflects the new realities.
