Facebook Instagram Linkedin Twitter Youtube
Home Blog Page 5797

VP Sara opens satellite offices  

INDAY SARA DUTERTE FACEBOOK PAGE

VICE President Sara Duterte-Carpio’s office has opened satellite offices in six areas across the Philippines to make its services closer to the people.  

“We opened satellite offices in different parts of the country to give Filipinos easier access to the Office of the Vice President’s services,” she said in Filipino in a Facebook post, but did not specify the programs that are offered.  

Ms. Duterte-Carpio has said she would continue to live in her hometown in the country’s south, although she would spend most of her days working as a public servant in Metro Manila — an arrangement that her father, former President Rodrigo R. Duterte, was used to.   

The former Davao City mayor is also the secretary of the Department of Education, an agency previously led by economist and academic Leonor “Liling” Mirasol Magtolis-Briones.  

As education chief, Ms. Duterte-Carpio is faced with a lingering learning crisis that had worsened due to the long lockdown and restrictions in the past two years.   

The Alliance of Concerned Teachers (ACT) Philippines has also urged the new Education chief to fulfill her father’s promise of increasing the salaries of teachers.   

“She should push for significantly increasing teacher’s salaries to correct the distortion in the government salary scheme where teacher’s pay lag behind those of uniformed personnel and nurses,” it said in a statement. — Kyle Aristophere T. Atienza

P3.8-B cash aid for inflation released — LANDBANK 

PHILIPPINE STAR/EDD GUMBAN

THE LAND Bank of the Philippines (LANDBANK) has disbursed as of Friday P3.8 billion of the cash aid in response to rising prices of fuel and other goods, the state-run financial institution reported.  

This covers 3.8 million households consisting of three payout tranches under the Targeted Cash Transfer (TCT) program, it said in a press release on Sunday.  

The TCT will provide P500 per month for six months to about 12.4 million households.  

LANDBANK is responsible for distributing the cash subsidy through various mediums, including cash cards, other banks, electronic money issuers, and remittance centers. 

Beneficiaries are identified by the Department of Social Welfare and Development using data from existing and past cash transfer programs.   

Inflation averaged 4.1% in the first five months of the year, exceeding the Philippine central bank’s 2%-4% target after quickening to a three-and-a-half-year high of 5.4% in May. 

The Bangko Sentral ng Pilipinas (BSP) projects June inflation to further increase, settling between 5.7% to 6.5%, former BSP Governor and now Finance Secretary Benjamin E. Diokno said earlier on Twitter.  

Meanwhile, pump prices of diesel, gasoline, and kerosene had gone up by P41.15, P28.70, and P37.95, respectively, from the start of the year to June 14. — Diego Gabriel C. Robles

High court rules in favor of Bacolod private school vs registrar  

PHOTO BY MIKE GONZALEZ

THE SUPREME Court (SC) has granted the appeal of a private school in Bacolod City on a case involving the dismissal of a school registrar for gross misconduct.  

The High Court’s ruling reversed the decision of the Court of Appeals, which overturned a resolution by the National Labor Relations Commission (NLRC).  

In a 17-page decision dated March 28 and made public on July 1, the SC’s second division ruled the employee had been validly dismissed by the Colegio San Agustin-Bacolod (CSA-Bacolod) for “an act that constitutes a breach of trust and confidence.” 

The court said the former chemistry instructor and school registrar was validly dismissed for allowing ineligible students to march on graduation day.  

“Respondent’s conscious decision allowing the ineligible students to march shows her willfulness to transgress the established rule,” according to the ruling penned by SC Associate Justice Estela M. Perlas-Bernabe.  

“This willful transgression of a rule indeed results in the loss of the trust and confidence CSA-Bacolod has reposed on her.” 

CSA-Bacolod argued in its appeal to the country’s Highest Court that Ms. Montaño had shown wrongful intent in allowing some students to attend their graduation ceremony despite lacking requirements.  

The school had issued a memo that prohibited students that did not comply with all academic requirements to march during graduation rites. 

In the same decision the tribunal ruled that the employee was not entitled to back wages, separation pay, moral and exemplary damages, and attorney’s fees, but ordered the school to pay a total salary differential of P54,218.16 with 6% interest due to a diminution of benefits.  

Under the country’s labor code, an employer may terminate employment for serious misconduct or willful disobedience of orders. Employers may also fire an employee for an act of fraud or “willful breach of the trust reposed in him by his employer.”  

On the other hand, Ms. Montaño said that during her reappointment as school registrar, the school decreased her basic monthly salary from P33,319 to P26,658.  

The SC agreed that there was a reduction in her monthly pay, which went against the country’s labor code. — John Victor D. Ordonez 

Cornet stuns top seed Świątek

LONDON — The Iga Świątek winning machine broke down on a lush Wimbledon lawn on Saturday as the world number one and red-hot favorite for the title was comprehensively beaten 6-4, 6-2 by France’s Alizé Cornet.

There was a sense of disbelief on Court One as Poland’s Świątek, who had won her last 37 matches over four months, was outplayed by the unseeded 32-year-old.

Even when she fought back from losing the first three games of the match and then also led 2-0 at the start of the second set, top seed Świątek’s usual confidence was missing.

Cornet will face unseeded Australian Ajla Tomljanović in a bid to reach her second Grand Slam quarterfinal this year, having never achieved that before.

She completed her shock victory in one hour and 32 minutes, reeling off the last six games as Świątek disintegrated.

“I feel like maybe I’m like a good wine; in France, a good wine always ages well, that’s what’s happened to me,” Cornet said of her return to form this year.

“It’s unreal — I’m playing one of the best seasons of my career, I feel great on the court. I’m still so motivated and I still have the fire in me.” — Reuters

Ronaldo expresses desire to leave Manchester United

MANCHESTER United forward Cristiano Ronaldo has told the Premier League club that he wants to leave in the close season because of his desire to play in the Champions League, The Times newspaper reported on Saturday.

Speculation has been rife about Ronaldo’s future at United following a trophy-less campaign and their failure to qualify for the Champions League last season, although incoming manager Erik ten Hag has said the Portuguese international is part of his plans.

The report added that the 37-year-old believes that he can play at the elite level for another “three of four years.”

Ronaldo re-signed for United from Juventus in August 2021 and was one of the few bright sparks for Ralf Rangnick’s team last season, netting 24 times in all competitions.

The former Real Madrid attacker, who still has a year left on his contract at Old Trafford, has been linked in recent days with a move to Chelsea and Bayern Munich. — Reuters

J.T. Poston opens four-shot lead at John Deere Classic

J.T. POSTON followed his opening-round 62 with a 6-under-par 65 Friday to establish a healthy lead after two rounds of the John Deere Classic at TPC Deere Run in Silvis, Ill.

Poston racked up four early birdies at the second through fifth holes on his way to reaching 15-under 127 through two rounds. He leads Denny McCarthy by four strokes after McCarthy shot his own 65 to move to 11 under.

Professional Golfers’ Association (PGA) Tour rookie Christopher Gotterup (67), Monday qualifier Chris Naegel (66), Austria’s Matthias Schwab (65) and Argentina’s Emiliano Grillo (64) are tied for third at 10 under.

Poston’s approach game and putting were equally dialed in Friday. Three of his birdie putts were inside 3 feet, and another was just under 5 feet. But he also knocked in a 42 1/2-footer, uphill and left to right, for birdie at the par-4 ninth.

Poston tied for second at last week’s Travelers Championship, but he is still in search of his first win on tour since August 2019.

“Any time you’re in contention, whether you’ve been leading since Thursday or the back nine on Sunday for the first time, any time you get up, there are some nerves,” he said. “There is some pressure. So thankfully, I’ve put myself in that position a few times in my career and I know that I can do it.”

McCarthy rolled in six birdies without a bogey to take sole possession of second. The 29-year-old has never won on the PGA Tour.

Gotterup is making his fourth start since turning pro. He nabbed the Fred Haskins and Jack Nicklaus awards as college golf’s player of the year while playing for Oklahoma, then made two of three cuts in his first three starts, including a tie for 43rd at the US Open.

After opening with a career-low 65 on Thursday, Gotterup posted a Friday card that featured four birdies, two bogeys and an eagle 2 at the par-4 14th. He reached the green with a 351-yard drive and made a 41-foot putt for eagle.

“Obviously, we still got a long ways to go here, but I do think that… coming out of college, I did think my game would translate really well to pro golf,” Gotterup said. “You look at guys that hit it pretty far, and I really improved my wedge game over the last couple years, so if I’m hitting the fairway, I got a lot of wedges coming into the greens.

“So I’m comfortable, and if I’m hitting it good, I don’t see why I shouldn’t play well.”

Eight players are tied for seventh at 9 under, including Maverick McNealy and Kelly Kraft, who shot 63s for the low rounds of the day.

Defending champion Lucas Glover rebounded from a first-round 74 with a 66 on Friday to get to 2 under, but he missed the cut by one stroke. — Reuters

Branden Grace fires 65 to claim LIV Portland

SOUTH African Branden Grace rallied by shooting a 7-under-par 65 on Saturday to win the LIV Golf Invitational Portland in North Plains, OR.

Grace vaulted past 36-hole leaders Carlos Ortiz (third-round 69) and Dustin Johnson (71) for the win. Patrick Reed shot 67 to finish in third.

Grace finished at 13 under, two shots better than Ortiz.

Grace opened with three birdies against one bogey on the front nine before catching fire on the back nine; he carded five birdies on the final nine to earn the victory.

He started the round two shots behind Ortiz.

Louis Oosthuizen shot 69 to finish in solo fifth.

The 4 Aces team of Johnson, Reed, Pat Perez and Talor Gooch won the team event.

LIV events feature 48 players, last just three rounds and have no cuts. Portland marked the league’s second tournament and first on US soil. South Africa’s Charl Schwartzel captured the LIV opener in mid-June near London. — Reuters

Tempers boil as Kyrgios stuns fourth seed Tsitsipas

LONDON — Australian maverick Nick Kyrgios knocked out fourth seed Stefanos Tsitsipas in a wild and wonderful Wimbledon third-round slugfest that threatened to spiral out of control on Saturday.

The 27-year-old Kyrgios produced sublime tennis to earn a 6-7(2), 6-4, 6-3, 7-6(7) victory but the match will be remembered chiefly as one of the most bad-tempered seen at Wimbledon for decades.

The eagerly-awaited Court One clash was the hottest ticket in town, even with Rafa Nadal playing over on Centre Court.

It did not disappoint either, with scintillating tennis accompanied by mayhem as both players lost their heads.

With the lights on and a deafening atmosphere, it was the unseeded Kyrgios who emerged from the chaos with one of his finest Grand Slam victories, edging a nerve-jangling fourth set tie-break after saving a set point.

Kyrgios claimed victory with a drop shot and he will enter the last 16 for the fourth time with serious title aspirations.

Next up is unseeded American Brandon Nakashima. — Reuters

Durant wants out

No matter how things turn out, the Nets will be holding scraps in light of the trade request of top dog Kevin Durant. There’s simply no way they can get fair market value in return for him, not when he’s aiming to land in a situation where he can continue to chase championships. He’s said to have identified the Suns and the Heat as his preferred destinations, and his reasons are obvious. The need to ensure the competitiveness of his new digs is precisely why the likes of Devin Booker or Bam Adebayo cannot be among the assets going the other way.

There is likewise the not inconsiderable hurdle posed by Durant’s public admission that he wants out. Because everybody and his mother know he’s angling to leave, the Nets’ leverage has been undercut; they’re hard-pressed to come up with a deal sooner rather than later. Never mind that he’s inked to a four-year deal that will just be kicking in; for all the supposed stability it should provide, it’s trumped by the fact that he’s no longer inclined to burn rubber in black and gray. And the extent of the tumult hasn’t even taken into consideration the disruptive presence of mercurial guard Kyrie Irving.

To be sure, the Nets haven’t exactly been blameless, never mind that they’re getting a raw deal three years after spreading the welcome mat for the marquee names. From the outset, they effectively gave Durant and Irving crate blanche; they allowed the two buddies to dictate ostensibly onerous arrangements. For instance, the arrival of well-past-prime DeAndre Jordan and wet-behind-the-ears Steve Nash was upon the insistence of their new headliners. Little wonder, then, that when they decided to restore some order to the setup, they were met with significant resistance.

And so the dominoes have started falling on top of each other, scuttling a seemingly well-built path that led to the Larry O’Brien Trophy. No one quarter comes out clean. Not the Nets, who perpetuated an unstable culture. Not Durant, who appears to still be searching for happiness even after reaching pinnacles of success with model franchises, and even after being the clear Number One in another team. And not Irving, whose petulance drove James Harden away and ultimately caused the biggest disappointment in National Basketball Association history.

It will be years before the Nets recover, at least as long as it took them to pick up the pieces after ill-advised acquisitions of has-been stars early in the last decade. They invested heavily in Durant, giving him the keys while he sat out an entire season convalescing from a serious injury. They allowed him — and, by extension, Irving — to dictate terms of engagement. In the meantime, they set aside nothing for a rainy day, which came when their luck turned against them. They gambled and lost, and are now left to survey the rubble along with the rest of the league.

 

Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994. He is a consultant on strategic planning, operations and Human Resources management, corporate communications, and business development.

Curiouser and curiouser

BW FILE PHOTO

One of the first acts done by Ferdinand Marcos, Jr. as President of the Republic of the Philippines was to veto an enrolled bill, which the House of Representatives and the Senate approved during the Duterte administration. This enrolled bill is titled “An Act Establishing the Bulacan Airport City Special Economic Zone and Freeport, Province of Bulacan and Appropriating Funds Therefor.”

In returning without his signature the Enrolled Bill (also known as House Bill No. 7575), the new President explained his objections to the enrolled bill.

The bill has “provisions that pose substantial fiscal risks to the country and its infringement on or conflict with other agencies’ mandates and authorities.”

The enrolled bill providing fiscal incentives without going through a rigorous cost-benefit analysis done by government “will significantly narrow our tax base.”

The President’s letter emphasizes that an existing law — The Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act — “already allows eligible enterprises to apply for and avail [themselves] of tax incentives outside economic zones by providing a favorable incentive package without the need for creating new special economic zones.”

The President writes that the Enrolled Bill contradicts existing rules and laws “by failing to provide audit provisions for the Commission on Audit, procedures for expropriation of lands awarded to agrarian reform beneficiaries, and a master plan for the specific metes and bounds of the economic zone.” Further, “the enrolled bill grants the economic zone authority rule-making powers relative to environmental protection that is not found in the charter of other economic zones.” And the enrolled bill gives “blanket powers to handle technical airport operations,” which contravenes aeronautical laws.

In addition, it does not make economic sense that the Bulacan Airport City will be located close to the Clark airport. This does not result in complementarity but can lead to ruinous competition.

Thus, the veto.

The arguments for the veto are solid. But what makes us curious about this issue is why the new President vetoed an enrolled bill transmitted by the previous House of Representatives and Senate?

Legally, this is allowed. Said a colleague, who is a lawyer, “As long as the 30-day period within which the previous President should sign, not sign, or veto a bill hasn’t lapsed, then the next President has the authority to exercise the authority. Otherwise, there will be a vacuum on who should exercise the presidential power.”

But why did Marcos veto the enrolled bill, one of his very first acts upon assuming office? Has he been tracking and studying this bill assiduously, giving him the confidence to veto the bill on the first day of his being President?

This has led to speculation and rumor. One, for example, goes: does Marcos Jr. want to regain control over San Miguel? Or, as others speculate, is this political retaliation against Ramon S. Ang (RSA)? (But RSA attended Marcos Jr.’s inauguration, and RSA is friendly to all politicians.) A friend heard the rumor that the idea of a veto came from Justice Secretary Boying Remulla, former congressman from Cavite, since the proposed perks for the Bulacan City Airport would be disadvantageous to the Sangley International Airport. All these are conjectures; there’s no evidence to show.

“Curiouser” still is why former President Rodrigo Duterte did not veto the bill. It was no secret that his Finance Secretary Carlos Dominguez and the economic team objected to the bill.

Also “curiouser” is the timing of the transmittal of the bill to the Office of the President. The House of Representatives passed the bill on Sept. 15, 2020. But the Senate approved the same bill much later, on May 26, 2022. That gave Duterte a narrow window to act on the bill — whether to sign or veto it. His term ended on June 30. Any bill would lapse into law after 30 days, if unsigned by the President.

Those pushing for the passage of the bill knew that Duterte’s Department of Finance (DoF) was opposed to the bill, and that Secretary Dominguez would ask President Duterte to veto the bill. Hence, a clever ploy — and this is likewise done in relation to other bills which the President would likely reject — was to delay the transmittal of the enrolled bill, giving the outgoing President little time to scrutinize and veto it.

But here’s the piece of evidence we do have: Secretary Dominguez acted quickly and decisively to have the controversial bill vetoed. On June 2, Secretary Dominguez sent a memorandum for President Duterte through Executive Secretary Salvador Medialdea to veto the enrolled bill.

The Dominguez memorandum was thoroughly written, leaving no stone unturned. It is a good example of what is called “complete staff work.”

The arguments found in Marcos Jr.’s veto of the bill are essentially the arguments expounded in the Dominguez memorandum. Wrote Dominguez:

The bill if it became law would have resulted in “enormous tax leakages.” Forgone revenues from income tax and value-added tax would have amounted to P1.62 trillion. This was apart from forgone revenues arising from the 10-year construction such as franchise taxes, permit fees, and supervision fees.

The bill would have given the “Bulacan Ecozone Authority to unilaterally determine and expand specific metes and bounds.” This provision that prevents government approvals for delineating specific metes and bounds is not found in the laws for other ecozones. This means that the Bulacan Ecozone Authority can unilaterally expand its territory.

The bill “promotes conflicts of interests in the implementation of projects.” The Bulacan Ecozone Authority is both a regulator and implementor of projects within the zone.

The bill allows members of the private sector “to influence the disbursement of public funds.”

The bill carves out the Bulacan ecozone’s authority from general laws and rules and regulations. This undermines the Administrative Code of 1987, the Philippine Immigration Act of 1940, the GOCC (Government-Owned and -Controlled Corporation) Governance Act of 2011, and Executive Order No. 325 (series of 1996), which pertains to the reorganization of Regional Development Councils.

It is reasonable to conclude then that the Dominguez memorandum reached Marcos Jr. and his economic managers. Moreover, Marcos Jr. and his economic team agreed with Dominguez and the DoF (and Duterte) to veto the bill.

Thus, what could have been a clever ploy to disable an outgoing President from vetoing a controversial bill boomeranged. This should likewise dissuade vested interests and lobbyists from pursuing such tactics in the future. This episode also shows that to defeat such a cunning ploy, one needs a Dominguez (used as a metaphor) to be a champion and a good team to do complete staff work and convince the principal, the President of the Philippines.

 

Filomeno S. Sta. Ana III coordinates the Action for Economic Reforms.

www.aer.ph

Reimagining ageing: Older persons as agents of development

STOCK PHOTO | Image by Danie Franco from Unsplash

OLDER PERSONS are highly visible across Asia and the Pacific: they work in agricultural fields producing our food supplies, peddle their wares as street vendors, drive tuk-tuks and buses, exercise in our parks, lead some of the region’s most successful companies, and form an integral part of our families.

Indeed, population ageing is one of the megatrends greatly affecting sustainable development. People now live longer than ever and remain active because of improved health. We must broaden the narrow view of older persons as requiring our care to recognize that they are also agents of development. With many parts of the Asia-Pacific region rapidly ageing, we can take concrete steps to provide environments in which our elders live safely, securely and in dignity and contribute to societies.

To start with, we must invest in social protection and access to universal healthcare throughout the life-course. Currently, it is estimated that 14.3% of the population in Asia and the Pacific are 60 years or older; that figure is projected to rise to 17.7% by 2030 and to one-quarter in 2050. Moreover, 53.1% of all older persons are women, a share that increases with age. Therefore, financial security is needed so older persons can stay active and healthy for longer periods. In many countries of the region, less than one-third of the working-age population is covered by mandatory pensions, and a large proportion still lacks access to affordable, good quality healthcare.

Such protection is crucial because older persons continue to bolster the labor force, especially in informal sectors. In Thailand, for example, a third of people aged 65 years or over participate in the labor force; 87% of working women aged 65 or over work in the informal sector, compared to 81% of working men in the same cohort. This general trend is seen in other countries of the region.

Older persons, especially older women, also make important contributions as caregivers to both children and other older persons. This unpaid care enables younger people in their families to take paid work, often in metropolitan areas of their own country or abroad.

Older persons should also have lifelong learning opportunities. Enhanced digital literacy, for example, can close the grey digital divide. Older women and men need to stay abreast of technological developments to access services, maintain connections with family and friends, and remain competitive in the labor market. Through inter-generational initiatives, younger people can train older people in the use of technology.

We must also invest in quality long-term care systems to ensure that older persons who need it can receive affordable quality care. With the increase in dementia and other mental health conditions, care needs are becoming more complex. Many countries in the region still rely on family members to provide such care, but there may be less unpaid care in the future, and care by family members is not always quality care.

Finally, addressing age-based discrimination and barriers will be crucial to allow the full participation of older persons in economies and societies. Older women and men actively volunteer in older persons associations or other organizations. They help distribute food and medicine in emergency situations, including during the COVID-19 pandemic, monitor the health of neighbors and friends, or teach each other how to use digital devices. Older persons also play an active role in combatting climate change by sharing knowledge and techniques of mitigation and adaptation. Ageism intersects and exacerbates other disadvantages, including those related to sex, race, and disability, and combatting it will contribute to the health and well-being of all.

This week*, countries in Asia and the Pacific will convene to review and appraise the Madrid International Plan of Action on Ageing (MIPAA) on the occasion of its 20th anniversary. MIPAA provides policy directions for building societies for all ages with a focus on older persons and development; health and well-being in old age; and creating enabling environments. The meeting will provide an opportunity for member States to discuss progress on the action plan and identify remaining challenges, gaps, and new priorities.

While several countries in the region already have some form of policy on ageing, the topic must be mainstreamed into all policies and action plans, and they must be translated into coherent, cross-sectoral national strategies that reach all older persons in our region, including those who inhabit remote islands, deserts or mountain ranges.

Older persons are valuable members of our societies, but too often they are overlooked. Let us ensure that they can fully contribute to our sustainable future.

* The meeting was held from June 29 to July 1 in Bangkok, Thailand.

Marcos Jr. faces a balancing act

Ferdinand “Bongbong” R. Marcos, Jr. took his oath of office as the 17th president of the Philippines before Chief Justice Alexander Gesmundo at the National Museum of Fine Arts in Manila on June 30. — PHILIPPINE STAR/KRIZJOHN ROSALES

President Bongbong Marcos has inherited an economy that is barely able to make ends meet. In fact, it depends on debt to fill its budgetary gaps. That said, the Marcos Jr. administration can’t afford to make a mistake nor can it adopt populist policies that erode national revenues. At this point, every centavo counts.

Buoyed by a debt-to-GDP ratio of just 42.1%, government international reserves of $83 billion, and a budget deficit of only 2.4% when President Rodrigo Duterte inherited the reins of government in 2016, Mr. Duterte went on a borrowing and spending spree to fund infrastructure and his pet projects. The situation was exacerbated by the pandemic in which the government needed to borrow more to fund the country’s emergency healthcare needs and to provide lifelines for the poor.

From a public debt of roughly P5.9 trillion in 2016, debts doubled to P12.68 trillion as of April this year representing 63.5% of GDP. In other words, the Philippines owes P63.5 for every P100 worth of goods and services it produces. Our debt-to-GDP ratio surpasses the government’s limit of 59.1% and the international standard of 60%.

The Duterte administration will pass on to Marcos Jr. the highest ratio of maturing debts since Erap bowed out and GMA took over. It will be recalled that when Erap was ousted, 17.9% of debts were falling due within the year and 22.5% were falling due in the medium term.

The situation is worse now. As of the beginning of 2021, 33.4% of all debts will be falling due within the decade of which 6.8% or P834 billion is payable within this year.

Over dinner with Finance Secretary Ben Diokno last week, our cadre of economists from BusinessWorld were assured that the situation is still manageable. After all, 73% of our debt stock comes from local creditors while only 27% come from foreign sources, said the finance chief. Our foreign debt-to-GDP ratio is the lowest among the five biggest economies of ASEAN.

I asked the secretary if he is likely to increase taxes or create new levies. He said no. He would rather focus on tax collection efficiency. Tough call, I thought, considering the President would have to lead by example and settle his own tax liabilities first.

Our bloated debt situation leaves the Marcos administration with no choice but to cut spending whilst sustaining investments in infrastructure and social services. It leaves it little room to borrow to sustain economic growth. And here lies the conundrum.

The economy needs to grow by at least 6% until 2028 for us to ensure our capacity to pay while decreasing our debt-to-GDP ratio. How can Marcos grow the economy while simultaneously cutting down on spending? It will be a delicate balancing act.

The IMF recommends adjusting personal income taxes, particularly wealth tax for billionaires. Records show that Filipino billionaires saw their wealth increase by over 35% during the pandemic while 3.7 million Filipinos fell into extreme poverty. Only 143,000 families control 70% of the country’s economic output.

Government can raise up to $6.3 billion a year if a 2% tax is imposed on wealth of over $5 million, 3% for wealth of over $50 million, and 5% for wealth of over $1 billion. This will be sufficient to cover our revenue gap.

Taxing the richest 1% of the population will not choke our consumer-driven economy as it would if the poor were to be taxed. This is why taxing billionaires makes sense. The problem is — most billionaires belong to political dynasties and/or have political influence. Will our politicians impose taxes on themselves and their benefactors? I doubt it. The likely scenario is that the middle and lower classes will be made to foot the bill.

The dinner with Secretary Diokno was also attended by incoming Department of Budget and Management Secretary Mina Pangandaman. I asked her if the allegation of a presidential candidate was true that some P700 billion out of our P5-trillion national budget is pilfered through graft and corruption. Pangandaman said it was fairly accurate.

If the Marcos Jr. administration is able to cut pork barrel and frivolous budget insertions, the budget can go a longer way towards pump priming the economy and debt service. In other words, fiscal discipline will be a must. But will our legislators be willing to cooperate? They were unwilling to sacrifice their pork barrel funds before — what makes us think that they will be willing now? It will be a test of political will on Marcos’ part.

Notwithstanding the tight finances, Marcos’ economic team is confident that the economy can grow its way out of its debts. Per the government’s forecast, the economy is expected to expand by 7-9% this year and by 6-7% in 2023 and 2024. These projections, however, are subject to adjustments given external factors such as the Ukraine war, the Chinese lockdown, and tensions in the Taiwan Strait. It is also contingent on successful reforms to improve agriculture and manufacturing outputs.

Adding pressure to the incoming administration is the budget deficit. Last year, the country registered the largest budget deficit in recent history at 8.6% of GDP. This is due to the reduced revenues brought about by the pandemic and increased spending on infrastructure and healthcare. The goal, according to Mr. Diokno, is to bring this number down to 3% by 2028. All the more reason to clamp down on pork barrel funds and channel our resources to where we get the most bang for the buck.

It is going to be a tight balancing act for the Marcos Jr. administration. It must raise tax revenues without further burdening a population besieged with high inflation. It must cut spending without choking economic expansion. It must spend on infrastructure and social services without widening the budget deficit. It must raise funds without acquiring more debts.

Now the real work of governance begins.

 

Andrew J. Masigan is an economist

andrew_rs6@yahoo.com

Facebook@AndrewJ. Masigan

Twitter @aj_masigan

1...5,7965,7975,798...13,825Page 5,797 of 13,825
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin Twitter Youtube