By JOHNNY DAYANG
DESPITE the good reviews we get as Asia’s most promising economy, the disturbances affecting our growth track invite questions on how we deal with our new found amelioration.
Various factors have affected our country’s economic constancy. Its projected 6.7% growth has sunk to 6.0% although economists say this is still quite high given the turbulence on the ground. Some of these identified factors are the state’s tax reform program, declining dollar-peso exchange rate, high oil prices, low agriculture performance, and others which cumulatively have triggered high inflation.
Their confluence has created unpredictability that forced the peso to devaluate, and prices to skyrocket. Imbalance between actual income and food cannot easily be solved by form of unconditional cash transfer.
In reality, high commodity prices don’t easily go down no matter how strongly the economy improves. Predictably, demand for higher wages follows. Accommodating the demand translates to hiked tax targets.
Progress spells more jobs and higher income, but also bigger state spending. Addressing deficits created by big spending compels government to impose new taxes to fund social services, infrastructures, etc. The Duterte administration is thus now compelled to accelerate its TRAIN speed on an inferior railway system which blurs socio-economic issues.
To address skyrocketing costs, the state must revisit its programs and focus on the implications of overspending. The fundamental issue to resolve is how to ensure that poor Filipinos get three square meals a day and build a truly viable and vibrant society.
RE-ENACTED BUDGET. Albay Rep. Joey Salceda asserts Congress must pass a new 2019 budget since a “reenacted (2018) budget is bad policy, does not reflect changes in people’s needs, and/or respond to our economic imperatives.” It also casts doubts among investors about the country’s ability to sustain its reform momentum.
Indeed, the Filipino people are the biggest losers in a reenacted budget.
The new budget could combine the DBM-proposed “cash-based” system for programs that can be completed within one year, and the “obligation-based” system for programs that will take over a year to accomplish like giant infrastructures.
As Salceda points out, a reenacted budget will compromise the welfare of 1.2 million civil servants since the 2019 budget includes the 4th tranche of the Salary Standardization law, the 2019 elections, the 2019 SEA Games we will host, the free-tuition expansion for students in private colleges, and assistance to 4Ps beneficiary families, among others.