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Rannie and Renz on a roll ‘knee-jerk,’ says Roxas

07/12/2007

Economic managers seem resigned to missing a P63-billion budget deficit target this year after Socio-economic Planning Secretary Romulo Neri, also the National Economic and Development Autority director-general, said the likely deficit figure would be P100 billion by the end of the year.

Finance Secretary Margarito Teves insisted that the target remains attainable by augmenting revenues through sale of state assets and a proposal to raise fees on government services.

Sen. Manuel Roxas II, however, warned that raising of fees would only show that the government is resorting to patchwork instead of clear-cut fiscal plans to avert a looming budget blowout.

Neri and Teves have been crossing swords on fiscal target after Neri claimed the target to balance the budget next year, as claimed by Teves, was too ambitious and that 2010 was a more realistic target year.

“The mad scramble to keep our fiscal numbers up may jeopardize long-term investments and lead to knee-jerk solutions that are short-sighted and inefficient. In the case of raising government fees, this contradicts the administration’s concept of social payback where the expanded value-added tax (e-VAT) will be used to help the poor,” Roxas stressed.

Roxas said the government should present a solid plan to the public on how the administration intends to sustain its fiscal program despite shortfalls in tax and other revenue collections.

The government is expected to miss its first-half budget deficit goal of P31.3 billion by about P6.4 billion with total first-half tax revenues about P53 billion short of the P483 billion peso target based on preliminary data.

Teves said some P105 billion is expected to be generated from the sale of key government assets including the sale of a 20-percent stake in the profitable geothermal firm Philippine National Oil Co.-Energy Development Corp. (PNOC-EDC).

Roxas, however, said revenue shortfalls are now driving fiscal policy rather than the other way around, leading to potentially bigger burdens on the people.

Roxas, chairman of the Senate committees on economic affairs and trade and commerce in the 13th Congress, said the people should not be made to pay more in government fees due to shortfalls in fees and tax collections.

He also called on the boards of government finance institutions and corporations to ensure that their respective constituencies and members are consulted before public shares and assets under their supervision are privatized. “Sell these assets as part of a bigger investment program, not as a shortsighted solution to our fiscal shortfalls,” the senator said, adding the law on lateral attrition and political will to run after big-time tax evaders are part of long-term solutions to sustained fiscal growth.

Roxas pointed out that increases in government fees and charges should be matched with visible improvements in how frontline agencies serve the public. Data from the Department of Finance showed that as of January to May, earnings from the combined collections of fees and charges by different government agencies reached only P7.98 billion, much less than the P11.195 billion target set for the first quarter.

The first-half target for government fees and charges amounts to P19.975 billion. But to meet this target, the government agencies will need to have collected P11.995 billion in June alone, much larger than the collection for the first five months combined.

Some of the biggest sources of revenues from government fees and charges are: the Land Transportation Office, with income derived from drivers’ licenses; the Department of Foreign Affairs which charge passport fees; and the National Bureau of Investigation, which collects fees from the issuance of clearances.

Roxas said the Department of Finance should meet with the heads of these departments and agencies and ask them to remit their collections on time so that quarterly targets can be met.