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Oops, they did it again

During those weeks or months when road construction is ongoing, each time I hit Quirino Avenue and become one of the snarling mass of slow-moving vehicles on it, the question that inevitably rises out of my guts in between prayerful ejaculations (not curses, mind you) for politicians (whose CDFs fund the infrastructure project), DPWH bureaucrats, and contractors’ is WHY THE ANNUAL RESTORATION OF VIRTUALLY THE SAME PATCH OF REAL ESTATE?

The need to focus on tax administration in the near term

Two factors make tinkering with the tax code irresistible. One, the
BIR’s tax effort, contributing roughly 75% of National Government tax
revenue, has slid down to pre-CTRP (Comprehensive Tax Reform Package) levels. After peaking at 13% in 1997, it went down to 10.9% in 2000, lower than the 1994 BIR tax effort of 11%. Two, the revenue “crisis” comes at a time when prospects for economic recovery are bleak, and all sectors look to government to stimulate economic activity.

O Cartel!

For over a decade from the 1970s to the 1980s, the Philippine cement industry thrived under a powerful, government-sanctioned cartel that captured Filipino consumers and industry users including the government. In the absence of information, the government, through the Philippine Cement Industry Authority (PCIA), had to coordinate closely with the industry association, the Philippine Cement Corp. (Philcemcor). This led to the collusion of firms through informal agreements to set production quotas and geographic markets. By regulating prices and outputs, prices were no longer the product of competition among rival producers but more of the outcome of negotiations between the government and a small number of producers.

Mr. Banez’s Challenge

Most economic analysts agree that the gaping fiscal deficit is the single biggest factor that will drag our economic recovery in the next few years. Critics of the President Gloria Macapagal-Arroyo’s SONA mainly questioned the doability, not the merits, of her concrete proposals, citing the serious fiscal constraints facing the government. But we are in this situation because actual government fiscal performance in the past two years had deviated widely from the projections made in the Estrada Angat Pinoy Plan.

The Folly of the Modified Gross Income Tax

Among some economists, the current joke is that they and their ilk
should be banned from seeking the presidency. One likely problem with an economist-turned-president who thinks he knows his stuff is that he would ignore advice and pursue an economic policy that does not make sense to others.

It’s the Governance, Stupid!

Time and again, it is often asserted that the policies for social and
economic development espoused in our Medium-Term Philippine Development Plan (MTPDP) are generally sound – but it is in implementation where we fall apart. A key function of governance is the effective translation of policies and strategies embodied in the nation’s development plan into tangible actions by the various players in society, both in and out of the government. But alas, governance is precisely where the previous administration went wrong.