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The President’s Budget for 2001: Depleted Economic Choices

For government to be able to function and fulfill the role assigned toit, it must collect sufficient resources and allocate and use thoseresources efficiently and effectively. In this regard, any assessmentof the government budget cannot proceed without an implicit recognitionof the integral relationship between revenue and expenditures, the twoprincipal elements of fiscal policy. Thus, the analysis of this paperassesses not only expenditure program but also the revenue program ofthe President’s Budget for 2001. In particular, the President’s budgetproposal is evaluated in terms of two principal objectives of a goodpublic expenditure management: fiscal discipline and strategicallocation of resources.

Gender-aware policy analysis

A common reaction among economists when one mentions gender is, “Gender? Aren’t there more important things in this world?”

This reflects the common notion that gender equality is something one
should be concerned with only after what are perceived to be “more
fundamental” problems have been addressed. From this point of view, the
more fundamental problems include eradicating poverty, narrowing income inequalities, protecting the environment and ending hunger, among others.

On the import surcharge: What’s not to like?

At this point, to tax or not to tax is no longer the question.

With all the public discussions stirred up by the UP 11 fiscal alarm,there has been widespread recognition of the need for new tax measures.The key issue now is who to tax.

Who should bear the burden of increased taxes? Smokers and drinkers?Texters? Telecommunications service providers? Foreign investors?Car-owners? Commuters? Consumers in general? These are just a few ofthe sectors that may have to bear the burden of new taxes – that is, if Congress approves the government’s proposed tax measures.

Turning Crisis into Opportunity

Several months have passed since the media first bannered the warningof the 11 faculty members of University of the Philippines School ofEconomics (UPSECON) about a looming economic catastrophe in the eventthat a worsening fiscal crisis is not arrested. The good news is that everyone, from Gloria Macapagal-Arroyo (GMA) tothe man on the street, is aware of the gravity of the problem. But the bad news is that the administration has not yet acteddecisively on the problem. Its actions to date are far from reassuring.

Get the best out of the crisis debate

{mosimage}The fiscal crisis has generated a wide range of responses. The GloriaMacapagal Arroyo (GMA) administration initially packaged its revenuestrategy by stringing together eight revenue measures, which thePresident outlined in her State of the Nation Address (SONA). In apaper published by BusinessWorld (Yellow Pad column, Aug. 9 2004), Icriticized the revenue package of eight measures for being half-bakedand ill-conceived.

This package also served as a backdrop, or a context, of the paperauthored by the 11 faculty members of the University of the Philippines(UP) School of Economics (or the UP 11) titled “The Deepening Crisis:The Real Score and Deficits and the Public Debt.”

The UP 11 paper – notwithstanding its clear critique of government’seconomic, including fiscal, policy – was kind and gentle in itstreatment of GMA. This, at first glance, was surprising, consideringthat some of the coauthors are known for their outspoken,no-holds-barred criticisms (they call a spade a spade, to borrow SolitaC, Monsod’s favorite line). But a constructive paper, with a mild tone,was meant to get GMA to listen. Call it a benign tactical approach; itnevertheless paid off in moving GMA to declare a fiscal crisis and inproducing a sustained, vigorous debate on the issue.