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Thursday, April 22, 2004
FPJ, Roco advisers bare economic plans
THE economic advisers of presidential candidates Fernando Poe Jr. and Raul Roco agree that the fiscal crisis is a major problem of the country, with one saying emergency powers may even be in order for the next president.
Dr. Milwida Guevara, economic adviser for Roco, said the country’s top problem was the “fiscal crisis.”
“And if there’s a crisis, it’s possible for a president to be given emergency powers,” said Guevarra, a former finance undersecretary, in a television interview.
The Philippines ended 2003 with a budget deficit of P199.9 billion. The target deficit ceiling this year is P197.8 billion, with the country aiming for a balanced budget by 2009.
Analysts and credit ratings agencies have warned of a debt crisis if the country does not manage its finances better.
Guevara said a Roco administration would seek systemic reforms in the collection of value-added taxes (VAT) to plug the current VAT leaks.
Subsidies
She also advocated “direct subsidies to the transport sector, not tax relief.”
Poe’s economic adviser, Calixto Chikiamco, on the other hand, added the power crisis and peace and order concerns to the fiscal crisis as the top problems of the country.
In a separate TV program, Rodolfo Salalima, Globe Telecom senior vice president for corporate and regulatory affairs, agreed that security problems hampered business.
He said that in the last three years, Globe Telecom’s cell sites had been attacked 20 times, forcing the company to delay deployment of cell sites in some areas.
He said each cell site costs P10 to P15 million.
Chikiamco also said it was a “myth” that the Philippines was doing well because of the four percent growth of the economy.
The reason is that the growth was not all driven by internal events or job creation, but in large part by the remittances of overseas Filipino workers.
Sin taxes
Chikiamco said a Poe presidency would see its finance officials going for an indexation of sin taxes, and the levying of “environmental taxes, like taxes on petroleum.”
Sin taxes, which refer to those on tobacco and liquor products, are being pushed as a revenue-enhancing measure for government, but Congress has failed to pass the measure.
To avert a power crisis, Chikiamco would “de-politicize appointments” to persuade investors to come in for the long run.
The government is currently selling off the assets of the loss-making National Power Corp.
Poe’s adviser also assured that the action star would not be protectionist, saying the Arroyo government had sent the wrong signals by raising tariffs last November.
To preserve the sanctity of contracts between the government and private firms, he said it was important to have a “functioning judiciary.”
He cited the Piatco case in which the contract was voided but “no one went to jail.”
Last year, the Supreme Court invalidated the franchise awarded by the Estrada administration to Philippine International Air Terminals Co. Inc. (Piatco), saying changes made to the original deal were disadvantageous to government. CTL
(April 22, 2004 issue)
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