|
Tuesday, April 19, 2005
Espinoza: Hard to believe government
By Fred C. Espinoza
SOVEREIGN GUARANTEE. It’s hard to believe that the government has taken the initial step to remove the sovereign guarantee enjoyed by state-owned companies, whose losses are said to aggravate the country’s fiscal problem.
I was shocked to learn recently that the Philippines borrowed from the Asian Development Bank (ADB) some $446 million, representing about eight percent of the bank’s lending assistance to Asian countries, in 2004.
Senators even urged Malacañang to sack the heads of the government-owned and -controlled corporations (GOCCs) who were found to be enjoying fat salaries despite the weak financial performance of the firms.
The proposal to remove the automatic provision of sovereign guarantee to state-owned companies gained ground last year when the heavy losses of the GOCCs prompted Congress to call for an inquiry into the way the firms were managed.
But even before the Department of Finance (DOF) and the Department of
Budget could make good on their promise to lobby for a bill in Congress to take away the sovereign guarantees, and to make the officers of losing state-owned firms accountable, the National Power Corp. had the temerity to borrow on its own by floating P5 billion worth of peso-denominated bonds this month.
The proceeds of the bond float, “which will be guaranteed by the government,” will be used to cover “operating expenses of the debt-ridden Napocor,” the report said. It is really hard to believe what the President says nowadays, based on what is happening to state-owned companies and the kid-glove treatment the administration is giving to the lackadaisical officers of the firms.
Of the country’s debts, the national government accounted for P3.7 trillion, while the 14 GOCCs being monitored by the DOF held the remaining P1.7 trillion. The biggest debt contributor among the 14 GOCCs was the National Power Corp., which accounted for P1.4 trillion of the total amount, the DOF said.
For a while, I thought we finally had a no-nonsense finance chief in the person of Cesar V. Purisima, after he made the initial step to remove the sovereign guarantee for foreign borrowings of GOCCs.
But I realized how wrong I was. The latest report said the finance secretary has given his blessing to the plan of Napocor to borrow on its own by floating P5 billion worth of bonds this month. The bonds will have tenors of five and seven years.
The national government, through the DOF, had been borrowing on behalf of the state-owned power firm, as the credit market was charging higher interest rates if Napocor borrowed on its own. Napocor accounts for roughly 70 percent of the combined P103-billion deficit of the GOCCs monitored by the DOF.
Let’s hope President Arroyo will realize soon that it will be for the best interest of the nation if the government rids itself of the losing GOCCs that have been pushing the nation to the brink of fiscal crisis.
For now, we just hope Congress will focus its attention on the next reform measure, after having reformed the value-added tax system. We hope this new measure will not only seek the removal of the sovereign guarantee on GOCCs but also scrap the losing GOCCs and hold the officers accountable for the poor financial performance of their firms.
(April 19, 2005 issue)
Write letter to the editor.Click here.
Join the Sun.Star message board.Click here. |
|
[return to top]
[home]
[network page]
|
LOCAL NEWS
BUSINESS
OPINION
SPORTS
LIFESTYLE
FEATURE
SUPERBALITA
WEEKEND
|
