President Arroyo, in her eighth State of the Nation Address (Sona), defended her economic policies yesterday amid surging food and energy costs while asking the people to be patient because the global crisis spared no one.
She said it is too late to scrap the value-added tax (VAT) on oil and electricity because it would only compromise present and future progress.
She said tax proceeds go to pay the country’s debt, improve infrastructure to boost investment and generate funds for pro-poor programs.
“Take away VAT and we strip our people of the means to ride out the worst food and energy crisis,” she said. “We have made too many sacrifices to turn back now on reforms.”
Arroyo admitted that VAT on oil and power, together with oil deregulation, is among govern-ment’s much-criticized policies but were irreplaceable and which government persevered in implementing “without flip-flops.”
She said scrapping VAT on oil and power would only benefit the rich who consume 84 percent of fuel and 90 percent of power while hurting the poor who would be deprived of P80 billion in subsidies.
Government critics have been calling for the removal of VAT to help the people cope with rising prices of fuel and other goods.
But the President said scrapping VAT would lessen business confidence, raise interest rates, bring down the value of the peso, and increase the prices of commodities.
Katas ng VAT
Government, she added, will continue to use the revenues from VAT to help poor families affected by high prices and the effects of calamities, while preparing the country for future crises.
Government released last month a P4-billion subsidy from the VAT on oil, composed of P2 billion in lifeline subsidies, P1 billion for college scholarships, P500 million for the conversion of fuel of passenger jeepneys from gasoline to compressed natural gas and P500 million for the use of compact fluorescent lamps.
She said the next “Katas ng VAT” would be composed of P1 billion in lifeline electric subsidies, P500 million for the elderly who are not covered by social security, P500 million capital for the families of drivers, and P500 million for the upgrading of provincial hospitals.
Arroyo said that with the VAT subsidies, the rice being distributed by the National Food Authority is among the cheapest in the Asian region.
“Because tough choices were made, the global crisis did not catch us helpless and unprepared. Through foresight, grit and political will, we built a shield around our country that has slowed down and somewhat softened the worst effects of the global crisis,” she added.
Crisis
Arroyo warned that the country is in for a roller coaster ride of oil price increases, high food prices and looming economic recession in the US and other markets.
“How do we solve these many complex challenges? Special care and attention in this hour of need,” she said.
First, the country must have a targeted strategy with set of precise prescriptions to ease the price challenges the country is facing.
Second is food self-sufficiency; less energy dependence; and greater self-reliance “in our attitude as a people and in our posture as a nation.”
Third, short-term relief cannot be at the expense of long term reforms.
“These reforms will benefit not just the next generation of Filipinos, but the next President as well,” she said.
She has said the Philippines will produce enough of its own rice within several years to avoid costly imports.
“While we can take some comfort that our situation is better than many other nations, there is no substitute for solving the problem of rice and fuel here at home,” she noted.
The President also announced the availability of P32 per kilo commercial rice in the market.
Common tao
Arroyo used the “common tao” to illustrate some important points in her speech, like Rodney Berdin, 13, of Barangay Rombang, Belison, Antique, who saved his mother, brother, and sister from the raging waters of Sibalom River.
Mayor Rosario Camma of Nagtipunan, Quirino nearly stole the show from the President when he showed up literally “underdressed” for the Sona, wearing only a tribal G-string or “bahag.”
He hogged the limelight when the President recognized his efforts in helping his 15,000 tribal members achieve food sufficiency through farming.
Other highlights of the Sona:
l The President announced a 50 percent cut in the rates of text messages following talks with telecommunications companies.
“It is now 50 centavos per text to other networks,” she said.
However, an advertisement by Smart stated that the 50 centavos text to other networks is only for a limited time and one has to register daily.
The promo will end by October 22, 2008.
0 Arroyo cited the campaign against corruption which she said would rather address by infusing more funds in the campaign and strengthening the concerned institutions instead of being distracted by those who prefer to make allegations and speeches without presenting any evidence or proof.
l She called for the passage of a supplemental calamity budget for Western Visayas and other typhoon-hit areas, extension of the Comprehensive Agrarian Reform Law, amendments to the Social Security System charter and Electric Power Industry Reform Act (Epira), Renewable Energy Bill, and Consumer Bill of Rights.
She wants rackets out of land reform, which includes “the threats to take and therefore undervalue land, the conspiracies to overvalue it.”
Arroyo likewise urged Congress to immediately act on the needed “legislative and political reforms” to hasten the achievement of peace in Mindanao.
l “We released P1 billion for the victims of Typhoon Frank,” she announced.
l Money amounting to P500 million this year and P1.5 billion next year has also been earmarked for projects to tap sources of clean water.
l “As your President, I care too much about this nation to let anyone stand in the way of our people’s well-being. I will let no one – and no one’s political plans – threaten our nation’s survival. Our country and our people have never failed to be there for us. We must be there for them now,” she said.
l She also lobbied for natural family planning, after “long years of pushing contraceptives.
“Therefore informed choice should mean letting more couples, who are mostly Catholics, know about natural family planning,” she said. (AP/Sunnex)
