Copying Aquino’s macro economic policies?

CARTOON EDITORIALIt could just be a case of a beginner’s nerves- but the knee-jerk reaction of the Duterte Government to be a copycat of the Aquino era’s basic macroeconomic policies means we will have more of what we have seen.

Unfortunately, that includes GDP growth without inclusion of the lower social strata  from the benefits of growth, which is a major failing of the Aquino era.

Without big-ticket items for privatization as in the FVR era where there were years of the so-called “balanced budget”, the Aquino  fiscal mantra was “live within one’s means” anchored on a fixed budget deficit/ GDP ratio.  Smarting from an Arroyo era’s debt-financed GDP growth, Aquino opted for more reliance on internally -generated funds -policed by a debt/GDP ratio focus.

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If one wishes  to move out of Aquino’s fault line one must ask  whether  every policy and program of the Duterte government can   answer  this question: how will this positively affect the poorest of the poor to insure inclusive growth from hereon? It is a simple enough formula.

The dilemma of most governments, of course, is facing an almost limitless demand for public service programs versus  the finite resources of a young government.

To fund a more ambitious  fund total for  government programs that would eventually redound to the benefit of the poor ,government must do creative access to more sources of funds.

Big-ticket items involving infrastructure that enthuses foreign investors to try the Philippines and thus generate jobs- need participants from the private sector because government cannot do it all say, through the PPP (public private partnership) .  Government just has to make sure that the private sector enjoys a reasonable return on its  investment against the risk and size of capital it throws on the table.

That  may involve a  highly beneficial regulatory environment for the PPP participant through government support. It means local legislation involving the project site must be subordinated when the project is tagged by the national government  as “top priority”.  If congressional initiative is needed, this  has to be pushed.

Seriously now, also, the study to rationalize the huge “tax leaks” from legislated  fiscal privileges of firms from EPZA (export processing zones) and BOI- registered firms must take place immediately.

Meantime, reforms at  one of the citadels of corruption – the Bureau of Customs-  which only collects a fifth of the total  BIR collections must take place now. The efforts of vigilant practitioners involved in the trade are  still looking for that one day where everything in customs will finally become “paperless transactions” , bereft of human intervention and judgmental discretion.

Another source of incremental funding for social services would be -given the excellent international ratings the nation has gotten- to restructure short-term debt (peso and foreign)  to longer terms and save on cash -flow in the interim.

One must note that of the P3-Trillion GAA (national budget) close to one third of that is an automatic appropriation for debt-servicing. Any postponement of capital payment, therefore,  is additional  source of funding for government.

Finally, there is the crowd of GOCCs (government owned and operated corporations) out there  which is not making money and has been a constant source of subsidy from government year in and year out. A study group must be created fast  to determine which of these high-maintenance GOCCs should be abolished or merged with similarly -functioned GOCCs. This would be a tremendous amount of savings for government.

If government succeeds to amass such incremental cash inflow from the above- one is back to the basic question – which projects should be prioritized (funded from such) that will directly impact the welfare of Juan de la Cruz’ family? Aye, there lies a potential tug of war of warring interests.

Creative sourcing of funds and judicious application of  these resources require a different set of skills, mindset and sectoral commitment of government.   The poor should have a break this time- after years of benign neglect.

For comments: email to dejarescobingo@yahoo.com or bohol-rd@mozcom.com



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