Ilocos Norte Representative and Nacionalista Party senatorial candidate Ferdinand “Bongbong” Marcos Jr., on Monday said that if elected, the improvement of the government’s fiscal health and the transformation of the Philippines into a more attractive investment destination will be his main financial policy priorities.
In an address delivered at the 4th General Meeting of the Financial Executives Institute of the Philippines (FINEX) on April 19, 2010; Marcos said that he will prioritize measures that will raise the government’s tax collection efficiency to ensure the more productive use of government resources.
“It is therefore essential that government exercise great care and caution in managing its finances and setting the right economic policies in order to maintain monetary and financial stability,” Marcos said.
He cited the government’s questionable policies that deter economic growth. Marcos noted that the government’s practice of making Government Owned or Controlled Corporations (GOCCs) pay in advance the dividends payable in subsequent years hide the actual shortfall in revenue.
Marcos also said that the government’s policy of making private corporations pay their income taxes in one fiscal year before they are due for payment impairs the accuracy of the appropriations of expenditures enacted into law in the subsequent fiscal year.
The Ilocano congressman expressed concern about the government budget scenario wherein he noted that under current practices, the cash operations of government do not truly reflect the fiscal health of the government.
Marcos said: “The General Appropriation for the operations of government is enacted into law annually by Congress. It is based on the budget of expenditures and the sources of financing, including receipts and proposed revenue measures, together with the proposed level of deficit, if there is any. The budget is a tool of the Executive Branch for the conduct of its financial operations. The proposed cash budget may change as a result of developments, such as shortfalls in revenue, but in no way should they be manipulated just to show a healthy fiscal position.”
The congressman from the north also highlighted the urgent need for the efficiency of revenue collecting agencies and spending agencies. As a former local chief executive, he also lamented the intended delay of cash release of the internal revenue allotment (IRA) and other shares in the internal revenue collection bloats the budget of expenditures of the subsequent years.
“On the national revenue side, it is estimated that at least 30% of what should be collected is not collected. If the leakage is plugged, total revenues will increase the funds available for (1) the delivery of services such as education, health care, etc, (2) increases in the salaries of government employees, military and police, and (3) capital expenditures for infrastructure. In addition, there will be more funds for IRA and shares in revenue derived from the extraction of minerals due the LGUs,” Marcos said.
Marcos noted that on the expenditure side, it is estimated that some 30% of the 70% collected – or about 21% — is lost due to overpricing and wasteful spending as a result of political patronage and unproductive use of pork barrel.
“When you combine it all, the total waste of national government resources reaches 51%, leaving less than half (49%) of taxpayer money for productive use. When you add to this the leakage in almost all LGUs arising from graft and corruption, the amount lost is staggering. We should therefore not wonder why government is ineffective and economic development is sluggish in our country,” Marcos added.
The youthful solon also underscored the importance of the remittances of Overseas Filipino Workers (OFWs) in the national finances. He stressed that currently it has become institutionalized as the Philippines’ biggest source of foreign exchange, accounting for one-sixth of the GDP.
“The situation is the result of the country’s failure to provide for more domestic employment and absorb the growing labor force through a more competitive manufacturing, agriculture and export sectors,” Marcos said. “At the same time, our country is absorbing a tremendous social cost for the deployment of over 10 million of our people overseas – separating them from their families and loved ones.”
Marcos emphasized the importance of the contribution being provided by OFWs to the country’s economy. He stressed that the nation would be even more dynamic and far-reaching if, instead of just depending on OFW remittances to keep the country afloat, the government should embark on an aggressive effort to develop the domestic economy and spur the growth of local industries and agriculture.
“Imagine a situation where we have both – a more productive and competitive economy here at home and a dynamic OFW community contributing a substantial portion of GDP. In such a situation, we would become an economic powerhouse in our part of the world,” Marcos added.
Marcos believes that the key in restructuring the Philippine economy is to focus again on industries where the country and the Filipino people have a competitive advantage: agriculture, tourism, shipping, mining with environmental safeguards, IT and related services, BPOs and call centers, and infrastructure development and construction.
“These industries and sectors have the highest multiplier in terms of employment, income and increased national output. They will also be effective in decongesting highly urbanized centers and thus contribute to population dispersal. And with the expansion and growth of these sectors, they will in time help to moderate the exodus of OFWs because more of them will be encouraged to work here at home once the jobs are available,” Marcos said.
Marcos said that agricultural development in his view is absolutely essential because food security is vital to national survival. He added that 33% of the Filipino people continue to depend on agriculture for a living.
“To finance expansion and growth of agriculture and the other sectors, we should embark on a single-minded effort to generate more direct foreign investments in the economy. As is the case with other emerging economies, this is the key to growth for our country. What has been missing all this time is the political will to pass the needed policies, and the government to zealously implement them,” Bongbong said.
Besides advocating for an improved government tax-collection system, the youthful solon is also pushing for a comprehensive policy and program to increase dramatically the inflow of foreign investments by converting the country into a world-class and strategic investment location.
The Ilocano congressman stressed that there is no reason why a democratic government like the Philippines cannot match in efficiency the socialist government of the People’s Republic of China and the democratic government of India. He added that what really matters most is effective governance.
Marcos noted that the country has tremendous economic potential, and that there’s no reason the nation should not be able to attract the foreign investments needed for rapid development. He said that if India, China, Thailand and Indonesia can do it, so can the Philippines.
“The call of the hour then is to put in place those reforms that will make our government more fiscally responsible, our economy more attractive to foreign investments, and our industries more competitive in the global economy,” Marcos added.