Gov't urged to revise expenditure plan due to US financial crisis
by CARMELA FONBUENA, abs-cbnNEWS.com/Newsbreak | 10/01/2008 6:03 PM
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A day before the start of plenary debates on the 2009 budget in the House of Representatives, Bayan Muna Rep. Teddy Casiño reiterated Wednesday his call to “radically revise” the Arroyo administration's national expenditure program for 2009.
He said the macroeconomic assumptions and projected revenues are now unrealistic because of the US-led financial crisis.
“A more sober and realistic projection is needed for us to craft an appropriate budget for next year. It would simply be daydreaming to insist that GDP will still grow by 6.1 percent to 7.1 percent and GNP by 6.9 percent to 7.8 percent, or that inflation will be a mere 6 percent to 8 percent and that the peso-dollar exchange rate will be between P42 to P45 to a dollar,” Casiño said.
“Sticking to the P1.4 trillion national budget will most likely bloat the budget deficit, which is already projected at P40 billion. Government will then be forced to borrow more money, which would be very expensive given the global credit crunch," he added.
Teves: Not time to adjust
In meeting with leaders of the House of Representatives last week, Finance Secretary Margarito Teves allayed the congressmen’s fears that the impact of the US-led financial crisis will spill over to the country.
Teves made the assurance despite having said then that his office needed two weeks to comprehensively assess the impact.
Asked by reporters if the 2009 budget needs to be adjusted, Teves said “not yet.” He said the challenge is for the executive to improve its collection efficiency.
But Teves acknowledged that there are problems with the revenue projection.
Even if the impact of the US financial crisis is disregarded, Teves said several economic relief measures passed by Congress will reduce the revenue collections and affect the government's financial targets.
“We still need to work on the revenue picture,” Teves said.
The adjustment of personal exemption on taxes accounts for revenue loss of P9.5 billion. Teves said they earlier thought that the measure will be applicable in January 2009 and not in July this year. The reduction of the corporate tax from 35 percent to 30 percent will also account for another P16 billion.
Improve Oversight
Teves asked Congress to exercise its oversight function, particularly to check the spending of the Department of Transportation and Communication, the Department of Agriculture, and the Department of Public Works and Highways.
“It will be helpful if Congress is to perform its oversight function to ensure that they (agencies) are on track with their spending,” Teves told the congressmen.
Teves also asked Congress to exempt the Bureau of Internal Revenue and the Bureau of Customs from the salary standardization law and pass the law on sin taxes.
