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BAUANG,
La Union—President Arroyo said Tuesday the government
intends to balance the budget by the end of her term—and
not specifically in 2008, as had been her habit of
saying—further fueling the possibility of a deficit for
the year due to pressures from soaring oil and food
prices.
Speaking
at the inauguration of the second international
cable-landing station of the Philippine Long Distance
Telephone Co. (PLDT) here, the President said the
telecommunications giant’s $500-million investment
spares the government from bearing the financial cost of
such a vital facility, and as such, “we are better able
to balance the budget, which remains a very important
priority.”
“We have
always said that the balanced budget was our goal by the
time we leave office. That remains our target. We are
well on our way to meeting that goal, thanks to
private-infrastructure investors like PLDT,” she said.
On
several occasions since world oil prices skyrocketed and
drove up prices of basic goods, the Chief Executive
herself had raised the prospect of incurring a “small”
deficit this year, confident that the international
financial community would understand this provided that
the government continues to exercise fiscal prudence and
improve revenue collections.
At the
PLDT event, the President reiterated that the government
“does not want to and will not go back to days of heavy
deficit spending,” especially as its “commitment to
economic reform has proven effective.”
“We’re
both comfortable and confident that our discipline will
allow us to continue on a balanced path of targeted
investment and overall restraint. Balancing the budget,
as I said, remains a very important priority. That will
not be abandoned. But we will do this while investing in
much-needed infrastructure and social services,” she
said.
The
President also said, “There is no need for new taxes,”
especially with some private firms bearing part of the
financial brunt of building vital infrastructure in the
country.
“With
firms like PLDT taking a large part of the burden of
building vital infrastructure, there is no need for new
taxes. We have plenty of room to increase revenues by
enhancing tax administration, and tax administration can
be enhanced because we have better Internet services,”
she said.
Asked
whether the President hinted at a missed balanced budget
target this year in her speech, Budget Secretary Rolando
Andaya Jr. said in an interview at the sidelines of the
Cabinet meeting in San Fernando, La Union, that
considering the current situation, such a scenario would
be understandable for as long as the government meets
its revenue targets.
Andaya
said that when the government advanced its balanced
budget target from 2008 to 2010, “there were no problems
on rice prices, there were no problems on oil prices.”
“So
these things only came into play now and it would be
wrong if the government will be inflexible not to
address these problems,” Andaya said.
He said
that while “it’s still desirable if we can have it
[balanced budget] this year, I don’t think we will
hesitate if we have to do it [forgo balanced budget this
year]. For the economists, it is important to show that
we can collect the revenue needs.”
“The key
here, I think, more than balancing the budget—because
you’re looking at the expenditure side—is the growth in
revenues. That’s what’s important. They [economists]
will understand if you exceed your expenditure program
as long as you can show that your commitment, that
revenue collections will go up, as projected, will be
met,” Andaya said.
He said
the President’s statement only reflects the government’s
“flexibility in responding to whatever needs have to be
addressed.”
“She’s
just showing that government funds should be allotted
wherever they are needed. In simple terms, of what good
is a balanced budget if your citizens are suffering from
high oil prices, high food prices? That is where you
will put your resources,” Andaya said.
He said
the President has ordered that extra revenues from the
value-added tax on oil imports, be spent on priority
programs of the Department of Social Welfare and
Administration and the Department of Education. |
