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CONTRARY to what some politicians (mostly from the opposition) are
sounding out, a top official of the Bureau of Internal Revenue (BIR)
and a noted economist feels the subsidies being provided by
government for low- and middle-income families are actually good for
the country and could even boost the economy.
In an interview over NBN Channel 4’s
EQUILIBRIUM TV talk show (hosted by former Senator and Environment
Secretary Heherson Alvarez) BIR Deputy Commissioner for Legal and
Enforcement Atty. Gregorio Cabantac said the infused cash flow will
in fact help pump-prime the economy, and—would you believe—in
some ways even boost tax collection.
Says bar top-notcher and court ligitator Atty.
Cabantac: “The funding came from the value added tax [VAT] and
from government savings. We in the Bureau are thankful that all our
efforts at revenue collection are being used to help the poor.
These taxes came from the people and it is only
right that we return it to them in terms of concrete financial
assistance”.
Cabantac, who was named Officer-In-Charge of the
Bureau after Commissioner Lilian Hefti went on a study leave to the
United States, believes the law clearly allows the government to use
its savings for social services, in the same way that savings are
sometimes disbursed as Christmas bonuses and incentives for
employees.
In the same TV interview, former Socioeconomic
Planning Secretary Dante Canlas said the government subsidies are in
fact needed as an immediate response of government for the global
economic crisis affecting the country.
“This is a proportional response of government
for what I see as a temporary economic crisis. The poor needs these
emergency subsidies for them to be able to cope with the crisis and
President Arroyo is on the right track,” stressed Canlas, a former
Secretary-General of the National Economic and Development
Authority, and now a professor of economics at the University of the
Philippines in Diliman.
President Arroyo is being criticized by the
opposition for giving out mere “dole-outs” to the poor, claiming
these will keep the poor in perpetual state of dependency and
poverty.
Funding for subsidies mostly come from the
proceeds of the value-added tax.
The Chief Executive also signed a law giving tax
breaks for minimum wage earners which the BIR said would result to
some P14.25 billion in lost revenues.
Government subsidies include cheap rice at
P18.25 per kilo; P2 per liter subsidy for diesel fuel; P295-million
fertilizer subsidy for Mindanao farmers; P500-peso power subsidy to
4 million Meralco lifeline users, amounting to P2 billion; P1
billion fund for scholarships and student loans; P1-B loan fund for
the conversion of jeepney and bus engines to allow liquefied
petroleum gas (LPG) and compressed natural gas (CNG) use.
At the same time, Canlas clarified that a budget
deficit may not always be bad for an economy, especially for a
developing country like the Philippines.
Early this year, the Department of Finance
announced it was postponing its plan for a balanced budget this
year, after revenue collections fell short in 2007.
“From a budget deficit of P210 billion in
2002, we now have roughly P60 billion. This is only about 1 percent
of our gross domestic product. That is still within acceptable
levels as long as we keep the deficit below 5 percent of GDP. But
what government must look out for is that interest rates should not
go up, as this will discourage borrowings and investments”, said
Canlas.
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bizzfizz_98@yahoo.com
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