ANGARA TELLS PURISIMA: TAKE THE LONG VIEW

Senator Edgardo J. Angara challenged Department of Finance (DOF) Secretary Cesar Purisima to effectively fulfill its role of overall conductor of the Philippine financial system and aggressively work to stimulate rapid growth that will translate to jobs for the poor.

During yesterday's hearing of the Senate Committee on Finance, Angara repeatedly asked Purisima to present the DOF's budget in the context of the Aquino administration's goals until 2016. "You should have a clear vision of what the economy should provide. Calculate how much revenues must be raised in order to improve maternal health care, reduce infant mortality and develop our infrastructure network to fuel growth.

"Our projected tax effort for the year is only 13.1 percent of gross domestic product when at least 17 percent is recommended for us to be able to address our myriad needs, especially in education, health, and infrastructure. What are you going to do in order to reach that?" asked Angara, Vice Chair of the Senate Committee on Finance.

"We should work to increase government revenue through the rationalization of incentives, restructuring excise tax on sin products, and road users taxes--areas that won't hurt the poor," he stressed.

Angara also criticized Purisima's view that improving the deficit is equivalent to improving economy. "Stop having such a tunnel vision of just reducing deficit, at the cost of investing in human capital and infrastructure development that will spur economic growth and improve living standards of our people."

Angara continued, "It's not just about paying debts, but balancing deficit reduction and strategic spending."

He noted that the Asian Development Bank (ADB) has already downgraded its full year forecast of the country's GDP growth from 5.0 percent to 4.7 percent because of low government spending and weak exports.

The country's GDP for the second quarter is at a measly 3.4 percent, drastically low compared to last year's second quarter performance of 8.9 percent.

Citing the previous day's hearing of the Department of Public Works and Highways (DPWH) budget, Angara said, "The DPWH, for example, has spent only P16 Billion out of it's P90 Billion budget for infrastructure in a period of nine months. And then it says it plans to spend P20 Billion every month for the remainder of the year. That won't happen."

Reminding the DOF of its authority, "You raised this money for them but they render it useless by not spending it on projects. Because of this practice, spending is so low, jobs aren't being created, and the economy is contracting.

"You are the overall conductor of the financial system, you ought to do something about it. This is a matter of leadership," Angara told Purisima.

Angara urged Purisima to fund an elasticity study that will serve as basis for policies on investment and finance, and asked him to also submit additional documents in connection with the committee's consideration of DOF's proposed 2012 budget P22.673 billion.