evat & the national debt
totoo yata ang tsismis na pabalik-cabinet si dating senador ralph “vilmasantos” recto, also known as the author of the evat law. why else would he be on anc talking about the evat on fuel and electricity and saying na hindi ito dapat i-lift dahil kailangan ni gma ang napakalaking datung na ito (some P90 billion) panggastos sa “development projects”.
yan na yan din ang say ni gary teves (na matagal nang natsitsismis na pa-exit na at papalitan mismo ni vilmasantos recto).
Finance Secretary Margarito Teves is bent on keeping the 12-percent Value-Added Tax (VAT) on oil products and power citing the need for government to collect revenues.
Teves, who spoke to reporters after a press briefing by the World Bank, said that the high oil and power costs as well as rising food prices is just a temporary situation. Tweaking a law, he said however, would be a more permanent measure.
“Well legally, it’s their (Congress’) prerogative,” Teves said, “But let’s remember that we have to have the revenues to be able to spend for various projects.
The finance chief instead proposed two things: first, for all power utilities, including Manila Electric co. (MERALCO) and National Power Corporation (NAPOCOR), not to pass on System Loss charges to consumers.
“If there’s no System Loss, there will be no VAT on this to pay,” said Teves.
The second is for all collections from VAT on oil and power to be used for “targeted spending” to help vulnerable sectors cope with the high costs.
Government estimates VAT collections from petroleum products to reach P73 billion this year, while VAT from power is projected to hit P12.6 billion.’
interesting the proposal that evat collections be used this time for “targeted spending to help vulnerable sectors cope with the high costs.” i suppose ito yung “development projects” ni vilmasantos recto.
question is, where did evat collections of 2005, 2006, and 2007 go? saan ginamit ang datung?
sa kaka-google ko i found the answer in a january 2008 manila times article by the freedom from debt coalition:
The reason why the government is hell-bent in defending an aggressive consumption tax measure (R-VAT) is in order to beef-up revenues. The Department of Finance (DOF) itself admitted that 70 percent of the revenues generated from R-VAT would go to debt service in the first six months of implementation, with only 30 percent going to social services and infrastructure programs.”
ah, so the rvat/evat collected in 2005, 2006, and 2007 went pala mostly to debt payments. but this time daw it will be going to teves’ “targeted spending” on vilmasantosrecto’s “development projects”? ganoon?
take note. the national budget for 2008 is a whopping php 1.23 TRILLION bucks!
how much of that is going to debt payments? according to the website of the department of budget and management:
php 269, 847, 000, 000.00 for interest payments
php 328, 341, 000, 000.00 for principal amortizations
php 598,188, 000, 000.00 total
that’s almost php 600 BILLION bucks! practically half of the budget! OMG. OF COURSE gma needs that php 90 billion from the evat on fuel and electricity. OF COURSE it’s going to debt payments as usual, ‘wag na tayong bolahin about “targeted spending” and “development projects”.
in fact, the total national debt has been growing and growing and growing under gma, but what does she care. hindi naman siya ang magbabayad. say ng fdc:
As of end-August 2007, the National Government (NG) Outstanding debt was pegged at P3.871 trillion, or US$81.91 billion. The bigger part of this debt was acquired domestically (55.98 percent), with Treasury Bonds debt pegged at P1.55 trillion. This is worse when Mrs. Arroyo acknowledged that the country was suffering from a fiscal crisis. In 2004, National Government debt was P3.81 trillion.
Our situation is rendered even more precarious with National Government contingent liabilities reported as having reached P537 billion by 2007, much of it foreign currency denominated. Contingent liabilities are commitments by the national government, expressed or implied, to directly assume the liability of another entity should it be unable to honor its obligations. Thus, contingent liabilities are potential debts. . . .
In truth, the total debt service is higher, not lower, contrary to the Arroyo administration’s claim. A close look at the proposed 2008 budget will reveal that payments for the principal amortization of debts actually went up by 6 percent, or P18.842 billion. Combined with the total of interest payments and principal amortization, debt expenditure actually went up by P11.296 billion, belying any claim of less expenditure for the debt. . . .
The Arroyo administration broke two major fiscal records-first, for being the most aggressive if not the most addictive borrower, and second, for being the largest payer of debts. From 2001 to 2006, Mrs. Arroyo borrowed a total of P2.83 trillion shaming the total P1.51 trillion combined borrowings of the Aquino, Ramos and Estrada administrations spanning 14 years.”
hay naku. definitely, absolutely, we the people must make the debt problem a central issue in the 2010 elections. for the sake of our children and apos, we want national leaders who will free us from debt by following these recommendations of the fdc:
- audit all our debts so we have an accurate comprehensive picture of our humongous debt problem
- promote critical study, analysis, and consensus
- repeal the automatic debt service provision of the Revised Administrative Code of 1987
tama na. sobra na. palitan na.