Last week, the Arroyo Administration came up with a two-page advertisements in newspapers titled, “Ganito Tayo Noon, Ganito Tayo Ngayon” trumpeting their achievements. Now, I don’t have a copy of the ad because my secretary was busy with her Farmville. I do not want to disturb her, lest I’d be voted out as the cutest boss to work for.

Now, the other day, Noynoy Aquino’s speech at the Makati Business Club’s Event was very well received by the business community. In that speech, he talked about the looming fiscal crisis. He was talking about the budget deficit.

“In 2010, our next President will inherit a continually bloating deficit. As of November 2009, the deficit of the national government already reached P272.5 billion, or 4.1% of GDP. In addressing the looming fiscal crisis, good governance and the drive against corruption are critical components in our strategy. We will refrain from imposing new taxes or increasing tax rates.” (Source: A PHILIPPINES THAT WORKS: ECONOMIC VISION AND PLATFORM)

Actually, Noynoy’s number are lower. Although I lost the link, the projected budget deficit for 2009 is $320 billion.

Now, what is budget deficit? It simply means that the government spent more than what it was allowed to spend. Bottom line? Purdoy.

When there is huge budget deficit, who suffers? Us. The population, for the social programs due us evaporates. Here’s a very simple example. Have you seen those pictures coming out of Maguindanao that showed how decrepit the schools were? The teacher that was interviewed said that there was no budget.

Then maybe you’d ask, if the government does not have any money with that budget deficit, how are they able to operate?

UTANG.

Yes, utang in the form of bonds. What are bonds? It’s just a piece of paper telling you that you’d be paid x amount of money for say 10 years at this x rate. Like this one: here, they’re trying to sell Samurai Bonds to help fill in the budget gap. See?

Where in the world have they been spending the monies? Oh, I don’t know. All I know is that, the Bicol corridor to this day does not have any decent superhighway that spans from Manila all the way to Matnog, Sorsogon. Pwe!

Ok. You’d ask. Who’s going to pay all these then?

No worries. In all these bond issues, there is a Sovereign Guarantee. And what shit is this? Well, I thought I’d share you what CBCP thought about Sovereign Guarantee. According to them, “Sovereign Guarantee” is in reality nothing more than an exploitative government doing the following:

- First, it is the government that officially seeks and gets one big loan after another from this or that foreign or local sources.

- Second, it is the same government that gives the solemn promise and assurance that the Filipinos are the ones who shall make full payments for all the loans made plus the interests incurred.

- Third, it is precisely the same government that thereafter directly gets the money and gleefully spends it according to its design and desire.

- Fourth is precisely the same government that imposes and collects heavy and continuous direct and indirect taxes from the people, young and old, rich and poor, oligarchs and beggars alike to pay the borrowings made.

- Fifth is definitely the same government that again seeks and gets more loans—and the same cycle goes on and on. (Source: Sovereign Guarantee)

They went on to say:

“There would be no problem with a government that gets loans, that gives “Sovereign Guarantee”, that spends the money if those in government, especially the leading figures, are known for their honestly and integrity, and not infamous instead for the long litany of gross graft and flagrant corrupt practices.”

So that’s where we are right now. We are saddled with so many bloody Sovereign Guarantees, budget deficits and loans that our soul have already been mortgaged and sold to the world and that was part of Noynoy’s speech where it touches the budget deficit. People don’t discuss this much because we don’t have any damn shit control as to how the government spends money. Who amongst them would want transparency anyway?

And this only means one thing really – it will not be looking good for the next President and the people.

Except one person.

Gloria.

Gloria Arroyo claims that she had already laid down the groundwork for a robust economy.

“Swerte ang susunod na Pangulo sa akin [The next president after me will be lucky],” she said. Boasting of her accomplishments after nine years in office, Arroyo said the peso was stronger, tax reforms were in place, and social services available to most Filipinos.”

“Ito lang yata ang administrasyon na lumakas ang piso kaysa humina [This seems to be the only administration where the peso got stronger instead of weaker],” she said. As the country’s top leader, Arroyo said her role was to lay the foundations of the economy.

“Ang papel ko ay ihanda ang pundasyon. . . . Andyan na yan, ang pundasyon ng matatag na ekonomiya at inaasahan natin na itutuloy niya iyon para maramdaman ng mga Pilipino [My role is to lay down the foundation…It’s there, the foundation of a strong economy and we expect that this will be felt by the Filipinos],” Arroyo said. (Source: Inquirer)

What an unbelievable selfishness! I’ll make exception to Erap but not only has she discredited the past Presidents, she’s also taking away everything else for the new President! For if the economy improves way after Gloria, the glory is hers. And if the economy goes down the pit, she had already laid out her excuse slip that it won’t be her fault for she has already “laid down the foundations”.

Pray tell me, are we truly better off today as compared to last night?
Ok. That’s wrong.
But you know what I mean.

Update: I just read this on Bulatlat. It’s a great article on economy. The Philippine Economy in 2009: Bruised and Battered by Myths and Hype

The country entered a new period of fiscal crisis in 2009 with a deficit of P272.5 billion (nearly $6 billion at the current exchange rate of $1=P45.82)in the first 11 months that is likely to reach, by Ibon Foundation’s estimates, P293.3 billion ($6.4 billion) for the whole year and equivalent to 3.8 percent of GDP. This has been an uncontrollable and a very rapid deterioration from the P12.4 billion ($270 million) deficit in 2004 equivalent to 0.2 deficit of GDP. It is over seven times the original full-year deficit target for 2009 of P40 billion ($873 million) set in October 2008 and nearly triple even the adjusted target of P101.3 billion ($2.2 billion) set at the start of 2009. the rate of deterioration since 2007 also far exceeds that preceding the last episode of fiscal turmoil in 2002.

The descent into fiscal crisis will accelerate in 2010 with drastic implications on social services, portending greater tax burdens on the people, and leading to greater instability. It will be recalled that the record fiscal deficit in 2002 ushered in a long period of soaring debt service and declining spending on social services which culminated in the implementation of the regressive RVAT in November 2005.

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reynz is one Uragon and a Filipino-American, has many years of public accounting & auditing, broadcast investments, housing tax credits and equity investments as his background. Based in the US, he maintains his personal and humor blog at reyna elena dot com. A graduate of Aquinas U, he went to GWU and Temple U in the United States.