Monetary officials score Aquino stand on taxes

Senior monetary officials Wednesday scored the incoming administration of President-elect Benigno “Noynoy" Aquino III for refusing to support legislation of new taxes. Such a stance may have a populist appeal, but definitely impractical as the fiscal sector is struggling with its deficit program, the officials, who requested anonymity told reporters. For nine years outgoing President Gloria Macapagal-Arroyo tried to balance the budget by 2008 but the global recession forced her administration to try again this year. Aquino’s no-new-tax policy could short-circuit the consolidation process and prove “impractical," officials said. The former Bangko Sentral Gov. Rafael Carlo Buenaventura who said that, “Where you stand depends on where you sit," was cited by the monetary officials. Still, outgoing Finance Secretary Margarito B. Teves said that the Aquino administration and its fiscal policy planners would eventually see that the way to a healthy fiscal condition is the pursuit of additional revenue sources. “We still hope they will seriously look at new revenue measures and allow themselves the flexibility. We believe only higher revenues and not a compression of expenditures will do the country good," Teves said. Teves had lobbied for a package of legislation that could generate up to P94 billion in new revenues next year and up to P200 billion of the same come 2016, if enacted this year. But acting Budget Secretary Joaquin Lagonera made it clear that the plan was to work within the parameters what had been mapped out in 2010 Budget Appropriations Act. The plan could mean that some public programs would go unfunded, unless the Bureau of Internal Revenue, the Bureau of Customs, and the privatization of government assets deliver the numbers, Lagonera said. Fiscal planners have widened the year’s budget deficit by P7 billion to P300 billion, because of the faster-than-programmed economic growth in the first quarter, raising the deficit to 6 percent of the gross domestic product from 3.6 percent. The five-month budget deficit totaled P162.1 billion, or beyond the P145.2 billion ceiling under the fiscal program as government was forced to frontload disbursements in the early this year to blunt the impact of last year’s calamities which ruined billions of pesos worth of infrastructure and agriculture output. Teves noted that the BIR posted a 9.6 percent increase in collection to P500 billion in the first five months, saying the bureau has reached a level of efficiency that surpassed the 7.3 percent GDP growth in the first quarter. —VS, GMANews.TV