Senate Minority Leader Franklin Drilon on Monday advised the incoming administration of President-elect Ferdinand “Bongbong” Marcos Jr. to be transparent to the public on the current problems faced by the Philippine government, particularly in the management of the country’s fiscal space as the Filipinos continue to suffer from the consecutive oil price hikes.
In an interview with reporters, Drilon stressed the enormity of the economic problems that the Philippines will face in the next several years, citing the budget deficit brought about by the huge borrowing due to the “mismanagement of the COVID-19 pandemic.”
“Here, I lay the blame on Secretary Duque and this administration for mismanaging the pandemic, the COVID-19 pandemic. Having said that, we now are in the situation where the country’s debt has grown to about P12.64 trillion,” he said.
“Therefore, the fiscal space for the services is constricted and affected by the payment of our interest of foreign debt,” he pointed out.
As of end of April, the government’s outstanding debt hit a new record-high of P12.763 trillion.
Apart from the government’s obligation to pay its foreign debts, the government also has to implement the Mandanas ruling of the Supreme Court.
The so-called Mandanas ruling expands the LGUs’ internal revenue allotment share to all national taxes including those collected by the Bureau of Customs.
The Supreme Court ruling favoring increased share of taxes for LGUs stemmed from the petition filed by then Batangas Representative Hermilando Mandanas.
“My advice is…that the Marcos admin should use its political capital to institute reforms to consolidate our fiscal situation and tell the people the truth because it is really tough on the budget issue,” the outgoing minority chief said.
“I hope that we do not sugarcoat the problems that we have because it is not fair. It is better that they be candid with the Filipino people and say exactly what is in store for them in order that the policies that will be issued to address these problems will be supported. I repeat, the Marcos administration should not sugarcoat the problems that we have,” he stressed.
Drilon explained that the incoming administration did not cause the problems that the country is dealing with right now and the economic situation is mainly attributable to the mismanagement of the pandemic and Russia’s invasion of Ukraine.
What the Marcos administration can do is to “tell the people the truth” and prioritize the expenditure side of the government through its budget policies, Drilon said.
“That is why they have to prioritize, the government must prioritize the expense side of the budget so that the most essential are given the highest priority at least for the next several years,” he said.
Apart from the management of the budget for the next several years, the Marcos administration should also widen the tax base so that the government can collect more revenues and respond to the needs of the budget.
Following the calls to suspend excise taxes and other levies imposed by the government, Drilon explained that there are advantages and disadvantages if the government will implement this.
“Depending on which side of the coin you are (in). You say, we do suspend VAT, the needed revenue coming from the taxes will be reduced. On the other hand, hopefully the savings that the consuming public or the industries will realize out of the suspension could be used productively. So it’s not an easy question to answer,” he said.
Drilon made the remark after Senator Aquilino “Koko” Pimentel, who is poised to join the minority bloc next Congress, called on the Marcos administration to suspend the excise tax and the value-added tax (VAT) on fuel products, saying this is a government intervention which can be done to cushion the impact of the fuel price hikes to the public.
Pimentel said he will file a bill that will seek the suspension of excise tax and VAT imposed to fuel products in the 19th Congress.
Earlier in the day, the Department of Energy said pump prices of petroleum products could hit P100 per liter should the weekly increases continue due to a mix of factors.
Oil firms announced a price increase that will take effect on Tuesday — gasoline by P0.80, diesel by P3.10, and kerosene by P1.70 — marking the third straight week of increases.
The latest data available from the DOE indicate that the year-to-date adjustments stand at a net increase of P28.70 per liter for gasoline, P41.15 per liter for diesel, and kerosene by P4.85 per liter as of June 14, 2022.
Data from the agency also show that gasoline prices in Metro Manila have reached as high as P91.90, diesel to as high as P94.90 per liter, and kerosene as high as P97.34 as of June 14, 2022.—LDF, GMA News