Independent think tank IBON Foundation today urged presidential aspirants in the coming May polls to disclose how they intend to address the national government’s mounting debt obligations and budget deficit. | Reference: Mr Sonny Africa
The group noted that the incumbent Arroyo administration is about to pass on to the next President a national government debt of almost P5 trillion and a likely yearend budget deficit of P300 billion.
Such very high levels of debt and deficit have serious implications on government spending on social services and at the same time threaten to burden the people with new and additional taxes, IBON said.
Thus voters are entitled to know how the would-be President will address the country’s chronic and worsening fiscal woes in a pro-people and sustainable manner.
IBON is anticipating a major fiscal flare-up this year as the gap between national government revenues and expenditure continues to widen. The combined impact of the global financial and economic crisis and major climate-related disasters on tax collections and government spending; implementation of revenue-eroding measures; and missed privatization targets could push the 2010 budget deficit to as high as P300 billion, based on official Department of Finance (DOF) estimates.
The 2009 budget deficit has already reached P272.5 billion as of November, already an all-time high in absolute terms. IBON had earlier estimated that the deficit could reach some P297.9 billion by the end of 2009 – or the biggest deficit in nominal terms that the government has ever had.
Meanwhile, as of September last year, the national government’s debt, including its contingent liabilities, was about P4.92 trillion – almost 85.7% higher than what it was when President Gloria Arroyo first assumed office in January 2001. As the deficit continues to swell, government is expected to borrow more to fill the gap.
Concretely 2010 presidential bets must make public their stand on the repeal of automatic debt servicing; cancellation of odious debt; increased allocation and spending for health, education, and housing; and reversing trade liberalization, improving collection efficiency, and addressing bureaucratic corruption and wastage to raise badly needed revenues instead of imposing new taxes such as the tax on text messaging.