Friday, September 23, 2005

Kapihan (Fiscal deficit)


The guest on September 21 Kampus Kapihan was Professor Leono Magtolis Briones is currently the Co-Convenor of Social Watch Philippines and an active member of the global network of Social Watch.

On the said event, She mentioned three ways that may help in solving the country's deficit problem. These three solutions that we could use are to 1.) Increase the revenues; 2.) Selective expenditure cuts and; 3.) Manage the debt.

The first solution ,that is to increase the revenues of the people, is not a good idea for Briones. Why? Because she said that the collection the of taxes would be indirect. It would be paid for every products or goods or services that we consume. She also added that it would make the poor peoples' lives more difficult because with every move that the people will be doing, they are paying taxes, which is unfair.

As what most people know it, it is called the Value Added Tax (VAT) that will surely hit the poor people because indirect taxes are consumption-based, as i have stated earlier. Briones also said that VAT has a very dangerous political and social consequence.

What briones apprpoved of is the direct taxes, wherein the tax would be paid through the peoples' salary. So it means that the bigger a person's salary, the bigger is the tax that would be getting from it. For Briones, that is the fair way to pay the taxes.

The second solution to the copuntry's deficit problem is the Selective expenditure cut. With this, it would mean that we should give priority to much more important sectors like health and education. Briones shared a little obvious situation that is happening in our country today and that is the lack of nurses and doctors on public hospitals. it is sad but true. most nurses now are leaving the country to work on the hospitals abroad while the doctors are now studying again to be nurses and again, just to leave the country.

And lastly, Manage our debt. The problem in our copuntry is we do not have someone who who manages our debt. Briones shared that the money loans are not recorded in specified items. so no one will know where that money was used.

For me, I think this is the most saddenning part of the Kapihan. According to Briones as of June 2005 our debt amounts to P6.163 Trillion. She even emphasized that a trillion has 12 zeros in it. So just imagine how big that is. she even said that in time, the responsibiltiy of paying that big credit wpuld be passed on to us since we are the future of this cpuntry. And to tell you the truth, it scares me. Now, i am indirectly paying taxes with the food, clothes and the pre-paid cards that I buy, what more when im already working? I can't imagine the thought.

One of my classmates, Micheal Bodin, asked a question to Briones. He asked if fund raising activities can be a feasible option to solve the deficit problem of our country. What Briones answered was no. Fund raising is not a possible way to solve our deficit problems because there will only be few people who trusts our government. And to be able to put up a fund rasing, it would need a hell lot of credibility. Though in some countries like Korea, fund raising was a success, where in women gave up their jewelries to help the country. but here in our country, Briones doubt if there would be people who would be doing the same thing. Honesty is lost in our government and so is trust of the people.

There was a quote of a columnist that Briones shared in the Kapihan who said that “it is only a question of time, it is inevitable that we will go to the International Monetary Fund.” It is because we do not have enough resources to pay for our debts. What had caused this is the mere fact that our country borrows some money that is far beyond our capability to pay for it.

Now, as citizens of this country, it is a must taht we should know the fiscal deficit of our country for us to to aware and eventualy help and not contribute more to our problem. Since we already have three options on how to solve the problem, the next wise thing to do is make it happen.

spurce of image: http://www.livingincebu.com/currency.htm

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