I was with my politically incorrect (whatever that means ha ha ha) friend the other day. We were talking about Gloria’s SONA 07 (State of the Nation Address also known as Same Old Nuts Again) and a lot of other things.
Although he expected the same things from Gloria’s speech, he was surprised and awed by the grandiosity of Gloria’s dream especially the projects that she wishes to accomplish at the end of her term(if that really is true).
Friend: Where is the money? Our government has no money, di ba?
Me: Our government has billion peso budget deficits (always), right?
Friend: What is the connection?
Me: This simply means that our government is spending billions of money every year whether it can earn the money or not. The budget deficits and the growing debts indicate that there is money to spend. The question of where is the money is not a question at all.
People in the government can make money easily.
Friend: What do you mean? How they do that?
Me: Simple. Do you have money now?
He checks his wallet.
Friend: I have 10 Riyals and a few (but very expensive) peso bills. Ha ha ha.
Friend: Yes, but my cash is not enough.
Me: What are you going to do now?
Friend: Aha. Wait. No more problems. Okay na! I have my plastic with me. Besides the bonus and the commissions are coming soon. Hopefully these will cover the payment for these items. If not, I will file a personal loan.
Let us forget my friend for now and let us go back to earth. I am not done with this post yet. Ha ha ha.
If you read or listen carefully to Gloria’s SONA, part of which says “Imprastraktura ang haliging nagtitindig hindi lamang ng kapayapaan kundi ng ating buong makabagong ekonomiya: mga kalsada, tulay, paliparan, public parks and power plants.”, you probably know that this SONA has a cost, aside from what Major Tom metioned in his blog.
Gloria proudly enumerated more than 70 (if you care to count) infrastructure projects lined up until 2010, and the total bill for these projects amount to PHP1.7 trillion – “What I have outlined today is just a sampler of our P1.7 trillion Medium Term Public Investment Program. How will we fund all these? P1 trillion from state revenues, with tax reforms and firm orders to BIR and Customs to hit their targets. P300 billion from state corporations. The balance from government financial institutions, private sector investments, local government equity and our bilateral and multilateral partners.”
Now, let us do some simple mathematics. Please get a calculator so you can enjoy this.
Okay, let us proceed. Key in the following numbers in your calculator:
1,700,000,000,000.00 multiply by 10% = 170,000,000,000.00
1,700,000,000,000.00 multiply by 20% = 340,000,000,000.00
1,700,000,000,000.00 multiply by 30% = 510,000,000,000.00
1,700,000,000,000.00 multiply by 40% = 680,000,000,000.00
Incredible figures ha. My calculator can not accommodate these numbers.
What these figures represent?
Admittedly, these figures are just numbers and percentages and may mean nothing. I must agree that these are just computations and assumptions. But, given the record of our country with regards to handling our money, these numbers can tell you the immensity of how much this will mean to you, to them and to me.
Simply, these figures are the possible amount of Kickbacks, Tong, Scam, Raket, Dugas, Kurakot or Commissions that will be generated from the trillion-peso projects of Gloria in different percentages.
I might be assuming too much like most true blooded cynical Pinoy but the truth remains, whether we like it or not, our country belongs to the league of most corrupt. If you wish to think differently and assume that everything up to the last centavo goes to the intended project, that is fine with me.
Just looking at the figures above, I have the feeling that the corrupt officials, the dealers, the agents, the businessmen, the politicians and the racketeers who is or will be involved are now singing happy tunes with huge smiles in their faces that will last till 2010 and beyond?
Hindi ba kayo nagtataka why there were few politicians and businessmen who questioned the SONA of Gloria?
Well, the answer is simple. It is written in trillion pesos, part of which is the clear 12-digit giveaway.
Where is the money?
Even on worst situation, like if funds from sources that Gloria mentioned did not materialize, the government can and will still spend, just like my friend, with or without enough money. The result of this action, spending without enough money, is called Budget Deficit, the inseparable partner of Debt.
A budget deficit is defined as the amount by which an individual, business, or government’s income falls short of the expectations set forth in its budget over a given time period. In most cases, those who experience a budget deficit must borrow funds to make up the difference between projected and actual income and expenses. The borrower must pay interest on this amount, known as its debt, which further increases expenses for the following time period. In this way, budget deficits tend to grow over time with the accumulation of loans and interest payments. If a business fails to take action to correct a budget deficit and restore the balance of cash inflows and outflows, bankruptcy can result.
The Abstract of Maria Teresa Caparas’ indepth study/research paper stated that “It is a common, albeit rebuked knowledge, that the Philippine government has, for quite sometime, been spending more than what it has been earning. The outcome is that the deficit has to be financed either through local or foreign borrowing. Either way, government borrowing has its consequences, foremost of which is the increase in interest rates.” [Full text here].
Does this make Filipinos happy too?
Except for the lucky few, the answer is NO!
This early, our government is running into deficits already. Finance Secretary Margarito Teves said that preliminary data showed the government missed its first half-budget deficit goal of 31.3 billion pesos by about 6.4 billion pesos. Total tax collection for the first half were estimated to have fallen about 53 billion pesos short of the 483 billion peso target.
Socioeconomic planning Secretary Romulo Neri said the budget deficit could most likely reach 100 billion pesos.
Going back, starting from Marcos, our presidents always dreamed of leaving a great legacy to the Filipino people. Unfortunately, they are not the most beautiful or important things that we wish we could have. This is because these presidents have one common bad habit of leaving a legacy of nightmare that extends to the unborn Filipino child. That legacy of nightmare is DEBT.
DEBT, that sounds like DEATH.
The total Philippine debt as of May, 2007 was 3.82 trillion pesos (USD$84 billion).