On the proposed 2006 national budget:
More Taxes, Less Services this Year
The government, said
Bayan Muna (People First) Rep. Teddy Casiño, may impose additional taxes
to raise the income needed to finance this year’s proposed P1.053 trillion
($20,371,445,153) national budget. In the 2006 proposed budget, the real
value of the proposed budget for education and health decreased while that
for debt servicing and defense increased.
BY ALEXANDER MARTIN
REMOLLINO
Bulatlat
With the Philippines
having failed to meet its target growth in the gross domestic product
(GDP) for 2005, Filipinos may have to expect to have more taxes imposed on
them, a party-list representative told Bulatlat in an interview.
The government, said Bayan Muna (People First) Rep. Teddy Casiño, may
impose additional taxes to raise the income needed to finance this year’s
proposed national budget.
The House of
Representatives has recently passed a proposed national budget of P1.053
trillion ($20,371,445,153 at $1:P51.69) for 2006 – which, Casiño also
said, is the “largest budget proposal” in the country’s history. The
budget bill is now up for deliberation at the Senate.
“A slower pace in
economic growth, which is reflected by the slower GDP growth rate
registered in 2005, meant lesser income to tax, hence lower revenue
performance,” Casiño pointed out. “This means we may not have enough
revenues to finance this budget proposal. This could mean more taxes in
2006.”
The government
targeted P968.6 billion ($18,738,634,165) in revenues to finance the
proposed 2006 budget. Based on data from the Bangko Sentral ng Pilipinas (BSP
or Central Bank of the Philippines), total revenue collections for 2005
amounted to only P795.7 billion ($15,393,693,170), P172.9 billion
($3,344,940,994) less than the target.
Citing findings of
the House Committee on Appropriations, Casiño said that every
one-percentage point shortfall from the GDP growth forecast would result
in a P6.2-billion ($119,945,830) deficit. BSP data shows that the
Philippines registered a 5.1-percent GDP growth for 2005 – which is less
than the low-end forecast of 5.3 percent based on the Medium-Term
Philippine Development Plan (MTPDP) for 2004-2010.
The government failed
to meet its targeted revenue performance for 2005 despite the imposition
of the so-called “sin taxes” and the Restructured Value-Added Tax (RVAT),
which government spokespersons say were imposed precisely to generate
needed additional income.
The imposition of the
“sin taxes” and the RVAT in 2005 had contributed to the widening gap
between the cost of living and the income of wage-earners in the country.
Based on data from the National Wages and Productivity Commission (NWPC),
the national average family living wage for a six-member family – the
average Filipino family – is P657.13 ($12.85) as of February 2006.
Conversely, the daily minimum wage is presently pegged at a national
average of P237.56 ($4.64) as of March 2006, with the highest being that
in the National Capital Region (NCR) which stands at P325 ($6.35), NWPC
data further show.
“The ‘sin taxes’ and
the RVAT are not generating as much income as planned,” Casiño said.
Because of this,
Casiño said, the government may be expected to impose more taxes this
year.
That is, he said,
unless it considers other ways of addressing the budget deficit. Casiño
reiterated, as an alternative to more taxes, Bayan Muna’s long-standing
call for the repudiation of behest loans.
But there’s more bad
news. Most of the proposed budget for 2006 – which the Filipino people may
have to finance with additional taxes – will go to debt servicing. Social
services are at the lowest rung of priorities – as has always been the
case.
In the proposed 2006
budget, the portion allotted for debt servicing amounts to P340 billion
($6,577,674,598), or 32 percent of the pie.
Education comes at
far second, receiving P146.45 billion ($2,833,236,602) or 14 percent.
Government statistics
show that the value of the education budget relative to the peso’s
purchasing power has been declining steadily since 2000. Likewise, while
the education budget appears to have been increasing nominally since 2000,
its rate of increase has been lower than the country’s population growth
rate.
Thus, in 2000, the
government spent P3, 459.70 ($66.93) for every Filipino aged 5-24 per
year, or P9.48 ($0.18) for every student each day. Under the proposed 2006
budget, the government will be spending only P2, 871.05 ($55.54) for every
Filipino of school age per year, or P7.87 ($0.15) per day.
Within the education
sector, the Philippine Military Academy (PMA) gets the biggest share of
the pie for 2006, with an annual budget of P325.13 ($6.29) for each
enrollee. The University of the Philippines (UP) comes at a far second
with P125.34 ($2.42) for each enrollee per year. Other state universities
and colleges will have to put up with a combined budget of only P17.26
($0.33) per enrollee this year.
But if the education
sector fares badly, the health sector is in worse straits. In 2000, the
government spent P191 ($3.69) for every Filipino per year – or about P0.52
($0.01) a day. Under the proposed 2006 budget, the government will be
spending only P119 ($2.30) for every Filipino every year, or about P0.33
($0.006) a day. “That’s not even enough to buy an aspirin tablet,” Casiño
said.
In contrast,
allocations for debt servicing and defense have been growing nominally and
in terms of real value for the last six years.
In 2000, Filipinos
each paid P1, 836 ($35.51) for debt every year. Under the proposed 2006
budget, every Filipino will be paying P2, 968 ($57.41) a year for debt.
In 2000, each
Filipino spent P429 ($8.30) a year for defense, while in the proposed 2006
budget the government will be collecting P458 ($8.86) annually for the
same item. This does not even include the P3 billion ($58,038,305)
allotted for the counter-insurgency program and the P1.2 billion
($23,215,322) for intelligence funds. Bulatlat
BACK TO
TOP ■
PRINTER-FRIENDLY VERSION ■
COMMENT
© 2006 Bulatlat
■
Alipato Publications
Permission is granted to reprint or redistribute this article, provided
its author/s and Bulatlat are properly credited and notified.