Contracting social services, bleeding the people dry

It has always been a priority for the Arroyo administration to “balance the budget”–meaning, to decrease the gap between government revenues and government spending. In plain reading, this is good. Trimming the budget deficit should mean less borrowing, and eventually more money for health, education and other social services. However, the goal of balancing the budget under the Arroyo administration, and even before, has always been to ensure the payment of our debt obligations, unfortunately at the expense of social services spending. To make matters for ordinary citizens worse, in order to balance the budget and earn more revenues, the government, for years, has always put a stress on consumer taxes (E-VAT, sin taxes, proposed text tax) instead of directly taxing corporations and high-income tycoons, instead of taxing imports or plugging the leaks from corruption.

In the age of trade liberalization and globalization, government would rather give rich foreign investors, high-income tycoons and importers tariff cuts, tax holidays and other tax incentives. Aside from taxing the consumer, government has also been selling its assets and privatizing services and public utilities in an effort to hide its poor and lopsided tax effort. This results to private companies concerned largely with profit and not with public service controlling public utilities. Thus, the high power and water rates we experience. When corruption and smuggling comes into the picture, we arrive at the terrible fiscal decay we find ourselves in. Ordinary people are being taxed dry, and yet social services are continuously deteriorating, and despite all these, our debt just keeps growing and growing. Below are some graphs that would illustrate the trend of the government in its budget proposals for the past years.

National Government’s Outstanding Debt Stock (1990-2010*)

National Government Spending Per Capita Per Day (1998-2010*)

graphs from IBON Foundation’s “2010 National Government Budget: Confirming GMA’s Legacy of Fiscal Decay” presentation (*estimated)

The second table just shows how much government has been spending on debt-servicing and selected social services per Filipino per day. For the 2010 Budget, the government will be spending P1.10 per Filipino per day on health, but would be spending P21.75 per Filipino per day on debt-servicing. This is one of the simplest way of showing what the government’s priorities are.

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