The Arroyo administration’s "severe governance problem," and not global crisis, should be blamed for the country's current economic and social woes, a civil society group said Tuesday.
"If all countries are affected by the global crises, how come other countries are not as hungry as Filipinos are? How come Vietnam has 7.4 percent growth rate, Malaysia 7.1 percent, Indonesia 6.3 percent, Thailand 6 percent, and the Philippines an embarrassing 5.2 percent? The crucial factor is governance," said Social Watch Philippines lead convenor Leonor Briones.
Briones pointed out that the slowing down of the economy is a manifestation of the inherent weakness in how President Arroyo has managed the economy.
The former national treasurer lamented that under the Arroyo administration the growth in agriculture, fishery and forestry went down to 3 percent in the first quarter of 2008 as compared to 4 percent in the first quarter of 2007.
The industry sector, meantime, has gone down from 6.6 percent during the first quarter of 2007 to 3.9 percent in 2008, she added.
She also noted that the country’s unemployment rate now stands at 8 percent and underemployment at double digit levels.
"This resulted to a net loss of 168,000 jobs since April last year," Briones said.
Briones also lambasted the administration’s "wrong" development priorities, citing among others the lack of funding for social development particularly for the Millennium Development Goals (MDGs).
"These wrong economic priorities rendered more Filipinos vulnerable to rising cost of living and threaten to push more people into poverty," she said.
Due to Arroyo government’s alleged governance problem, she said the Philippines government was named as the most corrupt government in East Asia by The World Bank.
Arroyo’s ‘dependence’ on VAT hit
Social Watch also assailed Mrs. Arroyo’s alleged high dependence on value-added tax (VAT) to fund government programs.
Social Watch convenor Filomeno Sta. Ana III said the administration should improve its revenue collection so that the government will not be too dependent on VAT.
Various groups and lawmakers have been urging President Arroyo to scrap VAT on oil amid high fuel prices. During her Monday’s State of the Nation Address (SONA), however, the President rejected the appeal saying that the poor would suffer if the government removed VAT.
Sta. Ana suggested that instead of VAT, which was described as a regressive form of taxation, the government should impose a progressive system of taxation, with higher dependency on income and real property taxes.
"The surging prices of rice and food items and oil exacerbated by the VAT will diminish the purchasing power of people's money, which will lead to lower consumption and may affect business profitability. This, in turn, could lead to closure of firms and greater unemployment," Sta. Ana said.
Latest data from the National Statistical Coordination Board showed that the number of families whose income is not enough to cover basic food requirements increased in 2006 to 1.9 million from 1.7 million. As of 2006, there are already 12.2 million food poor million Filipinos as compared to 10.8 million in 2003.
The group also scored the government’s subsidy programs, saying these were mere palliative and addresses only present, day-to-day needs.
It called on Congress to check the legality of providing subsidies under the item Unprogrammed Funds.
"The General Appropriations Act is very specific that there has to be a showing that there is excess income. It is also clear that subsidies should go to health and education and that a special law on appropriations should be passed before the government can use any excess funds," Briones said.
"Moreover, it is another opportunity for corruption," she added.