Saturday, February 06, 2010

Show me the Money!

Public finance is probably not such a hot topic for opinion-makers and news writers. We do not often hear about the state of the country's national purse - what we make, what we save (if any), what we spend on, how much goes to what. Numbers probably seem a snooze compared to the political scandal of the moment.

But think about it - public finance deals with the most intimate aspect of our political identity - the money we are obliged (coerced) to give to our country. If you tally all that is automatically deducted from your income, what could you have bought instead? Would you have been able to send another sibling to school? Better medical treatment for your folks? A house? Seen this way, 'public' finance suddenly becomes very personal. What have we given up to the state, what have we sacrificed in our personal lives to be able to pay taxes?

So far none of our presidentiables have dared tackled public finance issues. Nobody has talked about the P4 trillion public debt and what they propose to do about it. Sen. Noynoy Aquino in his MBC address did mention not raising taxes and making tax collection more efficient. Other than that, no one else has talked about money!

One of my favorite columnists is Prof. Benjamin Diokno because he often writes about these matters in a relatively jargon-free manner. In last Wednesday's column, he makes some calculations and concludes that Filipinos have been paying government more than they have been receiving in services....for the last 25 years!

Another horrifying statistic is this - "For every P100 taxes collected, P73.20 goes to payment of interest and amortization." How has the debt-to-GDP ratio gotten so bad? For the past decades successive governments have borrowed and borrowed deferring payment to future generations. The Arroyo government leaves the next president a huge budget deficit in a time of crisis. I think we ought to ask these candidates what they intend to do with the sorry state of our public finances.