A pro-poor president
WE are in the season of defining the desired qualities of the successor of President Benigno Simeon Aquino III. Many groups are now coming forward with their list, following earlier attempts by Good Governance advocates to describe the characteristics of the next president. The danger with these efforts is that in formulating the list, there is the design to ensure that their favored candidate scores high while the others rank low. The even greater risk is that the focus will be on personalities rather than programs. Of course the kind of programs could depend on the mindset of the president as well as the passion to pursue them. Otherwise it could just be programs for election purposes but forgotten once the candidate is victorious.
For me the highest priority for the president is to reverse the trend of Philippine economic development – increasing high growth but also increasing levels of poverty. The last six years of the Aquino administration has proven the futility of the “trickle down” effect. The rich will get richer while the poorer not only get poorer; there will be more of them. The conditional cash transfer is only a palliative which must be supplemented by well thought-out government intervention as well as changing the “rules of the game” to favor the poor, the small and medium businessmen, and the working class.
The first target would be to lower the income tax rate which Senator Sonny Angara has proposed and is being supported by Senate and House leaders but not by President Aquino and, by extension, his anointed candidate. The arguments in favor of the bill are legion but the executive branch is adamant in opposing it. It even had the audacity to put forward a counter-proposal to raise the Value-Added Tax, adding insult to injury.
It is clear that the present tax regime favors those with the money with final taxes at low rates for some business transactions and allowing tax-free treatment for long-term deposits (something the poor, the working class, and even the middle class cannot take advantage of; they will just have to be content with lower-thaninflation-rate interest on savings deposits). Income of the working class is taxed at a rate which through the years has resulted in decreases in the real value of their take-home pay. Dividends paid to corporations have a different but favorable treatment than those paid to individual stockholders. The next president should reform the tax regime in favor of the poor, the small and medium businessmen, and the working class.
The second target should be the pattern of government expenditures. The cost of administering government should be reviewed especially the budgets of the legislature and the judiciary. In the name of “fiscal autonomy” and “independence of equal branches of government,” their budgets have ballooned, if not padded to accommodate significant allowances for them and their staff (for a number this largesse allegedly go back to the legislator). These branches have been given the freedom to adjust their budgets and it has been seen, defer filling up of positions in order to generate savings for bonuses and other year-end incentives for them and their staff. Infrastructure projects befitting more developed nations are constructed when simple less expensive ones will do. Are we a poor country pretending to be rich?
Both the fund-raising and spending activities of government are linked. A pro-poor president would tax the rich more than the poor and spend more for hard and soft services to the poor. Revenues raised would be spent prudently, consistent with the financial and economic conditions of the country. Priority would be given to pay foreign debt and such would be included in the national budget for transparency and accountability. Public-Private Partnerships (PPP) would be thoroughly reviewed to ensure that the public is not hit two ways – having to pay higher taxes in order to fund the government’s commitment to a minimum rate of return to the investor and having to pay fees to use the infrastructure. In many instances, it would have been better to use government funds, available after cutting down the high cost of bureaucracy, to fund necessary infrastructure.
Beyond what yardstick many well-intentioned groups will propose to the Filipino voters, the most important is the candidate’s genuine empathy for the poor, the small and medium businesses, and the working class; it cannot be contrived through clever advertisement and image building of the candidate and spouse which make them queue in line like ordinary mortals or mix with market vendors. It will be seen in their public record of programs for the poor and in some cases, experiencing poverty. It will be part of their life experience as they struggled to afford an education and work for their daily bread. It will be seen in their passion to give economic freedom to the poor so they can make the right choices in life and in the coming May elections.