RPS CREDIT RATING WILL SUFFER IF 2006 NATIONAL BUDGET IS NOT PASSED

Senate Minority Leader Aquilino Nene Q. Pimentel, Jr. (PDP-Laban) today warned that the countrys credit rating and confidence of investors will suffer if the 2006 national budget will be shelved by the administration and its legislative allies in favor of a reenacted 2005 budget.

Pimentel said the refusal of the New York-based Moodys Investors Service to upgrade the countrys current negative rating should alarm the administration and Congress about the adverse consequences if the P1.05 trillion budget for 2006 is not approved.

There are tell-tale signs that the administration is moving to scrap the 2006 national budget. The approval of the budget bill is already very much delayed but Malacañang and its congressional allies havent done anything to speed up its passage, the minority leader said.

He noted that Moodys suspended its credit rating outlook upgrade for the Philippines because it wanted to see whether the projected revenues from the expanded Value Added Tax will be collected and how the government will spend taxpayers money.

The ratings agency said in its report: Important factors for Moodys to move the rating outlook back to stable from negative include whether authorities can achieve their EVAT revenue targets for 2006, stay within the 2006 budget deficit targets and maintain public confidence in their policies.

A negative credit rating will mean that the Philippine government will be subjected to higher interest charges for loans by foreign banks and lending institutions.

Pimentel lamented that the House of Representatives has not yet taken up the 2006 budget in plenary session. Based on the legislative calendar, the budget bill should have been transmitted by the House to the Senate by the middle of November, 2005.

Instead of taking steps to fast-track the enactment of the appropriations measure, Pimentel decried that President Gloria Macapagal-Arroyo prohibited Cabinet members from attending congressional budget hearings last week to prevent lawmakers from inquiring into the misuse of funds by certain agencies such as the P728 million fertilizer fund of the Department of Agriculture that was allegedly siphoned off to the Arroyo election campaign in 2004.

He said the appointment of Camarines Sur Rep. Rolando Andaya, Jr. chairman of the House appropriations committee, as secretary of budget and management will not help any in expediting the passage of the budget bill.

Andaya is scheduled to assume his Cabinet post on Feb. 15 although House leaders say they expect to approve the budget before the end of March.

Pimentel has charged that administration was more interested in having a 2005 reenacted budget because this can be easily converted into a presidential pork barrel to be distributed among members of Congress and local government officials who will toe the administration line, specially in amending the 1987 Constitution.

He said another glaring indication that the 2006 national budget is in danger of being scrapped was the insistence of the administration to approve a P13.1 billion supplemental budget for the monthly P1,000 allowance of national government workers.

He branded as highly irregular the enactment of the supplemental budget ahead of the 2006 national budget, of which it is part and parcel of.

Pimentel also assailed the fact that the supplemental budget is not supported by a certification from the national treasurer that funds are available for the purpose.

We have not even held floor debates on the national budget, but they have already gone ahead with supplemental budget. And up to now they havent explained where the funds for the supplemental budget will come from, he said.