Press Release
November 27, 2007


Senator Chiz Escudero today said Malaca�ang has made false assumptions when it claimed it has submitted a balanced 2008 budget proposal to Congress for consideration.

Escudero said he will seek answers from the national government about what he said were false claims like a balanced budget and the lofty promise of a social payback.

In her budget message, President Arroyo said that the proposed 2008 budget amounting to 1.227 trillion pesos is a balanced budget. She also declared that next year's budget will be used for payback to the Filipino people who bore the brunt of new taxes and the government's "austerity measures".

Escudero belied these claims saying that next year's budget can never achieve equilibrium as there are still program and project loans slated to be made amounting to 77 billion pesos.

He said no matter how the government rationalizes the proposed budget, the fact still remains that we are still very much deep in our knees in borrowings. "The president had said in her budget message that balancing the budget veers us away from borrowing, but in the proposed budget for next year, we have a 46 billion program loans and a 31 billion project loans."

The amounts, added Escudero, do not yet include borrowings for prepayments to retire old debts. The national government intends to borrow 346 billion to pay off maturing debts this year.

Escudero also expressed doubts about the pay back agenda of the budget from the gains of the new taxes slapped on the Filipino people through value added tax (VAT). For 2008 budget, the Bureau of Customs (BOC) has allocated 64.6 billion pesos from its VAT revenue, while the Bureau of Internal Revenue has allocated 34.4 from the same collection.

"If you add these revenue collections, you have 99 billion pesos or about a hundred billion pesos cash source. The question is where is this money? Can the government account for this amount and actually tell us it will redound to the benefit of the general public"?

Escudero said he wants the national government to provide a breakdown of the social services to really know if the additional VAT revenues really go back to the Filipino people. "How much did we make from VAT to show that we can really improve the lives of our people? Last year, combined VAT revenues of BIR and BOC amounted to 88.8 billion pesos; did the people taste its benefit? I don't think so. Can we taste it this time? That is for the government to lay down well in Congress".

The senator said the government should be able to satisfy Congress that it has properly designed the budget and that it can properly implement it if they want it approved with no hitches.

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