Press Release
September 26, 2009

BORROWINGS A 'CONVENIENT EXCUSE' NOT TO CONFRONT FUNDAMENTAL PROBLEMS
CHIZ SAYS GOV'T NEEDS TO PRIORITIZE COLLECTION REFORMS NOW

Opposition Sen. Chiz Escudero yesterday assailed moves by the government to borrow about $2 billion from abroad to fund its financial requirements next year.

"While borrowings may serve to fill in budgetary gaps during this period when the world is still feeling the effects of the global economic crunch, it is alarming that the Arroyo government has failed miserably in improving revenue collections," Escudero said.

"This policy makes victims of the Filipino youth who will be the ones to shoulder these debts," he added.

The Department of Finance on Thursday said the country may borrow from abroad again - the third time this year - to bankroll government expenses.

Finance officials cited the growing confidence of foreign investors in the country as demonstrated by narrowing risk premium of the government's debt papers.

But Escudero said borrowings are a convenient excuse for government economic managers to address the core issue of the country's widening budget deficit - poor revenue collections.

"If the government is really sincere in its obligation to keep the economy afloat, it should pay particular attention to revenue collections. Why should the people bear the consequences of the government's poor performance in revenue collections?" Escudero said.

"The performance of our revenue collection agencies leaves much to be desired. While it is incumbent upon government to fund pump-priming activities during the economic crisis, our leaders should not lose sight of the fundamental problems that hound the country," the 39-year old lawmaker said.

He said the government's P300-billion stimulus plan should also include concrete measures on curbing graft and corruption in government.

"If we talk about plugging loopholes and improving collections, then we must address the issue of graft and corruption squarely. Plugging collection loopholes by itself can already raise billions of pesos in additional revenues," the senator explained.

"This administration, by its policy of increased borrowings supposedly to address the budget gap, is admitting that it is easier and more convenient to just borrow money rather than clean house to boost revenues. This is a skewed national policy which is unacceptable," Escudero said.

From January to August this year, the Bureau of Internal Revenue (BIR) was able to collect only P500.8 billion in revenues, lower than the P532 billion collected in the same period last year.

The country's budget deficit is seen to swell to P250 billion this year.

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