Perfect economic storm awaits next president, Drilon says

Senate Minority Leader Franklin M. Drilon, a veteran senator of 24 years, said the next administration faces a perfect economic storm, citing a ballooning debt, a record-high budget deficit and the high prices of fuel products caused by the ongoing crisis between Russia and Ukraine.

"This is a perfect economic storm that we could face in the second half of this year. The next President must have the credibility, political will and competence to address the economic situations that we are confronted with. It is a very difficult situation. Talagang mahirap ang kakaharapin natin in the next six months insofar as the economy is concerned," Drilon said in an interview with CNN.

"We have a debt of P12 trillion. We have a budget deficit of P1.67 trillion in 2021. Then, you are hit with the increases in petroleum price that will result in the increase in the prices of basic commodities," he said.

"Whoever will take over the reins of leadership come June 30 should brace for the heavy impact of the oil crisis, the COVID-19 pandemic, high budget deficit, and ballooning debt," Drilon said in a statement.

The country's outstanding debt has already breached the ideal 60-percent debt-to-GDP ratio, he noted.

The budget deficit in 2021 reached 8.6 percent of the country's GDP as tax collections suffered due to the pandemic, he added.

These situations, according to Drilon, are the reasons why the economic managers are opposing suggestions to suspend the excise taxes on fuel products. He noticed that the suspension is not among the solutions presented by the economic managers.

Drilon said the economic managers should take the bull by the horns even if it means a further setback on tax collections as he warned of more adverse effects if the war between Russia and Ukraine will deteriorate.

"This is unusual. Nobody predicted this crisis. But we must face and confront this. There will be more adverse effects that will need solutions if the war escalates," Drilon said.

The Department of Energy estimates that gasoline prices may rise to P78.33 per liter, while diesel may leap to P68.97 per liter once Dubai crude reaches $120 per barrel. It is now at $114.95, he noted.

The former justice secretary reiterated that the Department of Finance, under the TRAIN Law, can suspend the imposition of excise taxes on oil products.

"We should seriously consider suspension of the excise taxes on fuel products. The law clearly recognizes that if the price of oil per barrel exceeds 80USD, the government has the power to intervene to cushion its impact on the economy and the consumers," Drilon said in a statement.

Drilon said that the Filipino people should consider these serious economic problems in casting their votes come May 9.