Nathan Andrada’s Blog

It has been almost two months since the last time I wrote for my blog. The Christmas and New Year celebrations, and the extended holiday period thereafter, seemed to have held me and I have not found the time to write in these past few weeks.

Now there is all this talk about a government stimulus package. Remember folks that even in the early months of the financial crisis during October and Novermber last year, the Palace-dominated House of Representatives has already been deliberating the budget for the fiscal year 2009. The President’s allies railroaded the process without even putting into account the core issue of the crisis which is about to hit the country this year. Malacanang and Congress were so confident that the country would not be hit hard despite the rest of the world were already moving to a direction in preparation for a tumultous 2009.

It is amazing, therefore, that our leaders are jumping into the stimulus bandwagon virtually telling the public they had it all figured out. Conservative senators were even apalled when the President declared to the public they had a multibillion peso stimulus package in store when in fact no one mentioned about this in the halls of Congress when the budget was being debated.

What this is all about is the Palace and their allies in Congress are packaging the budget in a way the people would feel they are on top of things. I am afraid there has been an extreme lack of effective governance. The people should know that our government failed to recognize the magnanimity of the global financial and economic crisis and did not act when they should have. The people ought to know that the government is set to spend more anyway this year with or without the crisis. In fact, there is no stimulus package.

Government has clearly miscalculated and they are racing hard to salvage their image especially that election season is coming up.  There are disturbing reports that many lawmakers are quick to get a piece of taxpayers’ money. Lack of transparency on how the people’s money are spent is the root cause of this. This government, unfortunately, tolerates this because it makes sure they are the ones going to do the spending.

When you are a middle-income earner, you would notice that your taxes continue to remain high even at the height of the inflationary cycle last year. The Arroyo government fell in love with this setup and fought heaven and earth not to change it. The Arroyo government will never dream of providing tax cuts to middle-income families and let them improve their own savings and purchasing power. This setup afforded the Arroyo-dominated Congress to raise government spending. Not only it strayed them away from their initial goals to significantly reduce public deficit, it also took away the ability of the middle class to spend more.

 Now that we have this crisis, the Arroyo government continues to stay stubborn and sticks with this economic strategy. I mean, how stimulative can a government get by putting the fate of the economy by handing it to the hands of officials which some has been long tainted by corruption. This is classic Arroyo economics. You earn Php180,000 a year, the government takes away Php30,000. Government has all the power to spend that money but ends up only a portion of it actually goes to where it is supposed to be intended. Why not offer significant tax credits to middle-income earners and let them save and spend, stimulating the economy in the process. 

I fear that much of these spending that the government have in store are not stimulative at all. I believe some of them lack the vision of a long-term development unlike that of US President Barack Obama’s, that focuses on energy and education as the core of their economic stimulus plan. It is sad that the Filipino people are stuck with leaders with no genuine ability to handle this once-in-a-lifetime crisis. The numbers may not be availalble yet but I strongly think the Philippines is currently in recession. I honestly do not trust Malacanang and this current Congress to ever get a grip of this crisis. You might as well look after yourself because in the Philippines, no help is coming for the middle class.