This working draft is the continuation of a review ofNoynoy’s SONA, Part 1.
On Government Revenue
The funds accumulated by the Aquino defacto government came from FORCIBLY taking away individual incomes.
Recall the travails of Manny Pacquiao with Kim Henares and the BIR. Remember how the BIR imposed an order that prevented Manny from withdrawing his money from the bank. Or the current legal battles of former Chief Justice Corona involving tax evasion.
It’s time for each Filipino to learn to lead one’s self – and not be led by others because that provides an opportunity for politicians to waste your money on stuff other than your own health, education, entertainment, housing, retirement, and investments. In expanding the size of government, Noynoy has expanded the number of problems instead of eliminating it.
Noynoy talks about not wasting government funds – and then embarks on a monumental waste of tax money – starting with the CCT subsidy which only ended up being gambled away or spent on booze by people who weren’t even poor.
On the Investment Ratings Upgrades
All these credit ratings are worthless to the common Filipino. In fact, the credit ratings will bury future Filipinos in deeper debt.
Government will borrow more money at lower interest rates. We all know where that government money goes – practically 65% of it is wasted in pay-offs to congressmen, LGU officials, COA, and the DBM.
To compensate for the reduced funds of the actual services delivered, the crony firms who have been awarded the contract will then have to OVERPRICE the cost.
To ensure that the overpriced project has a semblance of legality, the implementing agencies rig the bid into a clusters of collusion.
The overpriced project will need the blessings of the powers that be – and this means that the take will become higher.
When it is time to pay interest – Filipinos will pay 100% of the interest but reap barely 25% of the benefit as these have already been pocketed by government insiders and their cronies.
On the PEZA Investments
The 42% of the PEZA investment that came in during Aquino’s time did not come to the decision during Aquino’s time. Investment preparations took place BEFORE Aquino’s time. The decisions to invest took place BEFORE Aquino’s time. The actual investment is but the final outcome of actions taken PRIOR to Aquino’s time. These actions include: Comparative analysis of potential locatons, feasibility studies and business planning.
The bigger picture however is that the economy needs more than PEZA investments. The country needs investments outside of the PEZA – energy, health, entertainment, communications, infrastructure, agriculture, tourism and more.
Thus Noynoy may say PEZA investments grew by XYZ%. Do not be bamboozled because whatever percentages Noynoy is stating as being achieved – we need easily 4 times , or 5 times of the XYZ that he is boasting about.
The ignorant base of Noynoy will cheer his XYZ. To us who understand the numbers – the numbers are frankly disappointing.
On the economy taking off
The only economy that is taking off is the economy of Aquino’s cronies. Lopez, Cojuangco, Ayala, Pangilinan, Sy, Tan, Gokongwei and the local oligarchy are protected from foreign competition and are able to charge exorbitant rates for power, wireless, broadband internet, groceries, rice, poultry, meat – and consumers have no other recourse because government has kept the competition out. The very few entrepreneurs who are willing to meet the demand of consumers for alternatives are then labeled as “smugglers”.
Speaking of aviation – the state of the industry is best exemplified by the NAIA. Not only is it world renowned as one of the world’s worst airports – more recently it may have also won the distinction of being the MOST STINKING airport in the world. No different from the foul stench that comes from the pork-laden halls of Malacañang and Congress.
The lifting of the ICAO ban is a non-news. The more relevant question is – how did we get banned in the first place? Why did it have to get to that point? The buck stops with Noynoy.
On the Aviation Industry
The shortage of flights to the country is not due to the huge swell in the number of tourists and businessmen wanting to visit the Philippines.
It is due to the fact that there are few foreign carriers serving the Philippines. It is further screwed up because the local air carriers (PAL / Cebu Pacific ) want to keep foreign carriers out or at the very least, tie down more foreign carriers into code sharing arrangements with the local carriers – even as they want more access to foreign markets. Which means that anyone wanting to travel to the Philippines has to shell out a lot more to this protected local carriers instead of flying cheaper with a foreign competitor so that one can have more spending money on food and accommodation.
What really has the DOT travel tax achieved? What has the DOTC’s airport fees really achieved? Stinking congested airports that has placed the Philippines in the limelight of the global stage.”
On Lesser Strikes and Labor and Management Relations
Consider this: There could be a lesser number of strikes because more Filipino workers have left the Philippine labor force and chose to look for jobs overseas – that means lower number of workers available to go on strike.
Also, more huge investments have left – Ford Philippines for one. This means lesser companies. If there are lesser companies doing business – that means lesser number of workers who might possibly go on strike.
Thus, reduction of the number of strikes do not necessarily point to improved labor and management relations – it might actually be a red flag that means a reduction in the labor force.
On Not Adding New Taxes
People need to be reminded of: 1) Sin Tax; 2) AO 31, and; 3)the EVAT. All of these were passed after 2010. Thus, Noynoy is outright lying that the budget for infrastructure was achieved without adding new taxes.
Note also that any government loans incurred for the purpose of infrastructure will be paid back in terms of future taxes.
Then there’s the matter of inflation – which in itself is a tax.
These include financial loss of value suffered by holders of cash and fixed-rate bonds, as well those on fixed income (not indexed to inflation), due to the effects of inflation; or capital gains tax resulting from inflation. This financial loss of value is often expressed as a loss of purchasing power.
When central banks print notes and issue credit, they increase the amount of money available in the economy. This is sometimes done as a reaction to worsening economic conditions. It is generally held that in the long run, an increase in the money supply causes inflation.
If the annual inflation rate in the Philippines is 4.5%, one hundred pesos will buy PhP100 worth of goods and services this year, but it would require PhP104.5 to buy the same goods or services the next year; this has the same effect as a 4.5% annual tax on cash holdings, ceteris paribus. Real property such as a house priced at 100k and holding steady value will sell for 104.5k within one year, resulting in capital gains tax on the PhP4500 in “”earnings””.
Governments are almost always net debtors (that is, most of the time a government owes more money than others owe to it). Inflation reduces the relative value of previous borrowing, and at the same time it increases the amount of revenue from taxes. Thus it follows that a government can improve the debt-to-revenue ratio by employing inflationary measures.
And what have the Filipino people received in return for the taxes that have been forced upon them?
Ghost NGOs linked to government officials; Presidential relatives involved in influence peddling for big ticket infrastructure projects; cost over-runs; protection and awarding of government contracts to cronies; more tax increases – without receiving any value at all.
For instance, what have all these NBI clearances, birth certificate requirements got to do with job employment really? People would rather line up for job interviews than being in those government sweatshops smelling the scent of sweaty underarms.
(to be continued)
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