Live within country’s means, control population
The Duterte administration’s outgoing economic managers have advised the incoming Marcos Jr. finance group to work toward financial consolidation. The premise is that they have left an economy with adequate measures and policies to sustain and implement development plans, such as amendments to the Foreign Trade Act and passable credit ratings from most of our international lenders. These are, of course, their subjective assessments of the financial situation they’ve left us with, that some might disagree with.
Financial consolidation could mean efforts to consolidate the assets and liabilities of the government, restructure, and possibly secure better repayment terms. In short, it is similar to a balance sheet audit done for private corporations under a receivership. How that can be feasible putting together the financial structure of government agencies under one financial roof is a big challenge. Beyond such balance sheet review, revenue generation will also be inputted to ensure that the debt restructuring is doable against future revenue generations. More government debts will have to be avoided like the plague, unless unavoidable.
Generally, the country must live hereon within its means. Contingencies for unexpected upheavals, such as the recent COVID health emergency that caught us flatfooted, should be anticipated with reserved funds set aside in the grand financial template. Much like drawing up a well-thought-out family budget.
Congress as part of the consolidation process should control with legislation, putting caps on the ensuing government borrowings each time the annual budgets are considered. The discretion of the executive department on borrowings should be confined within the legal limits set, for checks and balances. We have witnessed how public debt tripled under the Duterte administration from P6 trillion in 2016 to close to P13 trillion, with poor revenue generation on the horizon.
This consolidation is supposed to happen in the next six years of the Marcos Jr. administration. A very critical component, however, in the financial consolidation that cannot be left out is the country’s population growth at 1.32 percent per annum (1.3 million more people!), which cannot continue as it will derail any sensible financial planning and consolidation.
We have enough workforce to man industry development; we simply cannot risk the financial situation going out of hand if mouths to feed continue to increase significantly. The Commission on Population and Development is a key partner in making headway to drastically plan population control and growth for the next six years as a component of the financial consolidation. Legislation should be afoot to discourage overpopulation, such as by providing incentives to have smaller families. China has dramatically reduced in one year its population growth in 2020 from 1.11 percent to only 0.34 percent in 2021. If there’s a will, there’s a way!
MARVEL K. TAN
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