Consumers Domain
By Ian Seruelo

EDSA what?

“ He whose ranks are united in purpose will be victorious.” —Sun Tzu

It has been almost two decades since the 1986 EDSA uprising.   But for sure all will agree that real spirit of EDSA seems lost amidst the continuing trapo politics and in the face of deepening poverty and crisis.    In this thought, this column would like to yield this space to an article entitled “PEOPLE's URGENT AGENDA IN THE FACE OF DEEPENING POVERTY AND CRISIS”.

Jointly released by progressive groups, non-government and people's organizations and social movements all over the country, the piece below features calls for genuine and meaningful reforms.  

1. We demand immediate steps towards a just and decisive solution to the debt crisis! Prioritize spending for social services and social justice programs!

Our debilitating debt and the conditionalities that come along with it has brought our country to a point where government has been rendered incapable to provide critical social and economic investments and services particularly for and to the benefit of the poor majority of Filipinos.

At more than P 5 trillion, the public sector debt is already more than 100% of the Gross Domestic Product. Interest payments for the National Government Debt comprises more than 30% of the 2005 Budget, and total debt payments (interest and principal) is even greater than government revenues.

Debt service has been crowding out allocation for social services and social justice programs in the national government budget. In 2004, payments for interest on the debt was not only the single biggest item in the budget as it has been for many years,   it was also larger than the budget for all social services combined, and bigger than the allocation for all economic services combined.

Government spending per capita for social services and social justice programs have been declining for several years. This includes spending for basic education, primary health care, reproductive health, nutrition, housing, adequate water supply and sanitation and agrarian reform.

Immediate steps to be taken should redound to the substantial reduction of the debt stock and debt payments.   Social services and social justice programs should be given the highest priority in government spending.

2.   We demand the scrapping of the proposed increase and expansion of the value added tax (VAT)!   Undertake major reforms towards a more progressive tax system.  

The cruelty of depriving the people of benefits from the taxes they pay is aggravated further by the imposition of greater tax burdens with the increase and expansion of the value-added tax or VAT.

Instead of decisively addressing the debt problem, grossly inefficient tax collection, and rampant corruption, the government is taking the easy way out by imposing new taxes and increasing indirect, regressive taxes. The VAT is an indirect tax that. The larger portion of collected revenues come from indirect taxes that do not discriminate between the rich and the poor, and place a bigger burdens on impoverished and vulnerable citizens.Current laws on direct taxes are also flawed. While the existing tax system succeeds in capturing the taxes of fixed-income workers (most of whom earn less than the government's own estimate of the basic cost of living), it is riddled with loopholes that legalize tax avoidance by corporations and rich individuals.

Taxation is a significant tool that should be used to promote social equity and development.   Instead of continuing to rely primarily on indirect taxes to generate revenues, the government must shift its emphasis on direct taxes and increase tax relief for the poor.

3. Stop unjustified power and water rates increases! Ensure government role and responsibility in providing adequate and affordable water and power for all citizens.

Consumers are made to suffer from high power rates due to expensive and grossly burdensome contracts that the government forged with independent power producers in the 1990s. High power rates are also being used by the government to entice private sector investment in the power industry. At present, power rates have already reached P7/kwh from only about an average of P4/kwh prior to the passage of the Electric Power Industry Reform Act in 2001.   This means that twenty per cent of an ordinary household's average monthly income of P8,000 goes to payment for a 200 kwh monthly electricity consumption. New power rates increase looms as the Energy Regulatory Commission intends to decide on the National Power Corporation's application for a P1.87/kwh increase either at the end of this month or next month.   Power rates will further increase as government aims for a P4/kwh rates hike until year 2006.

The government shamelessly continues to burden the people with higher costs of water service in order to ensure profit for private corporations. Over seven years, the government has betrayed public interest as it granted water companies numerous mechanisms to charge their losses against water users.

A large chunk of household income now goes to payment for higher power and water bills, thus, decreasing budget allocations for food, medicines, schooling and other day-to-day expenses of the family.   We demand a halt to all these unjust power and water rates increases!

Water and power are essential elements for a dignified life.   Access to safe, clean and adequate water is a basic human right.

4.   Arrest skyrocketing costs of basic commodities; immediately impose price ceilings and review / rescind policies that spur unbridled rise in rates and prices.

The Filipino people continue to reel from spiraling price increases of basic commodities and services.   Exorbitant power and water rates do not only burden the people directly but contribute to price increase of basic commodities.   More recently, the opening of the new Northern Luzon Expressway has introduced an almost 400% increase in toll fees that has triggered immediate fare hikes and increase in such basic goods as fruits and vegetables.

Notwithstanding this, oil price hikes occur almost on a monthly basis, which has constantly pushed up the prices of transportation fees and basic goods.   Government has failed to cushion the people from the impact of oil price hikes under its policy of oil industry deregulation.   From an average of P7 per liter in 1997 (pre-deregulation policy), the price of diesel increased to P20 per liter.   The proverbial galunggong now costs P100/kilo, a 150% increase from its 1997 price of P40/kilo.

As prices and rates continue to increase, most everything basic and necessary to the Filipino people is fast becoming inaccessible.    Government must arrest skyrocketing costs of basic commodities and provide immediate relief to the unbearably high cost of living now bearing down on the toiling Filipino.   Price ceilings must be imposed on the cost of oil product and other basic commodities.  

But providing relief is not enough.   The condition of unbridled price increases in basic goods and services stems from a set policy and laws of government that feeds the cycle of rising costs.    Among these, as with the power and water delivery, it is imperative for government to stop unjust increases in rates of other basic social services, and review policies and contracts covering privatization of public utilities and delivery of public services.   Likewise, government must review and rescind its policy of oil industry deregulation.

•  As the cost of living rises, the living wage of the toiling Filipino must also be raised.

The incompatibility of rising prices of basic goods and services and the low wages of the toiling Filipino becomes more severe everyday.   But while government is bent on imposing new tax measures that will affect mostly the poor majority of the population, it has been miserly in granting wage increases.    This is so, government explains, because wage increases would only effect an increase in labor costs of production, thereby triggering higher costs of commodities, worse still, this may affect continued operation of business and inhibit the entry of new investments.   Thus, the Filipino worker is made to live on meager wages in the face of rising cost of living.

But inflation today stands at 8.4% from 4.1% in January 2004, and still rising. Instead of imposing new taxes, government must work out with labor a package of relief composed of tax cuts along with innovative means providing them access to goods at price discounts-- non-wage measures that would increase the take home pay of the toiling Filipino.

6.   Stop indiscriminate trade liberalization.   Remove agriculture out of GATT-WTO negotiations.   Develop local production and food self-sufficiency.   Assert Philippine sovereign right and install protective trade measures to prevent undermining of our domestic economy with import dumping.

Government policy of trade liberalization, especially the lifting of tariffs on imports has been a major cause of loss in government revenues.   Tariff rates have been reduced so drastically.   In fact, even when the Philippines had just joined the WTO in 1995, the average nominal tariff rate was already at 19.72%, lower than most of the bound rates committed under the WTO.

In the meantime, the impact of government's trade liberalization policy has been most debilitating in agriculture.   In rice, corn, poultry, and vegetables, the flood of foreign goods through WTO arrangements has resulted in displacements of significant local production and large numbers of producers.   On the other hand Philippine exports have not been spared from restrictions imposed by trading partners like the United States , Australia and the European Union.

Efforts to solve the current fiscal crisis cannot be completed unless this gaping whole, causing revenue losses, is plugged.   Moreover, the production of our domestic economy will continue to be undermined unless government installs protective trade measures.

(For comments please send SMS to 0919-348-6337 or email to ianseruelo@yahoo.com)