Press Release
October 16, 2006

Transcript of Senator Ralph G. Recto's interview on ANC (Oct. 13)
With Twink Macaraig and Tony Velasquez

TM: Well, I suppose it will be too optimistic for Speaker De Venecia to expect that the budget for 2007 will be passed without any problems. But do you think it will pass?

SRGR: Well I think it is imperative that we pass the budget for 2007. We cannot have a reenacted, reenacted budget. You know, just to inform everyone that we did pass a supplemental budget for 2006, and if we have a reenacted budget, that will not include a supplemental budget.

Therefore the spending of 2005, assuming we do have a reenacted budget, the spending levels of 2005 well be spending that over 2007. And ah that would not sit well with our taxpayers, because we increased taxes. So Im sure that our people will expect more services, value for money in return.

TM: So I guess youre acknowledging that the burden, or the pressure is on the Upper Chamber now to pass this budget?

SRGR: To improve the budget. The burden is to improve the budget.

TM. To improve?

SRGR: That is right because if we compare this budget with regard to our spending this year, it is roughly P140 Billion more. Having said that, then what we should look into is value for money and quality of spending. As far as I know, what the House passed and with the NEP (the net expenditures program) submitted to the president, the congress the budget, theres only a P10 B increase for infrastructure or capital outlay.

If the increase in the budget is P140 B, why should only P10B go to infrastructure? That is how we should be able to determine whether we have a quality spending or not. If we want the economy to improve, or to be sustainable, or to have a higher sustainable economic growth, I suppose we should be spending more on roads, bridges, airports, seaports and other important infrastructure projects.

TM: Senator, I understand you have questioned the level of borrowings being earmarked for next year?

SRGR: No. I did not question the level of borrowings. What I am saying is that we are still not out of the debt trap. I was watching your show yesterday Twink, and you asked a very good question of Secretary Teves. And he did admit that our debt to GDP ratio is still at 70%. That is just the national government debt and that does not include the GOCC.

But having said that, next year, just to prove my point, if you add what we will be paying for principal and for interest next year, thats roughly about P800 Billion. Thats 9 cents for every 10 cents that youll be raising in terms of revenue. You pay principal for amortization, we borrow to pay the principal. So we just roll over our debts, so to speak. The only thing that were really paying is just the interest itself.

TM: So youre questioning why not more of the principal is being paid off?

SRGR: No, not really. What Im just saying is that youre borrowing P800 B in effect next year that goes to debt service - principal and interest. And our revenue is only something like P900 B. So, malaki pa rin yong what goes to interest and expenses for principal, for amortization. Thats all Im saying. Compared to previous years, thats definitely much lower, because we did pass revenue measures and the revenues have continuously increased. Next year we expect it to be 16.7 % .

TM: Sen Recto, will this improvement of the budget as you call it, perhaps, will it result in some stalemate, conceivably.

SRGR: Well I hope. I dont think there should be a stalemate. Like I said, it is important to pass the budget for 2007. If we can point out to the House that we in the Senate could improve the budget, as submitted by Malacañang and as transmitted , assuming that they are able to transmit the budget to the Senate, then there is no reason why we shouldnt be able to improve as I pointed out earlier. That there is roughly a P140 Billion in increased spending for 2007.

And what Im saying is that in terms of the quality of spending, why is it that only P10 B is earmarked for an increase in capital outlay spending? I think we can double or triple or even quadruple that next year. And it will make a more effective budget. If you want a more effective budget. And if you want the economy to grow at a faster rate or even a sustainable rate than the debt, then at the end of the day, the economy should grow at a faster rate than the debt. And that is the only way to reduce poverty incidence and to be able to achieve our mi8llemium development goals.

TM: Senator Recto, Tony Velasquez would like to ask a few questions.

TV: Senator, people are already beginning to count the days before Christmas. So I guess at the Senate, how many days are left for you to scrutinize the proposed budget?

SRGR: Yes, thats right. We roughly have three to four days of session every week. The Senate has already began hearing the budget particularly the committee on finance. I understand that as of yesterday, they heard already about 90% of the budget. We have a standing resolution that allows us to have committee hearings during the break, and by November 6, we will resume sessions. I would suppose that a week or two weeks after that, assuming the House passes the bill and transmits it to the Senate, then we could have immediate debate on the second or third week of November.

I think its reasonable enough that it would probably take just a month to pass the budget before we go on break for Christmas.

TV: So, that is your fearless forecast. Just a month and the budget gets passed at the Senate.

SRGR: Precisely. Thats why I would like to enjoin my colleagues in the Senate to give priority to the budget for 2007.

Its very important that we pass the budget for 2007 so that we can be sure that the economy grows at a sustainable rate. Or, if not, even grow better. A reenacted budget for 2007 cannot be good for the economy for the long term. It may be good for the short term, in that we could wipe out the deficit, or you could have a balanced budget by next year. If we have a reenacted budget next year, maybe even a surplus. So, in the short term, that will be good, but not for the medium to long term.

And I think what is more important is that we politicians and bureaucrats as well should have a longer vision for the future. We should be planning 20 years ahead. And not have rear view mirror politics by just looking at the past or just looking at the figures down the road. I think that although politicians are elected every 3 years their line of site should be 30-40 years and not

TV: Well, Filipinos like to take it one day at a time. I dont think we really have that kind of long-range vision, well senator

SRGR: Well, I dont think Tony. I think that the organization that you belong to plans 50 years ahead ..

TV: Yes I think, but, were not politicians.

SRGR: Well I think there are many politicians that think way ahead as well. Especially, if youre a parent. You plan for the education of your children. You plan for the healthcare of your family, you buy insurance policy. Youre looking 20 years 30, 50 years ahead.

TV: You said you wanted to see an improved budget. For next year, what sort of reallocations would you like to see in the budget?

SRGR: Very good question. At the end of the day, I call it HEART. Thats health, education, agriculture, roads, technology and security. I think these are the five or six areas that are very important where we could put our money where our mouth is.

So, with an additional P6 B you could have universal health care. No government has been able to achieve universal health care. It is important, I think, for this administration to have additional P6 Billion, you could have universal health care, and most Filipinos will have a health card or health insurance. Then, of course education where we were all witness to the shortages of classrooms, textbooks, teachers and so on and so forth. I dont think P2 B or P3 b is enough to improve the delivery of educational service to the country. With regard to the school building program, Im sure we should double or even triple that. As I said theres a P140 B more in spending. Then, of course agriculture. Then you could build farm-to -market roads, which is neutral investment for agriculture in that you could choose between a high value crop or a food or rice corn or sugar. You build a road, everyone who has a private entity in that area will benefit from it, such as irrigation for example. Technology. I suppose we must be able to even for the computerized election. Not to mention technology for schools, for the bureaucracy.

TV: Senator, do we expect by the time the final version of the bill goes to Malacañang for the presidents signature - that some departments whose budgets were already approved by the House could more or less go down or up depending on how the senators see it?

SRGR: Yes thats right. Thats always been the case. Thats why you have a bicameral Congress. Its like going to the doctor. You get a second opinion. And thats what the Senate is all about.

Even in the private sector, you have a private board of directors or independent directors. In effect, you want a second opinion, so to speak. And thats what the Senate is all about. And at the end of the day, Congress will come out with agreements and have a bicam and agree.

At the end of the day, the House can tell that they did a better job, or, the Senate can tell them that we improved on what they did. Then Im sure that it will not be difficult to come out with an agreement which we could be submitted to the Palace for scrutiny and for approval.

TV: Thank you

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