CHIZ SAYS GOV'T BLOATED EXCHANGE RATE IN '08
BUDGET, COST THE NATION 20 BILLION OVERPAYMENT

The national government has bloated its assumed exchange rate in the proposed national budget thus saddling the government with a 20 billion peso overpayment in interest and principal payment of foreign loans.

In the proposed budget for next year, the national government pegged the peso-dollar exchange rates to a low of 46 and a high of 48 according to Senator Chiz Escudero.

Escudero said the government has swollen up the exchange rate as any banking institution would say that it would already be impossible for the dollar to reach a high of 48 in the next years as the peso is expected to stabilize within the 40 to 45 margins.

The assumed exchange rate will be applied in the payment of foreign loans next year amounting to 196 billion pesos. Escudero said this inaccurate rate will bleed the national coffers white as the government is looking at an overpayment of almost 20 billion pesos, if the assumed exchange rate of 48 is implemented.

"Supposing we use 46 as the assumed exchange rate, the government will still erroneously pay almost 20 billion pesos in the interest rate and principal payments alone of foreign loans because the actual exchange rate today is somewhere near 42-44".

Escudero wanted to know where this huge amount will go. "Will they give this for social services that were badly needed since yesterday? If yes, I want to see the breakdown of social programs the government has.

He cautioned about the likeliness of the overpayment going straight to the president's kitty. "It can take the form of hidden pork which only the president has the wide latitude and discretion to spend on. This is distinct from her contingent, discretionary and intelligence funds."

With the scarce resources the government has at its disposal, Escudero said it should be appropriating funds to the many needed programs that are yet to be funded and not the programs and projects that are nowhere to be found in the proposed budget.

To avert an overpayment and earn the government savings, Escudero said the Department of Budget and Management and the Department of Finance should be able to rectify the exchange rate in the budget proposal and put an educated assumption based on the actual rate.