Press Release
July 29, 2008

SONA laden with ambiguities -Loren

Senator Loren Legarda yesterday expressed disappointment over President Gloria Macapagal-Arroyo's failure to delve much on priority legislative measures, while calling the projects identified in National Social Welfare Program as either "vague' or "ambiguous" in nature.

"It is quite disappointing that legislative measures are not talked about as a priority in climate change mitigation and adaptation," Legarda said in reaction to the President's a little less-than an hour long State of the Nation Address (SONA) the day.

Legarda also noted that most of the projects identified in the government's National Social Welfare Program were mentioned only in passing, and that she said, it gave us only "a vague picture on the implementation."

"The so-called NSWP program may appear to address poverty if indeed areas such as livelihood, microfinance, child nutrition, education, etc will be covered by the said program. However, it was mentioned only in passing,' she said.

"Its ambiguity concerns us. The administration is laden with so many corruption issues that when a program which is cash-based and discretionary in nature is proclaimed, there is an apprehension that the poor would end up burdened rather than benefited," Legarda said.

At the same time, Legarda slammed the government's much dependence on expanded value added tax revenues as a shield to global crisis, saying it only exacerbates the country's precarious situation.

"This reaffirms the structural weakness of the government. The government's remedy to global crisis should not be dependent on Vat windfall which is highly volatile and dependent on world prices," stated Legarda, adding that the President did not make mention whatsoever on the rate of revenue collection and cuts in unnecessary expenses and irregular government transaction.

The government is expected to continue slapping VAT on oil and power consumption in its effort to justify its release of more subsidies to the poor affected by the spiraling prices of prime commodities triggered by high oil prices in the world market.

"While we acknowledge that the government is reaping huge profits from VAT revenues, these should be channeled to proper uses that will in effect introduce structural reforms, thereby ensuring the country's sustainable growth and stability amid the global crisis," she said.

Instead, government's dependence on VAT for its poverty-alleviating projects can only be viewed as a political move for the administration to gain popularity at the cost of instituting structural reforms to enable the nation to hurdle the onslaught of increased world food and oil prices, according to Legarda.

Legarda said the government must present the tracking and disposition mechanism for VAT windfall, otherwise, it will open the government up to charges of graft.

"We don't know if the P80 Billion VAT windfall goes to where it should be. The P3 Billion fund for anti-graft and corruption may even fuel rather contain the problem."

PGMA boasted on the high economic growth that the country has enjoyed in the year 2007, the low inflation level, the strong peso and the million jobs created, and Legarda said, this should not give us the wrong impression that the growth was led by internal economic reforms.

"Just like today's crisis on food and fuel, some of these positive indicators were largely brought about by an external factor, which is the depreciation of the value of dollar thereby resulting in lower inflation rates. Indeed, the economy grew by 7 percent, but mostly fuelled by consumption, owing to the droves of remittances sent by the OFWs even in the midst of its diminished value," Legarda explained.

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