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Tuesday, September 14, 2004

Why the Philippines is in a Fiscal Crisis

In my previous post, I mentioned that the root cause of the Philippines' fundamental flaws are two things: (1) Absence of True Leadership and (2) its very culture. The Philippines faces today a fiscal crisis and looming beyond the horizon--- a power crisis. These are two distinct problems yet intertwined by the fundamental flaws of the Philippines.

Let us first address the Fiscal Crisis.

Again, this problem exists because of the Philippines's fundamental flaws. Let me explain. In the Philippines, it is the norm that the poor go to their respective congressmen for assistance in say... hospital bills. It is also the norm to go to the Philippine Charity Sweepstakes Office to ask for help to pay for hospital bills. Sure this system breeds graft, sure it demeans the human person but that's not the problem at all is it?

Everybody is depending on the Government to provide for them and the Leadership has created a Government that encourages the flawed view that it is the job of Government to provide for every citizen as opposed to the view that it is the role of Government to ensure that the playing field for all of this is available and fair. It has help spawn a feudal society where every Filipino without power or money is a vassal. Such a path is not sustainable.

To put it simpler (let's borrow from the Good Book), Government is not teaching the citizenry how to catch fish, it is simply giving it out.

It is not the role of Government to be building power plants or to manage them. It is the role of Government to encourage that industry put up power plants and to ensure they don't abuse that privilege. Similarly, it is not the role of Government to be running gambling establishments, rather it is their role that these establishments follow the letter of the law. Likewise, it is not the role of Government to beg oil companies to lower prices or subsidize their goods to appease labor and transport sectors but it is their role to encourage the development of alternative power sources through development assistance, through better science programs and university systems.

There are instances wherein the presence of Government can not helped. But such presence must be minimized. It is the duty of Government to create, encourage and ensure industries are growing not by directly involving itself in very minor detail but more through indirect methods. Let the people be Entrepreneurs and allow the natural flow of economics govern, it is a free market after all, is it not?

This flaw is only part of the reason. Let me get to the next point. Why is culture part of the problem?

Philippine Society has bred an order of things that encourages as i've mentioned it has been the norm for the better part of a 100 years--- this feudal society and you could say even before that, the Filipino sees himself as a vassal. Hence, the continued policy of asking congressmen who make laws for money. Politicians are the masters and people expect that they be helped. if you can not then, good bye position of power. Ergo, PHP50B pork barrel that exist in the national budget.

What does this pork do? It funds hospitals, it sends sick people to get treatment, it funds scholarship programs, just to name a few. But then, doesn't the Philippine Government already have a Department of Health, Education. I could never justify that in my own mind... why not simply expand the budgets of these departments... they do submit programs to be included in the national budget anyway, right?

These two flaws are at the heart of the problem.

Succeeding post will deal with suggestions on how to meet the Fiscal Crisis.