Change vs more of the same

Change vs more of the same | Daily Tribune

That early-in-the-year announcement of “no new taxes” amounts to a reassurance across businesses of a bright prospect for their bottom lines. It’s welcome news for everyone else but with the caveat of a “better tax collection.” The latter sure sounds more like a cliché though.

An earlier pronouncement of state-sanctioned “shrinkflation” readily appears to conflict with the finance secretary’s promising agenda. That drives home the point that perhaps two distinct departments or more should get their acts together in furtherance of public sector reforms.

On the pension of military and uniformed personnel, the new finance secretary has taken the view of the Senate, viz., that “only new entrants shall contribute to the pension fund” via the creation of a trust fund to be managed by the Government Service Insurance System. Truly, this departs from the Diokno plan of a blanket contribution by both active personnel and new entrants to the service.

Approaches and perspectives vary. The former finance secretary, a dyed-in-the-wool economist, saw the elephant in the room — current payouts as fiscally unsustainable — and sensed imminent fiscal collapse until and unless the MUP pension is “reengineered” as proposed. Some P213 billion was sliced from the national budget last year for pension payments.

There is mention made of the use of “idle assets of the military” to defray the cost of the MUP pensions. It can appear like a mere stop-gap solution that circles back to being unsustainable. The big elephant never left the room, in a manner of speaking.

For every year that a given number of MUPs are retiring to benefit from the world’s best pension package, it can only be a matter of time before the problem gets totally out of hand. The increasing population of retirees and pensioners — now 600,000 — is beyond the State’s carrying capacity.

The good thing is everyone just depends on what the economic managers would say. If the Bangko Sentral ng Pilipinas is not worried about inflation pushing up rather than down, then so be it. If it allows foreign borrowing that might further bloat the country’s debt, then fine. Perhaps we have yet to see how the vaunted “sovereign wealth fund” created by law could work to every advantage permissible.

It is a disheartening fact that of the original pack of economists tapped to buoy up the economy, only half the number are still in office, with two already out. What if the exit of yet another is just around the bend? What will happen to the economy when all four are soon out?

It would be laudable if the government could set in motion an innovative drive to make tax collection more efficient, on the one hand, and effect a no-nonsense anti-corruption campaign across the bureaucracy, on the other. Even implementing agencies and private partners in PPP (public-private partnership) infrastructure projects, assets, and services should not be exempt from these objectives toward efficiency and accountability.

There have been newly minted laws in the economic realm that should augur well for the country’s fiscal standing — the general theme of which is to attract foreign investors and drive foreign direct investments into the country. The government is deemed to have done its homework to operationalize an “enabling environment” in future economic activity or in the immediate years ahead.

Still, a problem as heavy as a couple of hundred billion fund allocation for MUP pensions taken from government coffers would be impossible to bear, not to say, in clear violation of the constitutional enunciation that the State shall, upon review, increase the “pensions and other benefits due to retirees of both the government and the private sectors,” military and civilian alike.

Why not explore the policy landscape of the salary standardization law with the end in view of logically dishing out the same menu for a counterpart “government pension standardization law?”

What justifies this is the crystal-clear anomaly of the MUP pension being nine and three times higher than that of SSS and GSIS retirees, respectively.