PIA Press Release
Speech of President Gloria Macapagal-Arroyo during the 2nd General Assembly of the League of Provinces
Villa Del Ray, Pili, Camarines Sur, February 13, 2008
Thank you for your support. Thank you for working together with me toward a first world Philippines in 20 years.
Together we are making real progress in alleviating poverty. The rate of poverty is down, employment is up. Our education and healthcare services to the poor are vastly improved. We have a long way to go, but only through a strong economy can we improve the plight of the poor together. To that end, together we have turned the corner on our economy. This allows us to invest together in job creation, better healthcare and more educational opportunities. These are the keys to lifting up the poor.
Our economy has reached a new level of stability with some of the strongest macroeconomic fundamentals in three decades. Together we have aimed high. We have met the challenge. Seven years ago, no one thought we could get more revenues, cut down on tax cheats, strengthen the peso and move the stock market. No one thought we could bring our budget close to balance, lower our national debt and raise employment. But we have.
The 2007 national government deficit was P9.4 billion, versus the deficit target ceiling of P63 billion. Total revenues amounted to P1.13 trillion, P15.9 billion more than target. Interest payments declined 14 percent and posted P36.5 billion in savings. We could have had a surplus or balanced budget if we wanted but we decided to take the opportunity of our good fiscal position to provide for higher spending especially for infrastructure to sustain a high growth in 2008. Funds were disbursed to government owned and controlled corporations and government financial institutions for pump priming activities and to allow additional contributions from them in 2008 including dividends.
I have always supported the LGUs' right to receive your IRA (Internal Revenue Allotment) in full. When I became President I waived the President's prerogative to retain part of the IRA as the Local Government Social Equalization Fund. We have provided automatice appropriation for your IRA. We have even paid debts of previous administrations. I have asked Nonoy Andaya to study how to securitize the IRA shortfalls from the years when we had re-enacted budgets.
But while the fiscal numbers are better than expected, we need to work harder and more effectively in improving the tax effort together. I ask our governors to join the BIR's LGU Assurance Program which will result in better collections of both national and local taxes, as illustrated by the experience of Calbayog City.
We have secured a new loan from the Asian Development Bank in the yen equivalent to $300 million for Local Government Financing and Budget Reform.
We will support the DOF's efforts to help the LGUs improve your capacities to plan and budget, as well as deliver better services for the general welfare of your constituent communities. The program will support reforms in (i) intergovernmental fiscal relations; (ii) fiscal management, planning and public expenditure at the LGU level; (iii) LGU performance measurement and service; (iv) credit financing; (v) local-own source revenue.
We have ordered a surge in infrastructure spending as a firewall against the economic slowdown in the United States and as a springboard for further growth.
The global economic situation is clearly a key issue for us. The more interconnected the world becomes, the more we need to manage the ups and downs of other nations' economic bubbles. This is certainly true with any further volatility in the U.S. economy. The good news for the Philippines is that we have matured and diversified our economy so much the last few years that we are confident our economic turnaround is permanent and our economy resilient to major economic disruptions.
We can afford to and should spend more for infrastructure - hopefully, P200 billion between the national government, the GOCCs, and you, the local governments.
Investing in vital infrastructure includes building up our environment as a reflection of our commitment to our quality of life. People need to breathe clean air and swim in clean water while we build manufacturing and bridges.
These programs and activities mirror how you have operationalized your theme - "Enhancing National and Local Government Partnerships in Improving Environmental Governance and Natural Resources Stewardship."
From rising tides, to changing weather to deforestation and pollution of air, sea and land, the challenges of climate change are great. As a nation made up of 7,000 islands, rising seas due to global warming takes on a whole new meaning. Florida may lose some coastline, we lose a nation. Our response to this grave challenge may sound humorous, but our intent is deadly serious: we must work together to solve this problem. If we do, it will be one of the great achievements of our partnership.
We must assume the mantle of leadership and work to address the challenge of climate change. Each and every person bears some measure of responsibility for what we have done today and throughout history to diminish our global environment. Our nation has been more responsible than others. But all that apportionment of blame does nothing against a rising tide of global warming that will swamp our nation if we do not act with decisiveness and solidarity.
We have begun the Green Philippines plan, a blueprint for mapping our environment and economic policies that will allow for sustainable development that doesn't fall on the backs of the poor or erode our environment. There is a cost to make the Green Philippines come to life. But the cost is greater without the investment people and environment.
We aim to make our economic reforms permanent so that our nation is on a sustained path of economic growth and stability. We have turned the economy around and for the first time in a generation, we are investing hundreds of billions of pesos in human and physical infrastructure. Roads, bridges and airports as well as new schoolbuildings and scholarships are the central building blocks that are necessary for the long term prospects of our citizens.
Moody's upgraded the Philippines to positive last month for very good reasons. We have the fastest growth in a generation - 7.3% for 2007. And we have a surge in foreign reserves at a time our budget is almost in balance.
An aggressive foreign policy is essential to the lifeblood of the Philippines. Nowhere is it more important than protecting and advancing the interests of our overseas workers. That is why we include a governors' representative in my trips abroad.
I want to spend more time with your more often. Let us stay united and continue to work together for a Philippines that will be ready to be in the First World in 20 years. (OPS) [top]