Batangas Rep. Ralph Recto on Sunday said the country needs to borrow an average of P4 billion daily to sustain the proposed 2024 national budget of P5.767 trillion.
He said next year’s budget translates to an average daily spending of P15.8 billion, of which only P11.7 billion is “supportable by revenues, leaving a P4 billion hole which must be plugged by debt.”
“To fully grasp the dimensions of the budget, you have to compute it on a daily basis, to fully appreciate the enormity of both spending and borrowings,” he said.
“In easy to remember figures, this is the lowdown: spend P15.8 billion a day but only P11.7 billion in tax can fund that. Therefore, there is a need to borrow P4 billion.”
“Now if that is based on the actual disbursements, that is about P3.7 billion in daily spending that must be funded,” he added.
Recto said while the “art of budget marketing perfected by all governments” focuses on what would be spent, “what is downplayed is the enormous money required to finance it.”
“Programs that dazzle are highlighted while muting the cost, a great portion of which are paid by debts left to the next generation to pay,” he said.
Payment for interest alone on the burgeoning public debt would be around P1.83 billion a day next year, Recto said.
This, however, does not give the whole picture as the payment for the principal amortization which should be automatically appropriated is not included in the budget, Recto said.
If the principal amortization requirement of P3.4 billion a day is added to the interest payment of P1.83 billion, “real” debt service expenditures would be around P5.2 billion daily, he added.
“That is only payment for existing debts. The fresh debt to be made is a different matter,” he said.
Gross borrowings next year to finance the deficit, debt and development have been forecasted to reach P2.46 trillion, or “about P6.7 billion daily,” Recto said.
Meanwhile, Senator Francis Escudero said the country should brace for possible increase in taxes to address the loss of revenues once operations of Philippine Offshore Gaming Operators (POGOs) are banned.
“If we shut down their operations, we will raise taxes since we need to cover lost income,” Escudero said.
“For this, I’d like to look at the big picture,” added Escudero, a member of the Senate Committee on Finance that oversees public expenditures.
He said while some POGOs proved to be “bad,” the reality is that PAGCOR’s income “increased by several hundred percent due to POGOs.”
“My stand is that just because some are bad eggs, the solution is to ban all. I do not agree to that kind of principle and policy,” he said.