Arroyo calls for unity to solve crisis<\/p>\n
Associated Press, Manila, Philippines<\/p>\n
President Gloria Macapagal Arroyo called for national unity on
\nThursday as she sounded the alarm on a "grave economic crisis" in
\nthe Philippines, which is battling a burgeoning fiscal deficit.<\/p>\n
Arroyo said the deficit - 111 billion pesos (US$1.98 billion;
\neuro 1.61 billion) in the first eight months of this year - was
\nthe result of "incessant borrowings" in lieu of raising revenues
\nin past years, resulting in interest payments growing from 28
\npercent of the national budget in 1992 to 32 percent this year.<\/p>\n
"We can beat the odds even as our nation faces the threat of a
\ngrave economic crisis ... if we act on time and in tandem," she
\nsaid. "Our national survival rests on whatever patriotic
\nconsensus we can build."<\/p>\n
She said the national government was also "saddled" with
\nfinancial obligations to local governments, whose share of the
\nrevenue allotments more than doubled from 7 percent in 1992 to 16
\npercent in 2004.<\/p>\n
The interest payments plus the revenue allocations have left
\nonly 6 percent of the national budget for crucial infrastructure,
\nthe president said.<\/p>\n
She said the Philippines is losing more to debt payments
\nfaster than it is able to raise revenues, leaving the country
\nwith an external debt-to-gross domestic product ratio of 71
\npercent - the third highest in Asia - and a revenue-to-GDP ratio
\nof 14 percent, the region's second lowest.<\/p>\n
Arroyo urged legislators to support revenue measures to raise
\n80 billion pesos ($1.43 billion, euro 1.16 billion), including
\none that increases the "sin tax" on products such as cigarettes
\nand alcohol.<\/p>\n
She has already decreed several austerity measures, including
\nenergy-saving in government offices and pay cuts for government
\ncorporation officers.<\/p>\n
She has given two months for the Bureau of Customs to crack
\ndown on smugglers, and for the Bureau of Internal Revenue to
\ngarnish bank accounts of "notorious" tax evaders.<\/p>",
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