A research group called on President Benigno "Noynoy" Aquino III to adopt pro-people measures to generate revenue amid a serious fiscal crisis.
 
Ibon research head Sonny Africa challenged the Aquino administration to increase revenues by putting the burden of adjusting to the fiscal crisis on those that have the greater capacity to pay.
 
“The new Aquino administration is faced with a serious fiscal crisis that could deteriorate rapidly or compel severe austerity if the revenue effort does not quickly improve,” Africa said.
 
He cited that the first quarter deficit is already at 8.4 percent of the gross domestic product (GDP) from 7 percent of GDP in the first quarter of 2009.
 
Africa said that being a new administration, the Aquino government enjoys a measure of goodwill, and it can translate this to revenue generation measures that will not burden the public.
 
Ibon recommended measures such as restoring the import tariffs to their 1993 levels, or at 5.6 percent of the gross domestic product (GDP).
 
“This will create an estimated revenue of P427 billion, instead of the P220 billion generated in 2009 (at 2.9 percent of GDP),” Africa explained.
 
Another measure is restoring the corporate income tax from 30 to 35 percent, which will generate an estimated revenue of P16 billion for the government.
 
“This is possible because top corporations saw a 20 percent increase in their first quarter 2010 profits. Moreover, the top 1,000 corporations registered a profitability rate of 11.7 percent in 2007 from 3.2 percent in 2001,” he said.
 
Ibon argued that the supposed 36 straight quarters of GDP growth declared by the past government has not been accompanied by corresponding increases in real jobs and decent wages, further deepening poverty while expanding the wealth of those in the top income deciles.
 
“Amid rising poverty and increasing incomes of the corporations and individuals, the Aquino government can therefore look into increasing wealth taxes such as on high value real estate, luxury goods and services, and others,” Africa said.
 
He added that the Aquino government is “in a good position to establish democratic instincts including implementing pro-poor measures in managing the fiscal crisis.”
 
“This would be more productive instead of considering conventional approaches such as removing rice subsidies, increasing taxes, etc.,” he said.