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As of November 17, 2004
A TALE OF TWO CRISES: 1946 and 2004By: Prof. Leonor Magtolis BrionesHolder, Pres. Manuel Acuna Roxas Professorial ChairI. Revisiting the Past to Understand the Present
Why a public professorial lecture on President Manuel Roxas? School childrenand ordinary citizens know him as the last president of the Commonwealth of thePhilippines and the first president of the Republic. College students know about thedebates surrounding his positions on issues of national sovereignty, Philippine-Americanrelations and other political issues.Is Roxas relevant to the present fiscal crisis? Not very many Filipinos know that Roxas left enduring legacies in publicadministration and governance, economic planning, development finance and central banking, fiscal administration—taxes and other revenues, expenditures and borrowing— as well as accountability. Not many Filipinos know either that fifty-eight years ago, our country grappledwith a terrible fiscal crisis in the aftermath of a war which was not of our making, butwhich devastated the country’s material and financial resources and infrastructure.Buildings were not the only edifices which were bombed and shattered; the economy wasin ruins as well. Epidemics—cholera, dysentery, smallpox—swept the country andfamine stalked the land.How Roxas managed the crisis of 1946 can provide insights as to how we candeal with the present fiscal crisis of 2004.After all,“ history that serves as a guide to the people in perceiving presentreality is itself a liberating factor, for when the present is illumined by a comprehension of the past, it is that much easier for the peopleto grasp the direction of their development and identify the forces thatimpede real progress.”
 
Renato Constantino in
The Past Revisited,
l975Prof. Jose V. Abueva who conceptualized and inspired the
Ating Pamana
series assessing the administrations of Filipino presidents wrote that
 
 
“…
On the part of the University of the Philippines as a community of scholars, we are committed to create and disseminate knowledge for itsown sake, and knowledge useful for our people’s understanding and participation in problem-solving, nation-building, democratic governance,and national development. We want to help our people and leadersto have a social memory of our cumulative knowledge, experienceand wisdom. To be a learning society. To strengthen our publicinstitutions. And to enhance our sense of national community, our sense of history and a common destiny.”Jose V. Abueva ,
The Macapagal-Arroyo Presidency andAdministration,
2004
The Fiscal Crisis of 2004
After several years of denial, no less than the President of the Philippines hasfinally admitted that the “we are in the middle of a fiscal crisis.” The consolidated publicsector debt stands at P5.39 trillion as of 2003 (the latest data). Of this ,P4.063 trillion ,which includes P708.5 billion in contingent liabilities , is accounted for by the nationalgovernmentAccording to the Department of Finance, the national debt stock as of the end of last year is already 92.4% of the GNP while the Consolidated Public Sector Debt is161.3% of the GNP.Allocations for sectoral expenditures have been going down even as the debtservice is rising steadily. For example expenditures for social service were allotted33.2% of the budget in 1999 As of 2004, its share has gone down to 28.73% On theother hand, 18.3% of the 1999 budget was allocated for servicing of interest paymentsBy 2004, it had ballooned to 31.4% of the total budget, making it the highest sectoralallocation..For several years now, the annual deficit hovers at the P200 billion level. For 2005, the national government budget deficit is projected at P184.526 billion while theconsolidated public sector deficit is estimated at P253.636 billion.The president’s admission of the fiscal crisis triggered loud calls for sacrifices andassorted advice on what to do about it. These have ranged from contribution of jewelry,cash donations, to revenue bills , abolition of the pork barrel and internal revenueallotments for local government units, reorganization of the government and even closureof Congress.
 
Why revisit 1946?
 
 
 Why is it important to revisit the fiscal crisis of 1946 and the efforts of PresidentManuel Roxas in order to help understand and possibly manage the crisis of 2004?First, the present fiscal crisis is not the very first one for the Republic. The birth of the Republic itself was attended by multiple crises, not the least of which was fiscal innature. The country was engulfed with political, social, and economic threats, including problems of ethics and accountability. These problems still linger on, even after fiftyyears.Second, the solutions which Pres. Roxas crafted to solve the fiscal crisis might beinstructive for the 2004 crisis. He introduced reforms in the areas of fiscal policy,revenue administration, expenditure and budget policy, made strong statements on theissue of borrowing, and improved accountability.Third, lessons can be drawn from the crisis of that time which can help the presentgovernment choose from the plethora of advice which have emerged since the Presidentadmitted its existence.After all, it has often been said that those who do not learn from history will becondemned to repeat it!
II. The life and times of Manuel Roxas
“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief,it was the epoch of incredulity, it was the season of Light, it wasthe season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us,we were all going direct to Heaven, we were all going direct theother way…”from Charles Dickens,
A Tale of Two Cities,
1859Manuel Roxas led an extraordinarily fascinating public and personal life. As achild growing up in the Visayas, I am familiar with stories about the first Visayan president of the republic. I used to listen as my elders discussing his life and times. Iremember the shock and terrible sense of loss which they felt when he died suddenly.For purposes of this paper, focus will be on his public life, particularly on publicfiscal administration. Roxas’ career as a public servant spanned a total of 31 years from1917 to 1948. He started from the lowest rung of the political ladder as councilor andclimbed up to the presidency of the republic by 1946.
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