Monday, July 14, 2008

Benjamin Diokno gives fiscal advice, for some reason

ABS-CBNNews.com's current headline story says "RP fiscal position shaky, unstable". Which certainly would be alarming if it were real news! Thankfully, despite it's strange position as ABS-CBN's "top story", it hardly qualifies as a current event. There are a dozen variations of "Diokno said" in that article-- and in fact the entire thing is constructed from the building blocks of Diokno's opinion given at some lecture he gave at the University of the Philippines last Friday.

Diokno was Secretary of Budget and Management during the Estrada administration. This is a fact not mentioned in ABS-CBN's article, as simply crediting him as a UP economics professor apparently gives the story more credibility. Estrada's term was characterized by economic mismanagement and by the corruption that led to its downfall.

The budget deficit was the government's single biggest problem during Estrada's administration. With Benjamin Diokno at the helm of the Department of Budget and Management, the government ended 1999 with a budget deficit of P114 billion, dramatically overshooting its original target of P68.4 billion. In 2000, the government set a deficit target of P62.5 billion, and the International Monetary Fund set its "worst case scenario" deficit at P126.5 billion, yet the country managed to overshoot even that, ending with a full-year deficit of P136.1 billion.

The IMF set a worst case scenario, and the actual deficit ended up even worse.

After Estrada was ousted, Senator Joker Arroyo had to admit that "The government is bankrupt, its coffers are empty".

And now Benjamin Diokno is giving advice on fiscal policy? Seriously?

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