As expected, president Gloria Macapagal-Arroyo’s State of the Nation Address (SONA) was a litany of accomplishments and a list of motherhood intents. It was obviously given within a political framework of offsetting her unpopularity and defending her political position.
The most glaring tendency appeared when she started blaming the global oil and food crisis for the local crisis regime of high prices. Later on, it appears that she cited accomplishments by her former appointees who had just been booted out and replaced by her more loyal people. This was the case in the Ombudsman and in the Social Security System–two institutions whose leadership were replaced at the height of their credible performance.
She made a spirited defense of the extended Value Added Tax (eVAT). Basically, she argued that it taxes more the rich and that, if rescinded–even if only for oil and oil products, it would not necessarily lead to relief from the high price regime. It, she averred, would only deprive the government of necessary funds for targeted subsidy and other services to the poorest people.
There is a half-truth hiding in these arguments. EVAT on oil and oil products, even if the majority of direct consumers are the rich, is invariably passed on by them to the poor because of their control over the levers of production, services, and exchange. This is why it is called a regressive tax.
EVAT therefore leads to higher prices of all commodities affected directly or indirectly. A simple suspension or rescinding of the eVAT on oil and oil products will therefore ease pressures where it counts–on higher prices of all products related to or influenced by its price. Progressive income taxation can easily replace eVAT through cancellation of tax exemptions for many big businesses, banning of tax holidays, and pegging the tax on corporations to their real profits. If sacrifices have to be made, it should be made by those who are in position to give up more money.
Agrarian reform law extension is a desirable target. So are the various services enumerated for the poor. However, the inclusion of the pro-Catholic position for natural family planning as the whole of government policy on population diluted any progressive reform content of these proposals. It betrayed the GMA administration’s fear of her unpopularity and its obvious cultivation of the Catholic church hierarchy to prevent people power or prevent the translation of the economic crisis into a serious political crisis.
In sum, the well-choreographed SONA speech by president Macapagal-Arroyo is a well-calculated pitch for her continued political survival. Nothing more, nothing less.