Recently in the stock market —regarded as the mirror of the economy—the motorbiking Duterte Harley gave a speech that he peppered with typical invectives.
It was another of his impromptu addresses, as the President tossed aside the written speech, prepared diligently for him, I heard, by the Department of Finance.
By the way, he was supposed to ring the closing bell for trading at the Philippine Stock Exchange on that day, but he was late.
The prepared speech in all likelihood dealt with some vital economic trends, complete with graphs and statistics, some facts and plans and schemes under his administration.
Instead he gave the audience, a rather expectant crowd of fund managers and investment analysts, his usual spiel on corruption, together with threats of immediate dismissal of his appointees.
You know—the now famous just a “whiff” of corruption!
Perhaps the President wanted to reserve the material on economic performance for his second Sona on July 23, since he also intended to submit to Congress on the same day his 2018 budget, a whopping P3.8 trillion.
His guys in the Cabinet crowed that, for the first time in history, the President would present the budget to Congress right on Sona day. Meaning, some six months in advance.
And the 2018 budget would also be the first one fully and exclusively prepared by this administration. And it already drew high hopes in business. And it even inspired higher forecasts on our economic growth rates.
The budget allotted some P1 trillion for new infra projects, which the administration claimed to be shovel ready—not just drawings in powerpoint presentations—promising that construction would go on 24/7 nonstop.
The 2018 budget indeed set aside some 25 percent for infrastructure and capital outlay, which never even hit 10 percent in the past years.
It could be the most glossy budget ever, but Duterte Harley would still have to sell it to those people who happened to be his “allies” in Congress.
The budget after all would rely on one and only one factor: the tax reform package.
From what I gathered, the package targeted some P200 billion in “net” revenue in its first year, or P360 billion in new revenue, minus the P160 billion that the government would lose by lowering income taxes.
Guess what—under the version passed by the House of Representatives, the net revenue in the first year would only be less than P100 billion.
The House managed to mangle the proposed tax rates on vehicles, for instance, thanks in part to the intense lobby from the so-called car “manufacturing” industry that, for several decades now, sold here mostly imported cars!
From a target of P68 billion in the first year in the original package, the new rates on cars would yield P24 billion in the House version.
It was really a much more watered-down version than what the administration cared to tell the public and, perhaps, analysts and fund managers.
Duterte Harley loved to talk about how he hated corruption, how he wanted to eradicate this pain in the public neck under his administration.
But in his recent tirades in the PSE speech, for instance, he could only threaten to fire his appointees.
Did it mean that he could not lift a finger against his “allies” in the House?
Early this year, when a huge company was desperate to renew its franchise in Congress, somebody in the House was said to have demanded for P500 million in bribe for himself.
To top it all, the House wanted the companies doing the infra projects of the administration to get the expensive congressional franchises, too.
Some in the House also would want to scrap all existing franchises, so that their holders would have to get them from Congress anew.
Just what would Duterte Harley do with his “allies” that were not his “appointees” should be an interesting topic in the next Sona.