Katipunero: a member of the Kataastaasang Kagalanggalangang Katipunan ng Pilipinas, a revolutionary group of the 1800s; a Filipino who continues to fight unjust and corrupt structures in society.

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Location: Loyola House of Studies, Quezon City, Philippines

Thursday, November 03, 2005

Credit Rating or Credibility Rating?

I am no economist. But based on the little I know and the little I've read about credit ratings, it seems that these ratings reflect an entity's creditworthiness based on its present financial condition and past credit history. In short, it is an entity's ability to settle its obligations in the appointed time.

The news today says that the US-based investment banks - Merill Lynch and Morgan Stanley & Co - have upgraded the credit standing of Philippine debt papers in reaction to the news about EVAT. Also, the value of our peso and stocks surged after 5 months of beating in anticipation of good things to come with the implementation of the EVAT. The financial community seems to be very optimistic about the EVAT.

Yes, things will seem to be better. Because the government is able to collect more revenues, they will have more funds to dispose. Unfortunately, another news item says that 70% of the EVAT will be used to service our outstanding debt and only 30% will be spent on infrastructure and social services. This means, that the additional tax we pay will not immediately redound to out benefit. It will take some time - years and even decades perhaps - before we feel the benefits of the additional taxes we pay.

The question is: have we ever felt the benefits of the taxes we pay? I have never met anyone who is happy to pay taxes? And the reason is that only a few really feel it is all worth it to pay taxes. The prevailing perception is that the money we pay go to the pockets of a few individuals. Corruption seems to be a badge proudly brandished by our public servants! Hence, with the implementation of the EVAT, the little consolation we deserve is the assurance that our money will be used for the benefit of the majority.

But how is this possible when the President herself has not cleared herself of the doubt cast on her honesty, integrity, and credibility by her "lapse in judgment" and by her family's "little" acts of indiscretion?

Maybe it is not the country's credit rating that should be improved; it must be someone's credibility rating.


Blogger Jeff Pioquinto,SJ said...


Saturday, December 24, 2005 11:31:00 PM  
Anonymous weyms said...

felices pascua tambien hermano! =)

Sunday, December 25, 2005 11:40:00 PM  

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