TIBURCIO TANCINCO MEMORIAL INSTITUTE

OF SCIENCE AND TECHNOLOGY

Calbayog City

GRADUATE SCHOOL AND TRAINING ACADEMY

Subject: Budget Preparation and Fiscal Management

Professor: Dr. Socorro O. Bohol

Student: Donald M. Patimo, MPM

Date: September 20, 2008

REACTION PAPER FOR MAYOR MEL SENEN S. SARMIENTO’S LECTURE

Last September 6, 2008, the Honorable Calbayog City Mayor

and the Secretary General of the League of Cities of the

Philippines, Mel Senen S. Sarmiento, delivered his more than 1

hour lecture in our class in budget preparation and fiscal

management. He presented to the class different current

issues, techniques, and tips about fiscal management.

One of the current issues discussed was on the Senate

Bill 717 which aims to lower the amusement tax to 10 percent

from the present 30 percent. This bill may lower the tax

burden and improve the state of the local film industry.

However, Mayor Sarmiento stressed the fact that the approval

of this bill can make the people behind amusement industry

richer and more comfortable.

Mayor Sarmiento also presented the issues behind

politics. According to him, politicians made decisions and

projects only for “pogi points” even if there were problems on

fiscal matters. For example, congressmen want ports and cities

in their respective districts even if there is no market

available. In fact, there are 84 airports throughout the

country but only 34 of these are fully operational.

In addition, Mayor Sarmiento presented the problems of

the Calbayog City in terms of its education system. According

to him, the Calbayog City is one of the providers of quality

education in Region VIII but the participation rate is very

low. In order to solve this problem, the Calbayog City

government implemented the bus system project as patterned in

the City of San Fernando, Pampanga. The bus system project

offers free bus ride to school for pupils and students. This

project can be considered as a good investment for the future

educated citizens of the country.

Mayor Sarmiento emphasized the need for cost-benefit

analysis in project planning. Make sure that the cost of the

project must be justified through the benefits that could be

derived on it. Priorities must be also set in such a way that

the primary needs are taken into consideration. Moreover, it

is also helpful to consult and let the stakeholders

participate on budget preparation and other fiscal matters. In

addition, the Philippine bureaucracy must be governed by

managers and not by technicians because technicians are

inclined more on how to increase the productivity even if a

high cost is at stake.

Personally, I really appreciate the fiscal management

pointers that were shared to the class by Mayor Sarmiento. In

fact, those pointers were not only theoretically true but also

applicable in practice for effective fiscal management. I

realized that it is really important to scrutinize every item

in the budget and find out if it's really worthwhile for

enhanced governance, more investment confidence, broader

infrastructure, and better social programs to stop crimes,

create jobs, and educate the children of the country. In the

process, I could positively say that we can strike out the

political instability and gather momentum for political

change. Fiscal management must involve everyone and cooperation

is very vital for its success.

In this connection, I want to quote from the tough

message of President Arroyo against her critics in the

imposition of the 12 percent VAT on oil products. "They will

hold this nation hostage to a future devoid of hope but

putting petty politics ahead of the national good. We're all

in these together. We must share the pain and share the gain.

I said so for the beginning of my term, hear me clearly if we

don't make the tough choices today there will be no choices

for us tomorrow."