Proceedings of the first Independence congress : held in the city of Manila, Philippine islands, February 22-26, 1930 / Published under the direction of Dean maximo M. Kalaw, executive secretary, University of the Philippines.

ECONOMIC SECTION

51

Mr. Hammond estimated that taxation in 1926 averaged
10.75 per cent of the national income. Of this average 7.28
per cent accrued to the Central Government. In 1928, these
percentages were 11.6 per cent and 7.6 per cent, respectively.
We shall take Mr. Hammond's smaller average, as we assume
conditions adverse to the ordinary march of business. Applying that average of 7.28 per cent to the estimated national
income, we find that under the circumstances assumed by us,
the revenue of the Insular Government will be as follows:
Revenue from taxation......... P52,000,000
Incidental revenues and other income 16,000,000
Total................... P68,000,000
This income shown by a conservative estimate, compared
with the average income of the last six years, which is
P80,000,000, shows a reduction of P12,000,000. Practically
the same result will be obtained by making a more detailed
analysis of the several sources of income in the same conservative
spirit.
Considering the business depression, supposed to prevail at
the time, it would not be advisable to create new taxes until
the economic condition of the country should become more
stable and we should have entered fully upon a period of
progressive development.
The disbursements would have to be adjusted to the available revenues, and in order to counteract the decrease of the
latter and to provide for some of the more indispensable obligations of the new Republic, such as the nucleus of an army
and the diplomatic and consular service, the construction of
new public works projects would have to be suspended for some.ime and, perhaps, salaries would have to be reduced in a
reasonable proportion (which would be in consonance with
the assumed general state of economic depression and probable
decreased cost of living), not very necessary services would have
to be eliminated, and other economies would have to be introduced. The circumstances surrounding our Government
and the experience we have had in other crises which our fiscal
system had to undergo in the past are an assurance that our