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July 2, 1942

Both public revenue and public expenses have decreased. Salaries have also been decreased by 50% or 75%, and the number of government employees has also been reduced. The Legislature has been abolished. The Constabulary disbanded. The thirty five thousand public school teachers have been trimmed down to just nine hundred. And so with the employees of the other branches of the government. The budget approved by the Military Government for the period of January 23 to April 30 was ₱7,800,000. The previous budget for the same period was ₱25,000,000.

As to be expected, taxes have increased. Luxury items such as shoes, clothes, watches, utensils, and others are taxed 20 to 30%. By government decree, the rate of house rental was slashed by half, but real property tax has remained at its usual rate. Delinquents are being threatened with confiscation. Certainly, only the Japanese administrators know where the money goes, and how it is being disposed of.

Another rich source of revenue is the entered savings. Savings deductions of ten per cent or more are made depending on the amount of salary an individual receives.

Due to these deductions, the salary of Secretary Vargas, for example, which was ₱700.00 a month has been reduced to ₱390.00, more or less one-half of his former salary. The members of the Executive Commission who were receiving ₱600.00 will also receive ₱390.00. Provincial governors and bureau chiefs with their ₱400.00 will actually receive only ₱330.00.

But these are not the only deductions. There are others imposed on workers in private firms. As a consequence, no one in the Philippines today could earn more than ₱390.00 a month. The fabulous annual earnings of $100,000.00 or more of some American magnates have been reduced to four thousand six hundred and eighty.

If these employees were assured that the amount deducted from their salaries could be claimed when needed, they would have accepted the idea willingly. But everybody is asking, “Where does all the money go?”