esposo’s “revolutionary situation” #VAT

william m. esposo, philstar columnist and true-blue, i mean, -yellow, aquino supporter, is as annoyed about #noynoying as leftist (pa ba? more like red-turned-yellow) joel rocamora.  and esposo is now calling the youth activists (who coined “noynoying”) “ANAYchists,” as in termites, who undermine stability and peddle unrealistic solutions to the oil price hikes.

i think it’s a poor metaphor.  having to deal with termites where i live, i know they only feed on wood, and they are destructive but can be held at bay.

in fact, there’s nothing wooden about government (well, except the forests under the care of the state, which are mostly gone, converted into cash by a different exclusive breed of anay); and there’s nothing destructive about these youth activists who are really more like askal watchdogs whose barks are worse than their bites.  and it’s not as if, historically, government has not vigilantly, and successfully, held them at bay, as rocamora would know.

of course, the noise that squealing yelping high-alert watchdogs make when faced with suspicious smells and sounds (lalo na when something’s rotten sa kapaligiran) can be most irritating and can keep you awake at night, especially if you or your boss is in charge for another four years.  you must now realize that you guys promised too much, and so “noynoying” has gained traction.  kung walang corrupt, walang mahirap, you said, a promise to address corruption and poverty.  little did we not know that the fulfillment of the promise would hinge on chief justice corona’s and gloria arroyo’s persecution, i mean, prosecution, and conviction.  meanwhile the corruption everywhere else continues, nothing has changed, except maybe it’s gotten worse.

“noynoying” is a clever critique of the president’s do-nothing approach to the spiralling costs of everyday essentials due to the spiralling costs of oil products and electricity.  true, the president is in no position to influence the global ups and downs in the price of oil.  however, he IS in a position to undo gloria arroyo’s VAT on oil products and electricity, which, until gloria, were VAT-exempt, like food and other essentials.  and he IS in a position to ask congress as well to revisit and amend, nay, railroad amendments to, EPIRA, particularly with regard to provisions that allow power companies to pass on all kinds of costs to consumers.

instead, the aquino admin is on damage-control mode, but the defense is weak, we’ve heard it all before, ito na rin ang mga excuse ni gma noon.  but maybe esposo, and his president’s men, have forgotten, or weren’t paying attention:

To scrap the oil deregulation law is to subsidize the petrol needs of Filipinos. That’s something we cannot afford to do and to do it is to upset the fiscal position that we now have that’s generating rating upgrades and attracting foreign investors. To remove or reduce the VAT on petrol will result in the same worse scenario of wreaking havoc on our fiscal position. The ANAYchists simply want to provoke a revolutionary situation.

esposo might not be wrong about “a revolutionary situation,” bully for the youth activists.     but he is wrong about everything else.  “subsidize”?  we have always paid, we will continue to pay, hangga’t kaya — it’s not as if we have a choice — but please, without all the patong, that is, taxes upon taxes.  and what foreign investors?  given our high power rates mismo (no thanks to EPIRA and VAT) and poor infrastructure, among many other unattractive features, all we ever attract is “hot money” (pang-stockmarket lang) that goes out as quickly as it comes in, the foreigners and local elite laughing all the way to their banks, without any real positive effect on the economy on the ground.

as for credit rating upgrades — highly desired because it allows government to borrow more and more, again and again, from foreign creditors, borrowing and spending, beyond our means, and nothing much of significance to show for it except a ballooning foreign debt.  upgraded credit ratings are based on enhanced capacity to repay loans, that is, based on increased revenues.  yeah, right, at our expense, an imposition, no less, of an obscene 12% VAT on essential petroleum products and electricity (hitherto VAT-exempt, it bears repeating), on top of other taxes (it bears repeating).

this email addendum to When VAT on oil is “crooked road” (thanks, rudy coronel) explains further why arroyo then was, and aquino now is, loathe to give up VAT on oil.  after all, it’s like, you know, a la juan tamad: without having to lift a finger, cash comes rolling in, never mind where it’s coming from.

Petroleum products are perhaps the single biggest source of taxation in this country. This country consumes 300,000 barrels of oil per day. There are 159 liters to a barrel. Local oil prices are now about P60.00 per liter for premium gasoline; P45.00 per liter for diesel. While there are other oil grades in the marketplace, gasoline and diesel together comprise the biggest slice of the whole cake. From this alone, you can imagine how much Vat oil products contribute to the country’s coffers. Add to that the excise tax (about P4.50 per liter for gasoline, of course lower for other grades) and the customs duties due on imported crude and finished oils. This is the reason why P-Noy, and even GMA in her time, will be, and had always been, reluctant to give up the Vat on oil. The thing is we have the highest Vat in the region, and yet I’m sure, were it not for the continuing rise in the global prices of oil, we might wake up one day with another proposal to increase the Vat rate. Vat, kasi, is one of the easiest taxes to collect. But Vat, you will be surprised, do not exist in the US, where tax collection is relatively more efficient. Vat is common whenever and wherever there are problems in tax collection, like in these parts. The irony is, year in and year out, we are not unlike a golf ball stuck in a sand-trap, unable to rise up from our budget deficits. My take on this is, throughout our history we have tried, but vainly, to solve our budget woes by imposing newer and newer taxes. At least for once, why can’t we try another strategy: trim down our expenses and manage our budget more responsibly?

here’s an elected congressman who’s talking sense, too, no less than san juan rep jv ejercito, more power to him:

At the House of Representatives, San Juan Representative Joseph Victor Ejercito has filed House Bill No. 6014 exempting petroleum products from the 12-percent VAT to provide immediate relief to motorists.

Ejercito, chairman of the House committee on Metro Manila development, said classifying petroleum among the VAT-exempt products was a more efficient and effective alternative to the government’s subsidy program, the Pantawid Pasada Program, which gives public transport owners discounts on their fuel purchases.

“Neither the bus, jeepney and taxi operators nor drivers agrees it is the solution to the skyrocketing cost of gasoline, diesel, kerosene and LPG. It does not benefit the people at all,” he said.

On concerns of the government that removing the VAT would reduce tax collections, Ejercito claimed that the government’s share from the

P45-billion annual income of Philippine Amusement and Gaming Corp. (Pagcor), P31-billion income of Philippine Charity Sweepstakes Office (PCSO) and P43-billion royalties from the Malampaya gas project would be “sufficient to replenish the lost revenues.”

Ejercito noted that the VAT was imposed in 2004 to boost revenues and lower the government’s dependence on borrowings that were pegged at 78.2 percent debt to the gross domestic product ratio. With the debt-to-GDP ratio falling to 55.4 percent, Ejercito said it was time to reconsider the VAT as it has already served its purpose.

so, again.  it is not true that gov’t is helpless on rising oil prices.  the president can drop VAT, which would bring down prices all around, give some measure of relief all around.  yes, this would reduce government’s resources but, like coronel and jv say, there are other sources, and there are other ways of raising revenue.

i would add: improved tax collections from the rich, the moneyed classes who are masters at, and get away with, undervaluing their assets and understating their incomes (as can be sensed from the corona trial); a rational debt policy — let’s not rush to pay obligations in advance just so we can borrow again — the nation is lubog na sa utang as it is.  and what about the pork barrel, and the presidential coffers — it’s time our government officials stopped enriching themselves while-in/through-their offices, augmenting their salaries with huge allowances and other emoluments, as though the money weren’t urgently needed elsewhere.

”yun nga lang, the president would have to rise to the challenge, demonstrate some creativity, perspicacity, and balls, so to speak.  and yes, william esposo, it would amount to a revolutionary situation of sorts, one that the masses would happily support, for sure, as in people power, remember?  revolution can be fun in the philippines.

 

EPIRA, epic fail

i’ve long been wondering about EPIRA or the Electric Power Industry Reform Act of 2001 that was enacted by congress supposedly to cut high power costs by privatizing the mismanaged and debt-ridden napocor.  obviously EPIRA hasn’t worked, doesn’t work.  read this from philstar‘s marichu villanueva, Thanks, P-Noy, for saying no to emergency powers and an appeal that he revisit EPIRA in the face of impending increases  in power rates.

The other day it was reported the Energy Regulatory Commission (ERC) has approved on March 26 the pending rate adjustment petitions by Napocor and the PSALM to enable them to recover costs incurred from 2007 to 2010. Based on the ERC decision, electricity rates for Luzon are up by 69.04 centavos per kilowatt-hour (kwh); Visayas, 60.60 centavos per kwh; and Mindanao, 4.42 centavos per kwh effective this May.

Speaking of ERC, the EPIRA authorized it to determine the universal charge. This gave distribution utilities like Meralco and Napocor the right to pass on the burden of paying for stranded costs under the IPP contracts to consumers.

Thus, more than a decade after its passage into law, EPIRA is obviously no cure-all to the problems of stable and affordable supply of electric power in our country. That is why there have been persistent calls to amend the EPIRA to correct the flaws of this law to really achieve its mandate to bring down the cost of electricity in our country, which is the highest in this part of the world.

Congress giving him emergency powers will not solve it. Let’s face it. Legislators will always try to suit their own selfish interests into the laws they craft.

indeed, there’s no counting on legislators to help us out here.  senator serge osmena‘s briefer on the mindanao power crisis simply sounds so complicit to me, as though everything’s as it should be in luzon and the visayas, as if spiralling costs to make power oligarchs happy, never mind the suffering middle-class and the masses, were not a form of corruption, too, and we’re not even talking VAT yet.  read this from tribune.  the history, the rumors of lagayan, the scam…

Serge’s Epira contradictions
Herman Tiu Laurel

The electricity spaghetti hit the ceiling fan last week, and the stench of the power oligarchs reeks all over the place. Now it’s not just electricity consumers charging the oligarchs and their captive government officials with conspiracy; local officials, such as North Cotabato Gov. Emilou Taliño-Mendoza and General Santos City Mayor Darlene Antonino-Custodio, are saying that the Mindanao power crisis is “intentional.” Even Sen. Koko Pimentel openly agrees with Mindanao Development Authority (MinDA) Chairman Lualhati Antonino’s assertion that the “artificial shortage” is the National Grid Corp. of the Philippines’ (NGCP) means to “have the Agus-Pulangi Power Plant privatized.”

The NGCP is by no means the main culprit. It goes way up to the oligarchy and the international corporatist mafia behind it. We must remember that the NGCP Frankenstein was sewn together by Fidel Ramos’ Monte Oro Corp., with the Carlyle Group catalyzing the entry of the State Grid Corp. of China, together with the Sy Group, to become the NGCP.

Monstrous as it became, the NGCP Frankenstein is but the son. The mother Frankenstein is the Electric Power Industry Reform Act (Epira), which, in its time, was sewn together by the International Monetary Fund (IMF), World Bank (WB), Asian Development Bank (ADB), the illegal Gloria Arroyo regime, the oligarchs and their Yellow “civil society,” together with the corrupt 12th Congress of Edsa II. They managed to use the thread of the ADB’s $900-million power sector loan and the IMF-WB’s $300-million rehabilitation loan release as conditions for the enactment of the Epira into law.

The local power oligarchs were also alleged to have contributed to a payola of P500,000 for every member of Congress under Speaker Sonny Belmonte, which emoluments were further spruced up by Gloria’s P10-million per congressman “O, Ilaw” project. And, like the current railroaded Corona “Articles of Impeachment,” it is doubtful that even half-a-dozen of the representatives or senators who signed the Epira even read it.

As for media, the oligarch-controlled “presstitute” (press-prostitute) merely suppressed the truth. Only a few, like this columnist and the Freedom from Debt Coalition (FDC), campaigned in the streets against it.

The argument for Epira was that the monopoly enjoyed by the government’s National Power Corp. (Napocor) was too big to be efficient and had to be broken up into smaller units. Fast forward to today and the chairman of the Senate energy committee, Serge Osmeña, himself a champion of the Epira, now argues for the expansion of the split-up units.

In his defense of Department of Energy (DoE) Secretary Rene Almendras’ disastrous handling of the Mindanao power crisis, Osmeña claims the Energy chief “is aware of economies of scale and that electricity would be cheaper for everyone if distributed over a bigger transmission grid than a smaller one…”

The shift in tone is obviously because much of the elite — a class to which Osmeña belongs — have already formed an oligopoly in the sector and are using their clout to blackmail the entire nation into swallowing the “highest power cost in Asia.”

Osmeña says, “The national reform policy on electricity… was to harness the finances and management talents of the private sector in ensuring that the country would be supplied in a timely manner with dependable, quality and reasonably priced power…” Really?

Independent power producers (IPP) are private utility companies established on the basis of state “sovereign guarantees” and/or securitization of captive consumers’ aggregate payments in a contract period. Here, securitization comes in “the form of financial instruments used to obtain funds from… investors… backed by amortizing cash flows.” These cash flows, in turn, are derived from the pockets of millions of electricity consumers.

Historically, securitization was done by the Republic of the Philippines to launch the Napocor; and as government did not shell out any money, only acting as an intermediary of the funds from power consumers, we can say that the power sector was never (repeat, NEVER) subsidized.

When the state’s power assets were still under Napocor control, the price of electricity in the Philippines was not only competitive but one of the lowest in Asia. Today, after Epira, power costs in this country have shot up way into the stratosphere.

In the case of Mindanao, we now see the IPPs blackmailing consumers, the way the privatized Aboitiz Group Power Barges 117 and 118 and the now Lopez-run Mt. Apo Geothermal are being used to force Mindanaoans into accepting 20-year, exorbitantly priced contracts, or else continue being denied much-needed electricity.

But wait. Isn’t price a reflection of these privateers’ much-vaunted “efficiency?” If so, aren’t they and other utilities like the Manila Electric Co. (Meralco) guilty of doing their jobs at a very high cost to the nation and, in fact, destroying its entire economy?

Therefore, given that these oligarchs are only “efficient” from the point of view of profit extraction, totally missing the mark of providing efficient and reliable electricity at the least cost to consumers, why should we accept any of this, in view of the fact that things have gone from bad to worse despite 90 percent of the power sector being privatized?

As if to further cover up the litany of lies that is the Epira, Osmeña raises another point, saying that “Napocor was bankrupt and that even if it sold all of its assets, it still could not cover its liabilities.”

Napocor was a very healthy and viable public corporation before Corazon Aquino, her Yellow gang, and her oligarch-patrons took over the reins of the Philippine Republic. They abolished the Ministry of Energy and placed its functions under the Office of the President to ensure an efficient dismantling of the nation’s energy development program. They established almost a dozen IPPs and cancelled half a dozen major energy projects (including the Bataan Nuclear Power Plant). All these led to a “Dark Age” under a Cory-appointed oligarch as Napocor head. What followed during the Ramos era were 43 more plundering IPP contracts that were to be the most massive bloodletting of Napocor’s resources to this day — via the $18-billion so-called stranded debts that Epira was supposed to have erased but never did. All these have transpired while the oligarchs have not paid $10 billion of what they owe government for these privatized assets.

The current Speaker, Sonny Belmonte, when pressed for a response to the crescendo of complaints from Mindanao lawmakers, said, “We have to investigate (the power crisis) to know what is going on.” Let’s see when the investigation will start and how far it will go (considering who the distribution source of the Epira payola in 2001 really is).

Still, on a slightly positive note, despite the elder Sen. Nene Pimentel’s signing of the Epira, we are hopeful that the younger Pimentel will take up the energy cause in the Upper Chamber this time. My only criticism is that he may have weakened his position when he stated, “If I need to personally beg to Senator Osmeña to hold the inquiry before the Holy Week break, I will have to.”

Why even beg, Koko? Your duty lies with the people and no one else.

 

When VAT on oil is “crooked road” #noynoying

Rudy L. Coronel

Let us please get real! The repeal of the Oil Deregulation Law will not cure our oil price woes. It will only throw us back to the bad old days when government required documents before approving every price increase proposal. Still, the oil prices increased—the only difference was that it took some time to take effect, simply because the government had first to evaluate the oil companies’ price-hike claims. In other words, it is not as much a regulated or a deregulated oil industry atmosphere as the relative volatility of the global prices of oil that causes our oil price woes today.

Methinks a comparatively more practical recourse would be to repeal the value-added tax law. Indeed, for every centavo increase in the local price of oil, the public unduly suffers, yet the government virtually rejoices because of the extra one-twelfth of a centavo automatically added to its coffers. Alas, there can’t be anything more ironic, or a road of governance more crooked, than that!

One recalls that when the VAT law was introduced, several basic consumer products and services were VAT-exempt, including food, medicine and petroleum. Truth is, government finds in the VAT system the perfect and easy solution to its tax collection inefficiencies. But here’s the rub: Its tax collection deficits continue to grow from year to year, so much so that medicine and petroleum have been delisted from VAT exemption. Worse, the tax rate which began at 10 percent is now 12 percent—in fact, the highest in the region. Alas, when can government learn to moderate its tax greed, which nonetheless has failed to eliminate its yearly tax collection shortfalls?

UP economics professor and former Budget Secretary Benjamin Diokno recommends a lowering of the VAT rate on oil from 12 percent to 10 percent. With due respect, I don’t think that’s enough! It would be probably fine if applied to all products, but definitely not with respect to petroleum products alone, which should rather be totally VAT-exempt. For two commonsensical reasons: First, petroleum products were originally (under the old tax code) exempt from VAT, and precisely because they were then already subject to excise tax. They still are today—a clear case of double taxation. Second, let us eliminate the tax collection bonanza that government automatically gets, while the public suffers, whenever oil prices go up. I must submit this is generally true for all commodities subject to VAT. But then, I seriously doubt that there is any article of commerce in our midst and times whose price behaves as wildly, uncontrollably and frequently as petroleum products do.

A zero-VAT on oil is, of course, going to be a big drain on the government’s revenues, given the volume of oil business this country has. But sheer business volumes are irrelevant here. Aren’t there, all told, more agricultural, marine, livestock and forest products in the market? And they are all VAT-exempt! Well, there are many ways to skin a cat. It is high time government learned to manage its finances more sensitively and less irresponsibly.

rudycoronel2004@yahoo.com

 

“twisted machismo” #azkals

HOW CRISTY RAMOS MAY HAVE HELPED THE AZKALS  

By Benjamin Pimentel

SAN FRANCISCO—The Azkals had a good week this week. After losing to North Korea, they came back to win against India 2-0.

But that’s not the only big story about the famous Philippine football team which has helped ignite interest in the sport in the country.

It’s international women’s month, and in an odd twist, the Azkals are marking the occasion by wrestling with allegations of sexual harassment and crude behavior toward women.

That’s certainly bad news.

The allegations were made by Cristy Ramos, former head of the Philippine Olympic Committee and a one-time national football player herself. (She also happens to be the daughter of former President Fidel Ramos.)

Ramos’s complaint was aimed mainly at players Angel Guirado and Lexton Moy. As reported in the Philippine Daily Inquirer, she also had strong words against team captain James Younghusband whom she accused of not doing enough to discipline his teammates.

“He didn’t do anything to his teammates,” Ramos was quoted as saying. “I hope he teaches his players to behave well.”

I first heard of Ramos from my cousin Butchie Impelido, the North America scout for the Malditas, as the Philippine women’s national team members are called.

He said Ramos didn’t like the name “malditas.” Essentially, he said, she thought it was demeaning to the Filipinas. But the name has stuck and the team has moved on.

I’ve been told by a source Ramos is a pretty controversial figure in Philippine football circles. Apparently, she rubs some people the wrong way. And she certainly has struck a nerve with her complaint, provoking some pretty harsh attacks on Twitter.

But I’ll say this: Anyone who takes the trouble to consider the way the country’s female athletes and women in general are portrayed deserves to be heard.

Anyone who would have the guts to publicly take on a team like the Azkals, who have become a group of male folk heroes in a macho-obsessed culture like ours deserves to be taken seriously.

Moy, one of the Azkals players she accused of behaving badly, put out a statement, calling Ramos’s complaint “a heartbreaking misunderstanding.”

“It deeply saddens me that such a misinterpretation can be so painstakingly blown out of proportion. I cannot wait for the truth to come out, as I am being wrongfully labeled, judged and criticized,” he said.

The suggestion is that Ramos made up or perhaps imagined the bad behavior she said she encountered, including Moy allegedly asking her about her bra size. One source familiar with the team said it had all been a misunderstanding. Well, hopefully, it is.

Especially since the recent controversy follows last year’s rape allegations against some team members. That too, was portrayed by this source as “a misunderstanding”—though the explanation wasn’t exactly reassuring—that the allegations shouldn’t be taken seriously because they were made by a woman some team members portrayed as a slut.

Which brings us back to the twisted machismo that may be at the heart of the Azkals’ image problem. There are some encouraging signs that the team’s leadership gets it.

“This issue has taught players how even a small thing can lead to a huge and painful misunderstanding, and they now want to take extra measures to avoid a similar future occurrence and see what we can do to help champion gender rights,” team manager Dan Palami was quoted as saying in the Philippine Star.

Government officials, led by Social Welfare Secretary Dinky Soliman, are focusing on the fact that the Azkals being composed of Filipinos who were raised in the U.S. and Europe. I don’t completely buy that argument.

Had Moy, who is from New York, behaved in the way he allegedly behaved in the United States, he would have been in deep trouble with his team and the American public. As my cousin Butchie, whose daughters played for a university in Illinois, noted, in the U.S. even college players must undergo forms of gender sensitivity courses.

Instead, I’d argue that this incident is about young men who enjoyed a meteoric rise in popularity and prominence in a culture in which male star athletes sometimes think they can pretty much get away with anything — and who badly needed to be reminded that all that fame and attention comes with responsibility.

I’m writing this as one of many overseas Filipinos who want the Azkals to succeed.

My own sons aren’t into football (or soccer as it’s called in the U.S.) But I know many Filipino soccer moms and dads who would certainly be proud to have their children play for the Philippines. My own cousin Butchie pushed hard to have two of his daughters play for the women’s national team.

But this isn’t just about overseas Filipinos, or Fil-foreigners as they are also called. At the end of the day, this is about helping the growth of Philippine football, about encouraging more young kids throughout the archipelago to become excited about the world’s most popular sport.

The Azkals have played an important role in this change. They deserve a lot of credit. The presence of foreign-born Pinoy players also helped expand our definition of Filipino at a time when our overseas communities are growing steadily.

But the Azkals must now take every effort to project pretty much a spotless public image. It’s their responsibility.

Cristy Ramos may not be the most popular figure in Philippine sports right now, but I really think she just gave the Azkals a much-needed jolt.

And this whole mess may turn out to be just a minor bump in the road.

Fifteen maybe 10 years from now, when the Philippines is an even more formidable force in football, when the sport has become even more popular in the archipelago thanks to the successes of the Azkals, we will hopefully remember this incident as just a sad footnote in the team’s storied history.