Category: aquino admin

spaced out phnoy

asked at the APEC ceo summit what the aquino admin is doing to address the high cost of electricity in the philippines, the prez waxed euphoric about alternative sources:

There are substantial gas deposits—so enormous that they “dwarf” the Malampaya oil fields off Palawan—in disputed territories in the West Philippine Sea (South China Sea), President Benigno Aquino III said at the business leaders conference of the Asia-Pacific Economic Cooperation (Apec) forum. And by next year, the President said, a US firm would start operations in the gas-rich territory. 

which should tell us that he’s really doing nothing about the high cost of electricity hereabouts, except dreaming that china would stand aside while the u.s. starts operations in the spratlys that would give us indigenous sources of power.  fat chance.

ninez cacho olivares’ take on it, Spaced out at Apec,  makes me wonder what the prez might be smoking these days.  or maybe it’s just the erehwon vibes of the “house of dreams”.

let gma go

of course i want to see gma paying for her crimes, but i want her hale and hearty and up to the ordeal when she faces the sandiganbayan, not weak and ailing, braced and harnessed, which would remind of a thin and pale ninoy aquino being forced to attend military court hearings during his hunger strike. i don’t know that that would help the case against her any, might even turn her into a martyr, how smart is that.

so maybe she won’t come back right away, but she will eventually (they all do), maybe to a friendly new admin in 2016.  meanwhile, it’s up to the aquino admin to build a case that will stand, when the time comes.

PEACe bond-holders on warpath

when i first heard that the interest earned by Peace bond-holders’ would be taxed 20% by the BIR, contrary to the tax-exempt promise 10 years ago, my reaction was, ha?  why the bondholders?  why not CODE-NGO whose scheme / scam it was and who made Php 1.8 billion in the process for its povertyalleviationefforts kuno?

the latest from the BIR is that CODE-NGO is liable, too, but surely only for 20% also of the 1.8B it raked in as rent, uh, commission, which is about 360M, which is peanuts compared to taxing the almost 25B earned in total by bondholders, 20% of which is a whopping 5B that the aquino administration could use (or hoard for the 2013 elections?).

on this i sympathize with the business community, the bondholders, who must be mad as hell.  as mad as TonGuE-tWisTeD (of the long-dormant blog Tongue In, Anew), whose unexpurgated rants in comments to ellen tordesillas‘s updates re the PEACe bonds i reproduce here:

TonGuE-tWisTeD – October 18, 2011 10:31 am
Sino’ng gago pa ang aasahan nilang mag-iinvest sa financial instruments na ini-isyu ng gobyerno kung bebentahan ka na wala raw tax, tapos kung kelan mo kokolektahin sa maturity date e meron ka nang tax?

TonGuE-tWisTeD – October 18, 2011 10:43 am
Nararamdaman ba nila pulso ng namumuhunan?

Puta, magnenegosyo ka, pag sinuwerte ka, tutubo ka ng 4-7% NIBT para lang wag mawalan ng trabaho yung mga empleyado mo, pagkakataon mo’ng kumita ng konting dagdag sa pondo’ng inilalako ng bangko, tapos ita-tax ka ng 20% na malinaw na sila mismo nagsabing walang tax.

Tangina, ipon ng ipon ng pondo, buwis ng buwis, hindi naman ginagastos. Ayan, walang trabaho, walang negosyo, walang pag-unlad (growth). Tapos parurusahan yung mga nag-iinvest? Pinagtatawanan na lang sila ng mga bangkero.

Handa ba silang makipag-head on collision sa mga bangko?

Bakit di pa pagsisipain yang mga nakaupo diyan sa Finance? Alam ba nilang magpatakbo ng kumpanya? Lalo na ng isang gobyerno?

TonGuE-tWisTeD – October 18, 2011 10:57 am
Pasensya na medyo bastos tubo ng dila ko. Sa kaswapangan nila, ang nagdudusa yung biktima, yung mga salarin nakangiti pa.

Hindi biro ang kinita nila Red Mayo at Bobby Guevarra na P400M yata para sa pagporma at pagluto nitong letseng PEACe Bonds na ito. Isama na sila Yuchengco at Camacho/Songco pati sila Dinky at Deles sa bilyun-bilyong naraket nila.

Tapos ang kakarga ng kagaguhan ng BIR yung mga inosenteng bangko at mga namili ng Bonds?

Ang tingin dito ng mga negosyante, isang malaking con-job perpetrated by government itself against the country’s banking system and the investing public.

Stupid, stupid, stupid.

TonGuE-tWisTeD – October 18, 2011 11:34 am
Ang pinanghahawakan dito ni Kim Henares e yung desisyon ng BIR Commissioner nung 2004 na subject daw ito sa final tax.

Kaya ang kanyang bagong ruling, kung bumili ka matapos ang 2004, sabit ka na sa tax.

Ha? At yung bumili at nagbenta nung 2001 ay libre? Yung original na kriminal libre, yung biktima, may parusa. Nasaan ang katarungan diyan?

TonGuE-tWisTeD – October 18, 2011 11:42 am
Ano’ng ginagawa ni Tetangco para proteksyunan ang mga bangko at mga kliyente nila? BSP Governor na siya panahon pa ni Putot, ngayon ilalaglag pa niya ang mga bangko?

Bakit natulog siya sa pansitan habang ang mga pobreng gustong kumita ng konti diyan, di niya ipinagtanggol noon pa palang 2004 merong desisyon ang BIR?

Dalawang bangko ang nakinabang diyan sa PEACe Bonds, BPI at RCBC. Walo naman ang umaangal ngayon sa Supreme Court na highway robbery ito. Ilan naman kayang mga ginago ang napagbentahan ng mga bangkong ito?

Letseng bansa talaga ito, sino pa kaya gustong magnegosyo dito?

and when the supreme court ordered a TRO on the 20% peace bond tax:

TonGuE-tWisTeD – October 18, 2011 11:45 pm
I knew it would come to this. The complaining banks and their clients would definitely fight this to its bitter end. How long it will take? No one knows, but the 20% tax will still not be paid until this is resolved by (oh, well) THIS Supreme Court! The 20% meanwhile is held in escrow.

The irreparable damage this will cause the country’s image and reputation as a stable and predictable business destination further erodes the much-needed investor confidence, to say the least, and these bunglings will not help alleviate the sad state of the slow trickle of new foreign investments.

We have been overtaken by Vietnam, but hey, Cambodia’s latest numbers suggest they are out to threaten us soon. For all we care, and at the rate we’re going, we’re probably headed towards the tail end of ASEAN in a decade. I won’t be surprised the military junta-led Myanmar/Burma will clobber us, too and we’ll be sending our women as DHs to Rangoon!

Dammit, jail Arroyo, Yuchengco, CODE-NGO we don’t care who else. But puh-leeze, fuckin leave us businessmen alone!

and in response to another commenter saying the BIR should indeed tax everyone who made money out of the peace bonds:

TonGuE-tWisTeD – October 20, 2011 10:45 am
But that is not the case, CODE-NGO/RCBC will go scot-free (refer to the origin of “scot-free” and you find the pun there) because BIR will still honor the tax-free promise it made thru Comm. Bañez in 2001 BUT will not apply to buyers of the Bond after 2004 – when a new BIR directive said the Bonds are NOT tax free. If you bought the “sweetened” Bonds after 2004, sorry na lang daw.

Wow, meron nang fraudulent flavor – tapos sorry lang? The BIR afterwards kept its silence, so did BTr, Bangko Sentral, the traders. All these times, innocent final bondholders were made to believe the bonds were still tax-free up to maturity. Until Henares announced it on Oct. 17.

This is how you run a mafia syndicate. Not a country’s financial institutions.

TonGuE-tWisTeD – October 20, 2011 11:20 am
… Bañez issued 3 BIR directives authorizing the tax-free feature of the PEACe Bonds.

Relaxing taxes as a come-on is practiced in all countries that wish to bring in fresh money from investors, especially when competing for big-ticket projects. That is why we have Export Processing Zones, tax holidays and tax perks are major considerations for new enterprises willing to locate in EPZAs, at least make them survive in the initial stages of production in exchange for future government revenues and much-needed local employment.

TonGuE-tWisTeD – October 20, 2011 12:40 pm
…the 20% that will be held in escrow is just the “witholding tax” portion.

What does that mean? The money will be paid to the banks in full (P35B) by the government. But what is unique in this SC order is that the Bond-trading banks themselves, not a third-party escrow company, will handle the trust accounts amounting to about P4.9B. If the case takes ten years, the banks will have made the same money they were supposed to have “lost”. “Quits” na lang sila. They get the chance to break-even even if the SC decides, after TEN YEARS, that the deal is subject to tax.

The tax is therefore borne fully by the final buyers of the zeroes.

What are the other implications?

It is not only a 20% final tax that will be charged the buyers/holders. 20% is witheld as a PORTION ONLY of the full final tax that will have to be paid. In amounts larger than P1M, the tax due is about one-third or about 33%. Assuming that government collects the full tax, it is therefore not only P4.9B but a whopping P8.1B (one-third of the P24.3B PEACe Bond earnings) that will be a windfall to the BIR coffers.

People will think they do not have anything to lose because the money that was supposed to go to the “greedy” banks and businessmen is back to government. It looks like it but not so.

I agree with the analysts that this deal weighed down on the macro-economic scale as it affects revenues, debts, and investor confidence. Anything that impacts these would eventually be felt down the economic food chain in terms of social services, jobs, prices, among others.

Still fresh from losing billions in the educational plans that insurers blame on Cory’s changing the rules on tuition control, the pre-need industry now faces a similar situation under Cory’s son, those who invested on the zeroes to recoup some of the loses in the 80s are up for more surprises.

Those still hoping to send their children through college via educational plans are praying their fund managers be one of those who avoided buying the zeroes.

To shake off any perceived bias, I will not repeat here how it will impact on the predictability and stability of government rules as it affects foreign investments which small businessmen like me have been trumpeting since time immemorial. Ramos was the only president who heeded that call and unless future leaders are willing to make the same paradigm shift in exchange for a few billions today, forget long-lasting prosperity for the country. I am sad that I may not see that in my lifetime.

We will always be exporters of warm bodies to countries where business rules are stable, where government stimulates job generation, where laws are investment-friendly, and financial markets are more predictable and less prone to manipulations of the powerful few.

Forget the smallness of stability defined only by minimum wage; thinking beyond the next payroll and focusing on what’s in for the long haul is what will save this country that flaunts its college-educated English-speaking nannies, its gene pool of creative artisans and pound-for-pound champs, its savvy techies, accountants and engineers who are nothing but.

and here’s another question from an anonymous fb friend of ellen:

October 10, 2011 5:11 pm
One way of looking at the matter is to ask whether the 12.75% interest rate that government paid to CODE-NGO was “fair”? CODE-NGO claims the 10-yr (usual) Treasury note at the time was yielding 13.64%, so it seems that the government didn’t pay too high an interest rate. But if RCBC or some other entity was willing to buy the zero-coupon PEACe bonds for P1.448B more than CODE-NGO paid, then that lender was willing to lend to government at an interest rate BELOW 12.75%. Why was the government not able to borrow at that lower interest rate?

not surprisingly, the latest retail treasury bond offering of the aquino admin that had hoped to raise at least Php 250B raised only 110B “amid the confusion sowed by the government’s turnabout on the tax treatment of the controversial PEACe bonds.” maybe also because the interest rates are only half that of the peace bonds?

today the prez is reported to have met with finance sec cesar purisima and bir commissioner kim henares, as well as representatives of ngos that benefitted from the sale of the peace bonds.

“Yung P5-billion na tax na dapat makuha ng gobyerno, wala akong karapatan para i-waive. ‘Yung taxes imposed by Congress, ‘pag magbibigay ka ng exemptions o ia-amend, babawasan, dadagdagan – puro Kongreso po ‘yan. Kami taga-implement ng batas,” Aquino told reporters during the celebration of the 67th anniversary of the Leyte Gulf landing.

…“I think it is safer for us to implement the law the way we understand it rather than to ignore implementing the law and be guilty of not fulfilling our obligations and duties,” Aquino added.

safer daw, hello.  it may be safer, but is it right?  and safer for whom?  read the Freedom from Debt Coalition‘s paper PEACe Bonds: Unresolved, Ten Years On.

Truth is, there are more questions that need to be asked such as whether CODE-NGO paid taxes for its PhP1.8B earnings, or, at least, for the PhP140M it retained. However, this will require CODE-NGO to open all its financial statements, which we believe would be better answered by CODE-NGO on its own accord.

To give CODE-NGO its due, it did try to present its side about the transaction. It argued that the deal was “legal,” “transparent” and “pro-poor.” However, based on the facts mentioned, one cannot help but conclude that the transaction carries features of cronyism and influence-peddling in the name of the poor. Not even the argument of good intention is enough to wipe away the stain that was left by this transaction or recover the diminished public’s trust in civil society organizations.

Worse, the deal contributed to the indebtedness of the Filipino people. This 16th of October, the government is scheduled to pay PhP35 billion in interests for the matured PhP10 billion bonds. This will impact greatly on the country’s coffers especially as the government tries to fund important social services even as it is criticized for not spending enough.

This issue presents a setback in both the state’s and civil society’s efforts to establish transparency, accountability and honesty in our political culture and structures. Hence, in its campaign to make the previous administration accountable for its colossal crimes, the Aquino government must put just closure to this issue by seeking the truth and making accountable those who may have erred. This is especially important, as some of the personalities implicated in this transaction are now part of the Aquino government. If the broad civil society community is willing to open a sad chapter of its history and re-open old wounds to rectify wrongdoings, then all the more that the Aquino government should do its part to facilitate this process.

the prez should stop salivating over the Php 5B and settle for taxing only CODE-NGO and whoever else were complicit in that devious pro-poor kuno scheme.  and really, someone should be brought to court for violating laws against rigged biddings and influence peddling.

 

lying about cha-cha

here we go again. the prez says cha-cha is not a priority but somehow that does not inspire confidence.  not with the leadership of the upper and lower houses of congress suddenly seeing eye to eye on a constituent assembly that would vote separately on amendments, something they couldn’t agree on in gma’s term.  what happened since then?  major major lobbying no doubt by the imf, world bank, and adb, says herman tiu laurel, and i believe him. read The Chacha-FDI myth and this:

INVESTMENTS AND CHA-CHA
Herman Tiu Laurel

…The claim of Senate President Juan Ponce-Enrile and House Speaker Feliciano Belmonte that Charter change (Cha-cha) to open up ownership of Philippine lands, alongside other national patrimonies, plus media and other sectors to foreign capital will bring in FDIs is a big fat lie. Foreign land speculators in cahoots with local land grabbers/ bankers will be the only ones who will reap the bonanza while ordinary Filipinos will be priced out of owning their own land. By then, transnationals would have gobbled up majority of the nation’s natural wealth and public franchises.

The real alternative is retention of protection for Filipinos and nationalization of large scale industries for all to benefit.

Off the Mark

Can we trust the likes of Enrile, who, aside from being a confirmed dagdag-bawas beneficiary in the 1995 senatorial elections, admitted in 1986 to his faked assassination in 1971 to justify the declaration of Martial Law? Can we trust Belmonte, who was instrumental in passing the Electric Power Industry Reform Act (EPIRA) in 2001 through the lame duck Congress after Edsa Dos by distributing P500,000 to each congressman from the oligarch-beneficiaries of the law, which gave us the “highest power rates” in Asia for the past 10 years? Can we even trust Misamis Occidental Rep. Loreto Leo Ocampos, chair of the House committee on constitutional reforms, or his aptitude for math when he declared, “I think our FDIs will TRIPLE from the current $2 billion to $3 billion once these constitutional reforms are implemented…”? As the promised Cha-cha reforms are sure to be massively off the mark, they are, in turn, right on track with the desires of the IMF, World Bank and ADB that are egging for it.

In fact, the track record of “reforms” of the Philippine Congress the past 25 years doesn’t inspire confidence at all – which is why it is scary that they are brandishing the term again. Consider some of the key REFORM packages Congress had championed and passed into law since the Edsa I “People Power” government, beginning with the Comprehensive Tax REFORM Program (CTRP) that replaced the progressive income tax system with the regressive value added tax (VAT) that transferred the tax burden to the vast majority of middle and low income consumers.

Also, consider the trade REFORM laws passed in the early ‘90s that introduced liberalization, deregulation, and privatization – now casting a curse on the Philippine economy, spurring uncontrolled fuel and power rate hikes, debilitating peso fluctuations, and privatizations that socialize the debts while privatizing the profits.

Oh, lest we forget: The EPIRA wouldn’t be called the Electric Power Industry REFORM Act for nothing – for it simply raised our electricity rates to the highest in Asia, if not the world!

[Power rates in Vietnam are $0.05/ kWh; Thailand, $ 0.15/kWh; and in the Philippines, from $0.21 to $0.25/kWh today.  However, ours will even get higher, especially when new rate hike petitions, including renewable energy (RE) feed-in tariffs as well as the huge jump in the Universal Charge of the Power Sector Assets and Liabilities Management (PSALM) Corp., are approved. This is the REAL reason Philippine foreign direct investments (FDIs) are at a dismal $1.7 billion compared with Thailand’s $6 billion and Vietnam’s $8 billion.]

Net Invasion

This Cha-cha for FDI campaign has been massive – so massive and multi-media in fact that it has invaded the Net. I have had a few run-ins with its advocates who use as bogeyman, the “privileged, favored and protected, abusive and exploitative Filipino oligarchs” like the Lopezes, Cojuangcos, et al., who take advantage of the Constitution’s protectionist provisions to monopolize businesses and keep out foreign capital at the expense of free market competition. But is this so? Isn’t it a fact that in many of the oligarch-controlled companies such as PLDT, San Miguel, Petron, etc., foreign capitalists are the major partners of these local oligarchs or, in the case of PLDT, the ones who actually control these companies via majority voting shares?

A look at the Asean website’s “Foreign Equity Policies” section already gives us an overview of how certain of its members conduct themselves on this issue. In the Philippines, for instance, it says that “100 percent foreign equity ownership is allowed in all areas except those in the negative list under the Foreign Investment Act of 1991 as amended.”

As for Thailand, “The 1972 Alien Business Law grants foreigners permission to engage in certain business enterprises… only if more than 50 percent of the capital is owned by Thai Nationals. However, for BOI promoted companies, majority foreign ownership is permitted for projects that export not less than 50 percent of sales.”

Meanwhile, even as Vietnam’s foreign equity rule there appears liberal, where “100 percent foreign equity ownership is allowed” – and this is a phrase often cited by the likes of AntiPinoy.com to buttress their point – it appears to be more of a simplistic reading of its Law on Foreign Investments, Art. 4, Sec. 3, which, if we were to go by a May 2011 US State Department investment climate assessment, is nuanced as follows:

“There are ownership limitations… Foreign ownership cannot exceed 49 percent of listed companies and 30 percent of listed companies in the financial sector. A foreign bank is allowed to establish a 100-percent foreign owned bank in Vietnam but may only own up to 20 percent of a local commercial bank. Individual foreign investors are usually limited to 15-percent ownership, though a single foreign investor may increase ownership to 20 percent through a strategic alliance with a local partner.”

Difficult Challenge

Let’s just keep in mind that no country will ever give away protection of its interests and concerns, much less, the privileges of its own people. Local PR pushers for this Cha-cha for FDI are pulling the wool over many Filipinos’ eyes. What everyone should realize is that a major factor in any country’s investment climate is the cost of power or electricity. Even our detractor, Bangko Sentral ng Pilipinas Deputy Gov. Diwa Guinigundo, had to admit in a private NEDA briefing that “the most difficult challenge for the national government and the private sector (is) addressing the high cost of power in the country.”

However, Guinigundo, along with our senators and congressmen, don’t seem to have the balls to say this out loud in national media: That the exorbitant, predatory, and murderous power rates are the real reason FDIs shy away from our country. Instead, most of them lie, steal, and sell our nation out.

Filipinos should thus act now to stop their national swindles through Cha-cha. Write to newspapers; text radio programs; and send hate mails to those blasted legislative proponents. LET’S DEMAND OUR BIRTHRIGHT FOR PROTECTION IN OUR OWN LAND AS FILIPINOS AND TAXPAYING CITIZENS!