Tuesday, April 11, 2006

Political dividends from the expanded value added tax

PORK is pork is pork and is unhealthy to the Philippine economy. Why should it be otherwise?

If we take it from Press Secretary Ignacio Bunye, it’s perfectly alright to pad the proposed 2006 with pork barrel, a product of what he called “EVAT dividend.” He said the government collections from the “reformed” VAT must return to the people in terms of transparent, focused, and optimum spending… As far as I’m concerned, for as long as the process is transparent, and for as long as the benefits [accrue] to the people, then we don’t have any objections."

When has the pork barrel system in this country ever been “transparent” and “optimum”? Try looking at the budget and you will not see any item there explicitly tagged pork barrel, but every member of Congress will tell you without batting an eyelash that the bad political cholesterol is there, buried like needles in a giant haystack and only people like them know where to look. How could it be “optimum” when the basis for allocating those monies is necessarily political and therefore not in accordance with the country’s development plans?

What is alarming is that Bunye is presenting what is essentially a sleazy transaction between Malacañang and the Congress people as an “EVAT dividend.” This is a deception because, in the discussions about the EVAT law, they have been hammering on the people that the law was necessary for “fiscal consolidation.” Now they are using people’s money for their own political expediencies.

“The people’s interest is clearly being prejudiced by the dilly-dallying in the passage of the budget, which may continue to delay the benefits rightfully accruing to the community,” said Bunye. Thus, Malacañang seems to be saying that the additional P4.7 billion pork barrel is necessary to bribe legislators into approving the proposed and much-delayed 2006 budget. Is this the way members of Congress now behave? That they could do legislative work only if their mouths are greased?

But who dilly-dallied for months on end about the proposed budget? It’s Speaker Jose De Venecia, Malacañang’s hatchet man in the House of the Representatives. The government should have submitted the proposed 2006 budget in August, but Speaker de Venecia, apparently at the behest of Malacañang, sat on it for nearly eight months. The House only submitted that heavily-padded or pork-laden budget on the same day the Senate was to hold its last session before adjourning for a 5-week break.

It’s apparent, however, that Malacañang’s efforts to grease the proposed budget through the wheels of Congress is just a smokescreen for the grand design related to Charter change and the political survival of President Arroyo. In an interview with BusinessMirror, Sen. Manuel Villar, the Senate finance committee chief, noted that Malacañang never intended the budget to pass—the design being, so that they would automatically reenact the 2005 budget that would give them the maximum flexibility to use the money as “incentives” to members of Congress and local government executives to dance the Cha-cha. The reenacted budget therefore is one big sleazy pork barrel where every politician could dip his or her hands into, in order to ensure that they would all toe the line. By July, it’s expected that the Opposition will launch another impeachment initiative arising out of the “Hello Garci” controversy, among others, and the one big pork, the reenacted budget, will take care of them.

Meanwhile, as Malacañang and its minions squander the people’s money on Charter change, expect Bunye’s spin machine to continually hit the Senate about “dilly-dallying” on the budget. Given the questionable circumstances by which the budget was crafted, we could expect senators to look carefully into the details, thus forcing a stalemate. That will even trigger Bunye’s spin machine into high gear, blaming the senators for their intransigence. Worse, as Villar himself feared, some proadministration congressmen actually have the cheek to now say that Charter-change opponents should blame the Senate for causing a budget reenactment with their “delays,” thus providing the Executive elbow room to source funds for a Cha-cha plebiscite from the reenacted budget. If the senators would only approve the House-endorsed budget without thinking, goes the congressmen’s logic, then the 2005 budget won’t be reenacted and funds for the plebiscite cannot be easily sourced.

But all this is a virtual smoke-and-mirrors exercise for the real drama which is the Cha-cha and this administration’s political survival.

The greatest tragedy, besides having a politicized budget and having the appropriations process ruined, as Villar complained, is to hold hostage all that scarce resource for the most cynical of purposes. To think that the BIR is being flogged and threatened with lateral attrition to collect every additional peso from the expanded VAT.

It would take a genius of a taxman to explain well why more taxes must be collected so they can be given back as “EVAT dividends”—and why poor blokes like us must believe we can substantially get this back if they pass through our congressmen.


Bernardo F. Ronquillo said...

Hello, Dave! I am truly impressed with your blogs and can now understand your urging for me to update my own blog. I will do so but for now I have posted there a post from someone I look up to that expresses my take on the Da Vinci Code and the Judas Gospel.
This is in response to Karl Garcia's request at Philippine Commentary of DJB.

I will update my site but it will never appoximate what you have here. God bless!

Talking about the EVAT, as a senior citizen, it affects me this way:
Everytime I buy my favorite Super Supreme Pizza that cost around 230 pesos PIzza Hut adds the 12% evat and then gives me the 20% senior citizen discount, leaving me in effect only an 8% discount. Now, I never deny my age when buying anything.

Dave Llorito said...

hello mr ronquillo: thanks for this comment. indeed, you need to update your blog; i could sense you have a lot to say about things you feel competent to say. i do read other people's blogs, particularly djb's. but ill visit yours also.

Bernardo F. Ronquillo said...

Thanks, Dave. I promise to update my site once a week. And I will visit yours like I do DJB. Fair warning though, sometimes my post will be in Filipino. I write better in our native tongue.

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