Facebook Instagram Linkedin X Youtube
Home Blog Page 12358

How competitive is the Philippine economy today?

(First of two parts)
In this time of uncertainty resulting from the unnecessary provocation of our Christian community, political killings, and rumors of martial law, its important that we put perspective on things by taking into consideration the true state of the economy.
How solid is the country’s economic fundamentals? How competitive is the Philippines as compared to our regional neighbors? Are our economic managers doing enough? Is there a place for the Philippines in the world of tomorrow? These are questions we need to answer as we plan forward in these turbulent times.
There are two ways in which to assess the fundamental strength of the economy.
The first is by comparing where it stands against our neighbors in various competitiveness indices. The second is by comparing historical data, or its state today as compared to three years ago, before President Duterte took over.
The piece dwells on the Philippine’s competitive position in the region.
THE PHILIPPINES’ REGIONAL POSITION
There are numerous indices that measure an economy’s efficiency and sophistication. However, four indices, taken collectively, give us a fairly good idea where the country stands.
The first is the World Economic Forum’s Global Competitive Report.
This report assesses how efficient an economy is in using the resources available to it, its level of productivity and its ability to sustain economic growth. In particular, it looks into the state of a country’s infrastructure, the strength of its government institutions, its macroeconomic conditions, the quality of its primary and higher education, the efficiency of its work force and the sophistication of its financial markets, among others.
In this index, the Philippines rose from a lowly 85th position in 2010 (out of 139 countries ranked) to a high of 47th position in 2015. It slipped to 56th position in 2017.
Within ASEAN, the Philippines is in the lower rung competitive nations, better only than Laos, Cambodia, and Myanmar.
The second index is International Finance Corp.’s Ease in Doing Business Report. This index provides a snapshot of how easy it is to do business in a country. It is the index often referred to by potential investors.
Among the indicators it measures are the number of hours and steps it takes to register a business, obtain government permits, install electricity, apply for credit, pay taxes, and trade across borders, among others.
The Philippines rose from 148th position in 2010 (out 183 countries evaluated), to 99th position in 2016. Again, it slipped to 113th position in 2017.
Within ASEAN, we are only better than Laos, Cambodia, and Myanmar again.
The third index is the Transparency International’s Corruption Perception Index. This index shows how corrupt a nation is perceived by the international community. It is also an indicator of good governance.
The Philippines was deemed the 134th least corrupt country out of a lot of 178 nations back in 2010. It improved to 85th position in 2014, but dropped to 111th position in 2017. Again, the country lags against its neighbors as it is perceived to be the 7th least corrupt in ASEAN.
Finally, the Global Innovation Index provides an assessment of the innovation performance of 128 countries. It takes into consideration a nation’s policies on innovation, its ability to innovate products and processes, the level of education of its populace, the state of its infrastructure and level of business sophistication, among others.
The Philippines ranks 73rd out of 128 nations, an improvement from 91st position in 2010. Again, we are in the lower rung of ASEAN.
GOVERNMENT EFFORTS TO IMPROVE COMPETITIVENESS
Institutions like the World Economic Forum and World Bank have been ranking the competitiveness of nations since the early 90s. However, the Philippines only began to pay attention to it in the mid 2000’s.
In 2006, former President Arroyo signed Executive Order 571 creating a Public-Private Task Force to improve Philippine competitiveness. Its contribution, however, was dismal.
In 2011, President Aquino gave more teeth to the task force by making it a legitimate government agency with powers to influence policies across various government agencies and local governments. It was named the National Competitiveness Council (NCC) and was chaired by the Secretary of Trade and Industry himself. Its co-chair was mandated to act as the moving force of the council, responsible for its strategic direction and day-to-day operations. Guillermo “Bill” Luz, a highly respected executive from the private sector, was tapped to lead the charge.
As the numbers show, the big leaps in our competitiveness standings took place between 2010 and 2015. This was due to the dramatic improvement in the economy’s fiscal position, Malacañang’s dedication to good governance and Luz’ numerous efficiency programs that made it easier to navigate the bureaucracy.
Luz playbook at the NCC is what any private sector executive would normally employ. He created working groups composed of representatives from the national government, the local government units, and the private sector to address inefficiencies in government processes. These groups sought to cut the steps and slash the hours needed to get things done. They also served as an advisory council to economic planners as they formulated policies that affected the economy, labor, infrastructure, and education. Each working group was given legitimacy by being recognized by Malacañang as an official government functionary.
So successful was Luz’ playbook that other countries in the region adapted it.
Why did our competitiveness standings decline in 2016 and 2017?
Two reasons. First, the change of administration disrupted the reforms.
With new personalities installed in various positions of the bureaucracy, both national and local, implementation of reforms took a back seat as the new executives acclimatized themselves to their positions.
Second, reforms of other nations, particularly those from ASEAN, accelerated in the last two years.
In global rankings, to stand still is to regress. The competition never sleeps and most rallied forward during this time while the Philippines remained static.
AN END OF AN ERA
Last May, President Duterte signed Republic Act 11032 which created the Anti-Red Tape Authority (ARTA), a new government agency directly under the purview of the President.
With the establishment of ARTA, the National Competitiveness Council has been dissolved and its moving force, Bill Luz, had bowed out of government service.
We cannot let this piece pass without extending our gratitude to Luz for his service to the nation. He dedicated seven years of his career serving the NCC and succeeded in a multitude of ways. His playbook shows his successors how to effectively institute reforms in an otherwise unwieldy and lethargic bureaucracy.
Bill will be moving on to other pursuits, among them is to focus on his work at the ASEAN Business Advisory Council and the Philippine Disaster Resilience Foundation. We wish him all the best.
ARTA will be structured in the same way the NCC was. It will be chaired by the Secretary of Trade and Industry and its Co-Chair will be a presidential appointee from the private sector. Let us hope the President appoints someone based on their credentials and body of work, and not on political favor. This position is critical to our future and we simply cannot afford to have a lightweight at the helm of ARTA.
MOVING FORWARD
ASEAN is progressing at lightning speed in almost all competitive indices. So dynamic is the region that the Philippines must leapfrog on all fronts to compete. Luz offers some advise to achieve this.
In Ease in Doing Business, a complete paradigm shift is required for us to keep in step with our progressive neighbors. We must approximate the systems put in place by Singapore and Malaysia, both of which have fully automated their processes. Key to success is the ability register a business, obtain business permits and pay taxes through a smartphone. Everything must be automated with data shared across various government agencies to avoid redundancies in procedures. Transacting with government agencies should be as efficient as booking a hotel in expedia.com. To remain analog (and paper-driven) is to regress.
In terms of global competitiveness, the name of the game is soft skills. Having strong government institutions and appropriate infrastructure are now givens for rapidly progressing economies like those in ASEAN. What will set apart the good from the great is the quality of its work force — their skills, their adoption to new technologies, their aptitude in the sciences, and culture of innovation.
To this, government must focus on making the next generation of Filipinos more astute, competent, creative and skilled. It must also create an environment that is conducive to invention and innovation.
We operate in a very competitive region and the Philippines needs to step up its game in no less than revolutionary ways to secure a place in tomorrow’s world. ARTA has big shoes to fill.
Next week, I compare the state of the economy today against what it was is 2015.
 
Andrew J. Masigan is an economist

The Peace Talks and the Communist Party’s Economic Program

A good friend of mine gave me a copy of the book from the National Democratic Front of the Philippines (NDFP) titled Draft Comprehensive Agreement on Social and Economic Reforms (January 2018). This document is also known in its abbreviated form: CASER.
Sol and his wife Doods actually came all the way from Naga City not exactly to give me CASER but to pay their last respects to a dear cousin.
Sol perhaps suspects that I won’t read it, and I surmise that he himself gave me a copy to dispose one of the many publications in his library. Doods is happy for every unwanted book removed from their cozy home. But Sol did ask me to share my thoughts on the NDFP’s economic program.
To those in the know, the NDFP is the united front of the Communist Party of the Philippines (CPP). Hence, the document is essentially the program of the CPP submitted to the Philippine government as a starting point towards forging a peace agreement.
The book makes interesting reading, for it gives the scholars and analysts, the peace advocates, and other stakeholders a handle or a marker towards determining whether the peace talks will prosper. Having a realistic reform agenda, by eschewing ideological rigidity and political sloganeering, is one good indicator that the CPP is serious in forging the peace.
To quote Jose Maria Sison, the NDFP’s chief political consultant otherwise known as the CPP’s ideological fount: “This book is highly significant and useful in demonstrating the readiness of the NDFP to negotiate with the Government of the Republic of the Philippines (GRP) and make a substantive agreement on social and economic reforms despite tremendous obstacles ….”
The document also says that the CASER “is realistic within current political and legal processes and can be implemented by the current administration as well by any succeeding non-revolutionary governments.”
For this essay, I do not intend to come out with a thorough annotation or critique of the CASER. I select a few points, which albeit limited will be sufficient to make a case that the CPP or the NDFP is seriously attempting to have a realistic CASER.
On agrarian reform, CASER says that the goal is “free land distribution as a means of achieving social justice.” Further, CASER acknowledges that the “policy of expropriation with compensation shall be adopted to encourage landlords to invest in industrial and other productive enterprises.” These points are consistent with the Philippine Constitution and with the law on the Comprehensive Agrarian Reform Program.
Current statutes can address the CASER position of subjecting to confiscation “sullied landholdings or lands proven to have been acquired through illegal and fraudulent means…and through the use of violence”
A revelation is the CASER position to allow the “sale, mortgage, or any other encumbrance or mode of transfer of lands,” after a period of 10 years from distribution. The restrictions to this (like the land not being converted to nonagricultural use or land not being sold or mortgaged to former owners, money lenders and local officials) are well-intentioned.
On national industrialization, the general provisions are abstractions and hence not quarrelsome. Take for instance: “National industrialization aims to achieve full employment, improve real wages, continuously improve the standard of living, reduce inequality, and eliminate poverty. It raises the level of science and technology, expands domestic demand, and integrates regional production and markets into one national production system.”
The devil is in the details, and so let a thousand thoughts contend once the peace is forged. A stumbling block is the CASER’s position “to amend, suspend or terminate, as applicable and necessary, all bilateral investment treaties, and agreements bilateral and regional free trade arrangements (FTAs), and agreements under the multilateral World Trade Organization (WTO) that prevent national industrialization.”
A shrewd government negotiator can just tell the CPP or NDFP to just drop this position, for it will not be enforceable. The government can always invoke the conditional phrase “as applicable and necessary” to have the status quo.
My unsolicited piece of advice to the Red comrades: Learn from Cuba and North Korea; the last bastions of “actually existing socialism” are opening up to the world and liberalizing their economies.
The last example is on macroeconomic policies.
Again, the principles are fine, like fiscal policy being “in line with overall economic planning and strategic measures to develop the economy: or monetary policy serving the “goals of rural development, national industrialization, and improving the people’s welfare.”
As expected, some specific proposals can be messy. Some, I have to say, do not even make economic sense.
To cite one, CASER demands that “the value-added tax (VAT) and excise taxes on basic goods and services consumed by the working people shall be abolished.” The question is: How do we define “basic goods and services?” In truth, the most essential items consumed by the poor, like food in its raw state, are already exempted from VAT.
The radical activists, however, claim that goods like petroleum, electricity, and processed food are basic goods, despite the fact that the main consumers of such items are the rich and middle classes. Still, abolishing VAT will result in a drastic drop in revenue. The deficiency in taxes will endanger the financing of the Left’s desired goals of achieving rural development and national industrialization.
It is foolish to think that increasing income taxes and taxes on luxurious consumption will compensate for the losses from abolishing the VAT on many items. The rich can avoid paying ludicrously high marginal tax rates on income by moving out of the country.
A sound tax system is one that balances direct taxation (mainly income taxation) and indirect taxation (including VAT). Progressive fiscal policy is not limited to progressive taxes. (Oil excise taxes and some VAT taxes, by the way, contrary to popular opinion, are mildly progressive.) It is also critical to raise enough revenue from both direct and indirect taxes to finance programs that are pro-poor and pro-equity.
From the examples discussed above, I can say that the CPP and the NDFP are negotiating a CASER that attempts to be reasonable. The general principles and provisions are acceptable. The specifics of some economic policies are disputable. But then, compromises are necessary to achieve the peace.
Perhaps, part of the problem is that the CPP and the NDFP do not have trained or full-fledged economists in their panel. Or if they do, the ideology of the comrades gets in the way.
On Karl Marx’s bicentenary, the CPP can perhaps rethink Marx, to help shape a new agenda. After all, Marx ideas have been interpreted in many ways. Even the neoclassical economists have gained insights from Marx.
An honest rethinking is most apt at a time that the CPP has recognized reason and compromise to move the peace talks forward.
 
Filomeno S. Sta. Ana III coordinates the Action for Economic Reforms.
www.aer.ph

US-China ‘trade war’ and Philippine federalism

Among the big topics that dominated last week’s global and national reports are (a) US-China ‘trade war’ which technically means equalized high tariff (EHT), and the hard push for Charter change towards federalism by the Duterte-appointed Constitutional Commission (ConCom).
The US-China EHT or ‘trade war’ officially started last Friday, July 6. The US slapped 25% tariffs on imports from China worth $34 billion and the latter immediately slapped a higher tariff on equivalent value of imports from the US. There will be a follow up EHT from the US up to $550 billion worth of imports from China and the latter is expected to have its counterpart.
Table 1
Meanwhile, funds have fled stock markets of countries that are expected to be net losers of this trade spat. China’s Shenzhen and Shanghai are the worst-performing stock markets in the world this year, having suffered a -19.1% and -16.9% drop in index values year to date (Ytd) or from January 02 to July 06, 2018, largely because of this EHT spat.
In comparison, the US’ DJIA experienced only a -1.5% decline year to date.
It is worth noting that the Philippine Stock Exchange (PSEi) is the 2nd worst-performing stock market in the world after China.
Several business uncertainties in the Philippines this year helped pull down the PSEi: (a) sharp rise in inflation rate after TRAIN 1 law, (2) changes in fiscal incentives and corporate income tax under TRAIN 2 bill, (3) wholesale closure of Boracay island for six months, (4) political uncertainties due to rabid federalism and Charter change hard sell by the government, (5) “Iglesia ni Duterte” vs “idiotic God” pronouncements, among others.
The PSEi level is also -1.2% compared to past three years, indicating that the gains under the previous administration have been wiped out under the Duterte government. This further shows that the federalism hard sell is misguided for at least three reasons.
One, a big and bureaucratic national government on the top will have another layer of big and bureaucratic state governments in the middle, aside from expanding municipal/city and provincial governments.
Two, federalism is no guarantee for economic prosperity nor political maturity.
While several developed economies have federal structures, the same can be said about some failing economies.
Table 2
And three, the current Congress that will finalize the contents of the revised Constitution is too handicapped by clear lack of independence from the Duterte presidency. Thus, potential desires by this administration for continued stay in power beyond 2022 can easily be granted by Congress.
Trade protectionism is wrong as it penalizes the consumers while fattening the protected local players. “Trump protectionism” is similarly ill-intentioned but “Xi/China protectionism” is even worse. A move towards equalized low or zero tariff is needed.
The hard sell for Federalism is wrong as it will penalize local businesses and entrepreneurs with more national and local/state taxation and regulations while fattening many national and local/state agencies and bureaucracies. A move towards shrinking national taxes and agencies should have been done before federalism is pushed.
 
Bienvenido S. Oplas, Jr. is President of Minimal Government Thinkers, a member-institute of Economic Freedom Network (EFN) Asia.
minimalgovernment@gmail.com.

Not in the doldrums

How can President Rodrigo Duterte announce to his country and his people (and to world investors and creditors) that, “Now. The economy is in the doldrums. Actually — now.” (Philippine Daily Inquirer [PDI] June 24, 2018) He then rants on his version of economic dynamics: “Interest rates are picking up, are getting high so it destroys the present (economic gains)…you raise your (interest rate), our (peso value) goes down, theoretically…” Mr. Duterte said at a speech at the SMX Center Communications Summit 2018 (Ibid.).
Of course academicians immediately pounced on the President for illegal practice as economist — University of the Philippines professor JC Punongbayan said that “Duterte knows little to nothing about economics” (http://politics.com.ph June 26, 2018). He just had to correct Duterte’s “stab at economic theory” when Duterte incongruously said, “when you raise your [interest rate], our [peso value] goes down, theoretically.” Prof. Punongbayan said, “Basic economics tells us exactly the opposite is what happens. Higher interest rates spur capital inflows, and as investors haul their money into the country they exchange their dollars for pesos. This extra supply of dollars raises the relative value of the peso, thus strengthening (not weakening) our currency. The peso, at P53+ per US dollar, is not just the weakest in 12 years but also the weakest in ASEAN” Rappler, June 28, 2018).
Why didn’t his economic team and the Bangko Sentral ng Pilipinas (BSP) tell the President that? The peso started to drop in late 2016 because of the steady strengthening of the US dollar, as interest rates were raised in phases by the Fed. With the Philippines being a net importer rather than exporter of goods, costs were multiplied in more expensive foreign currency. Notwithstanding the foreign remittances of overseas Filipino workers (OFWs) and foreign exchange-paid business process outsourcing (BPOs), the increase in global oil prices caused rapid inflation, oil being a major input in most economies.
Academics would call it cost-push inflation, as costs of production in economic activities shot up, and thus the need to increase prices to maintain profit margins. Add to that the net increased taxes under the Tax Reform for Acceleration and Inclusion (TRAIN) law which lowered the tax-exempt income to P250,000/year but increased the excise taxes on various products like fuel, sugar, coal, and automobiles, while it expanded coverage on products which were previously exempted from the value-added tax (VAT). Note that prior to the TRAIN law, up to 40% of the country’s total number of families were already exempt from paying income taxes, while all have to pay the new excise taxes and VAT (cebudailynews.inquirer.net July 2, 2018).
Yet the Duterte economic managers said in a joint statement at the July 6 pre-state of the nation (SONA) forum: “While we acknowledge the public sentiment on rising prices, let us remind ourselves that the Train Law raised the take-home pay of 99% of income tax payers by an average of 15%, much higher than inflation. The additional revenues that we generated from the Train Law will also allow us to provide free education in state colleges and universities, free irrigation for farmers, conditional cash transfers to poor families and senior citizens, and higher salaries to government employees including uniformed men. Without doubt, these should help in coping with the rising prices of goods.” (Rappler, July 6, 2018).
Where did the “15% higher-than-inflation increase in take-home pay of 99% of income tax payers” come from? And this was just as the Philippine Statistics Authority announced that inflation hit 5.2% in June, the highest in five years (BusinessWorld July 6-7, 2018). “It is not something to worry about. It’s within historical amounts,” Presidential Spokesman Harry Roque said during a Palace news conference (Manila Bulletin, July 5, 2018).
When there was palpable public anticipation that inflation would soar further, BSP finally raised interest rates to 3.5% from 3.25% to tighten money supply and help bring down inflation. It last raised rates in May to 3% from 2.75%, which was the first increase since September 2014 (CNN Philippines, June 20, 2018). “There may have been a little bit of a slip in [the] timing of increasing policy rates….[The issue] is best addressed to BSP,” Socioeconomic Planning Secretary Ernesto Pernia chided (Rappler, July 5, 2018). Meaning: the BSP should have done this sooner?
BSP Governor Nestor Espenilla, Jr. accepted that “the higher-than-expected June inflation outcome is a setback. We will review and update our situational assessment and forecast inflation path. This will shape the strength and timing of our next monetary policy response to firmly anchor inflation expectations.” He reaffirmed commitment to the target inflation of 2% to 4% (Ibid.). In May, the BSP had expected 2018 inflation to average 4.6%, versus the 3.9% forecast given last March. Price increases are expected to ease next year to average 3.4%, back within the government’s target although higher than the previous 3% estimate (BusinessWorld May 11. 2018).
UP School of Economics professor Dr. Emmanuel de Dios criticized government economic managers’ non-coordinated economic moves. “They are pointing fingers, but they are all guilty (for what is happening),” he said. They cannot say TRAIN is only responsible for 0.4% of the [inflation]. But who is in charge of the economy? ’Di ba silang lahat (Isn’t it all of them)?” De Dios said last week in a forum on democracy and governance (Rappler, July 5, 2018).
De Dios shot down the ready boast of government that the country’s economy is among the growth leaders in the region, registering 6.8% in gross domestic product (GDP) in 2017. “Which countries are we comparing ourselves with?” he asked. “Reports said we are 3rd in ASEAN, but if we include Nepal, Bangladesh, Laos, China, Cambodia, and Vietnam, we are actually just 7th…and a 6-point-something percent of GDP is still not good enough…considering that Laos and Cambodia reached 7% in 2011,” De Dios said (Rappler, July 6, 2018). Our country dipped 9 notches to the 50th spot out of 63 economies in this year’s World Competitiveness Yearbook rankings of the International Institute of Management Development; the Philippines’ ranking in the ease of doing business also slipped to 113th this year from 99th last year across the 190 countries covered by an annual World Bank Group report (Ibid.)
At President Duterte’s landmark “we are in the doldrums” speech, he probably realized midway that he had babbled and blundered. To promote economic activity and boost tax revenues in the provinces, where “the doldrums” was most noticeable, he suggested, “Now if there’s jueteng…at least money goes around. Some people will get hungry, others will be able to eat, [but] there’s commercial activity.” (Rappler, June 28, 2018). Prof. Punongbayan (earlier quoted) reacted, |“But jueteng is illegal and not taxable. It can also hardly be considered the prime mover of economic activity in the provinces (no matter how big an industry it may seem).” (politics.com.ph June 26, 2018).
God help our country!
 
Amelia H. C. Ylagan is a Doctor of Business Administration from the University of the Philippines.
ahcylagan@yahoo.com

Conflicting provisions in BBL to be tackled

By Camille A. Aguinaldo and Charmaine A. Tadalan

BBL in Congress
The proposed Bangsamoro Basic Law was transmitted to Congress on Aug. 14, 2017. — WWW.BANGSAMOROONLINE.COM

THE House and Senate panels are poised to push for their respective versions of the proposed Bangsamoro Basic Law (BBL) when they meet for a bicameral conference on Monday, July 9, to July 13.
But lawmakers from both chambers of Congress agree that the final outcome of the proposed measure should be in accordance with the Constitution and will help bring peace in Mindanao.
JUDICIAL REVIEW
Senate Majority Leader Juan Miguel F. Zubiri, sponsor of the Senate version of the draft BBL, said the Senate Subcommittee on BBL will make sure its version will prevail in the bicameral conference committee, especially with regards to provisions in the bill that are consistent with the 1987 Constitution.
The subcommittee, which is under the Senate Committee on Local Government, is the counterpart at the bicameral level of the House Committee on Muslim Affairs, Local Government, and Peace, Reconciliation, and Unity.
Mr. Zubiri said the bill, once enacted into law, needs to withstand judicial review to prevent what happened to the Memorandum of Agreement on Ancestral Domain (MoA-AD) during the Arroyo administration.
The MoA-AD once sought to establish the Bangsamoro Juridical Entity but was stalled during the administration of then President Gloria Macapagal-Arroyo after it was met with strong opposition. Peace talks collapsed between the government and the Moro Islamic Liberation Front (MILF) after the Supreme Court in 2008 issued a temporary restraining order on the draft peace agreement and later declared it unconstitutional. Some members of the MILF then staged attacks in villages in the provinces of Lanao del Norte and North Cotabato (officially, Cotabato).
It was in the succeeding administration of Benigno S.C. Aquino III that the MILF returned to negotiating with the Philippine government and in 2014, both sides came up with a Comprehensive Agreement on the Bangsamoro. Mr. Zubiri said the proposed BBL is the final stage of the peace process before the MILF finally surrenders its arms.
The senator from Bukidnon province also recognized the need for the involvement of security officials and President Rodrigo R. Duterte in a possible deadlock during the bicameral hearings. He stressed that whatever Congress members decide on the bill has security implications in the region.
“If we don’t comply or if the final version is flawed and gets struck down by the Supreme Court, definitely, it will endanger peace in Mindanao,” Mr. Zubiri said.
House panel member and ABC Rep. Eugene Michael B. de Vera agrees with Mr. Zubiri. “The first thing that we have to do is look at the constitutionality of every provision, then we have to check it out with the corresponding jurisprudence as promulgated by the Supreme Court. Iyan ang guide namin (That is our guide),” Mr. de Vera said.
He noted the House leadership has been strict in addressing “all possible constitutional breach.”
Also sought for comment, Zamboanga City Representative Celso L. Lobregat said in a phone interview: “I cannot speak for the whole panel. But, of course, we will push for the provisions of the House. We will try to convince the Senate concerning (the) position of the House, since most of us… are closer to the ground.”
Mr. Lobregat is one of 18 members of the House Committee on Muslim Affairs, Local Government, and Peace, Reconciliation, and Unity.
“We’ll now have to sit down, rationalize, (and) convince each other which is best in each and every disagreeing provision. (It is) very important that we pass the law, but again, the Constitution is more or less the prime parameter,” he said.
VIEW OF MILF, MNLF
MILF chief negotiator Mohagher Q. Iqbal, who was also sought for comment on this story, expressed optimism in the outcome of the bicameral conference.
“It’s the job of the bicameral conference (to reconcile the versions), and all those lawmakers are professionals. They’ve been with their job for (such a) long time,” Mr. Iqbal said.
He added: “Maybe as part of the process, there is difficulty, but at the end of the day, they have to do it and produce the final BBL.”
A representative of the Moro National Liberation Front (MNLF) was also sought for comment. The MILF broke away from the MNLF in the late 1970s, soon after the mother organization led by Nur Misuari entered into a peace agreement with the Marcos regime in 1976. Exactly two decades later, the Ramos administration entered into a final peace agreement with Mr. Misuari that led to his administration of the Autonomous Region in Muslim Mindanao (ARMM).
But Mr. Misuari’s tenure in government became mired in controversy as his standing in the officialdom deteriorated, leading to the MNLF’s siege of Zamboanga City in 2013. Meanwhile, the MILF began negotiating peace with the government, culminating in a draft charter that proposes a Bangsamoro region to replace the ARMM.
Randolph C. Parcasio, a lawyer and spokesperson of Mr. Misuari, said when asked about the MNLF leader’s position on the BBL, “As of this time, I haven’t heard him say he would support it.”
Mr. Parcasio also said, “I will be briefing him (Mr. Misuari) on July 7, so I don’t have yet any idea on how he would respond to the BBL.”
Mr. Iqbal, when asked about the House and Senate versions of the BBL, said, “I cannot set a preferred version because we are hoping for the final version to be met by the bicameral conference.”
He added that “we’re hoping (that) the best part of the version of the Senate and the best part of the House version would be the one that will be assembled to make up the version of the BBL.”
KEY PROVISIONS
If approved at the bicameral, enacted into law and approved in a plebiscite, the consolidated version of House Bill No. 6475 and Senate Bill No. 171 will establish the Bangsamoro Autonomous Region. The authority of the Bangsamoro government presiding over this region will be vested in the Bangsamoro Parliament to be headed by the Chief Minister. The Bangsamoro government will also have a “Wali,” who serves as the ceremonial head of the Bangsamoro.
The versions of both chambers of Congress differ on several key provisions, such as the powers of the Bangsamoro government, the share in national government revenues, and the amount for this region’s special development fund (SDF).
The Senate removed the provisions on the reserved, concurrent and exclusive powers of the Bangsamoro government and the provisions on its power to conduct inquiries in aid of legislation and subpoena powers. This was retained in the House version.
The territorial jurisdiction for the region, once the BBL is enacted into law, will also be determined through a plebiscite. The proposed region will have an expanded territory, to include portions of Lanao del Norte and Cotabato provinces. Whereas the Senate retained 39 barangays (villages) in six municipalities in Cotabato as part of the territorial jurisdiction of the Bangsamoro region, the House removed these villages in its version of the BBL.
The Bangsamoro government will enjoy fiscal autonomy in order to attain economic self-sufficiency and genuine autonomy. The Senate changed the share in the national government taxes collected in the region to 50-50, while the House proposed a 75-25 share in favor of the Bangsamoro region.
The House set the annual block grant to 6% while the Senate set it at 5% of net collections of the Bureau of Internal Revenue and the Bureau of Customs.
The House set the SDF at P10 billion annually for a period of 10 years. The Senate version reduced the SDF to P5 billion annually for 10 years.
The proposed region will also be given the authority to create economic zones, industrial estates, and free ports. The Bangsamoro economic zone authority will also be created and will have jurisdiction over any corporation, firm, or entity established within the region, which will continue to enjoy benefits granted by the Philippine Economic Zone Authority (PEZA).
On the proposed Bangsamoro police, the Senate version provided that the Chief Minister will select the police regional director. In the House version, the Interior Secretary will appoint the regional director.
The justice system in the region will follow the Shari’ah law, but this will apply to Muslims only. The Bangsamoro Parliament will be mandated to enact laws to promote and support traditional or tribal justice systems for indigenous peoples. Regular courts in the region will continue to exercise their judicial functions.
FALLBACK
Sought for comment, lawyer and veteran observer on Mindanao affairs Michael O. Mastura sees that the House and Senate versions are “very hard to reconcile.”
“We cannot expect that it will be better than ARMM,” said Mr. Mastura, who was also a delegate in the 1971 Constitutional Convention. “(And) because I see that it is short of the ARMM, I would rather have the ARMM that was the status quo.”
According to Mr. Mastura, there are powers already granted to the ARMM that have been withdrawn in the BBL. “You know what the House did was ‘yung mga enumeration of exclusive powers for that parliament, nilagay sa concurrent (You know, what the House did was that the enumerated exclusive powers for that parliament were put under concurrent powers [or powers shared with the national government]),” he said.
A review of the proposed BBL by the Bangsamoro Transition Commission (BTC) showed exclusive powers on budgeting, the banking system, power and energy, and health, among others, placed under the provision on Concurrent Powers in the approved House Bill 6475.
The Organic Act of the ARMM, Republic Act 6734, did not specify shared or exclusive powers of the ARMM, but stated reserved powers of the government, which did not include any of those stated above.
On questions of constitutionality, Mr. Mastura said, “If the premise is if it runs counter to the Constitution, why will you pass the BBL? If the BBL does not comply with the demand and desire of the MILF, then why should we push it?”
He said the BTC has two functions — create the draft BBL and propose amendments to the Constitution.
“There is a fallback in case the BBL is not passed, or (if) something goes wrong, then we have a proposal for a constitutional amendment,” Mr. Mastura said.
He also pointed out that the BBL, which will operate under the 1987 Constitution, is more suited to a federal system.
“This BBL is for the 1987 Constitution, and, yes, it is full of questions about constitutionality. Hindi makalusot dahil (It can’t get through because) it falls into a picture of a federal system,” Mr. Mastura said.
To address this, Mr. Mastura led the All Moro Convention, a group of Mindanao stakeholders of which he is president, in drafting the Bangsamoro State Constitution, which proposes a parliament that will fit in a federal-presidential system.
A copy of the draft was submitted to Mr. Duterte on June 16, during the celebration of Eid’l Fitr on June 15.
‘DIFFICULT PART OVER’
Mr. Iqbal noted the significance of both chambers of Congress having already passed their respective versions of the bill. “It had already been passed by both houses. I think at this point, (that was the) difficult part (that) had been overcome already. Passing their respective (bills) — that’s the most difficult part of the process,” he said.
Also sought for comment on the BBL, Philippine Chamber of Commerce and Industry, Inc. (PCCI) chairman George T. Barcelon said in a phone interview, “If it satisfied some sector of our community where their authority to run the area is expanded (and) if it’s good, I think we should support it.”
Guenter Taus, president of the European Chamber of Commerce of the Philippines (ECCP), said via e-mail when also asked for comment: “ECCP fully supports the peace process as peace in Mindanao is the basic prerequisite in attracting investments and creating inclusive growth in large parts of Mindanao.”
He added: “Should the BBL not push through, we strongly urge the Philippine government to continue pushing for peace and stability in the region in order to sustain and continue to increase investor interest in Mindanao.”
American Chamber of Commerce of the Philippines, Inc. (AmCham) Senior Advisor John D. Forbes said via text when asked for comment, “AmCham has not taken a position on the actual BBL this year but follows and supports the peace process that we hope will improve security and enable needed and overdue economic development in the conflicted regions of Mindanao.”
Mr. Forbes also cited the potential in Mindanao for agribusiness, mining, and tourism.
Mr. Zubiri, for his part, said, “What is important (for businessmen) is peace. What is important is that they are not being kidnapped. What is important is that when they place establishments in the area, especially malls and restaurants, they are protected.”
He said the region may look into tourism in developing its economy, citing the potential of beaches in Sulu, Tawi-Tawi, and Basilan — the island province that has been frequently cited in incidents of terrorism and kidnapping, but which used to be a tourist destination until the late 1960s.
Mr. de Vera, for his part, said, “If the BBL would be the very reason why peace would be established in the region, it would be for the benefit of everybody, including the businessmen.”
But he also flagged “atrocities in Mindanao, between warring factions with the Muslim people.”
“(There’s) MNLF (Moro National Liberation Front), MILF, (there are) breakaway groups and, of course, we have to consider the Christians living there, the lumads living there,” Mr. de Vera said.
Mr. Lobregat said the consolidated bill, if enacted into law, will not guarantee immediate results.
“There’s no guarantee because you cannot legislate peace, but it’s closer to giving peace a chance,” he said.

Robredo: Not the time now for charter change

VICE-PRESIDENT Maria Leonor G. Robredo in a statement on Sunday cautioned against constitutional amendments now being pursued by the government.
“Hindi napapanahon ang diskusyon ukol sa pag-amyenda ng ating Saligang Batas, at lalo ang anumang mungkahing baguhin ang termino ng liderato at ipagpaliban ang eleksyon sa susunod na taon,” Ms. Robredo said. (This is not the time for discussions on amending the Constitution, and especially on any proposal to change the tenure of leadership and postpone next year’s [midterm] elections, because of many issues troubling our countrymen now.)
The Consultative Committee (ConCom) to Review the 1987 Constitution approved last week a draft federal charter, scheduled to be handed over to Malacañang Monday, July 9.
“We’re hoping that Congress will give it much weight as it prepares to submit proposed revisions to the people as a constituent assembly,” Presidential Spokesperson Harry L. Roque, Jr. said in a statement Sunday.
Ms. Robredo in her statement also said, “Mula sa sunod-sunod na patayan, hanggang sa patuloy na pagtaas ng presyo ng bilihin, ang pinakamahalagang usapin para sa mga Pilipino ay kung paano masosolusyonan ng kasalukuyang administrasyon ang mga problemang ito.” (From the spate of killings to the continued rise in prices of basic goods, the most important discussion for Filipinos is how the present administration can resolve these issues.)
She added: “Ang usapin ng pag-amyenda ng ating Saligang Batas ay hindi lamang tungkol sa iisang tao, partido, o organisasyon; may pangmatagalang epekto ito sa buong bansa at sa buhay ng bawat Pilipino. Ang usaping simbigat nito ay hindi dapat minamadali at ginagawang tungkol lamang sa mga kasalukuyang nasa poder ng kapangyarihan.” (Amending the Constitution is not just about one person, party, or organization. This matter has a long-lasting impact on the whole country and on the lives of every Filipinos. An endeavor of this significance should not be rushed and undertaken only in connection with those currently in power.)
For his part, Senator Aquilino Martin L. Pimentel III said in a radio interview on Sunday: “The federalism advocacy is not meant to benefit President Duterte. It is the party’s belief that federalism is better for the Philippines because there is decentralization, devolution, and distribution of resources. There is pinpointing of responsibility in the different levels of government so the development of the regions is fast-tracked.”
“That is our belief, not because of any one man who the party wants to benefit,” said Mr. Pimentel, the president of the ruling PDP-Laban.
ConCom, for its part, said in its statement on Sunday that there “cannot (be) a provision that bars a particular individual from enjoying the rights and privileges that the constitution or law confers on all.”
The body’s work has drawn attention after its members pointed out that there is no ban on incumbent officials under the draft charter. Under the existing charter, President Rodrigo R. Duterte as well as Ms. Robredo are limited to their single terms in office.
ConCom pointed out that in the 1987 Constitution, there was no transitory provision barring then President Corazon C. Aquino from running in the 1992 national elections.
“In fact, Section 5 of the Transitory Provisions extended the term of then President Aquino up to June 30, 1992 solely for the purpose of synchronizing the elections,” ConCom pointed out in its statement.
“It was solely the personal decision of then President Corazon C. Aquino not to run in 1992,” it added. — Charmaine A. Tadalan, Camille A. Aguinaldo, and Gillian M. Cortez

Uphold 25% threshold in PET recount: Stratbase ADRi

IMPOSING the 50% threshold in the vice-presidental ballot recount will disenfranchise voters, think tank Stratbase ADRi said, Sunday.
“The ruling would grossly violate the rights of all voters in the 2016 elections as their votes that had already been duly counted and canvassed would be invalidated,” Stratbase ADRi President Victor Andres C. Manhit said in a statement.
Mr. Manhit was referring to the ruling made by the Supreme Court (SC), sitting as the Presidential Electoral Tribunal (PET), which denied Vice President Maria Leonor G. Robredo’s motion for a 25% shading threshold on the ballots under review.
Mr. Manhit also noted that “National opinion polls, foreign observers and independent election watch dogs have assessed the 2016 elections to be one of the most credible in recent memory.”
The statement also cited a study for Stratbase by political science expert Francisco A. Magno, concluding that “The general assessment of the 2016 Philippine automated elections is undeniably positive and was far better than the past two automated elections in 2010 and 2013.”
The statement also cited Democracy Watch secretary-general Maria Claudette Guevara as saying, “The true will of the Filipino electorate cannot be fully ascertained if the PET will deviate from the standards by which the ballots were appreciated by the vote counting machines.”
“The results of the subsequent random manual audit revealed a near-perfect accuracy of 99.9023 percent for the vote counting machines,” the Stratbase statement also quoted her as saying.
“Fairness would dictate that a review of the votes being questioned should be made on the same set of rules and standards implemented during the 2016 National Elections. Changing the rules makes no sense and even insinuates that the votes received by all elected officials, from the President to local officials, especially those closely contested positions, should be recounted,” Ms. Guevara said further.
Solicitor-General Jose C. Calida has submitted his comment affirming PET’s upholding the 50% shading threshold. — Charmaine A. Tadalan

PHL seeks assistance of Iraq, Libya on kidnapped Filipinos

THE DEPARTMENT of Foreign Affairs (DFA) has sought assistance from authorities in Iraq and Libya following the separate kidnapping incidents of five Filipinos in the two countries.
“The Department, through our embassies in Baghdad and Tripoli, has been informed that five of our kababayan have been taken by armed men in Iraq and Libya on Friday,” Foreign Affairs Secretary Alan Peter S. Cayetano said in a statement on Sunday.
“We are in touch with authorities in Iraq and Libya and have requested their assistance in locating and securing the release of our missing kababayan,” he added.
According to the DFA, the Philippine Embassy in the Iraqi capital of Baghdad initially reported that two Filipino women were taken by unidentified armed men along a highway in Uzem District in Iraq last Friday.
The embassy’s Charge d’Affaires Julius D. Torres said the women were on their way to Baghdad from Kurdistan when their vehicle was stopped by the armed men. He also said reports indicated that the two Filipinos managed to escape and were now in police custody.
Meanwhile, the Philippine Embassy in Tripoli reported that three Filipino technicians were among the four foreign workers taken by armed men in a waterworks construction site 500 kilometers away from Tripoli last Friday morning. Four Libyan nationals were kidnapped as well. In a Reuters report on Saturday, the other foreign worker was identified as a Korean national.
The embassy’s Charge d’Affaires Mardomel D. Melicor said the armed group later released one of the foreign workers and all the Libyans.
According to Reuters reports, the number of attacks and kidnappings by Islamic State militants in areas in Iraq where the Filipinos were kidnapped increased over the past weeks. Risks on foreign workers were also high in Libya as well due to the presence of various armed groups, including Islamist militants linked to Al Qaeda and the Islamic State, especially in remote desert areas. — Camille A. Aguinaldo

CTA junks tax relief plea of hotel operator

THE Court of Tax Appeals (CTA) has dismissed for lack of jurisdiction Manila-based Grand Plaza Hotel’s (GPH) petition which sought to reverse a P508,101,381.12 deficiency tax assessment made by the Bureau of Internal Revenue (BIR).
The case stemmed from a Formal Letter of Demand (FLD) issued by the BIR to GPH on Sept. 19, 2013, claiming the latter had a deficiency Income Tax (IT) of P326,352,191.20, deficiency Value-Added Tax (VAT) of P142,281,715.20, deficiency Witthholding Tax on Compensation (WTC) of P37,394,321.84, deficiency Expanded Withholding Tax (EWT) of P1,312,562.44, and deficiency Documentary Stamp Tax (DST) of P760,596.44 for taxable year 2008.
In a 25-page decision promulgated on July 4, CTA Second Division Associate Justice Juanito C. Castañeda, Jr. said, “ (the) Court has jurisdiction over the decision of or inaction by the (BIR) in cases involving disputed assessments. However, this does not cover assessment which became final, executory, and demandable.”
According to the decision, “It was only on February 17, 2014 that petitioner sent to respondent a letter requesting for reinvestigation of tax deficiency,” past the 30-day limit for submitting a protest.
Citing Section 3 of the BIR’s Revenue Regulations No. 12-99, the decision said, “The taxpayer or his duly authorized representative may protest administratively against the aforesaid formal letter of demand and assessment notice within thirty (30) days from date of receipt thereof.”
The court ruled, “for failure to file a protest within the reglementary period, the assessment in question became final, executory, and demandable.”
“The fact that an assessment has become final for failure of the taxpayer to file a protest within the reglementary period means that the validity or correctness of the assessment may no longer be questioned on appeal. Consequently, this Court has no jurisdiction to entertain the present petition,” read the court’s decision.
Those who concurred with Mr. Castañeda’s decision were Associate Justices Caesar A. Casanova and Catherine T. Manahan.

Nationwide Round-Up

Comelec pushes Congress to pass law to fix loophole in premature campaigning


THE COMMISSION on Elections (Comelec) on Sunday, July 8, called on Congress to pass a law that will fix the “loophole” against premature campaigning.
The solution to stopping politicians from promotional activities way ahead of the prescribed period is legislation, Comelec spokesperson James Arthur B. Jimenez said at the Balitaan sa Maynila Forum at Tinapayan Festival in Manila.
“Ang solusyon po [sa premature campaigning] kailangan manggaling sa mambabatas, sa Kongreso (The solution should come from the lawmakers in Congress),” he said.
Mr. Jimenez pointed out that the rules against premature campaigning have changed over the years, especially after a Supreme Court (SC) ruling in 2009.
“Ano ang tinatawag nating premature campaigning bilang pangkaraniwang mamamayan? Ang pagkakaintindi natin ay di pa nga nag e-eleksyon ay nangangampanya na. Bilang mamamayan, ano yung tinatawag nating pangangampanya? Ito yung pagpapakilala sa sarili, pag presenta ng sarili bilang posibleng tatakbo (What is premature campaigning from the perspective of ordinary citizens? We understand it as a campaign activity prior to the election period. As ordinary citizens, what is ‘campaigning’? It happens when one introduces or presents himself as a possible candidate),” he said.
Mr. Jimenez cited that the SC, in the case of Rosalinda A. Penera versus the Comelec and Edgar T. Andanar, ruled that “a person who files a certificate of candidacy is not a candidate until the start of the campaign period.”
”Assuming that all candidates to a public office file their certificates of candidacy on the last day, which under Section 75 of the Omnibus Election Code is the day before the start of the campaign period, then no one can be prosecuted for violation of Section 80 for acts done prior to such last day. Before such last day, there is no ‘particular candidate or candidates’ to campaign for or against. On the day immediately after the last day of filing, the campaign period starts and Section 80 ceases to apply since Section 80 covers only acts done ‘outside’ the campaign period,” he explained.
Section 80 of the Omnibus Election Code of the Philippines states: “Election campaign or partisan political activity outside campaign period. — It shall be unlawful for any person, whether or not a voter or candidate, or for any party, or association of persons, to engage in an election campaign or partisan political activity except during the campaign period: Provided, That political parties may hold political conventions or meetings to nominate their official candidates within thirty days before the commencement of the campaign period and forty-five days for Presidential and Vice-Presidential election.”
Mr. Jimenez said this “loophole” stems from the law itself and should therefore be remedied through another legislation.
According to the Comelec official, the agency also has no power to penalize politicians who post advertising materials prior to the official campaign period.
“Allowed yan eh. Again, tandaan natin hanggang di nagsisimula ang campaign period ayon sa batas, free expression yan… (That is allowed. Again, remember that prior to the start of the campaign period, that is considered as free expression).” — Arjay L. Balinbin

DoJ orders NBI to get ‘immediate results’ in local officials’ killings

JUSTICE SECRETARY Menardo I. Guevarra has asked National Bureau of Investigation (NBI) Director Dante A. Gierran to get “immediate results” in the agency’s investigations on a string of murders of local government officials last week.
The most recent victim was Trece Martires, Cavite Vice Mayor Alex Lubigan, who, along with his driver, were shot dead last Saturday afternoon.
In a text message sent to reporters on Sunday, Mr. Guevarra said he has ordered Mr. Gierran to “include (Mr. Lubigan’s death) in the NBI’s ongoing investigation” on the murders of Tanauan, Batangas Mayor Antonio C. Halili and General Tinio, Nueva Ecija Mayor Ferdinand P. Bote.
According to a police report, the 44-year-old Mr. Lubigan was inside his vehicle when he was ambushed by still unidentified assailants. A similar incident happened to Mr. Bote on July 3, while Mr. Halili was shot from afar by a marksman during his city’s weekly flag ceremony last July 2.
Mr. Guevarra said he wants the NBI to “determine if there’s a pattern or (if) the incidents were unrelated.”
Senators Francis N. Pangilinan, meanwhile, expressed concerns over the spate of killings, raising the possibility that the incidents may have been deliberate to create “an atmosphere to justify strongman rule.”
“What is going on? Are these deliberate and orchestrated attempts at creating an atmosphere of lawlessness to justify strongman rule?” Mr. Pangilinan said in a statement Saturday evening.
“A swift, sure, and lawful move by the PNP (Philippine National Police) to bring the killers behind bars is what the public awaits. At the same time, the police must ensure visibility, especially in key critical areas to prevent another bloody incident. What we want is a safe, secure, and peaceful society, not a gangster land,” he added.
For his part, Senator Paolo Benigno A. Aquino IV, in a statement on Sunday, said, “To stop the violence, the government should first correct the use of force. If violence is continually being used as a solution to solve the country’s problems, our society will never be peaceful and safe.” — Dane Angelo M. Enerio and Camille A. Aguinaldo

Mindanao IP leaders to hold discussion as Congress tackles BBL

INDIGENOUS PEOPLES (IP) leaders from Maguindanao province will lead a “conversation” on July 9 set at the capital as the Congress bicameral committee conference tackles the proposed Bangsamoro Basic Law (BBL) this week. The umbrella group Loyukan, in a statement, said the dialogue, to be held at the MA+D Cafe in Quezon City, will tackle “the implications of a passage into law of a BBL that is acceptable to all, to the lives of Indigenous Peoples; and what’s happening on the ground now that all of these hi-level discussions and debates are happening.” In Davao City, Secretary Datu HJ. Abul Khayr D. Alonto, Mindanao Development Authority (MinDA) chair, said draft state constitutions will be discussed and submitted in the coming months for the proposed shift to a federal system of government. Mr. Alonto said these activities will include the participation of IPs to ensure that their concerns are included in the drafts. — with a report from Maya M. Padillo

Less than 10% of Boracay businesses fully compliant with requirements

LESS THAN 200 out of the 2,269 tourist establishments in Boracay Island are so far fully compliant with the set requirements for reopening, an official of the Department of Tourism-Western Visayas (DoT-6) said, citing latest data from the Boracay Inspection Committee. “While the other aspects like the quality of water are very fast in terms of results, but compliance with other rules and regulations imposed by the Inter-Agency Task Force and the local government of Malay is rather slow,” DoT-6 Regional Director Helen J. Catalbas said last Friday. “So meaning to say, even if Boracay is open already for tourists… those who are non-compliant will remain closed,” she added. Each establishment has to comply with six to seven requirements before they are given the DoT accreditation seal, including environmental certificates, fire safety clearance, and legal permits. Boracay is on a six-month closure since April 26 for rehabilitation after the President dubbed the popular island destination a “cesspool.” Compliance to the requirements is part of the agreement of the Inter-Agency Task Force headed by the Department of Environment and Natural Resources, DoT, and the Department of the Interior and Local Government. — Louine Hope U. Conserva

1...12,35712,35812,359...14,279Page 12,358 of 14,279
ADVERTISEMENT
ADVERTISEMENT
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin X Youtube