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TRAIN bicam sets P250,000 tax-exempt bracket

THE bicameral session reconciling the House and Senate versions of the Tax Reform for Acceleration and Inclusion (TRAIN) program approved the tax-exempt ceiling of P250,000 in annual income, among others, while deferring decisions on more contentious matters.

Sen. Juan Edgardo M. Angara, who chairs his chamber’s committee on ways and means, said in a radio interview on Sunday that discussions Friday were moving forward, and “when there is a matter that we cannot agree on we move on and defer action.”

The Friday meeting resulted in both houses approving the P250,000 income ceiling for tax-exempt individuals and the P8 million threshold for the top income tax bracket to be taxed at 35%.

Both sides also approved a four-page income tax return form and electronic filing for easier compliance, a value-added tax (VAT) exemption for lease and condominium dues at a maximum of P15,000 per month, and an estate tax rate reduction to 6%, down from 20%.

“We agreed on the income tax exemption. Our law on income tax has not been amended for 20 years. If we look into the law, those who do not pay income taxes are the jobless and minimum wage earners. In Metro Manila, the minimum wage is P512, which is around P10,000 or P11,000 a month or around P140-144,000 a year,” Mr. Angara said.

Mr. Angara said the committee decided to defer action on the proposal to exempt from tax 13th-month pay and other bonuses. The Senate version sets an P82,000 exemption threshold while the House draws the line at P100,000.

Other deferred provisions that will be tackled at the next bicameral meeting Tuesday are the optional 8% tax rate for the self-employed and professionals, the quarterly filing of VAT and percentage tax instead of monthly, a 15% tax on foreign currency deposits and capital gains for non-listed shares, a VAT exemption on the sale of houses outside Metro Manila worth a maximum of P2 million, and bank secrecy provisions.

Mr. Angara said in a separate interview on Friday that other deferred items were the increased excise tax on the sale of automobiles, fuel, and sugar-sweetened beverages.

“I see long debates (on these three issues). We are dealing with comprehensive tax reform, so a difference in views is unavoidable.

Senate President Pro Tempore Ralph G. Recto said in a chance interview on Friday that he expects the bicameral committee to tackle the “most sensitive” provisions involving the so-called “D and E,” or low-income sectors.

“There are many issues to tackle. You’re lifting the exemptions of the NGCP (National Grid Corporation of the Philippines), so there will be a hit. Question is, do you want to lessen the impact. Because for sure, the bill will be passed. So that is the role of the Senate, to lessen the impact on consumers.”

Mr. Recto said: “The DoF (Department of Finance) wants its version, (but it will hit the) D and E,, which is 91, 93% of the population.”

“You can look at it this way: the tax reduction will be paid by the D and E. If you think of it that way, remember, we’re giving away P140 billion in income taxes, and we’re taking back P280 billion gross from the public. Most of them are D and E. That’s why we introduced certain amendments here. For example, documentary stamp tax. The D and E will not be affected by it, unlike oil prices or sugar. Our job is to lessen the impact, to adopt a tax that’s fairer,” Mr. Recto said. — Arjay L. Balinbin

Mary Joy Tabal sets historic 5 wins in row at the Milo Marathon Finals

CEBU CITY — Mary Joy Tabal is now the first woman to win the National Milo Marathon Queen crown five times in a row. The Cebuana Olympian and SEA Games gold medalist fittingly achieved this impressive feat in the National Finals at her hometown of Cebu, with thousands of Cebuanos cheering her on. Meanwhile, Davaoeño salesman Joerge Andrade is the new name in the game, winning his first Milo Marathon King title.

The 41st National Milo Marathon National Finals in Cebu culminates 16 regional legs, all driven by values such as discipline, resilience, and determination, which runners can take with them in their journey in life. The champions received P150,000 in cash and a trophy each. Tabal received an additional P200,000 for placing third in the 42K female open category. As part of their prizes, both Tabal and Andrade will be sent by Milo on all expense-paid trips to participate in an international marathon next year.

In the female division, Tabal clocked in at 2:58:01 in first place, followed by Christabel Martes (3:04:20) in second and Jho-an Villarma (3:11:26) in third. In the men’s division, Andrade topped the group with a time of 2:39:34, while Erick Panique (2:42:10) and five-time Milo Marathon King and two-time Olympian Eduardo Buenavista (2:43:34) finished second and third place, respectively.

Tabal was in tears as she crossed the finish line. This race is the most difficult one she has experienced to date, as she ran with the sad reality that her father, Rolando, is no longer with her. Rolando Tabal, Sr. passed away on Saturday morning, just one day before Tabal was supposed to see him after the race.

Tabal almost decided on not joining the final, as it was too painful for her to compete. However, she was determined to fulfill her father’s wish of her completing the race.

Dumaguete council gives mayor authority to buy private lot for landfill site

THE DUMAGUETE City Council approved last week a resolution authorizing Mayor Felipe Antonio B. Remollo to enter into and sign the contract for the purchase of a private lot to be used as sanitary landfill site. The vote was five in favor, one against, and three abstentions, after deliberations for the purchase of the 30,530-square meter lot, near a housing subdivision, at a price of P615 per square meter. The lone ‘no’ vote came from Councilor Agustin Miguel A. Perdices, who contended that a qualified majority is needed on this ruling, considering the big amount of money involved, which is about P18.78 million. However, Councilor Manuel R. Arbon countered that a simple majority is enough because the amount was already appropriated in a previously approved ordinance. The site is situated more than 100 meters away from the Bloomington housing site, and 300 to 400 meters away from the waterway. Mr. Arbon said a technical working group, of which he is the chairman, is expecting opposition to the proposed site due to misconceptions that the city is merely transferring the dump site to another site, but still within Barangay Candau-ay. Mr. Arbon said the city government is running against time with no other possible area that can accommodate an average of 60 to 70 tons of garbage daily. He added that a comprehensive information campaign should be conducted to address the misconception that a sanitary landfill, like an open dump site, emits foul odor and poses health hazards. — The Freeman

The Gravy TRAIN is leaving and common sense isn’t in it

Otto von Bismarck once said that “laws are like sausages. Better not to see them being made.” No one would agree more than observers of the ongoing TRAIN legislation.

The just released Senate version illustrates the point. New ingredients surreptitiously found their way into the mix, diluting the DoF’s otherwise carefully thought-out recipe.

Package 1 of the reforms was intended to address the oppressive effects of inflation on taxable income — a phenomenon known as “bracket creep.”

To pay for the consequent revenue losses from raising taxable income thresholds and help fund the government’s ambitious Build, Build, Build Infrastructure program, oil and auto excise taxes were supposed to be raised to reflect current price levels, combined with the scrapping of VAT exemptions for 144 product categories that made our VAT system both unfair and low-yielding.

What has come out instead is a bit of a chop suey, due to the blatant accommodation of narrow-vested interests aiming to avoid paying their share of the tax effort or tilt the playing field against competitors.

Below are some of the more glaring examples.

EXPANDED TAX BREAKS FOR ECONOMIC ZONES, PEZA
Mind you, not just exemptions for the zones themselves but an expanded list for VAT zero rating for locators in the zones, including their suppliers, and tourism sites. Recall that some of these economic zones have been mired in controversy from birth, with reports of rampant smuggling of oil, automobiles etc.

LOWER TAX RATES ON LUXURY VEHICLES
The Senate version establishes two tax brackets for vehicles, 10% for those costing a million pesos or less and 20% for those costing more. Given where tax rates are today, this will have the effect of shifting the tax burden from buyers of high-end luxury vehicles to those of cheaper, everyday cars.

As one investor newsletter put it, “this new proposal looks like it was crafted specifically by and for luxury car dealers.” To illustrate, a Toyota Wigo (retail price of around P500,000) could see a price increase of around 8%. But a Toyota Land Cruiser (retail price over P5 million) could see a price decrease of over 20%.”

How does the Senate version hope to cover the revenue losses from these proposals? Some illustrations —

DOUBLING DOCUMENTARY STAMP TAXES
Taxing financial transactions is a last resort of the poorest African countries that possess few alternatives and weak collection agencies. This is not apt for our country — a supposedly dynamic emerging market economy trying to develop and promote its capital markets in a highly competitive region.

Such a tax raises the already high friction costs of transacting legitimate business in our country and diminishes our image as a center for investment. More fundamentally and over the long term, such costs impose a tax on savings and investment, on economic competitiveness, and on job-creation.

There has been no consultation on this and other measures, which were not meant for consideration until Package 4 of the DoF’s proposal covering capital income taxation. That the Documentary Stamp tax was brought forward way ahead of schedule reflects the size of the hole that will be created by the Senate’s generous exemptions and tax cuts.

COSMETIC SURGERY TAX
Purely cosmetic. A nuisance tax that will yield peanuts and burden revenue authorities and legitimate patients. Imagine every patient having to wait for his or her procedure to be certified as medically required before being allowed to undergo surgery free of tax? Inconveniences aside, this gives birth to new opportunities for rent-seeking and extortion, new income sources for less-than-scrupulous practitioners.

COAL EXCISE TAXES
From the current P10 per metric ton (MT) to P300 per MT — that’s a whopping three thousand percent increase. This measure comes out of nowhere, as it was neither in the DoF or Lower House version of Package 1.

Let me make the case against it.

First, a disclosure. I am an independent director of Aboitiz Power and Phinma, Inc., both of which have investments in coal power plants as well as in renewables. I am also the Private Sector representative in the Steering Committee of the University of the Philippines based Energy Policy Development Program (EPDP), co-chaired by the secretaries of NEDA and the Department of Energy.

The arguments of the proponents:

a) Coal needs to be taxed more due to the negative effect of its carbon emissions on the environment.

Whether this is true or not, the Philippines contributes less than 1% of world total CO2 emissions. At the same time, 35% of all the power we produce comes from renewable sources — a mix that is much more favorable than that of most countries, indeed better than almost all countries at a similar stage of development in the ASEAN and globally. (See “Carbon Footprint, Inclusive Growth and the Fuel Mix Debate in the Philippines,” by Raul Fabella et al, EPDP, PHL Economic Society Conference, Sept 22). We are doing more than our fair share to arrest global warming, even at the expense of cheaper electricity (renewables like solar and wind enjoy tax-payer-funded government subsidies).

b) Gasoline, diesel, and natural gas are taxed more than coal.

My friend, esteemed economist, and columnist, Ciel Habito, estimates that the tax on motor fuels is 10%, on Malampaya gas, 43%. He advocates that coal be taxed at P600 per MT, arguing that at an effective 15%, this will still be lower than the tax on Malampaya gas and the proposed 18% for diesel in the Senate version.

Ciel seems to overlook two considerations. The tax on motor fuels has never been about CO2 emissions and climate change, a recent notion. It is about the “user pay” principle — motorists should pay for the roads that the government builds and maintains. And there is the second reason — to discourage the excessive use of private cars that contributes to traffic and air pollution. In economics-speak, “negative externalities” from urban congestion.

As for the taxes on Malampaya gas, this too has nothing to do with CO2 mitigation. These are royalty payments for the exploitation of the country’s natural resources. The government collects the same 60% share of profits from oil and, yes, coal producers.

Given this, why single out coal for a carbon tax? Why not a carbon tax on every fuel based on its impact on the ozone layer (which incidentally should also include LNG)? And why not throw in cattle-breeding, as cows emit ozone destroying methane with an aggregate impact similar to coal plants?

Regardless, using widely accepted global norms, EPDP Senior Adviser Prof. Jim Roumasset calculated the appropriate carbon tax for coal in the Philippines, given its contribution of 1% of the world’s CO2 emissions — P60 per metric ton. Not P100. And certainly not P300.

The P300 per metric ton tax on coal will add P0.14 per kWh to our cost of generating electricity. This is on top of another measure climate change advocates and renewable energy developers pushed for — feed-in tariffs, a fancy term for what are just subsidies from the taxpayer. Combined, they will add P0.43 per KWh to our electricity bills or, at current consumption levels, a total of P40 billion for 2018.

This resulting 10% hike in generation cost comes at a time when our DoE is working hard to bring down power costs to attract investments and create jobs in manufacturing. Note that power costs represent the bulk of cement production costs, causing our local champions to struggle against foreign competition. High cement prices make it more difficult to provide low-cost housing for the poor.

But all is not lost.

There is still a bicameral committee that can hopefully inject some sense into the tax package. We implore the committee members: Pass the TRAIN but hold the gravy, please.

 

Romeo L. Bernardo is a Trustee of the Institute for Development and Econometric Analysis. He was Finance Undersecretary during the Corazon Aquino and Fidel Ramos administrations.

romeo.lopez.bernardo@gmail.com

Trump says ‘nothing to hide’ as Flynn brings Mueller closer

WASHINGTON/NEW YORK — Former National Security Adviser Michael Flynn’s guilty plea has given Special Counsel Robert Mueller new leverage that may help him pursue more serious charges against others close to Donald J. Trump, perhaps leading up to the president himself.

Mr. Trump, however, greeted the news with a show of confidence, signaling that he believes his campaign and transition teams are on solid legal footing in Mr. Mueller’s probe. In a Saturday tweet, Mr. Trump said Mr. Flynn’s contacts with Russians before the inauguration didn’t violate law.

“I had to fire General Flynn because he lied to the Vice-President and the FBI. He has pled guilty to those lies. It is a shame because his actions during the transition were lawful. There was nothing to hide,” Mr. Trump told his almost 44 million Twitter followers.

Democratic lawmakers seized on the president’s tweet.

“Trump’s claim today that he fired Flynn because of lies to FBI, as well as (Mike) Pence, shows knowledge of lawbreaking he concealed — never before disclosed,” Senator Richard Blumenthal of Connecticut, a former state attorney general, said on Twitter. “Obstruction of justice in the Oval Office unfolding before our eyes in real time.”

Representative Adam Schiff of California, ranking member of the House Intelligence Committee, asked in a tweet, “Why did you fail to act until his lies were publicly exposed? And why did you pressure” then-FBI Director James Comey “to ‘let this go?’”

Mr. Trump hit back in a later tweet Saturday night in which he said: “So General Flynn lies to the FBI and his life is destroyed, while Crooked Hillary Clinton, on that now famous FBI holiday ‘interrogation’ with no swearing in and no recording, lies many times … and nothing happens to her? Rigged system, or just a double standard?”

Mr. Flynn is now cooperating with Mr. Mueller, and as part of his plea deal he provided information related to Mr. Trump’s son-in-law and senior adviser Jared Kushner, according to two people familiar with the matter — a sign that Mr. Mueller’s probe is closing in on the president’s inner circle. Legal experts said Mr. Mueller may seek to use Mr. Flynn’s testimony to build a broader case of conspiracy or obstruction of justice.

Earlier on Saturday, Mr. Trump said he wasn’t worried about what Mr. Flynn may tell investigators probing possible collusion between Russia and members of the Trump team during the 2016 presidential campaign. “There has been absolutely no collusion. So we’re very happy,” Mr. Trump told reporters as he prepared to board Marine One at the White House.

CONTACTS WITH RUSSIANS
Senior White House officials have privately backed Mr. Trump’s remarks, saying they believe Mr. Flynn didn’t violate law in his contacts with Russians, but did when he lied to the FBI, one senior administration official said. The person, who spoke on condition of anonymity, believed that Mr. Flynn didn’t know that the contacts were lawful and therefore felt the need to lie about them.

Mr. Flynn told Mr. Mueller that he communicated with Russia’s ambassador to the US during the presidential transition last December about American foreign policy with the knowledge and direction of senior Trump associates, according to a court document.

The contacts with Russia could violate the Logan Act of 1799, which prohibits US citizens from interfering with relations between the US and foreign governments, said Senator Dianne Feinstein of California, the top Democrat on the Senate Judiciary Committee.

It’s unlikely Mr. Mueller would bring criminal charges solely based on the Logan Act, which doesn’t appear to ever have been used as grounds for prosecution, according to 2015 report by the Congressional Research Service. One US official, who asked to remain anonymous, said that a Logan Act case would be a victory for Mr. Trump and laughable as the grounds for impeachment moves by Congress.

Another White House official said the Logan Act wouldn’t apply during the period between Mr. Trump’s election in November and his January inauguration. The administration instead believes that the transition team — which used a government e-mail system and worked out of federal facilities — would be covered by transition guidelines that authorized them to talk with foreign governments.

Still, if Mr. Mueller identifies violations of the Logan Act, they could be a building block in making a broader case against Mr. Trump or his associates, according to Patrick Cotter, who prosecuted mobsters as an assistant US attorney from 1986 to 1994.

“Mueller’s not sitting there saying ‘I’m building the world’s greatest Logan Act case,’” said Mr. Cotter, who now heads the white collar criminal defense practice at Greensfelder, Hemker & Gale PC in Chicago. “The Logan Act is rare. Conspiracy — not so much.”

Under his deal with Mr. Mueller, Mr. Flynn pleaded guilty of one count of lying to federal agents and provided details about the controversial conversations he held with then-Russian ambassador Sergey Kislyak. In those discussions, Mr. Flynn urged Moscow not to react strongly to sanctions imposed by then-President Barack Obama and to help head off a United Nations resolution condemning Israel.

Mr. Trump was president-elect at the time and Mr. Flynn was a private citizen, although the retired Army lieutenant general was expected to be named to the White House national security post.

According to a court filing, Mr. Flynn said that a “very senior member” of the presidential transition team asked Mr. Flynn on Dec. 22 to contact Russian officials to help delay or defeat the UN resolution on Israel. The very senior member was Mr. Kushner, according to the people familiar with the events.

BANNON, PRIEBUS
Another person familiar with the push against the UN resolution said it was a collaborative effort that involved advisers Stephen Bannon and Reince Priebus, who went on to become Mr. Trump’s first White House chief of staff, as well as Mr. Kushner. Ultimately, Mr. Obama decided not to exercise the usual US veto against such condemnations of Israel, and the resolution went through.

Mr. Flynn also said he reported back on Dec. 29 to a “senior official” in the transition team at Mr. Trump’s Mar-a-Lago resort in Florida on his conversations with Mr. Kislyak about the sanctions that Mr. Obama imposed on Russia because of its meddling in the presidential campaign, the document said.

That official, according to the people familiar with the matter, is K.T. McFarland, who was brought into the transition team and later the White House by Mr. Flynn. The people asked not to be identified discussing internal matters.

The transition official and Mr. Flynn “discussed that the members of the Presidential Transition Team at Mar-a-Lago did not want Russia to escalate the situation,” according to the court document. Shortly after, Russian President Vladimir Putin announced he wouldn’t take retaliatory measures against the Obama sanctions.

White House attorney Ty Cobb downplayed the significance of Mr. Flynn’s decision to cooperate with Mr. Mueller. Mr. Cobb noted that Mr. Flynn was ousted from his post in Mr. Trump’s administration for misleading Vice-President Mike Pence about the nature of his conversations with Mr. Kislyak.

“Nothing about the guilty plea or the charge implicates anyone other than Mr. Flynn,” Mr. Cobb said in a statement.

But now that Mr. Flynn has “flipped” from target to witness, to use a favorite term of prosecutors, Mr. Cotter said Mr. Mueller has a central figure who can provide insight into what was happening within Mr. Trump’s inner circle.

“Flynn becomes, potentially, the hub of a wheel of conspiracy,” Mr. Cotter said.

“It’s not at all surprising to people who do this kind of work that the actual charges as you are building your case don’t go to the heart of the criminal enterprise that you’re investigating,” Mr. Cotter said. “This is clear evidence that Mueller has now moved an entire level up the ladder of his investigation.”

In a statement released on Friday, Mr. Flynn said his guilty plea and agreement to cooperate with the special counsel’s office “reflect a decision I made in the best interests of my family and of our country.” — Bloomberg

Austria named Coach of the Year, takes Perpetual Dalupan Trophy

FOR the third straight year, Leo Austria has been named Coach of the Year by the PBA Press Corps (PBAPC) and the San Miguel Beermen mentor is taking home permanently the prestigious Baby Dalupan perpetual trophy.

In the 24-year history of the PBA Press Corps, no other coach has able to win the award three consecutive times.

Perry Ronquillo of Shell came close to winning the award when he captured the Coach of the Year plum in 1998 and 1999, only to be foiled by Jong Uichico in Year 2000.

Chot Reyes was named co-Coach of the Year awardee alongside Ryan Gregorio in 2002 and won the award anew in 2003, but Siot Tanquingcen, who led Ginebra to two championships in 2004, was chosen as the best coach of that season.

Mr. Austria’s latest feat put him on top of the list.

Although his team was denied of a rare grand slam last season, there was no denying Mr. Austria was the best coach of the season just passed, but the former Rookie of the Year awardee deflected the credit to his players.

“They’re saying, you can bring the horses to the river. But you can’t force them to drink. They’re the real winners. The players execute the plays and win games. Before last season started, they showed respect to everyone. They showed dedication and they built the winning culture,” Mr. Austria said during his speech.

“Winning the Coach of the Year award is not just an individual award, but it is a testament to the team’s success, cohesiveness and the winning culture. I will not be here without them.” — Rey Joble

DPWH budget cuts to spare ongoing projects

THE bicameral conference committee on the 2018 national budget for 2018 will tackle the Department of Public Works and Highways (DPWH) budget on Monday, Dec. 4, according to Sen. Loren B. Legarda, who chairs the Senate committee on finance.

“We will examine the DPWH budget tomorrow in a way that any cuts to be made will not involve ongoing projects,” Ms. Legarda said.

Sen. Panfilo M. Lacson, the committee’s vice-chairman, said in an interview after the first bicameral meeting last week that his proposed amendments to the 2018 budget involving cuts of over P68 billion from the DPWH’s budget, including an P18-billion “lump sum” that the department cannot disaggregate, and another P50.7 billion from projects that have right-of-way issues.

The Senate, during the period of amendments, accepted the P50.7-billion cut. During the interview, Mr. Lacson said the P18 billion can still be removed during the bicameral meeting if the DPWH fails to defend it.

The funds, according to Mr. Lacson, will be diverted to the “Philippine Drug Enforcement Agency (PDEA), teacher’s chalk allowance, feeding programs, and the National ID System (once implemented) of the Philippine Statistics Authority.”

Meanwhile, Ms. Legarda said that the department’s funding largely covers current projects.

“Sen. Lacson has studied the budget to eliminate those with right-of-way issues,” Ms. Legarda said.

Ms. Legarda also said that the committee will restore the funding of those projects that are still ongoing in case they are covered by the 50-billion budget cut.

The senator also clarified that the intention is not to eliminate projects and that the Senate supports the infrastructure program of the administration.

“It is not our intention to remove any projects. We support  Build, Build, Build. But we know that each year there are budgeted funds that go unused, many of them due to right-of-way issues,” Ms. Legarda added.

In a chance interview last week, House appropriations committee chair Rep. Karlo Alexei B. Nograles said that the P50-billion budget cuts being considered are part of the government’s Build, Build, Build program.

“This is part of the Build, Build, Build program. If these funds are cut, does that mean they do not support the President’s Build, Build, Build program? Now they’re talking about TRAIN, the tax reform (legislation). Tax reform presumably is something that is being pursued by Congress to finance Build, Build, Build. So what are they trying to say? That they do not support the President’s program? Is that the message they want to send to Malacañang?” Mr. Nograles said. — Arjay L. Balinbin

Another Abu Sayyaf member caught

A MEMBER of the kidnap-for-ransom group Abu Sayyaf was arrested in Isabela City, Basilan last week through an operation of the Joint Task Force Basilan and police. Rahim Abdul, who uses the alias Aman Kabalu, was apprehended bearing a fragmentation grenade. “Abdul was positively identified by a civilian, leading to his arrest without his resistance,” said Brigadier General Juvymax R. Uy, commander of Joint Task Force Basilan. The suspect was immediately brought to the Basilan Provincial Police Office to face legal charges. From January to May this year, 81 members of the group have been killed, 18 apprehended, and 50 who have voluntarily surrendered, according to the Western Mindanao Command. The military estimates that there were about 500 Abu Sayyaf members at the start of 2017. — Albert F. Arcilla

Hit 2 birds with 1 stone at the Sinag ng Pasko bazaar

CHRISTMAS shopping may not only bring joy to a loved one but also help indigenous people, traditional weavers, craftsmen, farmers, and mothers in underprivileged communities.

The BPI Foundation, the social innovation platform arm of the Bank of the Philippines (BPI), will host the third Sinag ng Pasko bazaar on Dec. 13 at the Palm Drive Activity Center, Glorietta 2, Makati City. This year’s one-day holiday bazaar will feature 40 Filipino social enterprises focusing on food, fashion and accessories, and assorted gift items.

Many of the participating enterprises have undergone BPI’s Sinag Accelerate, a program that is aimed at discovering and empowering social entrepreneurs to expand their businesses to have further impact on community development.

The participating social enterprises include CustomMade Crafts which specializes in handmade products designed with traditional weaves; Akaba, which makes high quality travel bags made with hand-woven textiles; Accents and Petals, which features flowers created made from recycled wood and paper by the Ifugao community; and Tsaa Laya, tea made from local mint and organic Tinaw-on rice harvested from the Banaue rice terraces.

“The Sinag ng Pasko bazaar is about gathering businesses that can make people feel good about themselves,” BPI Foundation Communications/Project Officer Dorina Carita Z. Funk said during her presentation on Nov. 23 at Hineleban Café in Makati City. “[You] got your product, [you] have your gifts, and at the same time, [you] also get to help a lot of people.”

The bazaar will include a program where artisans and entrepreneurs will talk about their businesses, and some fun activities. The enterprises will also offer Christmas bundles and discounts. — Michelle Anne P. Soliman

XXX

For porn lovers, XXX or triple X stands for hardcore sex. But for the religious, XXX can symbolize three crosses.

I lean towards the religious, but XXX has a different meaning for me, other than crosses. I have a friend whose nickname is X — not for ekis (or Madrax, an addictive and risky depressant, which my generation used to pop). His given name is Francis Xavier; hence the nickname X.

The original Francis Xavier is the cofounder of the Society of Jesus or the Jesuits. In the Philippines, the Jesuits who were expelled from China founded Xavier School (XS).

So X is for Xavier, and triple X stands for three Xaviers. Specifically, I write about three alumni from XS who are in a position to shape the economic future of our country. The three alumni are Department of Finance Undersecretary Karl Kendrick Chua (XS ’96), Representative Dakila “Dax” Cua (XS ’95), and Senator Juan Edgardo “Sonny” Angara (XS ’89).

Messrs. Chua, Cua, and Angara are all deeply involved in the crafting of a comprehensive tax reform package dubbed as Tax Reform for Acceleration and Inclusion or TRAIN. Finance Secretary Dominguez has assigned Undersecretary Chua the twin tasks of technically designing the TRAIN package and having this passed in Congress. Representative Cua is the Chair of the Ways and Means Committee of the House of Representatives and is responsible for the passage of the House version of TRAIN. Senator Angara is the Chair of the Ways and Means Committee in the Senate, and is the principal author of the Senate bill on TRAIN.

TRAIN intends to rectify the fundamental weaknesses of the tax structure and make it fairer, efficient, and progressive. It desires to provide personal income tax relief especially for the fixed-income working classes. It wants to rationalize the value-added tax, which suffers from too many unnecessary exemptions. Removing the VAT exemption on many nonessential lines is a way of plugging the tax leakage and hence improving tax administration. TRAIN also adjusts the excise taxes on fuel and automobiles to correct for inflation and to shift the tax burden to those with a higher ability to pay.

TRAIN is necessary to fund expanding programs for education, health, infrastructure, and social protection.

To illustrate, the recently legislated controversial free college education requires P51 billion for its first year of implementation. A forthcoming law on universal health care (the House of Representatives has passed the bill) will require annual spending of more than P65 billion for the medium term. The said amount is necessary to achieve the last mile in health insurance coverage (that is, all Filipinos having health insurance), broaden the coverage of PhilHealth benefits to include primary care, and increase the value of services and substantially reduce the out-of-pocket health expenses particularly of the poor. On top of all this is the bigger amount to repair and modernize infrastructure.

TRAIN is a necessary condition for the country to break out of the middle-income trap. The country needs sustained, robust revenues. This will help achieve the people’s dreams, as articulated in AmBisyon 2040, a reality — eliminating absolute poverty and enlarging a prosperous middle class. It is an investment in the future for nation-building, for strengthening institutions.

Mssrs. Chua, Cua, and Angara, or the XXX, have a role in sustaining the economic and welfare gains for the medium term and in the transformation of the country for the long term. The House version, despite the compromises, passed an acceptable version. It is still consistent with the essential objectives and features of the original TRAIN. For this, Representative Cua and his colleagues in the House deserve credit for cooperating with Finance Secretary Dominguez and Finance Undersecretary Chua. The Jesuit boys did good. (Mr. Dominguez is an alumnus of the Ateneo system.)

Sadly, the TRAIN is in danger of being derailed in light of the watered-down version that the Senate has passed.

The Senate version does not correct the structural problems of the tax system, by still having many exempted items for the value-added tax (VAT) and by allowing a lower increase in fuel excise tax rates that fall short of inflation adjustment. The weakness in structure leads to less revenues, thus adversely affecting the financing of the country’s development program. The revenues to be raised from the Senate version will not even be enough to fund the social protection measures such as the cash transfers for the poor and near-poor households. The failure of the Senate to reform the tax structure is essentially a capitulation to those with vested interests in the economic zones, free ports, and real estate and a surrender to irresponsible populism.

Different stakeholders from economics, business, finance, health and other fields have criticized the Senate version.

For an incisive criticism of the Senate version, see the column written by former Economic Planning secretary Solita Collas Monsod, titled “‘Papa Bear,’ ‘Mama Bear,’ ‘Ice Queen (Philippine Daily Inquirer, Dec. 2, 2017).’”

The views written by Prof. Monsod mirror the positions of other leaders including former Finance secretary Gary Teves, former Finance secretary Ernest Leung, former Health secretary Paulyn Jean Ubial, former Health secretary Esperanza Cabral, Philippine Institute for Development Studies President Gilbert Llanto, former Finance undersecretary Romeo Bernardo, Financial Executives Institute of the Philippines President Benedicta Du-Baladad, Academician Antonio Dans, M.D., et al.

The stakeholders representing the public interest want the bicameral conference committee, which will reconcile the conflicting version of the House of Representatives and the Senate, to assert the good version of TRAIN. Here, we hope XXX will steer the decision at the bicameral conference away from protecting vested interests towards promoting the public good.

Those educated by the Jesuits are proud of being men and women for others. The term “for others” refers to the poor and the downtrodden. Those from XS the XXX, have a deep understanding of being men for others. Their Jesuit mentors, booted out of Communist China, were on a mission to have their students imbibe the Ignatian values of service and sacrifice.

Karl Chua exemplifies the values. He already had a comfortable job with the World Bank, but he opted to join government in spite of the personal difficulties. For Karl sees government service as a more meaningful way of serving country and people for the greater glory of God.

Jesuits are fond of light. Ateneo de Manila’s motto is Lux-in-Domino — Light in the Lord. XS’s motto is Luceat Lux — Let your light shine. We hope XXX will beam the light for the reforms and eliminate the darkness that overshadows the Senate version of TRAIN.

 

Filomeno S. Sta. Ana III coordinates the Action for Economic Reforms.

www.aer.ph

Global takes first leg over Meralco on late goals

GLOBAL Cebu FC drew first blood in its Philippines Football League (PFL) finals series matchup with FC Meralco Manila, beating the latter, 2-1, in the opening leg on Saturday night at the Rizal Memorial Football Stadium on late goals.

Stoppage time goals by Wes Dos Santos and Hikaru Minegishi gave Global, which played as the home team due to the unavailability of its home field in Cebu, the victory that allowed it to take early control of their two-legged aggregate-goals semifinal series.

Meralco dictated the phase of the contest early, putting itself in several solid positions to score a goal.

At the hour mark, the orange and black finally broke through as Tahj Minniecon scored on a penalty kick stemming from a foul off Global left back Darryl Regala.

Meralco did a good job maintaining the lead and control thereafter until Global made a change late in the game that proved to be crucial in the team pulling off the come-from-behind victory.

With 11 minutes remaining, Global coach Akbar Nawas brought on Paolo Salengas for Mr. Regala, a move that would pay dividends later on.

In the 90th minute Mr. Dos Santos headed home a goal off a Minegishi corner, tying the count at 1-1.

Three minutes later, Mr. Minegishi completed the Global comeback, scoring the winner off a nifty setup from Mr. Salengas to stun Meralco.

Mr. Minegishi was named man of the match after and said credit should also be given to their team’s resilience to come out on top.

“We we’re lucky but we never gave up,” Mr. Minegishi said.

Global coach Nawas, meanwhile, heaped praises to Mr. Salengas for rising to the occasion despite coming on late in the game.

“I wish I had two Paolo Salengas, one to start and one off the bench,” Mr. Nawas said of his game substitute.

Having lost the game late, Meralco coach Aris Caslib shared that the team rued the lost opportunity to get the upper hand but nonetheless still confident that they could bounce back and seize it all in the second leg.

“We lost in the last 15 minutes. We did not manage it well. But can we score against Global in the second leg? I think so. Can we defend against them? I think so,” the Meralco coach following their loss.

The second-leg of the Meralco-Global finals series is set for Saturday, Dec. 8, also at the Rizal Memorial Football Stadium. Kickoff is at 7:00 p.m. — Michael Angelo S. Murillo

Swift justice sought on state university president’s murder

SENATE PRESIDENT Aquilino L. Pimentel III, who hails from Cagayan de Oro (CDO) City, called on the police and other law enforcement agencies “to exert and exhaust all efforts to quickly arrest the suspected killers” of Ricardo E. Rotoras, president of the state-owned University of Science and Technology of Southern Philippines (USTP) in CDO. “We are a peace-loving society and killings of this nature must be stopped. The police must do its job to protect and secure the people against rouge elements of society,” said Mr. Pimentel in a statement. The police reported that the 48-year old Mr. Rotoras after he was shot by unidentified men early Saturday morning outside his house at Golden Glow North Subdivision. Senators Paolo Benigno “Bam” A. Aquino IV and Francis “Kiko” N. Pangilinan also issued a joint statement condemning the attack. “We worked closely with him for the passage of the Universal Access to Quality Tertiary Education Act as president of Philippine Association of State Universities and Colleges… His untimely death is a great loss to the country’s push for quality education for every Filipino,” they said. — Mindanao Bureau

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