Sunday, May 20, 2018
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Dirty hurry

Senator Franklin Drilon, who took over from Sen. Ralph Recto the chairmanship of the powerful ways and means committee to push for the “sin tax” bill of the Aquino (Part II) administration, insists that the pending bill is both health and revenue measure.

But other senators say it can only be one or the other.

And so, in the floor debates on the bill last week, Drilon seemed to have a hard time defending the bill from the probing questions of his colleagues, such as Senators Joker Arroyo and Panfilo Lacson.


In fact, on almost every point that the other senators would raise, Drilon had to consult with Revenue Commissioner Kim Henares and Finance Undersecretary Jeremias Paul.

Actually, Drilon was only trying to save the bill that the Palace had certified as an urgent priority measure, since the Department of Finance claimed it would raise for the government some P60 million more in yearly revenue.

That was a figure that Recto found unrealistic when he was still chair of the ways and means committee, and even the DOF admitted it was a figure straight from dreamland.

Thus, Recto scaled down the projected revenue, which the people of our leader Benigno Simeon (aka BS) apparently did not like, because they went to media to attack Recto, forcing the senator to resign as chair of the committee.

In business, it was said that the “sin tax” bill was a sure goner when Recto abandoned it, since it would take a lot of time and effort for his replacement to duplicate his deep understanding of the intricacies of the revenue measure.

But can the ever-game Drilon really save the bill, considering that in the plenary debates last Monday, for instance, he was put on the spot fielding queries from his colleagues, exposing his obvious lack of preparation?

He repeatedly claimed that the bill, more than anything else, was really a health measure, designed to make “smoking” less affordable to Filipinos through the huge increases in tobacco excise taxes.

Here is the thing: If the bill actually aims to discourage Filipinos from smoking, why can the government not just ban cigarettes 100 percent—just like the Aquino (Part II) administration banned logging 100 percent.


As it is, the administration wants to push for high taxes on so-called “sin” products (i.e. alcoholic drinks and tobacco), wanting to raise P60 billion more in revenues every year.

How could the government raise money if people would stop smoking?

Incidentally, Lacson seemed to agree with Drilon that, because of the hefty increase in the tax, cigarette consumption would tend to go down, which should be good for the health of Filipinos.

So Lacson also asked, if cigarette sales would drop heavily, how could the Aquino (Part II) administration expect to raise a lot of revenue from the measure, initially estimated by the DOF to reach P60 billion in additional income every year, which was later reduced to P40 billion?

Still, Drilon insisted that the decline in revenue—due to the hefty increase in the tax—did not happen in “other jurisdictions.” As to what “jurisdictions” they were, unfortunately, the good senator did not say.

On the contrary, studies after studies conducted in other countries (such as England, Singapore and the United States) all pointed to a drop in revenues because of punitive tobacco taxation, mainly because the high taxes only encouraged smuggling.

Aside from the ways and means committee, Drilon is also chair of the powerful finance committee, which is also trying push for the passage of the 2013 General Appropriations Bill, with barely a month before the Senate shifts to campaign mode for the elections in May next year.

It means that, for the guys down here in my barangay, who will bear the brunt of the 1,000-percent increase in the taxes on low-priced cigarettes that the administration wants to impose, there will hardly be any meaningful debate that will happen in the Senate on the 2013 budget. As part of its dirty job, the Senate will have to hurry up both the budget and the “sin tax” bills.

There goes the slogan about the straight and narrow path.

*  *  *

According to news reports, trouble nearly broke out last Friday at the port operation and industrial complex called Manila Harbour Centre in Tondo, Manila, when private armed security personnel prevented government officials from executing a court order.

It so happened that the order was for the company behind the complex, R-II Builders, to surrender control of the area to a group assigned by the government—the Manila Harbour Centre Industrial Park Association Inc. (MHCIPA).

R-II Builders is owned by the Romero family, headed by Reghis Romero II and his son Mikee Romero, who is the man behind the “Batang Pier” team in the local professional basketball league.

Their complex guards barred the court sheriff from entering the complex and serving a writ of execution issued by Branch 24 of the Manila Regional Trial Court.

Now, the MHCIPA is the association of businesses at the complex, and it received the assignment to manage the common areas in the complex from the Housing and Urban Development Coordinating Council, or HUDCC, which is among the agencies under the care of Vice President Jejomar Binay.

As part of his program, Binay wanted to strengthen housing agencies, including HGC, or Home Guaranty Corp., which is the government outfit fighting the Romero family and R-II Builders in court over control of the Harbour Centre complex.

It all dated back to 1993, during the time of President Fidel Ramos, when the government entered into a joint venture with R-II builders for the construction of about 3,000 housing units at the Smokey Mountain dumpsite. In return, the company would be allowed to operate the port business complex on the reclaimed land.

Unfortunately, R-II Builders could not finance the project, forcing it to adopt a circuitous funding scheme, involving the issuance of IOUs covered by all the properties in the project, which in turn were backed by the HGC.

About 10 years later in 2002, the IOUs matured and HGC had to make good the guarantee it gave on the IOUs, since the trustee bank, Planters Development Bank, announced that there was no money to pay for them.

Thus, all the assets in the project that were used to cover the IOUs, should eventually be assigned to the guaranteeing HGC, which the Romero family and R-II Builders contested in court. The case went all the way up to the Supreme Court, which eventually ruled against the Romero family.

HGC filed another case, aiming to compel the Romero group to surrender to HGC the controlling shares in the port and industrial complex, plus a full accounting of all revenues in the business to determine how much of it should belong to the government as its five-percent share.

Moreover, HGC demanded that the Romeros should vacate the complex, which the court recently ordered, leading to the trouble at the complex last week.

Issuing the order was Acting Presiding Judge Lyhila Abella-Aquino, who also issued a stern warning to R-II Builders about its record of disregarding court orders, even that one issued by the Supreme Court.

From what I gathered, it was still touch and go at the complex during the weekend. We can only wonder what our leader, BS, will do next, considering that this is the man who dared to oust the Chief Justice.

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TAGS: court, Franklin Drilon, Manila Harbour Centre, R-II Builders, Senate, sin tax bill, sin taxes
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