Alberto Lim

Promises Promises (you knew you'd never keep)

Yesterday, it was reported that the Finance Department was preparing a new raft of taxes for next year’s budget. Having promised “no new taxes” at a speech to prominent businesspersons and having by and large kept to that declaration during his first year in office, the president apparently has given the go ahead to pursue new ways of raising revenue.

With the conflicting policy goals of increasing the years of basic education to 12 from 10, creating universal health coverage, expanding social safety nets via the conditional cash transfers while at the same time reducing the deficit and bringing the budget within 1-2% of GDP, the Cabinet has finally come to the conclusion that intensifying tax collection efforts simply won’t be enough.

Here is the full transcript of the president’s speech at the Makati Business Club back in January 2010 during the heat of the campaign. It was in this speech that the then candidate Aquino declared, “We will refrain from imposing new taxes or increasing tax rates.” During the Q&A that followed, he clarified that this meant no new taxes were intended and were to be used as a last resort.

Even the MBC executive director at the time Alberto Lim hinted (if you read between the lines) that he did not believe this was even appropriate. Evidently that pledge has been interpreted by Cabinet to mean “no new taxes at least during the first eighteen months of his administration.” It appears that the Run After Tax Evader (RATE) and Run After the Smuggler (RATS) schemes cannot be expected to raise revenues by the required margins as the experts had predicted.

The sad thing is that the short window of opportunity for undertaking tough fiscal reforms may have passed by the time they introduce such measures in Congress. Next year, 2012 is an election year. With the proposals on the table being:

  • an increase in the excise tax on tobacco and alcohol,
  • an increase of the VAT rate to 15%,
  • the scrapping of redundant fiscal incentives to smugglers businesses operating in special economic zones,
  • a national real property tax assessment coursed through local government units and deducted from their Internal Revenue Allotments,

it does not seem likely that our representatives will have the appetite to enact them. Sen TG Guingona III who hosted the Open Budget Partnership forum on Tuesday seemed to admit that the measures though “sensible” were politically unpalatable. Never mind that in exchange for the “pain” of these measures, the public will “gain” through reduced corporate and income taxes. The dream of every tax economist is for a flatter simpler system to administer. This is seldom ever achieved in the lobby-ridden halls of Congress.

Window Closed

The time according to former Budget Sec Ben Diokno for instituting such tough measures would have been early in the term of a president (first six months), when his public support is at its highest and a few years from the next election to allow the sting of reforms to wear off and the public benefits to set in. Unfortunately this president chose to delay doing the hard yards until now.

This puts his spending programs at risk. Either way, something will have to give. The government will be forced to either scale back its social services spending or say good-bye to any possible credit upgrade. In all likelihood, it will end up somewhere in-between with half baked spending programs and a mediocre budget position. Society will not gain from an optimal level of social service, and the business sector will not benefit from lower costs of borrowing.

If only candidates were made to cost their campaign promises (as I had advocated during the campaign season), the President would have realized early in the day that a “no new taxes” pledge would be the undoing of his social compact. I recall during the campaign season being challenged on this issue in Manolo L Quezon’s blog site during the unveiling of the Liberal Party’s (LP’s) platform.

My claim was that party platforms usually came with budget impact statements. If you make a campaign pledge to introduce two more years of high school for instance, you need to estimate how much additional spending will be required and how you will finance it. I was told that being in the opposition prevented the LP from performing such an exercise. I challenged this view based on the fact that the LP had a former education secretary (Butch Abad) as an advisor, a recent NEDA secretary general (Ralph Recto) among his senatorial line-up, and the presidential candidate himself who claimed to be knowledgeable of the budget..

Just like Aquino I before him who promised to “honor all debts” whether they be tainted with corruption or not, the pledge of “no new taxes” by Aquino II might have bound the hands of this administration and caused unnecessary damage to its social reform agenda.

My concern was that such platforms turn into sweet nothings after the election, and that issuing such promises without costings was irresponsible. In the previous UK elections for instance, the Liberal Democrats under the now Deputy PM Nick Clegg which for a time was tipped to upset the major parties, prepared a fully costed first year’s budget in their manifesto hoping to project an image of a party ready to govern. Of course after having formed a coalition agreement with the Conservatives, they had to backtrack on some of these pledges, but the point is, in these mature democracies, if you want to be taken seriously during the campaign, you need to engage in serious pencil pushing and numbers crunching before formalizing your manifesto.

(Note: The reason why this is possible under the parliamentary system is that during the formal campaign when the government goes into caretaker mode, the bureaucracy is made accessible to the Opposition. So any costings for any planned effort can be run through the treasury department. But even so, under the presidential system in the US, a number of think tanks and advisors proliferate that would allow for such calculations to be made. The same applies in the Philippines.)

The other problem for me was that certain party nominees for the Senate had not signed on to the LP platform. If you for instance adopt responsible parenthood as one of the key planks in your program of government, then all those who run under your banner must sign on to it. How can you endorse someone opposed to it? It should be a condition of joining the team that each nominee must commit to support the proposed policies embodied in the document. The fact that they weren’t required to do so (TG Guingona and Ralph Recto oppose the RH bill or have serious reservations), shows how “airy fairy” these pledges become.

Aquino I and II: uncanny similarities

Just like Aquino I before him who promised to “honor all debts” whether they be tainted with corruption or not, the pledge of “no new taxes” by Aquino II might have bound the hands of this administration and caused unnecessary damage to its social reform agenda. A similar parallel can be drawn in the case of the CARP and the RH bill. Under Aquino I the legislation on agrarian reform was stalled until the more conservative forces in  congress could water it down. The RH bill seems to be suffering a similar fate due to the weak support being received from the president in the face of stiff opposition from the conservative Catholic bishops conference.

So as we approach the final quarter of P-Noy’s first year in the Palace, we probably should load up the karaoke and sing along with Naked Eyes. This is probably the only solace we will find in the wilderness of broken promises.

[youtube]http://www.youtube.com/watch?v=2D7GVyTtH1M[/youtube]

C’mon sing along!

Never had a doubt
In the beginning
Never a doubt
Trusted too true
In the beginning
I loved you right through
Arm in arm we laughed like kids
At all the silly things we did

You made me promises promises
Knowing I’d believe
Promises promises
You knew you’d never keep

Second time around
I’m still believing words that you said
You said you’d always be here
“In love forever”
Still repeats in my head
You can’t finish what you start
If this is love it breaks my heart

You made me promises promises
You knew you’d never keep
Promises promises
Why do I believe

Arm in arm we laughed like kids
At all the silly things we did
You can’t finish what you start
If this is love it breaks my heart

You made me promises promises
You knew you’d never keep
Promises promises
Why do I believe
All of your promises
You knew you’d never keep
Promises promises
Why do I believe

Promises
Promises
Promises
Promises
Promises

 

Purisima richest, Luistro poorest in Cabinet

Purisima richest, Luistro poorest in Cabinet
By Christina Mendez
The Philippine Star

MANILA, Philippines – Finance Secretary Cesar Purisma is the Aquino administration’s richest Cabinet member with a net worth of over P252 million while Education Secretary Armin Luistro is the least moneyed with only over P89,000.

The figures were based on the Statements of Assets and Liabilities and Net worth (SALN) submitted by the two officials and 16 other Cabinet members to the Commission on Appointments. Luistro declared his annual gross salary at P989,496.

Purisima, one of the campaign contributors of President Aquino, listed business interests – in partnership with his wife Maria Corazon – in at least four corporations.

The Finance secretary owns Filhouse Gem Inc., which he acquired on Feb. 24, 1997.

Purisima’s wife listed 20 to 23.53 percent share in MHC Commercial Corp., Zurcaled Realty and Development, and Archimedes Realty and Development Corp.

Purisima’s real properties include a condominium in Wack Wack Tower in Mandaluyong City; a unit in Villa Milagrosa Townhouse in San Pedro, Laguna; a house and lot in Ayala Alabang which he co-owned with his father and two sisters, and a condominium in Pinecrest, Tagaytay.

The second richest in the Aquino Cabinet is Trade Secretary Gregory Domingo whose net worth for this year is more than P151 million. He listed his wife, Rowena, as being a shareholder in Rights Security.

Following Domingo was Energy Secretary Jose Rene Almendras with a net worth of over P129 million.

Almendras reported owning a BMW 520-I worth P3.7 million, which he acquired in 2005 in addition to three other cars.

In his SALN, Almendras also listed P3.58 million in club shares and P9.264 million in various shares of stocks, and bank deposits/placement/foreign current placements amounting to P57.825 million.

Agriculture Secretary Proceso Alcala, former congressman of the second district of Quezon, has a total net worth of more than P87 million comprising 10 real properties, a number of vehicles and some investments.

Alcala has a real estate mortgage worth P11,447 million, three car loans with various banks as well as personal loan.

Public Works Secretary Rogelio Singson listed net worth of more than P84 million.

Health Secretary Enrique Ona, former executive director of the National Kidney and Transplant Institute, reported total net worth of over P77 million.

Ona included in his assets P74.441 million in stocks and investments, P2.596 million in motor vehicles, P1.317 million in cash and jewelry, and P500,000 in medical instruments.

Ona’s liabilities included P5.2 million in personal loans and income tax payables.

Science Secretary Mario Montejo reported more than P53 million net worth.

Tourism Secretary Alberto Lim listed close to P47 million net worth.

Lim reported being a shareholder in the Aldaba-Lim Foundation; Phil. Playhouse Inc; The Ancient Pergamom Holdings Inc., among other firms.

Defense Secretary Voltaire Gazmin has a net worth of over P23 million listing among others investments in Tagaytay Highlands, Malarayat Golf and Country Club, and Great Cakes Inc, and a number of real estate properties.

Executive Secretary Paquito Ochoa Jr. listed his net worth at P16.081 million with no liability.

Ochoa included in his assets a condominium unit in Quezon City, a house and lot in Ferndale Homes also in Quezon City and a lot in Pulilan, Bulacan.

National Security Adviser Cesar Garcia reported P15.6 million in net worth.

Agrarian Reform Virgilio de los Reyes has a net worth of P15.042 million. De los Reyes listed several real properties in Lian and Balayan, Batangas; Obando in Bulacan, and Malabon totaling P8.786 million.

Foreign Secretary Alberto Romulo’s net worth totaled P5.7 million while Justice Secretary Leila de Lima has P3.2 million.

Social Welfare Secretary Corazon Soliman has a total net worth of P2.125 million. Environment Secretary Ramon Jesus Paje’s SALN showed his net worth at P3.2 million, but he did not submit SALN documents to the CA because his name was not submitted for confirmation by the Palace. The CA received no SALN from Interior Secretary Jesse Robredo and Socioeconomic Secretary Cayetano Paderanga.

So far, the CA has only started the confirmation hearings on Luistro and Almendras. The CA has set a confirmation hearing for Lim on Dec. 8. – Aurea Calica

CABINET ASSETS

1. CESAR PURISIMA (finance) P252 M

2. GREGORY DOMINGO (trade) P151 M

3. JOSE ALMENDRAS (energy) P 129 M

4. PROCESO ALCALA (agriculture) P87 M

5. ROGELIO SINGSON (public works) P84.4 M

6. ENRIQUE ONA (health) P77.5 M

7. MARIO MONTEJO (science) P53.1 M

8. ALBERTO LIM (tourism) P46.9 M

9. VOLTAIRE GAZMIN (defense) P23.1 M

10. HERMINIO COLOMA (communications) P14.7

11. PAQUITO OCHOA (executive secretary) P16 M

12. CESAR GARCIA (national security) P15.6 M

13. VIRGILIO DELOS REYES (agrarian reform) P15 M

14. ALBERTO ROMULO (foreign affairs) P5.7 M

15. LEILA DE LIMA (justice) P3.29 M

16. RAMON PAJE (environment) P3.25 M

17. CORAZON SOLIMAN (social welfare) P2.1 M

18. ROSALINDA BALDOZ (labor) P1.7 M

19. ARMIN LUISTRO (education) P89,000

Aquino scraps 'Pilipinas kay Ganda'

Aquino scraps ‘Pilipinas kay Ganda’
By Aurea Calica
The Philippine Star

MANILA, Philippines –  As criticism against “Pilipinas kay Ganda” turned nastier, President Aquino finally decided to drop the newly conceived tourism slogan and hinted at reviving the old “Wow Philippines.”

The President said he arrived at the decision after meeting with various stakeholders and with Tourism Secretary Alberto Lim.

“The stakeholders appear unsatisfied. Perhaps it’s automatic that it no longer needs fine-tuning, but a replacement that will be more appropriate,” Aquino told reporters in Malacañang yesterday after receiving world boxing champion Manny Pacquiao.

Aquino acknowledged that “Wow Philippines” appears more acceptable to most Filipinos. “Wow Philippines” was the country’s tourism battle cry during the previous administration.

The President said he had also asked Lim to submit a blueprint for developing the country’s tourism industry.

“I want to review all the details,” Aquino said.

On Friday night, the President said he and Lim discussed a number of things, including the details of the overall tourism master plan.

In his own words: Why they’re Aquino’s Chosen

In his own words: Why they’re Aquino’s Chosen
By Philip Tubeza
Philippine Daily Inquirer

WHO IS THE CABINET member whose “first assignment” is to get at least “three hours of sleep” daily? Who did President Aquino have to “beg” to join his official family? And who “possesses 80 percent” of his brain?

Backed by an overwhelming electoral mandate, Mr. Aquino has assembled a team of new faces and old hands—a number of them from the Cabinet of his mother, the late former President Corazon Aquino—to help him take on the huge task of running the country.

Here, in his own words, are the key men and women who will help bring about the “real change” that he promised during the campaign.

PAQUITO “JOJO” OCHOA JR. (executive secretary). I’m not a lawyer; Jojo has helped me understand the intricacies of the law ever since I started in public office. Our relationship is on a second-generation basis already.

Our parents were allies in the Liberal Party, and we have been consistent allies throughout our lives. He has given me the most sound advice on so many matters pertaining to my work as legislator. Therefore, I’m very confident of his role as the guardian of my back. He’s more than qualified.

ALBERTO ROMULO (foreign secretary). He has graciously consented to retain his position. And we are very fortunate to have him as a senior member of the Cabinet.

CESAR PURISIMA (finance secretary). I think his credentials speak for himself. But for most of these people, their credentials speak for themselves.

LEILA DE LIMA (justice secretary). I am very sure you are familiar with the quality of her work. The judicial branch is a very important portion of our platform, and again we are very fortunate to get her to consent to carrying the burden primarily for judicial reform.

VOLTAIRE GAZMIN (defense secretary). Perhaps he is one of the key people who gave me the opportunity to be present before you because he took good care of us [throughout] the numerous coup attempts during my mom’s incumbency. And then there is his continuous dedication to the Filipino people in this very abnormal situation we find our country in.

BR. ARMIN LUISTRO FSC (education secretary). I think his coming from the Ateneo de Manila University already speaks highly of his qualifications, that I begged him to join the Cabinet.”

FLORENCIO ABAD (budget secretary). The Department of Budget and Management will have as its head my mentor, who is obviously older than me. He has been a five-time congressman.

The budget is the enabler of all our policy decisions. We believe he is the best person at the present time to assist us in judiciously spending the people’s funds.

CAYETANO PADERANGA JR. (socioeconomic planning secretary). We will have a National Economic and Development Authority that will give us sound advice based on economic, and not political, considerations.

PROCESO ALCALA (agriculture secretary). One of his innovations was to enable farmers in his district to have a centralized market where buyers and farmers deal with each other directly, bereft of middlemen. This increased profits of farmers and dropped prices for consumers.

He has been heavily involved in environmental concerns in and outside Quezon. Organic farming and so many aspects of agriculture have been his advocacies.

RAMON PAJE (environment secretary). He graciously agreed to serve as secretary of the Department of Environment and Natural Resources.

JOSE DE JESUS (transportation and communications secretary). He served in my mother’s Cabinet, both as secretary to the Cabinet and as public works secretary. He was one of the most, if not the most, hardworking members of my mother’s Cabinet.

As public works secretary, he slept three hours a day to make sure government projects were done in a timely and correct manner. His only luxury was a five-hour rest period on Sundays.

His first assignment is to make sure he sleeps more than three hours a day because he is a work-driven individual who will oversee the transformation of the Department of Transportation and Communications, which was characterized by the NBN-ZTE deal, into an agency that truly serves the interests of the people.

ROSALINDA BALDOZ (labor secretary). She used to head the Philippine Overseas Employment Administration, among other agencies. Her concentration also is on the workings of the National Labor Relations Commission, which, we believe, is in need of very strong reforms. We find in her the capability to make the labor department truly responsive to the needs of the working man.

ENRIQUE ONA (health secretary). In our interview, we saw in him the potential to become a complete alter-ego, especially given the fact that the health agenda is No. 3 on our platform. And he has been given instructions specifically to expedite universal coverage of PhilHealth, which is one of our campaign promises.

ALBERTO LIM (tourism secretary). He has been involved in various business endeavors including the setting up of [the world-class resorts of] El Nido and Amanpulo.

The bottom line is that tourism is seen as one of the key venues for increasing jobs. We need someone who has proven competence in this field. Hopefully, in the not too distant future, we will have as aggressive and successful a campaign as Thailand’s with regard to visits by Filipinos there.

GREGORY DOMINGO (trade and industry secretary). He served as undersecretary for the Board of Investments, and also was executive director of SM Investments Corp. and international trade law and business law lecturer of De La Salle University’s MBA program.

We see the trade and industry portfolio as very essential, to be headed by a very competent individual who will foster the necessary trade and investments that will lead to the fulfillment of the first part of our platform, job generation.

CORAZON SOLIMAN (social welfare secretary). She needs no introduction.

MARIO MONTEJO (science and technology secretary). He is a man of numerous titles, meaning many degrees, and a person I have known for decades. He is among a group of academicians who set up a corporation to translate their scientific studies into practical and applied technology for their countrymen.

Among their inventions were deep-well filters which were previously imported from Australia to the tune of 80 percent. They designed the filters and also invented the machinery to produce all these filters.

Are you familiar with the amusement park Water Fun, the first that featured slides, waves, etc.? That was Filipino technology—Dr. Montejo and his team’s effort.

None of it was licensed from abroad. It was Filipino-designed, -enhanced, and -experimented.

We expect him at the helm of the Department of Science and Technology to provide the backup for any agency that would propose projects involving technical considerations—be it the creation of a dam or the provision of IT services—to include the capability of Phivolcs and Pagasa.

We want an agency that can completely evaluate the proposals presented to us.

The current practice is to ask the proponent to evaluate and justify his proposal, which I think is counterproductive. The DOST under Dr. Montejo will be a real partner as an agent of change.

JOSE RENE ALMENDRAS (energy secretary). I’ve known him since our college days. He is a very good friend of mine and [was] with Manila Water. His main training is in finance.

For the energy portfolio, obviously we want somebody who is not part of the industry inasmuch as there will be a lot of dealings with the industry. We do not want to fall into a trap of regulatory capture.

He has proven competence in the various firms he has headed and worked for. This enables him to handle the Department of Energy, which is primarily a finance-heavy component of our Cabinet.

ROGELIO SINGSON (public works secretary). He has a very extensive CV and is not a stranger to most of us. It is coincidental that he [was] with Maynilad.

Hopefully, our water utility sector will not suffer with his and Almendras’ absence.

VIRGILIO DELOS REYES (agrarian reform secretary). I met him for the first time at the interview and I was very impressed with his knowledge of the problems pertaining to agrarian reform… which unfortunately are not covered by the Carper law.

Hopefully he will help us craft amendments to make sure the Department of Agrarian Reform is able to fulfill its primary mandate of empowering farmer beneficiaries throughout the country.

TERESITA QUINTOS-DELES (presidential adviser on the peace process). She is the second most closely guarded secret among the Cabinet appointees.

JULIA ABAD (Presidential Management Staff chief). I have been served faithfully by her ever since I became a senator three years ago. She has undergone extensive schooling. But more than that, she has my absolute trust, having run my office. If I have been able to do anything in the Senate, it is because of her. I think she possesses 80 percent of the brain I am holding. (See story on Page A1).

EDWIN LACIERDA (presidential spokesperson). He has been, will be, and hopefully will always be [my spokesperson].

EDUARDO DE MESA (presidential legal counsel). He is one of the first lawyers who helped when I took on public service in 1998.

PATRICIA LICUANAN (Commission on Higher Education chair). She will, as her primary mission, rectify the current situation where the agency tasked to oversee higher educational institutions seems to be sleeping on the job. For example, we have over 40 nursing schools who have not had a single board passer for quite a long time.

She will refocus CHEd so that it will serve the interest of the people rather than institutions that have no right to set up courses they are not competent in teaching.

KIM JACINTO HENARES (Bureau of Internal Revenue commissioner). She has been functioning in effect as secretary to the Cabinet in all the policy briefings that I have been subjected to. She has been very effective in answering a lot of questions in my rushed preparations for the presidential campaign.

More importantly, it is through her and the customs commissioner (whom we have yet to designate) that we hope to recover the tax collection efficiency first demonstrated by the Ramos administration, and, together with the finance secretary, give us the needed revenues without unnecessarily resorting to new taxes.