Despite odds, BIR delivers

In itself, this column is an oddity at this time of the year. This is because this is supposed to be the season for bashing the Bureau of Internal Revenue (BIR) and ours is an attempt at a maverick view of this much-maligned agency.

In an earlier column, we already pointed out the infirmity and folly of indulging in the ritual of a "monthly" BIR revenue collection report. This, we underscored, merely provided ammunition for the now-famous smear gang constantly plotting against the hard-working, soft-spoken duo at the helm of the revenue collection effort – Finance Secretary Gary Teves and BIR Commissioner Jose Mario Buñag.

The smear gang, as we have always pointed out, capitalizes on alleged revenue collection "shortfalls". The gang, however, does not explain the nature and cause of such "shortfalls". Understandable. The objective is to whip up hysteria against the Teves-Buñag tandem and provide an "excuse" to have their client/s appointed to the plum posts.

The hysteria is unfair not just to the Teves-Buñag tandem, but to the country as a whole. The misleading presentation of a "monthly shortfall" could damage the country’s image in the international financial community. In turn, a dented image could jeopardize efforts to raise funds for development.

But the smear job is unfair to all of us, too. This is because the hysterical presentation of the "shortfall" impairs our ability to interpret the collection figures correctly and colors our own perception of the government’s revenue collection effort.

The fingerprint of the smear gang is all over media stories that cap "shortfall" stories with speculations that the Teves-Buñag tandem could be replaced as a result. Nowhere in these spin materials are the real reasons for such performance levels explained.

Our media colleagues, in fact, noted that the negative stories on the latest collection report did not highlight the fact that the major contributors to the so-called "shortfall" are factors way beyond the control of the BIR and therefore did not reflect the quality of the collection effort the agency exerted.

For example, it appears the primary "culprits" which dragged down collection levels during the first nine months of the year were items like bank deposits, Treasury bills, and excise tax on miscellaneous products.

Collection of taxes on bank deposits was P6.92 billion below the expected level. Taxes from T-bill interests were P6.620 billion short. Excise tax on miscellaneous products were off by P0.524 billion.

Teves‚ and Buñag’s fault? Failure on the part of BIR men? That was what the demolition crew wanted us to believe. But what’s the real score?

Taxes on bank deposit interests plunged because interest rates were down, below the so-called programmed weighted average interest rate. The BIR could not do anything about this. Decisions on interest rates are determined by banking sector regulators and the market as well. The BIR could not help it if liquidity is high and there are less takers on available loan facilities. The BIR could not stop banks and regulators from encouraging lower rates on deposits in order to entice the mobilization of savings for commerce and business.

The same is true on the issue of shortfall in T-bill tax collections. It is not within the BIR’s powers to tell government to issue more T-bills or to raise interest rates on these instruments so it can collect more taxes.

We cannot also blame the BIR if more Filipinos preferred to buy imported cars and if there was a decline in volume of removals of cars spurred by the 70-percent value-added tax cap. The excise tax on these products took a dive, but what can the BIR do with consumer preference? Should Finance and BIR officials ask people to buy more so collection of excise taxes on miscellaneous products can increase?

So, there you are. Those are the aspects of the "shortfall" that the smear gang does not bother to explain to us. These are items totally beyond the control of the collection agency.

What we were also not told is that the BIR did fare very well on the items within its control. For example, the agency did monitor corporate and individual taxpayers well and laid out just enough incentive resulting in unprecedented revenue collections from these sectors.

We were, of course, not told that Buñag exceeded his corporate income tax collection target for the first nine months of the year by P19 million. We were not told that the Commissioner – who smiles amid the muckraking – exceeded his individual income tax collection target by a whopping P2.79 billion. We were not told because we would realize that on the items within its control, the BIR did well.

The smear drive wants us to holler in hate over the September 2006 "shortfall". Where was the smear gang when the agency marked a target overshoot in August?

Teves and Buñag appear to have accepted the fact that the smear drive is part of the territory, a given as far as their jobs are concerned. No, we have not heard them holler back at the detractors. They have absorbed the heat. The only thing we have heard from them is what they are doing to make sure targets are met.

No, we are not taking up the cudgels for them. Their respective national reputations are strong enough to negate the smear campaign.

We are taking up the cudgels for the public who are misled by the misinterpretation of the collection "shortfall".

Let us not allow the perpetrators to shortchange us.

Ratings game

The word war between AGB Nielsen, GMA Network, and ABS-CBN Broadcasting continues.

GMA Marketing & Productions recently sent to advertisers and media agencies a strongly worded letter criticizing the AGB People Meter reports on the ratings of free TV programs among cable viewers.

Based on these reports, all ABS-CBN programs outrated their GMA 7 counterparts among cable households while GMA shows rated higher than the ABS-CBN programs among non-cable households. As a result of the wide lead of ABS-CBN programs among cable homes, the lead of GMA programs among non-cable viewers was almost wiped out in arriving at total ratings, noted GMA Marketing president Manuel Quiogue in his letter.

He says that there was a significant advantage enjoyed by ABS-CBN programs on Sky Cable and Home Cable (owned by the ABS-CBN group) households versus the ratings obtained for subscribers of Destiny and other cable companies.

Quiogue in his letter is hinting of a possible conspiracy between ABS-CBN and AGB Nielsen, saying ABS-CBN had advance information of the data.

GMA’s letter of course earned the ire of AGB Nielsen. According to the latter, it has already explained to GMA the possible causes of the difference in viewership and noted that GMA was consulted when the new audience measurement panel for Mega Manila was set up. AGB says that even after 100 percent of all cable panels were replaced, the data differences for cable viewing remained approximately the same.

AGB-Nielsen says it is understandable that there will be occasions when not everyone will be pleased by the ratings, adding that interestingly, broadcaster clients who on other occasions can be very happy with the data never question the results when their programs perform well.

ABS-CBN however has a good explanation for the huge disparity in cable and non-cable viewers‚ preferences. All Channels from 2 to 6 because of their low-band frequency are vulnerable to noise such as those generated by use of electricity and telecommunications activities. They interfere with reception especially in the suburbs and not so much in Metro Manila which are closer to ABS-CBN’s transmission towers. This could explain why ABS-CBN is doing significantly better in Metro Manila than in the suburbs.

But connection through cable takes away the vulnerability of ABS-CBN’s reception from noise. Thus, among cable homes, the playing field is level and ABS-CBN’s reception is equal to that of any high-band channel. The only variable becomes quality of content.

For many years, ABS-CBN has lost to competition in Iloilo because the signal comes all the way from Bacolod making it weak. However, when it up its Iloilo transmitter towards the end of 2004, it quickly dominated the area. For a long-term solution to reception problems, ABS-CBN plans to spend billions of pesos for the introduction of digital TV starting next year.

ABS-CBN was among the first to sign up with a third party for the conduct of national TV ratings. Let’s hope that GMA joins ABS-CBN in putting a stop to this bickering by having a third party survey put a stop to this ratings controvery. After all, many viewers do not care about ratings. At least I don’t. What matters is that they deliver.

Manifestations of Excellence

Just recently, we wrote about how Security Bank has all of a sudden been in the limelight for doing their thing – and doing it right!

The other week, our opinion was validated by no less than the International Association of Business Communicators (IABC) when they cited Security Bank president and CEO Alberto Villarosa as recipient of the IABC’s 2006 CEO Excel Awards in the banking, finance and insurance category.

The IABC designed the annual CEO Excel Awards to be the ultimate event for recognizing the brilliance of CEOs who have recognized, appreciated and mastered the efficiencies that communications can contribute in achieving operational and financial goals of the companies.

Villarosa’s method was simple: increased openness in terms of stakeholder as well as general public information. Evidently, his 30 years of banking experience have proven the strategic impact communications has on an organization’s endeavor to achieve its goals.

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