Government flip-flopping

Barely a year after saying that his agency opposed proposals in Congress imposing increases in the excise tax rates on alcohol and tobacco products, Budget Secretary Butch Abad made a u-turn, claiming that his agency is actually for the hike.

This somersault in fiscal policy only shows how feeble-minded the country’s economic managers are. It gives the impression to the international community that the Philippines does not have a long-range economic plan to sustain growth.

No wonder, international business news provider CNBC ranked the Philippines as the worst Asian country for business, saying that the country attracted just 2.5 percent of the $76.5 billion of foreign direct investment that flowed to the 10 ASEAN members.

CNBC noted that foreign businesses are wary of the Philippine’s unstable legal system, violence, and bureaucracy, adding that the country also ranks among the lowest when it comes to starting a business, and resolving insolvency, with the latter taking more than five and half years, compared with an average one year and seven months in OECD countries.

Abad’s flip-flopping is a clear manifestation of a rickety strategy. First, he told Congress that he is opposing the indexation of alcohol and tobacco products and that in fact, the unitary system is regressive. Barely a year after, he denies this, claiming that this came from an outdated position paper.

Abad glosses over the fact that the position paper which his agency submitted just last Nov. 2010 to the House ways and means committee is supported by a study of the National Tax Research Center which reported that increases in tax rates do not necessarily mean that the government will have higher tax collection.

Abad justified his flip-flopping position by saying that he now supports the government’s proposal to impose a single rate tax on alcohol and tobacco products which became part of the Legislative-Executive Development Advisory Council (LEDAC) list of priority bills..

During the LEDAC meeting last August, the country’s finance managers failed to answer questions asked by members of Congress on the impact of the unitary system to the alcohol and tobacco industries, and to justify the basis of the P60- billion incremental revenue projection of his department.

For Pete’s sake, can somebody tell us then how this government determines what should be its priority measures when its key departments ignore the results of its own study.

Obviously, the standing of the Philippines will not improve as long as our government agencies continue to ignore economic realities.

Gross misrepresentation

Farmer-organizations have become restive lately following reports that they are being used as front by an official of a losing party list group to legitimize and perpetuate his hold in the position that belongs to a true farmer-representative.

Sources say Silvestre Bonto, an official of the National Confederation of Irrigators Association (NCIA) which was disqualified by the Comelec in May 2004, surprisingly found a way to represent the farmers in the National Food Authority Council (NFAC).

This was despite denial from the National Irrigation Administration (NIA) that they have endorsed Bonto to the Philippine Farmers Advisory Board (PFAB) whose chairman automatically becomes a member of the NFAC. 

NCIA was disqualified because according to the Comelec, its nominees do not belong nor represent a marginalized sector.

The NIA has questioned the act of gross misrepresentation by Bonto while a number of farmer groups have called for his suspension from the council. The NIA-Institutional Development Division (IDD) said that it has not endorsed any person belonging to any of the irrigators associations it helped organized. The IAs have yet to form themselves into a national confederation.

NIA administrator Antonio Nangel said that his office never endorsed Bonto, as farmers representative to the council.

For his part, NIA-IDD chief, engineer Renato Gamboa, said the IAs are still in the process of organizing themselves into a national association to comply with the requisite of an international institution extending financial assistance to the farmers.

Nangel and Gamboa said they have not issued any document endorsing or recommending Bonto as representative of the farmers to the FPAB and ultimately to the NFAC. Bonto they said is a political animal being the president of NCIA , registered in the Comelec as a party list organization.

There are reports that Agriculture Secretary Proceso Alcala, concurrently NFAC chairman, has ordered an investigation into the alleged misrepresentation by Bonto following reports of his activities relating to the reported disposal of NFA old stocks of imported rice. If this is true, then the agriculture department is moving in the right direction.

Farmer-groups from Central Luzon are also calling for the immediate suspension of Bonto’s representation from the NFAC pending investigation of the accusations against him.

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