Baguio crisis

Tourists and residents have started to feel the growing tension in the Summer Capital’s Camp John Hay. The city has become nervous over reports that officials of the Bases Conversion Development Authority (BCDA) have already started to build up an armed group to implement a planned forcible take-over.

Last we heard, the Camp John Hay Development Corp. (CJHDevco) was able to secure a temporary restraining order (TRO) that has temporarily staved off an imminent armed take-over of the facility led by BCDA president Arnel Casanova. Baguio City Mayor Mauricio Domogan, we were told, is both nervous and upset over Casanova’s planned armed take-over.

The mayor is now reportedly worried that the growing tension could send the prized tourists packing. Domogan would also prefer that Baguio City be associated with cold Januaries rather than with violent confrontations.

Baguio’s business community is likewise worried. The specter of an armed take-over cannot but resurrect the ghosts of that bloody take-over attempt of La Union’s Poro Point seaport and cargo terminal from another investor by former BCDA officials. Images of a heavily armed BCDA force firing at hapless Poro Point security guards are still fresh in the mind of Northern Luzon’s business community.

Clearly, the looming armed confrontation in Baguio is the result of a major business conflict between BCDA and CJHDevco. We explained in detail the root of that conflict in our column last Sunday. We explained BCDA claims that the private developers alleged huge arrears are enough reason for the agency to take-over John Hay.

We are yet to hear CJHDevco’s side of the issue. But what we do know is that the private developer has already asked the Court to “compel arbitration”. This means BCDA and CJHDevco will be ordered to sit down and settle the major conflict peacefully. 

The business community’s hope is that the parties would resort to the more peaceful alternative.

That unfortunate Poro Point stand-off scared many investors away and must have caused major dents in BCDA’s reputation as an important investment generator for the country. If we recall correctly, Casanova played an important role in BCDA’s Poro Point debacle. We hope the agency would have learned a valuable lesson there.

Rationalization

Is the restructuring of sin taxes going to be good for the government and the tobacco industry? The association of cigarette manufacturers and importers or Philippine Tobacco Institute (PTI) believes it will do more harm than good.

Malacañang’s  spokesman Edwin Lacierda declared that there would be no compromise on the finance department’s bill that seeks to restructure the existing excise tax system on cigarettes and alcohol products, which will push up the tax rate on cigarettes by as much as 1,000 percent.

“Rationalization” of the tax scheme will result in the collection of an additional P60 billion in revenues, Lacierda claimed.

PTI president Rodolfo Salanga is dismayed, saying “rationalization” is a euphemism used when people are about to lose their jobs. 

Salanga explains that the current excise tax structure already gives the government a stable and predictable source of revenue. In fact, the government was able to collect about P31.6 billion in excise taxes in 2010 from the tobacco industry alone. This figure is more than the government’s target of P25.8 billion.  

He said the country’s economic managers should instead explain how the government would be able to collect P60 billion in additional revenues.

The DOF’s plan calls for steep increases in two years, such that all cigarette brands would pay a tax of P30 per pack at the third year.  This means that a number of low-priced cigarette brands, which currently account for 60 percent of the cigarette business, and which are currently paying an excise tax rate of P2.72 per pack, would end up paying a staggering P30 after two years.

Salanga said that nowhere in the world have governments increased taxes in that magnitude. 

World Bank studies show that for every 10 percent increase in price, volume drops by eight percent.

He emphasized that that it will do is deprive some 2.7 million farmers and other stakeholders in the cigarette industry of a source of livelihood, and cause the closure of businesses., not to mention cause an upsurge in smuggling of cigarettes and the proliferation of fake cigarettes. 

The Federation of Philippine Industries (FPI) puts the government’s annual losses from smuggling between P127 billion to P175 billion pesos.  An additional P30 billion more is lost to unnecessary tax incentives.

Demolition job

Some people are desperately trying to make a mountain out of a molehill with their demand that Political Affairs Adviser, Secretary Ronald Llamas, be sacked by P-Noy or simply resign for having been caught on camera buying pirated DVDs from a Quezon City mall.

Atty. Coco Padilla, chief of the Legal Division of the Optical Media Board (OMB), the government agency that has jurisdiction over the issue of pirated DVDs, has already clarified that individuals who purchase allegedly pirated DVDs for their own personal use do not face any legal liability.

It is clear therefore that under the provisions of Republic Act 9239 or the  Optical Media Act of 2003, the OMB has no reason to file any criminal charge against Llamas. 

OMB chief Ronnie Ricketts also said that only those who buy more than five or more copies of the same DVD are liable under the law because this means they are doing so for commercial purposes.

Critics of P-Noy are trying to capitalize on this issue not so much to pin down Llamas, but to demonize P-Noy himself. 

If I were Llamas, I would acknowledge a “lapse in judgment” and end the issue right there and then. Doing so would deprive those behind the obvious  demolition job of ammunition and save P-Noy from any adverse publicity.

But P-Noy is right: Llamas should do the explaining himself.

It is true that P-Noy has more important things to do than focus on pirated DVDs.

The clear demolition job against Llamas and by extension, P-Noy himself, should not distract this administration from pursuing the daang matuwid.

Follow the law

Embattled outdoor advertising company Ever Corp. has urged the Metro Manila Development Authority to show respect for the Philippine justice system, following the latter’s adverse reaction to a recent court order preventing MMDA from dismantling the former’s billboards.

Newspaper accounts recently quoted MMDA officials questioning the decision of Pasay City Judge Divina Gracia Lopez. The MMDA was reportedly considering an administrative complaint against the judge for gross ignorance of the law. Further, an MMDA spokesperson was claimed as having said that the MMDA will carry on with its planned campaign against billboards despite the court’s order.

Ever Corp. general manager Freddie Arlantico notied that his company has been in compliance of the Additional Rules and Regulations (ARR) covering Signs and Signboards, introduced by the DPWH in 2007 in the wake of Typhoon Milenyo. Upon experiencing unauthorized dismantling by the MMDA, Ever petitioned for legal protection for its more than 100 billboard structures. In issuing the injunction order, the court found Ever to have been legally conducting its advertising business, noting that the company possessed the requisite permits stipulated in the ARR.

Arlantico observes though, that notwithstanding the injunction, the outdoor advertising industry remains at the mercy of the MMDA.

Outdoor Media Advocacy Group (OMAG) executive director Atty. Troy Banez has emphasized that despite showing the MMDA how they have complied with the law, the agency still brings down the billboard structures on dubious grounds.

OMAG said that some billboard operators have been practically bullied by the MMDA into compromising provisions of the law, even as the former emphasized that no less than the Supreme Court has, time and again, declared that the MMDA does not have legislative, let alone, police power.

According to OMAG, all they want is to promote the survival of the outdoor advertising industry, in compliance with established laws, which no mere agency can try to subvert.

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