APEC will cost as much as tax reform

Andrew Masigan, an economist and entrepreneur who writes for the Bulletin, estimated the cost of hosting APEC at P30 billion. That is also what it would cost to do tax reform as estimated by the BIR. If the estimates are in the ballpark, how can P-Noy say we don’t have money to do tax reform but there is money to host APEC?

Okay… some will say these are apples and oranges. Not so. P30 billion is the same whether that is splurged on hosting an international event of dubious benefit to the country or giving harassed citizens tax relief.

And it is also not as if we are asking for something truly outrageous with tax reform. We are only asking they update the basis of our income tax to account for inflation over the last 18 years. The peso in 1997 when they set the tax brackets is only worth 47 centavos today.

Indeed, government is effectively stealing money from its citizens with this failure to update. The administration is implementing a tax system whose rates had effectively been Increased without an act of Congress, normally required.

It looks bad on President Aquino and his anointed Mar Roxas to be so bullheaded about tax reform which is really nothing more than an update. Senate President Frank Drilon and Speaker Sonny Belmonte already went to P-Noy to convince him to change his mind, but it seems, to no avail.

Of course, the DOF and the BIR are right about the need to do a total tax reform but that, is too complicated to do in the time left. The DOF and the BIR is effectively saying no to tax reform. This is rather myopic, as many observers have already pointed out.

Our economy is consumer driven and tax reform that would put a little more money in the hands of consumers will boost GDP, the favorite measure of economic health of P-Noy and his economic team. More than that however, tax reform through a simple updating that takes into account inflation over the last two decades, will be a good morale booster for our harassed taxpayers.

It isn’t as if giving in to this demand will bankrupt our National Treasury. If it is alright to spend P30 billion on something as useless as this APEC conference, why is instituting tax reform for about the same amount not alright to do? Indeed, I suspect the estimate of P30 billion for APEC may be on the low side.

Let us not just count the actual money out of the National Treasury to host this event. Let us also count the cost of all those cancelled flights, not just on the airlines but also on the affected passengers  – specially those with forfeited onward airline and hotel reservations they have to pay out of pocket.

Let us count the cost of paralyzing the economy of Metro Manila, which accounts for over a third of the country’s total GDP. Let us count the wages lost by workers paid by the day, and the opportunity costs for thousands of SMEs that could not do business during APEC week.

I realize we have an international obligation to host APEC. We had 20 years to prepare for it and do it right with the least disturbance to the lives of our people. But I imagine they worked on it in earnest only over the last two years. Our Great Leader, the haciendero that he is, took it for granted he can just tell the people of Metro Manila to shove it while he has his party. It is like telling us to go eat cake.

It isn’t as if we have not done this before. In his wisdom, FVR decided to hold APEC in Subic so that Metro Manila could be spared the chaos we have today. We could have done this in Clark and we would not have had to cancel all those flights at NAIA.

Of course they would have had to build a convention center at Clark, but that is the kind of infrastructure that ought to be built anyway. APEC could have been a good excuse to do that at Clark.

It is all water under the bridge now, but let us not forget how this unfeeling administration failed to consider the impact on our lives by deciding to hold APEC in Manila. Let us remember that come May 2016 when we vote. Let us remember we cannot have more of this kind of officials with absolutely no regard for the people, supposedly their bosses.

At the opening session of the APEC Business Advisory Council, P-Noy declared “voting for or against Mar is a referendum of whether we did it right or wrong.” Putting it that way, I guess even if we are thinking of voting Mar as the least detestable option, we can’t do that now and give P-Noy the wrong idea.

For now, let us just hope and pray the administration that gave us the Luneta carnage and Mamasapano will not once again bring the country shame as we host APEC this week. I suppose that as Filipinos, we have the obligation to help see this event through. Retribution can wait for next year when we vote.

Our economy

Rappler picked up this very interesting quote on APEC. Try to guess who said it and when.

“The correctness of our reforms so far has been validated by the growth of the economy and a new tempo of nationwide self-reliance, even at the grassroots….We have demonstrated our own capability to manage our economy towards stability and sustained growth – earning the respect of the global economic community.”

If you thought this was something coming out of Sonny Coloma’s shop, you would be wrong. This is a quote from FVR in a SONA just before the last APEC we hosted in Subic. But isn’t it creepy how something said 20 years ago can seem so current?

We were a promising economy then and we still are now. Our economy is like the typical Filipino politician... forever promising. The international economic community, mostly rating agencies and banks who do business with DOF, had been optimistic about our growth then as now. Nothing new.

Twenty years is a long time. You can be a brand new parent and have that baby as a voting adult in all of twenty years. But our economy seems unable to go beyond a threatened take off… unable to grow beyond the promise and the big words.

One might say that if APEC was any good to our long term economic prospects, we would have seen it by now. I hate it when the same promises of long term benefits 20 years ago are being hoisted on us now when they ask for our patience while we host APEC.

Twenty years is a long time. I don’t think I can wait for another 20 years to see the supposed promise of APEC to dawn on my country. And don’t believe them when they say they will reach agreements good for our economy during this APEC meeting.

Nothing significantly earthshaking happens in these large scale summits. Everything is ceremonial. The big things happen behind closed doors, mostly in bilateral meetings that don’t require a metropolis of 20 million to stand still.

I sure wish public officials will just tell it like it is. Of course that would take guts, specially given the people’s sour mood in the light of the significant disturbance we all have to endure this week. We should consider ourselves lucky if nothing untoward happens.

Deng Xiaoping

My thought for the day comes from Deng Xiaoping, that wise old Chinese leader who is responsible for China’s growth into a world economic and political superpower. This quote is from a speech delivered at the United Nations on April 10, 1974

If one day China should change her color and turn into a superpower, if she too should play the tyrant in the world and everywhere subject others to her bullying, aggression and exploitation, the people of the world should identify her as social imperialism, expose it, oppose it and work together with the Chinese people to overthrow it.

That’s the same Deng Xiaoping who didn’t want to talk about the nine dash line and said it ought to be left to a future generation who may be wiser than his.

Looks like that wiser generation isn’t here yet. But the China Deng warned us about is already playing the big power role and is no different from the big powers Deng and yes, Mao, detested and fought all their lives.

Boo Chanco’s e-mail address is [email protected]. Follow him on Twitter @boochanco.