NPAs employ mob tactics to impose taxes

PEÑARANDA, Nueva Ecija (AFP) — Bullets and petrol bombs rained down on a telecom signal tower in this northern Philippine town recently as the "taxman" paid Globe Telecom a midnight visit to force the big mobile phone firm to play its part in bankrolling the communist revolution.

Neighbors roused by the gunfire called for help as the control cabin burned in this farming town. But by the time soldiers arrived, the unwelcome visitors had melted into the dark, leaving behind a shaken, disarmed security guard who has not shown up for work since.

The attack was not unusual as gunmen spouting Mao employ strongarm methods more closely associated with organized crime and impose a hefty cost on doing business in the Philippines, officials and experts say.

"In terms of revolutionary tax, (businessmen) compromise," said Abraham Purugganan, a former undersecretary for special concerns in the office of President Arroyo who provides anti-terrorism and risk management advice to government agencies and private companies.

Seven or eight in 10 companies that receive communist demand letters fork out the euphemistically termed "revolutionary tax on the enemy classes" because "there are a lot of things that they can do against you," he told AFP.

Strikes by communist-led unions that dominate industry can shut down factories, equipment and vehicles can be damaged, and company executives can be ambushed, he said.

Construction, mining and logging, factories, ranches and commercial fisheries, bus lines, truckers and port operators, sugar and coconut mills, and poultry and livestock farmers across the country are all "taxed."

The resulting cash is laundered through "bank to bank" payments, lending institutions, foundations and non-governmental organizations (NGOs).

The communist levy can also be paid in kind, including "high-powered firearms, explosives, medicine, communication equipment like satellite phones, computers, vehicles, or safe houses," said Purugganan.

Cecilio Salvador, leader of a New People’s Army (NPA) guerrilla front south of Manila, insists the rebel tax is voluntary.

"Unlike the mafia that is shunned," he told AFP in an interview, "when big companies enter a consolidated area, they usually talk to us before they set up a business there."

Globe Telecom says about two dozen of its 5,000-odd towers across the country have been shot up or firebombed in the past year after it stood up to the rebel demands.

Such sabotage has driven up the insurance premiums on the towers, each worth P7 million, Globe Telecom spokesman Jones Campos told AFP.

"We will never pay any tax that is not legitimate," he added.

One government study shown to AFP estimated the rebels raise about P4 billion every year for the 37-year-old insurgency, including P1.5 billion collected from companies.

The rest is protection money from politicians, funds skimmed off from government or foreign-funded development projects, and proceeds from organized crime.

Salvador said the rebels "did go into a number of so-called unprincipled finance-generating projects" in an effort to field large guerrilla units in the late 1980s, when the then dominant faction of their leadership mistakenly concluded that the NPA was about to seize power.

At the same time, he denied military allegations that these included illegal drugs, bank robberies, kidnappings and printing fake dollar notes.

The funds raised are invested in strategic businesses through dummy corporations in shipping and other industries, while the rebels even get to play "in the world’s top stock markets," one government source said, citing captured documents.

This source said the tax also serves a clear political purpose — to prove that the rebels occupy territory and should be recognized as belligerents, giving them the status of a virtual state and an equal in any negotiations with the Philippine government.