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Shut
up and start working Gauging from how things turned out during the canvassing of votes, the 12th Congress was – to the public – a big disappointment. It took more than a month after the May elections for our lawmakers to finish the tally, dogged by delays of politicking, and with everyone wanting to get his two minutes (or more) of fame. The air is filled with charges and counter-charges of cheating. There are no losers and therefore no winners; only the cheated and the cheaters. This is the style of politics that can only be found in the Philippines, sad to say. 12th Congress Did Some Work Going back to the 12th Congress, while it obviously had its limitations and failures, Congress also had its share of accomplishments. There were a number of significant laws that were eventually passed, albeit at crunch time. Take the case of the Anti-Money Laundering Act. It was passed when the Paris-based Financial Action Task Force was on the brink of imposing economic sanctions on the Philippines for its failure to enact a law against dirty money. Whether that law met the FATF’s standard is another story. The Special Purpose Vehicle (SPV) Law was another major accomplishment of the 12th Congress as it laid the groundwork for the establishment of asset management companies. These are firms that would buy the non-performing assets of banks and turn these around, while at the same time helping banks restore their loan granting capability. A year and a half after that measure was passed, things have yet to get moving. But should we blame Congress for that? Bankers say the law may need some fine-tuning, but that argument may be self-serving. That again is another story. Will The Next Congress Be Any Better? We are indeed in the midst of trying times. There is a social volcano threatening to erupt as our fast growing population gets less and less from a government hobbled with debt-burden in a fragile economy whimpering from the onslaught of globalization. The next Congress has to be a better one or we will be in deep, deep trouble. Adequate funds for basic social services urgently needed by a poverty stricken population should top the agenda. The new Congress must be able to enact measures that would enhance government’s tax revenues without necessarily stifling the growth of major industries. That balance, needless to say, is crucial to ensuring that the economy is on track to recovery. Below are suggested areas. Indexation Of Sin Products Taxes The indexation of excise taxes on sin products such as liquor and tobacco should be prioritized and swiftly acted upon by the 13th Congress. Based on a finance department study in 2002, the government has been losing yearly since taxes on these so-called sin products have not been adjusted to inflation. The study showed that by adjusting the tax index, government would earn at least P13.8 billion in additional revenues annually. The question now is whether our lawmakers, many of whom have been funded during the last elections by big businesses in the liquor and tobacco industry, could do it. It would be interesting to note how the voting will go on this proposed measure. Shift To Gross Taxation President Arroyo also wants the incoming Congress to pave the way for the shift to gross income taxation and in the process limit the allowable tax deductions of businesses and plug the loopholes and leakages in the taxation system. The business community would likely raise a howl over the issue. Again, this will test the president’s political will, especially now that she claims she has the mandate from the recent elections. Performance-Based BIR Now is also the time to re-structure and revamp the corruption-tainted Bureau of Internal Revenue (BIR) and transform it into a professionally run organization detached from the clutches of government functionaries and bureaucrats. The new organization – that needs Congress’s stamp of approval – must be able to better compensate its professional staff based on performance and also prosecute swiftly those with even a slight tinge of corruption. Slash Bureaucracy To show that additional tax revenues raised will not go to waste, Congress should also pass corresponding measures that would pave the way for drastic reduction in government expenditures. An area for immediate attention is the long-overdue streamlining and right sizing of the bloated and mostly unproductive government offices. How about the slush funds of each congressman and senator? If there is to be a show of real commitment on the part of our leaders, they should be ready to tighten their belts. If they walk the talk, it will be easier for the rest of nation to offer its own little sacrifices. With the gargantuan problems the country is facing, there is no opportunity left to fool around. The new Congress should just "shut up" and start working. Issues Confronting DTI On TV "Isyung Kalakalan at Iba Pa" on IBC News (5 p.m. and 10:30 p.m., Monday to Friday) starts today with a discussion on the role of the Department of Trade and Industry. Aside from the visible role it has been playing in keeping a close watch on the prices of basic commodities, the trade department is also responsible for bringing in foreign investors as well as nurturing the growth of local businesses. Recent increases in pump prices of gasolines and other petroleum products is putting a strain on the cost of manufactured goods, and we are now seeing double digit price hikes. On the investment front, foreign business continues to be apprehensive about sinking in their big bucks. Local industries on the other hand continue to take a beating as it tries to venture in the global market. What is the DTI doing? Watch it. ‘Breaking Barriers’ With Business Leader M. V. Jacob "Breaking Barriers" on IBC (11 p.m. every Wednesday) will feature Monico V. Jacob, former chairman and CEO of PNOC and Petron, and now chairman and CEO of several private firms engaged in providing educational services and job placements abroad. Education is one of the basic social services that government is expected to provide. More so for a government whose economy depends on the remittances of its citizens working abroad. With government not able to provide adequate funding to upgrade the quality of our people’s education, private companies have to step in. To assure adequate supply of qualified human resources, these companies are investing on new concepts in education and training such as distance learning, thus making education and training more affordable. Watch it. Should you wish to share any insights, write me at Link Edge, 4th Floor, 156 Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at reygamboa@linkedge.biz. If you wish to view the previous columns, you may visit my website at http://bizlinks.linkedge.biz.
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