Review and Outlook
More work, less politics
President Gloria Macapagal Arroyo announced on 30 December that
she will not run in the 2004 elections, with the hope of getting
her administration’s priorities right and getting the work
done. After all, more pressing economic concerns need immediate
attention. Among other things, Congress is expected to act on
the following measures when sessions begin on 13 January: 1)
Amendments to the Anti-Money Laundering Act (SB 2419 and HBs
5215, 5168); 2) removal of documentary stamp tax on secondary
trading transactions (SB 2368 and HBs 4480, 4481); 3) Securitization
Act (SB 2095 and HB 4453); 4) foreign currency deposit units’
tax exemption (HB 5246); and 5) the Corporate Recovery Act (SBs
174, 1979 and HB 2007, 3038). Of these, only the House bills
on removing documentary stamp tax and Securitization Act has
been approved on third reading while its Senate versions are
still under debates.
To emphasize the importance of unity to
resolve the nation’s problems, the President committed
to focus on an eight-point program that she hopes would yield
positive results in the remaining 18 months of her term: 1)
strengthen small and medium enterprises; 2) jump start housing;
3) reduce cargo costs from Mindanao; 4) decongest Metro Manila;
5) mark up contributions of the Presidential Commission on
Good Government to the fiscal resources; 6) make Makati a
specific urban tourist destination and the reclamation area
on Roxas Boulevard as a tourism complex or the new Nayong
Pilipino; 7) stimulate private investment in agriculture;
and 8) address the deficit problem through both administrative
and legislative measures. But with the cabinet revamp and
politicians gearing up for 2004, the realization of all these
ideals remains to be something to hope for.
Procurement Reform Act approved
The Senate approved SB 2248 or the Government Procurement
Reform Act on second and third reading on 9 December 2002.
Twelve senators voted in favor of the bill (Senators Angara,
Barbers, De Castro, Drilon, Ejercito-Estrada, Flavier, Legarda-Leviste,
Osmeña, J., Osmeña III, Pangilinan, Pimentel
and Sotto) while neither one voted against it nor abstained.
The procurement bill lays down the mechanics for acquisition
of goods, consulting services and contracting for infrastructure
projects of the government. The procurement bill was certified
urgent by President Gloria Macapagal-Arroyo for immediate
enactment on 14 August 2002.
On 17 December 2002, the bicameral conference committee on
the procurement bill met to reconcile the two versions of
the bill (SB 2248 and HB 4809), which proved to be an unconstrained
task since there were more common provisions between the versions.
For instance, HB 4809 provides for local contractors preference
clause which encourages availing of services rendered by local
contractors. Members of the committee from the Senate adopted
this provision. On the other hand, one different provision
is the applicability of the law to all government procurement,
regardless of whether local or international funding is used.
This provision, however, is subject to the rules of international
entities that provide the funding.
New Party-list representatives
The Commission on Elections (Comelec) proclaimed five qualified
party-list candidates last 26 November 2002 after the Supreme
Court lifted its hold order on all party list proclamations.
The Comelec, in a resolution dated 6 November 2002, declared
16 party-list candidates winners when they met the requirement
of garnering the minimum two percent of the total party-list
vote. The total party list vote was reduced when the Supreme
Court disqualified some party-list groups that were affiliated
with major political parties during the last elections for
party-list representatives.
Proclaimed as the latest sectoral representatives were Edgar
L. Valdez and Sunny Rose A. Madamba of the Association of
Philippine Electric Cooperatives (APEC); Mario P. Aguja, Akbayan!
Citizens’ Action Party (AKBAYAN); Leonila V. Chavez,
Luzon Farmers Party (BUTIL); and Ma. Blanca Kim Bernardo-Lokin
of the Citizen’s Battle Against Corruption (CIBAC).
The Comelec has yet to proclaim as winners party-list candidates
Rene M. Velarde and Mariano R. Logarta of Buhay Hayaan Yumabong
(BUHAY); Mujiv Hataman of Anak-Mindanao (AMIN); Dioscoro A.
Granada of Alyansang Bayanihan ng mga Magsasaka at Manggagawang-Bukid
at Mangingisda (ABA); Emerito S. Calderon of Philippine Coconut
Producers Federation, Inc. (COCOFED); Orlando V. Soriano of
National Confederation of Irrigators (NCIA); Renato B. Magtubo
of Partido ng Manggagawa (PM); and Jose Virgilio L. Bautista
of SANLAKAS.
Meanwhile, House Speaker Jose de Venecia Jr. administered
the oath to Eufrecino M. Codilla, Sr. as the duly-elected
representative of the 4th district of Leyte, replacing former
Rep. Ma. Victoria Locsin last 11 November 2002. Codilla was
sworn in right after De Venecia received an “immediate
and executory” decision by the Supreme Court to install
Codilla in Locsin’s place. The high court, deciding on
Codilla’s case to contest the Comelec’s decision
to disqualify him for an electoral offense, ruled 13-0 in
his favor.
Exempting certain services from VAT
On 3 December 2002, the House approved on second reading HB
5231 to further defer the imposition of value-added tax on
the sale of services of the following: banks, non-bank financial
intermediaries, finance companies, financial intermediaries
not performing quasi-banking functions; actors, talents, singers
and emcees; radio and TV broadcasters; choreographers; musical,
radio, movie, TV and stage directors; and professional athletes.
The deferment will be until 31 December 2004.
The Tax Reform Act of 1997 (RA 8424) mandates the imposition
of value-added tax on certain services, but has been deferred
(via RAs 8761 and 9010) since the law’s enactment. The
last deferment expired on 31 December 2002. The Finance Department,
however, wants the VAT applied on services except for banks
and finance companies which would still have to pay the gross
receipts tax (GRT).
HB 5231 also prescribes that services rendered by stock,
real estate, commercial, customs and immigration brokers will
be subjected to seven-percent tax based on gross receipts
from brokering services. On the other hand, the Senate version
(SB 2415) authored by Sen. Ralph G. Recto proposes to totally
exempt all the services from the imposition of VAT.
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