POSTSCRIPT / August 20, 2002 / Tuesday


Philippine STAR Columnist

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Why did Alvarez mislead GMA on Picop’s status?

HINTS OF AN EXODUS?: With another key official, Commissioner Rene Banez, flying south to avoid the creeping harsh weather at the Bureau of Internal Revenue, are we seeing hints of a mass migration of officials whose exodus will impact negatively on the Arroyo administration?

Before Banez was targeted by protesting BIR personnel, there were similar cases of mini-People Power rallies bearing on officials who have not mastered the art of making friends and influencing people and who have tried instituting administrative reforms on their turf.

There was Raul Roco, erstwhile secretary of education, hounded out of office by protesting personnel. Before him, some executives of the Social Security System were forced to resign when SSS employees added a protest demo to their daily lunch menu.

The BIR and the Bureau of Customs are the two top revenue-collection arms of the government. Both bureaus are under the finance department of Secretary Jose Isidro Camacho, a leading member of the US-trained finance team of President Arroyo that has earned kudos from foreign observers.

Will the heat eventually reach Camacho’s own kitchen and force him to rush out for fresh air? Such a development, unlikely at this point, could deal a big blow on the Arroyo administration’s performance and ability to attract investors.

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DISCRETION CORRUPTS: On revenue collection, President Arroyo told us over dinner last Friday that she favored gross taxation over the present system allowing too many variables and too much discretion on the part of tax officials.

Discretion opens the door to corrupt officials’ compromising tax cases and pocketing part of the revenue that should go to the cash-strapped government.

She did not elaborate, but we assumed that gross tax is a final fixed tax on income withheld at source. If, for example, the gross tax is a standard 10 percent, P100 is automatically collected or withheld for every P1,000 income that we make. The tax is remitted to the BIR by the person withholding it at source.

Having seen the cheating all around all these years, including by some officials and professionals wallowing in wealth but paying less income tax than we do, we’re disposed to giving gross taxation a try. But President Arroyo said that while she favored it, she was not taking the initiative to have it legislated.

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MEDALS FOR ALVAREZ: In the Cabinet, Natural Resources Secretary Heherson Alvarez should reap three medals for leading the government attempt to finally assert itself in the Mt. Diwalwal gold rush area where various forces are fighting to the death for the precious metal occurring there in superabundance:

  1. The first medal, a gold to be given outright, is for Alvarez’s audacity in accepting this awesome assignment. Lesser men would either collapse in the face of superior force or connive in the fact of superior gain (per the admonition that if you can’t lick ‘em, join ‘em).
  2. The second medal, a silver, is for his reckless imprudence of going to war in Diwalwal surrounded by men in uniform some of whose brothers-in-arms are reportedly on the other side with the big-time miners that Alvarez wants to subdue.
  3. The third medal, a bronze, tentatively to be withheld, is for his possibly resisting the temptation to use his extraordinary powers as presidential enforcer in Diwalwal to get back at his perceived tormentors at Picop Resources Inc. several hills away from the golden mountain.

(How Picop and its president Teodoro Bernardino got into the Diwalwal movie in Alvarez’s mind is another story reserved for telling on some slow day.)

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COPS ON BOTH SIDES: Diwalwal is a telling example of how the dint of force, and not due process, dictates what does/does not happen in a hidden pocket in the mountain fastness of Mindanao. It is one of the many dark corners where government seems to have lost out to chaos or waived its jurisdiction.

Whoever has the guts and the guns rules the area. The Wild Wild West situation is rendered more confusing by the blurred lines between the illegal operators and the supposed authorities.

We don’t know if the military-police contingent that flew into Diwalwal with Alvarez was aware that some ranking police officers, including a general, are actually the moving force behind two big syndicates lording it over the place.

That was why we suggested (Postscript, 13 Aug 02) the preemptive action of collecting all guns, licensed or not, in private hands and pulling out all military-police personnel for replacement with a fresh contingent.

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NPA AS SCAPEGOAT: Government must not allow the reported collection of revolutionary tax by the New People’s Army in Compostela Valley to cover up the involvement of ranking police officers in the gold rush mess. Neither should the government raise a NPA scare to divert attention from its failure to function in Diwalwal.

Considering that Diwalwal is mostly a police problem, Local Government Secretary Jose Lina should have been named co-leader, together with Alvarez, of the task force sent to ground zero. There should at least be an effort to have somebody balancing the obvious bias of Alvarez.

To appreciate the magnitude of the lode over which they are fighting, note that from 1986 to 1996, the Central Bank bought P23 billion worth of gold mined from Diwalwal. This is estimated to be at most 70 percent of total production. Presumably, the rest had been spirited away to foreign buyers.

The army of workers laboring in the life-threatening maze of tunnels in Diwalwal live marginal lives despite their being the ants busily bringing out the gold from the bowels of the earth. Some 60 of them have been killed in violent incidents in recent years.

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WRONG PERSON ON THE JOB: Alvarez was sent to Diwalwal only because he happened to be the environment and natural resources secretary. If he were not that, he would be the wrong person for the mission. Has he been objective in his handling of the case?

Based on his moves and pronouncements, we see Alvarez using the Diwalwal mess to put one over Picop president Bernardino. We can try to understand that since Bernardino had accused him of asking for “something substantial” before acting on the paper mill’s application for conversion of its timber concession into a forest management contract.

Alvarez has announced that under his emergency powers as Diwalwal trouble-shooter, he was placing some 8,000 hectares of Picop’s 75,000-hectare concession area in the gold rush area under his control. That takeover could torpedo Picop’s operations which is paper-making, not mining.

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GMA MISINFORMED: We were disturbed by Alvarez’s misinforming President Arroyo that Picop’s corporate life had lapsed with its alleged failure to renew its registration with the Securities and Exchange Commission.

It was awkward, but when GMA repeated that Alvarez line in our meeting last Friday, we had to interject that that was not true. We informed her that Picop’s registration had been approved by the SEC and that the firm had paid SEC the corresponding fees.

If Alvarez’s claim were true, that would pull the rug from under Picop because it would then have no legal leg to stand on when it attempts to deal with government. Alvarez was harping on this and withheld action on some Picop applications by pointing out its alleged failure to get a new SEC registration.

Btw, our fellow columnist Boo Chanco emailed SEC Chairman Lilia Bautistia on Picop’s status. Here is Ms Bautista’s reply to Boo last Aug. 15, the day before the GMA dinner:

“The Commission has approved the Amended Articles of Incorporation of PICOP extending the term of the corporation to another 50 years. Accordingly, the corporation continues its existence from and after original expiring date of its term or from March 31, 2002.”

Now why was Alvarez so desperate as to lie to President Arroyo on the status of Picop?

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(First published in the Philippine STAR of August 20, 2002)

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