US spying on RP: Aren't we doing it to them, too?
SPYING GAME: Our excitable senators are agog over reports that there are American spies in our midst.
What else is new? We should be surprised if the opposite were true — that there are none. It is part of a government’s routine to find out what is going on in other countries, including friends and allies.
Even the Philippine government, I assume, would have personnel in the US who spend part of their time spying and gathering confidential information. If our government is not doing that, some high officials must be falling on their jobs.
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LET THEM FIGHT: Some people are saying that Environment Secretary Michael Defensor and Sen. Jamby Madrigal, who portrays herself as an environmentalist, should stop quarreling and instead work together “for the sake of the country.”
My attitude is that it is better that they debate publicly and expose each other’s skeletons. It is when politicians huddle and transact business in conspiratorial whispers that we should start worrying.
Defensor said the Madrigals have amassed wealth through the decades partly through their exploitation of the environment in mining and logging. Why should he be faulted for telling the truth?
Madrigal had said that Defensor was going only after small-time loggers and has not filed charges against the big ones. Like who?, somebody should ask the senadora.
The secretary explained that while his office has filed charges against some operators, it was still building up cases against the bigger rapists of our environment. You know how the big ones fight back.
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DEPUTIZE NPA: If I were Defensor I would consider deputizing the New Peoples Army to go after illegal loggers as well as “legal” loggers who use their licenses to grab vast tracts, cut more trees than they are allowed and despoil the environment.
The NPAs know the hills better than officials who spend their time in their luxurious offices. They pack a wallop more deadly, and more scary, than the combined forces of the police and the prosecution service.
The NPA system of justice, if we may call it that, appears to be less susceptible to distortions inflicted by money and influence.
It may not hew to due process as defined by the government’s judicial system, but that is precisely why it would be more effective in curbing the malpractices of big-time loggers who have been raping our forests.
If deputizing the NPA to go after powerful and avaricious loggers is not acceptable, what is the better alternative?
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TSUNAMI COMING?: The body language of Energy Secretary Vince Perez, in resigning before his appointed time, tells me that he must know something unacceptable in the administration’s power game plan that we mortals do not know.
My hunch — just an old-fashioned hunch — is that either there is a deal involving the Napocor privatization that he cannot stomach or he sees a power-related tsunami racing toward us.
Perez’s main assignment, a tough one, has been to see to the early privatization of the heavily indebted National Power Corp.
The sale of Napocor’s generation assets, coupled with the transmission firm (Transco) spun from it, is one of the most urgent non-tax revenue-generating moves of the Arroyo administration.
Selling these assets for $4 billion-$5 billion would bring in much-needed revenue and end the fiscal hemorrhage caused by Napocor’s inefficiency and irrational subsidy of low power rates.
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RED FLAG: Napocor and Transo must be sold early this year (should have been last year yet), but there is still no indication that this is about to happen. The haggling drags on.
Failure to sell them early — and at a price favorable to the government — could be disastrous. The fiscal rehabilitation program of President Arroyo could collapse, or at least wobble, if the projected sale does not pull through.
Perez could not have missed that red flag.
The administration is moving heaven and earth to raise at least P180 billion to plug the fiscal hole and improve our credit standing: P100 billion from administrative reforms and P80 billion from new taxes. This target presupposes that Napocor and Transco could be sold for a good prize.
If the privatization falls through, the government will have to scrounge around for P30 billion on top of the P180 billion originally targeted to cover the power firm’s net debt of P300 billion. Where do we get that kind of money?
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SHOW THE LIST: Malacanang said that the 2005 budget of P943 billion reflects a modest growth of 7.9 percent, but this does not include interest payments for Napocor’s debts.
However, since the sale of Napocor will involve the buyer’s assumption of Napocor’s net debt of between P200-P300 billion, government’s inability to privatize Napocor will cost around P30 billion more to cover the power company’s interest payments this year.
Sen. Mar Roxas is demanding that the finance department submit to the Senate an itemized list of Napocor’s debts that were assumed by the government as of Dec. 31, 2004.
“We are duty-bound to look into it,” Roxas said. “Public interest requires us to. We also have to find out who were responsible for incurring these debts, some of which may have been contracted recklessly or negligently.”
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DEBTS ASSUMED: President Arroyo ordered the finance department last Oct. 12 to identify, in consultation with the Department of Budget and Management and the Commission on Audit, the specific Napocor debts, not to exceed P200 billion, that government would absorb.
Roxas said the list must have been completed before the government assumed the liability last Dec. 31, “so we surmise the DOF had already identified and listed the specific debts.”
He said the debts will be examined by the Senate energy committee in a formal and open inquiry.
Roxas pressed a “full and public accounting of how Napocor’s liabilities came about, for what purpose the obligations were contracted and how the power firm s executives used the borrowed money.”
The Napocor debts taken over by government represent one-third of its estimated P600-billion in total debt obligations.
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SMALL FRY: Executive Director Rex Tantiongco of the Independent Philippine Petroleum Companies Association, answering accusations that the small fry in the oil industry have been remiss in their tax payments, told us in an email:
“In 2003, the 15 independent oil players had only between 8 and 10 percent share of the domestic market. As such, they were only accountable to a fraction of one percent each of the taxable combined gross industry sales pegged at P287.2 billion.
“The rest of the taxable sales that year equivalent to 90 percent, should be accounted for by the big three oil companies. In real terms, the big three: Petron, Shell and Caltex should have paid their right taxes on P270.77 billion in gross sales while the 15 other oil player account for the balance based on sales volume.
“To correctly study whether income declared was judicious or not, it should not be looked at its absolute peso value. A deeper analysis should be made.
“In the case of one of the leading independent oil company, whose figures are more or less typical of its class, their gross margin on sales was 4.5 percent compared to the gross margin of the biggest major oil company of 8.4 percent. Please note the difference on gross margin of about 100%.
“The expenses of the independent company were 4.12 percent compared to 4.28 percent of the majors. Expenses can be considered as prudent all being more or less the same.
“Naturally, income of the majors was higher compared to the independents because they had a lower cost.
“The independent paid 0.15 percent of sales in income tax while the major player about 1.3 percent of sales. They had bigger income because they had a lower cost. Since they had about 90 percent of the market, naturally they paid more in absolute peso value also considering their very good profitability.
“Independent oil player’s market share was even eroded after the historic increases in oil prices last year because prices of refined oil products, especially diesel fuel, zoom much higher than crude oil and domestic prices could not react at the same proportion. For months, we had to retail our products below our costs if only not to lose our customers to the refiners whose price advantage had widened even under a uniformly imposed import duties of three percent.”