POSTSCRIPT / June 17, 2007 / Sunday

By FEDERICO D. PASCUAL JR.

Philippine STAR Columnist

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Philcomsat: From top earner to milking cow

GMA MISLED?: The shabby treatment of Internal Revenue Commissioner Jose Mario Buñag must stop if President Gloria Arroyo is to erase the impression that she is losing control of her administration.

There is no cogent reason to change Buñag in the first place – if performance and fidelity to an official’s oath are to be the only criteria. Players boasting of Malacañang connections just want their own man at the Bureau of Internal Revenue.

The record speaks for itself. Since Buñag took over the tattered bureau left by Guillermo Parayno when he joined the breakaway Cabinet group (the so-called Hyatt 10), it has been banner years for the BIR.

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BEST IN 10 YEARS: Under Buñag, BIR collections grew an impressive 20 percent last year despite the doomsday prognosis of his critics. In 2006, the BIR collected P652 billion in taxes, which was P114 billion in excess of its 2005 collection.

Buñag’s turning collections around in 2005 was nothing to scoff at as he was then facing a big revenue deficit posted by Parayno in the first half of that year.

Actually the BIR’s performance in 2006 was its best in 10 years. It even eclipsed by P30 billion what should have been the realistic collection target for 2006.

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CABAL AT WORK: Despite the glowing numbers, Finance Secretary Margarito Teves put a damper on the BIR’s accomplishments in 2006. He refused to reconsider the unrealistic tax collection goal of P675.4 billion set for the BIR.

Teves turned a deaf ear to the BIR’s protestation that P27 billion should be loped off from its target as the responsibility of collecting the sum was of the Customs bureau.

The BIR said its 2006 tax goal was also bloated by P26 billion despite the low interest and inflation rates that prevailed during the year.

The insistence on what was widely held as a capricious raising of the collection goals has been traced to machinations of a cabal bent on installing its own man.

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TEVES FORGETS: If the plotters succeed, Buñag may follow to the exit another good man who had left the government — Omar Cruz, who resigned as national treasurer months ago.

Like Cruz, Buñag is a non-politician who has been swimming against the current of corruption and incompetence in the bureaucracy.

It is sad that Teves seems to have forgotten how Buñag came to his rescue when Parayno left — how Buñag turned around collections in the second half of 2005 and the whole of 2006 despite the odds.

The record shows that Buñag had tripled the number of tax evasion cases filed, computerized and automated many processes, pressed collection of the Expanded Value Added Tax, and laid down regulations for the securities and lending program of the Philippine Stock Exchange and the Philippine Dealing System.

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ABORTED E.O.: In an interesting twist, Malacañang quickly withdrew Executive Order 625 that would have disturbed the BIR promotions system and caused demoralization among tax collectors.

EO 625 named one Cesar Lim of the Makati agency to head the BIR’s Large Taxpayers Unit and its Run After Tax Evaders (RATE) program. The units would have reported to Deputy Commissioner Gregorio Cabantac, who was being groomed to replace Buñag.

Under the aborted EO, Lim would have jumped over several senior BIR officials and the unit he was supposed to head would have emerged as a power base within the BIR with a direct link to Malacañang.

It does not help Teves any that (1) he is seen playing golf with a big businessman with tax evasion cases, and (2) Cabantac is known to be a protégé of the boss of a government cash-cow whose children were wiped out in the last elections and who is said to be pushing the failed EO.

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PHILCOMSAT: Talking of cash cows, from a profitable pioneer in the satellite telecommunications industry, the Philippine Communications Satellite Corp. has been incurring huge losses after its alleged milking ostensibly by some government agents.

In the background, two groups are claiming to be the rightful board of directors for the firm and its unit Philippine Overseas Telecommunications Corp.

The Senate committee on government corporations and public enterprises has unearthed unjustified increases in operating expenses, salaries and legal fees funded by Philcomsat Holdings Corp. and made through so-called “advances to affiliates.” These were undertaken, it said, with the knowledge of government nominees.

The committee said the increases were “in clear violation of a presidential directive limiting the salaries of government representatives to sequestered companies to P120,000 per year with monthly allowances not to exceed P3,400 per month.”

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PCGG UNAWARE?: Documents submitted to the committee showed that government nominees Enrique Locsin and Manuel Andal received total compensation in excess of P15 million and P11 million, respectively, from POTC, Philcomsat and PHC from 2003 to 2005.

Explaining reimbursements he had been receiving, Locsin said PHC president and CEO Manuel Nieto authorized such expenses as long as he submitted receipts.

The committee found, however, that Nieto — based on medical records submitted from the Stanford Hospital and Clinic — “has been suffering from Alzheimer’s disease since 2003.”

It noted also that PHC had been saddled by increasing net losses over the last two years, and that as of Sept. 30, 2006, its advances to affiliates had reached P82 million.

The committee said that with government nominees to POTC and Philcomsat sitting as directors and senior officers of PHC, the Presidential Commission on Good Government should have been aware of what was happening in PHC.

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(First published in the Philippine STAR of June 17, 2007)

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