POSTSCRIPT / September 7, 2021 / Tuesday

By FEDERICO D. PASCUAL JR.

Philippine STAR Columnist

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Red Cross given say on election spending

THE Philippine Red Cross has been given a key role under the Omnibus Election Code in preventing the possible use of calamity or emergency funds to boost the winning chances of administration candidates.

An obscure Section 261(v) of the election code imposes a ban on the release, disbursement, or expenditure of public funds from March 25 through May 8, 2022, covering the 45-day campaign period leading to the May 9 national elections.

Election lawyer Romulo Macalintal said that while the law forbids the release of funds for “all kinds of public works”, except for maintenance, jobs contracted before May 25, 2022, or ongoing projects contracted before March 25, it gives the Red Cross certain powers over their use.

Whatever President Duterte thinks of Red Cross chair Sen. Richard Gordon should be irrelevant to the humanitarian organization’s designation as watchdog over restricted funds that in the past were used for partisan election campaigning.

Presiding over the Senate Blue Ribbon Committee inquiry that has unearthed details of the administration’s pandemic responses that hint of incompetence and corruption, Gordon has reaped Duterte’s ire.

Should a calamity or disaster occur during the election period, Macalintal said, all fund releases usually coursed through Executive departments shall be turned over to, and be administered and disbursed by the Red Cross, under the supervision of the Commission on Audit.

Disbursing of such funds by the Department of Social Welfare and Development, the Housing and Urban Development Coordinating Council, and other offices with similar functions will be stopped during the campaign, except when paying salaries, routine disbursements, and other expenses approved by the Commission on Elections.

The same law prohibits “any candidate or his or her spouse or member of his family within the second civil degree of affinity or consanguinity from participating directly or indirectly in the distribution of any relief or other goods to the victims of the calamity or disaster.”

The pandemic, declared a public health crisis, is expected to be still around during the election period. This will thrust the Red Cross into that delicate role as a conduit for calamity funds.

If he runs, Gordon can give up his position as the Red Cross chief before he files his candidacy papers. His replacement will carry out the Red Cross’ mandate to help reduce the use of public funds to boost or block the chances of candidates.

Cannot Duterte, in his usual gambit of cursing and losing temper to discourage objections, push aside the law in the same manner he sometimes dispenses with public bidding? Macalintal said the President cannot evade doing what the law dictates.

Officials in the running are conceded to have the so-called equity of the incumbent, which can translate to a 25-percent advantage, part of which arises from their access to public funds, equipment and services for their campaign.

Macalintal said the Comelec this time should make more comprehensive the rules and regulations on how provisions of the OEC are to be implemented for the guidance of all officials handling and disbursing public funds during the 45-day ban.

Section 261(v) has been there in past election rules but largely unnoticed because the polls were conducted under normal conditions unlike this time when there is a pandemic. In the 2019 elections, the rule was part of Comelec Resolution No. 10511 promulgated on March 20, 2019.

 Why not eager to pin down suppliers?

WITH well-connected operators having ripped off Malacañang of borrowed billions, why is President Duterte not sending Tokhang operatives to track down the con artists (maybe shoot them if they sort of resist) and throw them into crowded cells while awaiting trial?

Instead, senators elected to craft legislation are the ones doing the executive job of enforcing the laws, playing detective, winnowing the facts from fiction, and, by a long shot, recovering the loot from the fraudsters.

Pardon us if we turn cynical seeing Malacañang looking more protective of the suspects than of their victims, the taxpayers represented by the Procurement Service of the Department of Budget and Management (PS-DBM).

Senate Minority Leader Franklin Drilon identified one of the suppliers as Pharmally Pharmaceutical Corp. which had a paid-up capital of only P625,000 yet bagged over P10 billion in deals from the PS-DBM headed by now resigned Undersecretary Lloyd Christopher Lao.

Drilon identified another Chinese company, Xuzhou Construction Co., which he said secured a P1.9-billion contract to supply face shields even if it is not registered in the country, making it the second biggest supplier of pandemic items after Pharmally.

Justifying his having assigning Lao to head PS-DBM as undersecretary, Duterte said he had served him well when he was Davao City mayor and during the 2016 presidential campaign.

Why has the President not ordered a hunt for the missing Chinese suppliers to make them pay for the mess? Some of them have even been linked to Michael Yang, said to be a Chinese business adviser of Duterte.

“it is not clear that Pharmally has paid the correct taxes,” Drilon said. “Bayanihan 1 and 2 do not exempt local purchases from VAT, therefore, the amount paid to Pharmally should have been subject to a 2-percent withholding tax on government payments, and a 5-percent VAT withholding.”

He added, “The sale of the Personal Protective Equipment to government is subject to an output VAT of 12 percent because the product they imported is exempt. Therefore, they would not have any input VAT to deduct except for the 5-percent VAT withheld if this was properly withheld from the payment to Pharmally.”

“Pharmally is classified as a domestic corporation,” he said. “To participate in government bidding, it needs a tax clearance from the Bureau of Internal Revenue. There are no records of its obtaining any tax clearances.” That is just the tax side of the caper.

(First published in the Philippine STAR of September 7, 2021)

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