Tuesday, August 23, 2005

Tax Drop

Finance dept wants probe on drop in cigarette tax take

Inquirer News Service

THE law raising taxes on tobacco and alcoholic products has failed to meet the government's revenue expectations in the first half, prompting the Department of Finance to call for an investigation into the weak collections from tobacco manufacturers.

Instead of rising with the increased tax rates imposed by the new law, excise tax collections dropped 7.39 percent in the January-June period to P10.5 billion from P11.3 billion in the same months last year, according to documents from the department.

The collection of excise tax from cigarette firms in the six months fell short of the government's forecast of P11.34 billion.

On alcoholic beverages, collection of the increased excise tax reached P9.06 billion, compared with the government-set target of P8.6 billion. But in June, the government collected only P1.3 billion, 8.12 percent lower than the P1.4-billion target for the month.

Finance Secretary Margarito Teves said he would order the Bureau of Internal Revenue to make an inquiry to explain the drop in collection despite the increase in the tax rates.

The bureau said it had started monitoring the production volumes of cigarette and alcohol companies to check the accuracy of their excise tax remittances.

It said it had come up with a new technology that would electronically record the volume of products being released from cigarette and alcohol factories. Michelle V. Remo, with INQ7.net

CAP Blues

CAP negotiating with two prospective foreign investors
Elizabeth L. Sanchez
Inquirer News Service

PRE-NEED firm College Assurance Plan Philippines Inc. (CAP) said it was in talks with two prospective investors that might infuse fresh capital that is deemed crucial in its financial recovery program.

CAP said it had also finalized a proposed capital build-up program involving P20.9 billion in trust fund assets over eight years.

The company said it was "now seriously negotiating" with St. Augustine Humanitarian Foundation on an infusion of $4 million a year over the next five years.

It added it was in "serious negotiations" with an unnamed investor that would infuse up to $100 million if CAP could get a dealer's license -- its permit to operate -- which the Securities and Exchange Commission suspended in August last year.

The information is contained in the CAP's reply to an SEC show-cause order threatening administrative sanctions and formation of a management committee to take the company over.

An Inquirer source familiar with the negotiations said St. Augustine Humanitarian Foundation was based in Rome and a part of an "old and rich group willing to support worthy causes."

Under its proposed recovery plan, CAP expects to build up its trust fund assets through infusion of P6.72 billion in equity, accumulation of discounts on its holdings of Metro Rail Transit bonds worth P2.52 billion, and use of proceeds of development and sale of real estate assets.

The real estate assets include the Canyon Woods residential resort in Tagaytay City and the Harbour Town development project in Nasugbu town in the province of Batangas, just south of Manila. Expansion of the Manila Southwoods subdivision is also expected to raise additional P2.64 billion.

In its 40-page reply to the SEC order, CAP is asking the commission to hold off imposition of administrative sanctions, abandon a plan to create a management committee for CAP and to restore its dealer's license.

It said that without its dealer's license it was impossible for it to complete negotiations with potential strategic investors.

It added that a management takeover could only lead to its liquidation, at the expense of its more than 700,000 plan holders.

CAP said the SEC had no authority to form a management committee since its quasi-judicial authority had been transferred to the regular courts.

CAP was incorporated in 1980 as a pre-need company designed to help Filipino families pay for the education of its children. With INQ7.net

Viva VoIP

NTC declares VoIP as value added service

Erwin Lemuel Oliva eoliva@inq7.net

THE NATIONAL Telecommunications Commission (NTC) has approved on Tuesday the final guidelines deregulating commercial voice over Internet Protocol (VoIP) services in the Philippines.

"We already signed the memorandum circular this afternoon. So we now have the final guidelines ready. Basically, we just reiterated what we have said earlier that VoIP is a value-added service. But we've added some few points to support our position," NTC Deputy Commissioner Jorge Sarmiento told INQ7.net.

This was after months of deliberation and heated public debates both at the NTC and the Philippine Congress.

Sarmiento said the NTD guidelines will become effective 15 days after it is published in a generally-circulated newspaper.

NTC's decision to deregulate commercial VoIP services in the country follows after mounting pressure from government, as well as the industry, in particular the Internet service providers.

VoIP routes phone calls through the Internet instead of through traditional public switched telephone networks. Its lower cost has made it a popular alternative to traditional voice calls.

The rules would now identify parties that are allowed to offer VoIP services, as well as standard agreements between telecommunications carriers and Internet service providers (ISPs) regarding service performance standards, interconnection charges, access costs, as well as consumer security and privacy.

Sarmiento said that NTC has followed its earlier position that VoIP is a value-added service instead of a regular voice service, which under the law is covered by the Telecommunications Act.

This was the primary contention that fueled the debates between the carriers and local ISPs.

VoIP is turning out to be a cheaper communications alternative to the public, and it can provide additional communication services not commonly found in traditional voice services.

The National Economic Development Authority has pushed for the deregulation of VoIP services in the country, saying that this would decrease government spending on telecommunications.

Books of Errors

130 English textbooks found full of grammatical errors

Alcuin Papa
Inquirer News Service

THE DEPARTMENT of Education (DepEd) has discovered grammatical errors in 130 textbooks in English and social science submitted by local publishers for possible use in public elementary and high schools around the country.

In a meeting between DepEd officials and textbook publishers, Education Undersecretary for Finance and Administration Juan Miguel Luz said none of the books submitted by the publishers passed the department's evaluation. In fact, most books required either major or minor revisions.

In an effort to improve the quality of textbooks in public schools, the DepEd is evaluating textbooks even before they are submitted for bidding. The department is also bent on revising the textbooks every five years.

Luz gave publishers a tongue-lashing, telling them to improve the textbooks or the DepEd would not buy them.

"If you want to sell to public schools, comply with our requirements and competencies. Quality begets better quality and it's our right to buy quality," Luz said.

He added that publishers must invest in research and good writing.

Luz explained that the evaluation of the DepEd was now conducted on four levels, compared to the old system whereby the department bought books solely on the basis of the lowest bid.

"There is a need to fix the content. If we leave the quality to the publishers, we might as well buy on price. If you want to do it by the old system, I suggest you find another buyer," Luz snapped.

The four levels for evaluation now in use by the DepEd are: Coverage of learning competencies (level 1); accuracy of content (level 2); presentation, vocabulary, language and the use of visuals (level 3); and grammar (level 4).

Evaluation for level 1 is done by the DepEd's original pool of evaluators. Level 2 by university professors, level 3 by classroom teachers and level 4 by grammar specialists, according to Luz.

Based on the coverage of learning competencies, the elementary and high school English and social science textbooks, as well as the teacher's manual "failed to sufficiently develop and include the required learning competencies set by the department," the DepEd said.

Department of Education (DepEd)

More Casualties

Dengue deaths reach 197 in RP this year

Agence France-Presse

THE PHILIPPINES has reported 197 deaths and 14,738 cases of dengue fever this year, doctor Eric Tayag of the health department's National Epidemiology Center said Tuesday.

He said the number of reported cases was a 20-percent increase from the previous year, and that the death toll had exceeded the 144 registered for 2004.

"The health department placed the Philippines on a dengue fever alert last week and this is likely to stay in force for the remainder of the year," he said.

He said hospitals in some areas had become congested with dengue cases but added "we are coping at the moment."

The health department fears the number of infections could exceed 20,000 by the end of the year, and has ordered fumigation and other measures to prevent the spread of the mosquito-transmitted disease in the worst affected areas, including the capital Manila.

Department of Health

Clavel's Pork

22 opposition solons got road users tax funds, too--lawmaker

Maila Ager Lira Dalangin-Fernandez ldalangin@inq7.net

CONTRARY to their claims, opposition legislators at the House of Representatives also benefited from the road users' tax, with at least 22 receiving a total of 399.395 million pesos or 20 percent of the 2.2 billion-peso fund, a colleague disclosed Tuesday.

Some of them are Cebu Representative Clavel Martinez, 37.8 million pesos; Nueva Vizcaya Representative Rodolfo Agbayani, 30 million pesos; Davao City Representative Ruy Elias Lopez, 29 million pesos; Laguna Representative Justin Chipeco, 20 million pesos;

South Cotabato Representatives Darlene Antonino-Custodio and Arthur Pingoy, 15 million pesos; 10 million pesos each for House Minority Floor Leader Francis Escudero, Taguig-Pateros Representative Alan Peter Cayetano, and Quezon Representative Proceso Alcala; and 7.6 million pesos for Bukidnon Representative Nereus Acosta, according to Mindoro Occidental Representative Amelita Villarosa.

"There are 236 congressmen, 22 minority members received 399.395 million pesos, more or less 20 percent of the total budget. Considering that the 22 solons are only 10 percent of the total number of congressmen, they got twice," said Villarosa, an ally of President Gloria Macapagal-Arroyo, who secured a copy of the figures from House records.

"If you will base this on a ratio -- like 10 percent of 200 Solons -- they should get at least [a] 10 percent allocation but in this case they got 20 percent," according to Villarosa who made the disclosure a day after Iloilo Representative Rolex Suplico and Bayan Muna party-list representative Teodoro Casiño accused the President of using the road users' tax to buy votes against her impeachment.

Suplico and Casiño had complained that they were not given proceeds from the road users' tax.

But Villarosa said there were also pro-administration lawmakers who did not get any budget, among them, Speaker Jose de Venecia, justice committee chairman Simeon Datumanong of Maguindanao, House Deputy Speaker for Visayas Raul del Mar, Surigao del Sur Representative Prospero Pichay, Bukidnon Representative Juan Miguel Zubiri, Cebu Representative Antonio Cuenco, Eastern Samar Representative Marcelino Libanan, and Leyte Representative Eduardo Veloso.

"This was prepared not according to politics or some favors but rather to address the road requirements all over the Philippines," Villarosa said.

Nueva Vizcaya Representative Rodolfo Antonino also pointed out that the special allotment release order for the road projects were requested on June 6 or even before lawyer Oliver Lozano filed an impeachment complaint against the President on June 27.

"For me, I consider it foul that the opposition is using this issue in order to discredit their own colleagues in Congress," Antonino lamented.

"I think that 's very wrong for them to use issues like this at any expense -- even at the expense of their own colleagues in order for them to achieve the single purpose that they are always trying to achieve and that is to discredit and bring down the administration of President Arroyo," he said.

Executive Secretary Eduardo Ermita described the opposition lawmakers' complaints as "preemptive action" to stop the President from allegedly using the funds to woo support against the impeachment complaints.

Earlier on Tuesday, Budget Secretary Romulo Neri is considering reviewing the tax measure.

Neri said he had been approached by both pro-opposition and pro-administration lawmakers complaining about the funds' release.

"That's why I think it needs to be reviewed," he said on radio.

The President ordered on Monday the suspension of the release of the funds by the Department of Public Works and Highways, which Neri said could have been prompted by a problem in the distribution of the Special Allotment Release Order (SARO) to the different engineering districts.

The road users' tax fund is sourced from the taxes consumers pay when they purchase gasoline or diesel and when vehicle owners register their vehicles, according to Neri.

Neri said the Department of Budget and Management releases the funds to the Department of Public Works and Highways.

The Road Board, using a formula for apportioning these funds based on the road density and the condition of the road, decides which areas to prioritize for maintenance, Neri said.

The basis of distribution is the engineering districts rather than congressional districts, he added.

Ideally, Neri said lawmakers should not have a hand on the funds.

"Dapat wala [They should have no involvement], because it's based on engineering districts," he said when asked if lawmakers could meddle in the funds' release.

"But this could not be helped because the congressmen would like to know what infrastructure projects [are there] that cover their congressional districts," he said.

In a separate interview, Road Board director Rodolfo Puno said 80 percent of the fund goes to preventive road maintenance while the rest are used for road safety devices, anti-pollution, and local road components.

In 2004, the Road Board collected 7.2 billion in road users' tax. This year, Puno said they collected an estimated 8 billion pesos.