Archive | October, 2009

Transcript of Senate Media Interview: On the state of calamity possibly lasting for a year

6 Oct

I’m opposed to the declaration of the state of calamity lasting for one whole year for the following reasons: First, should the state of calamity last for a year, it would be extremely counterproductive.  The calamity fund of every local government unit shall be open for appropriation.  That amounts to about P13.3 billion.  That would allow the local government unit to get 5% of its total expected revenues.  The longer the state of calamity extends, the more abuses can be expected.

My proposal is to limit the declaration of the state of calamity to just three months.  It is necessary that the flood victims should get on with their lives.  If we are going to spread out the release and use of the calamity fund to one whole year, there will always be an unrealized expectation of a return to normalcy.  The faster you lift the state of calamity, the better for the funds.

Another consequence of the declaration of the state of calamity is that the President will have power to transfer appropriations. Normally, this is not allowed, but when there is a state of calamity, she can juggle the funds.  There will be extreme pressure from many vested interests to transfer appropriations, but not necessarily to the most calamity-stricken areas.  In my view, it makes the President even more politically vulnerable to politicians.

The final adverse consequence is that under the Government Procurement Reform Act, if there is a state of calamity, there does not have to be a process of bidding or auction.  Negotiated purchases will be allowed.  You know that is a very fertile source of corruption.

For these reasons, I humbly suggest that the state of calamity should be limited to three months or not later than the end of the year.  One year would just be too long.

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Transcript of Interview: On the suggestion of waiving the donor’s tax for the donations for typhoon victims

2 Oct

There are many organizations here and abroad who want to make donations for the typhoon victims. What deters them is the prospect of having to pay donor’s tax. They are afraid that the tax would eat into the donation, that, in effect, they would be just giving money to the treasury which might be stolen by corrupt public officials.

There are existing exemptions from donor’s tax. One of the ways you can avail of so we can immediately give the donation to the flood victims is to course it through a government organization and not through a private individual or organization. I will file a resolution on Monday that the Senate and the House should set up a donor reception center and issue the proper receipts and document the donations so that the donations would automatically be tax-free. That would stimulate the expected influx of donations from abroad.

What happened to the P10 billion for disaster relief from Congress?

They decided just to source it from national treasury funds because there is a measure of assurance from the DBM that the funds are ready anyway. There might be technicalities involved with the road user’s tax. We are coordinating closely between the committees on ways and means, and finance, with our counterparts in the House so that both chambers would be able to approve it, meet as a conference committee, and then immediately implement the P10 billion supplemental budget. You can expect by next week that the P 10 billion will be available and ready for distribution, and that the Senate would put up relief centers with the House of Representatives so that the donor’s tax would be automatically waived. I patterned the donor’s tax exemption after a Hurricane Katrina legislative measure.

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