‘Republika ng Pila-pinas’

By Dan Mariano
June 18, 2008
The Manila Times

I don’t exactly recall when or where I first heard it, but “Republika ng Pila-pinas” aptly describes our national situation—thanks to the political gimmickry that the administration has resorted to in the face of very serious problems.

In its bid to prevent the rice-price shock, the skyrocketing fuel prices and exorbitant power rates from degenerating into yet another political crisis, Malacañang has resorted to several “impact” projects designed to portray itself as a compassionate administration.

Rice priced artificially below market levels—thanks to heavy state subsidies sourced from taxpayers’ money—is retailed in low-income communities. The authorities have yet to give a full accounting of just how much of the people’s money has been spent and continues to be spent for this project.

At many filling stations are public-utility vehicle lanes that dispense diesel priced a few pesos lower than exactly the same fuel sold to other motorists—again, thanks to subsidies raised from the taxes the rest of us pay. Some P3 billion in taxpayer pesos go to this diesel subsidy every quarter.

Consumers who used up 100 kilowatt-hours or less in May bring their electric bills to Land Bank branches for their one-time P500 handout. The administration claims that the P2-billion earmarked for their handout comes from the P18-billion “windfall” in oil VAT collections.

The officials in charge of these projects insist that they give financial relief to the poorest of the poor. However, the immediate effect of these undertakings are long queues of expectant beneficiaries—who complain far more often about how difficult it is for them to get their handouts than express their gratitude to their benefactors.

These impact projects also have far-reaching consequences, which only worsen rather than solve the root of the problems they purportedly address.

The bulk of the cheap rice that the National Food Authority retails in poor neighborhoods comes from countries like Thailand and Vietnam, whose farmers grow rich from the grains they export to the Philippines. Rather than support Filipino palay growers, the government’s multibillion-peso rice importation program merely enriches foreign rice producers and traders.

The diesel subsidies only encourage public utility vehicle operators to hang on to their smoke-belching engines, rather than shift to cleaner, more fuel-efficient motors. Result: worsening air pollution, especially in urbanized areas.

The P500 handout to so-called “lifeline” electricity consumers, as Senate Minority Leader Aquilino Pimentel Jr. has pointed, all too often goes to other—sometimes frivolous—expenses.

The opposition leader noted that there is no way to ensure that lifeline consumers use the P500 dole for paying their power bills. “In fact, they can spend the amount for anything else, including liquor, cigarette or illegal drugs in the absence of any clear-cut guidelines in the distribution of the money,” he said.

Pimentel said that if President Arroyo is really sincere in easing the financial burden of the poor, the better and more practical approach is to suspend or scrap altogether the 12-percent value-added tax (VAT) on the monthly power bills of residential users and the additional 12-percent VAT on the system losses that are being charged against them.

He faulted Malacañang for its persistent objection to a bill in Congress that seeks to lift the VAT on power even if temporarily. Pimentel argued that since diesel fuel and natural gas, which are used to run power plants, are already subject to 12-percent VAT the power generated and sold to consumers should no longer be levied the same tax.

Pimentel, however, raised a far more crucial issue: the lifeline handouts were never approved by Congress, which has the sole power of purse according to the Constitution. Notwithstanding the administration’s compassionate posturing, the President is not exempt from the constitutional rule that all public expenditures should have prior congressional approval.

“Of course, the people in times of financial difficulties may be happy for receiving the cash dole-out,” Pimentel said. “But the President should be reminded that she cannot play Robin Hood and disburse public funds just like that without complying with the requirements of the Constitution and appropriation laws.”

Earlier, former National Treasurer Leonor Briones branded as illegal Mrs. Arroyo’s order to set aside P2 billion as subsidy for small electricity consumers. Briones, a public administration professor at the University of the Philippines, pointed out that the handout is not covered by an appropriations law.

Briones warned that the President may be liable for impeachment if she is found to have violated the constitutional provision that all government disbursements should be covered by national budget laws.

Mrs. Arroyo has survived several impeachment attempts. Her political allies apparently still control the House of Representatives, where by law any bid to impeach her must originate. Threats of impeachment evidently do not bother her.

But as the economic situation worsens and as her administration responds with gimmicks instead of long-term solutions, how much longer can the President feel invulnerable?

As state funds are squandered in heavily subsidized impact projects—and ultimately dry up, how much longer can she keep her congressional alliances?


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