Consumer-taxpayers should revolt

CONSUMERS' DEMAND!
Herman Tiu Laurel
1/16-22/2012



Do you wonder why the call for higher and newer taxes of all forms is forever being raised by the government, the BSP, the IMF, WB and ADB, even as government service institutions are declining in number due to privatization?

While new taxes and higher tax goals are instituted at the same time public services such as power, water, road infrastructure among many other privatized public utilities raise their rates without end even as these companies continue to report ever increasing profits year-after-year.

Just the same, public infrastructure projects are supposedly being jointly funded in the BS Aquino III flagship PPP (public-private partnership) scheme.

Hence, government funding requirements should not be as significant as it would be if government had to go it alone, right?

Yet, BS Aquino III is still requiring greater and greater collections from the revenue raising agencies.

Why more taxes?
New tax impositions that all of us, at one time, raise our arms up against eventually come to be accepted as part of life, like the VAT on the Expressways toll which is still unjustified despite the reality that we have to live with it.

The increase on “sin taxes” slated this year, which proponents justify by invoking health concerns, even when they are just obfuscating what is simply an unjustified additional burden.

Last January 3, Malacañang said in a regular press conference that “new taxes still ‘last resort’” but only betrays the government’s continuing intention to raise collection in the face of the question we posed above. Why more taxes, even from so called “improved collection”, which really means forcing businesses to shell out more under-the-table for the BIR and Customs to “mediate” any final amount, when the taxpayer is not getting its worth from the existing taxes being extracted and even less from additional tax burdens?

Run after professionals, self-employed
The last columns in this space for 2011 focused on the essentials issues, including the incontrovertible fact that the Philippines now has sufficient internal financial resources to bankroll its public and private investment needs.

We have to drill this into our readers’ memory that the Philippines GIR (gross international reserves) is now $ 76-B and growing against the $ 62.5-B foreign debt of the country.

We cited Vice President Binay’s reiteration of this position which we have crusaded on for the past year.

In a speech before the PCCI, Binay called for the country to use its GIR for public and private investment requirements.

Yet, the government wants to squeeze more out of our countrymen, with Malacañang and the BIR stressing that it will now run after “self-employed and professionals – tagged as a major source of tax leaks - to help hit its P1.066-trillion goal” collection in 2011.

Averse to real hard work
Aside from the surplus GIR the Philippines holds in its coffers, there is also the SDA (special deposit account) held by the BSP with at least P1.7 trillion in deposits, paying out 4% interest.

Local bankers have urged the BSP to release it by reducing the interest it pays to keep this from circulating.

A mere reduction of interest paid on it by 1% would spur the depositors, like the local banks, to withdraw the funds to seek financial investments that would allow it to earn more.

The bankers want the BSP to bear the burden of the decision and evade the responsibility of making a patriotic decision to help the national economy by seeking worthwhile productive physical investments to fund, like agricultural projects or factories.

But the banks are averse to real hard work.

They are borrowing and borrowing
Much of the deposits are from the conversion of remittance dollars to peso parked in the BSP, which the BSP uses as a mere tool to control and balance money supply and credit instead of spurring real growth.

Despite the existence of this huge reservoir of funds, the BSP continues to harp on the greatness of its performance as measured by the “credit ratings” upgrade by Fitch’s, Moody’s or Standard and Poor’s--despite the fact that these ratings agencies have been discredited the world over for being tools of manipulation by the global finance mafia.

In the case of the Philippines, this mafia wants to keep us borrowing and borrowing without end, with the BSP officials such as Tetangco and Guinigundo in cahoots.

A hole in the head
Last Jan. 3, the headline, “Lenders swarm Philippine’s first global bond issue” appeared, making it like it was Christmas again from the financial Santa Claus in time for the Three Kings’ Feast.

“The oversubscription came within hours of the announcement by the Bureau of Treasury that it would raise between $500 million and $1.5 billion in what would be the first sovereign dollar-denominated bond sale for the year.

“Tapped to jointly coordinate the bond float were Deutsche Bank and Standard Chartered Bank.

“They were also mandated as joint book runners, along with Citigroup, Credit Suisse, Goldman Sachs, HSBC, JP Morgan and UBS.”

My oh my, they make it sound so great, except that we need this gift like a hole in the head, with the only true beneficiaries , the financial brokers and the bankers.

Making them richer and richer
The Philippines is already in a perfect position to do what Brazil did in 2005, which paid all its $15-billion debt while telling the IMF to go to hell. Argentina did the same after defaulting and negotiating a 70%-write-off. Today, it is one of the most dynamic economies in Latin America, growing between 8 to 9% per annum.

Our title for this week’s piece is “Consumers/taxpayers should revolt” because the continuing additional public utility rate hikes and tax increases are absolutely useless to those paying them.

The money extracted goes only to making the financial oligarchy richer and richer while the real, physical economy gets dried up even more. It’s time to revolt for real!

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