Aquino ready to sacrifice political capital

08/15/2010 - MANILA, Philippines—President Benigno Aquino is apparently prepared to spend his considerable political capital in the bruising defense of his decision to impose an unpopular road toll tax because he knows it will benefit the people in the long run.

“In the short term, we’d rather be unpopular because in the long term we know that the [value-added tax] that will be collected will be used for the social services that we have promised,” presidential spokesperson Edwin Lacierda told a news briefing yesterday.

The Supreme Court yesterday temporarily blocked a government plan to levy the 12 percent value-added tax (VAT) on all road tolls, starting with the South Luzon Expressway (SLEx) on Monday.

The government expected to realize at least P1 billion a year from the tax, which was to be implemented simultaneously with a 250-percent increase in the SLEx toll.

The government plans to use the proceeds to fund its social services program and to cut a budget deficit forecast to reach a record P325 billion this year.

Lacierda said that while Malacañang respected the Supreme Court order, the administration, through the Office of the Solicitor General, was prepared to discuss and argue the case before the high court.

He said the Aquino administration was willing to risk losing its high acceptance rating with the public in the course of implementing an unpopular tax that it feels would benefit all Filipinos.

85% approval

Mr. Aquino, who has been six weeks on the job, polled 85 percent in a recent Pulse Asia trust survey, the highest scored by any official since Pulse Asia started such surveys in 1999.

Lacierda blamed the former Arroyo administration for the criticisms being directed at the new government on the issue of imposing the VAT on road tolls.

He said the Arroyo administration refused to levy the unpopular tax on road tolls because it feared becoming even more unpopular.

Lacierda said the Arroyo government issued two revenue memorandum circulars on the tax and the toll increase but refused to implement them without offering any explanation.

“They issued two revenue memorandum circulars and they refused to enforce [them]. Now that we are in the process of enforcing the law, we are the ones who appear the villains,” he said.

Fears belittled

He said former President Gloria Macapagal-Arroyo was already unpopular at the time and “people would be upset if the toll rates increase,” he said.

Lacierda also belittled fears that the tax would lead to an increase in the cost of transporting goods. He said the increase would be only half a centavo per kilogram of goods being transported.

According to his computation, a 13.5-ton truck that traverses the entire North Luzon Expressway now pays a toll of P585. A VAT of P62.67 on the toll would only mean an additional cost of P0.0046 per kilo, he said.

He arrived at the figure by dividing the P62.67 VAT by the 13,500-kg maximum truck and cargo weight allowed on the NLEx.

Graft raps filed

Meanwhile, the United Transport Koalisyon (1-Utak) party-list group has filed graft charges against the Philippine National Construction Corp. (PNCC) for allegedly illegally collecting toll at the SLEx after the expiration of its congressional franchise.

In a statement, 1-Utak chair Vigor Mendoza said it also filed charges in the Ombudsman against the Toll Regulatory Board (TRB) for allowing the alleged violation to happen, despite court decisions at the time prohibiting the PNCC from continuing to collect fees.

Mendoza said the PNCC’s 30-year franchise ended on May 1, 2007. However, the TRB allowed the PNCC to continue to collect toll at SLEx until April this year.

Similar position

The Department of Finance has taken a similar position as 1-Utak. Last month, Finance Secretary Cesar Purisima ordered the PNCC to pay P3.9 billion, representing the toll revenues that the state-owned firm should have remitted to the treasury.

The TRB has explained that it only allowed the PNCC to operate SLEx because South Luzon Tollways Corp., the company which won the 30-year contract to operate the highway, was not yet ready to take over at the time.

“SLEx needed to be supervised so we allowed PNCC to operate it,” the TRB said.

PNCC said it had opinions issued by the Department of Justice and the Office of the Government Corporate Counsel, both of which said toll revenues collected were considered corporate funds.

PNCC president Ma. Theresa Defensor said despite these resolutions, the PNCC has offered to repay the government, using the proceeds from the planned sale of its stake in SLTC, the current SLEx operator. These shares are valued at P3.6 billion

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