Carlo's Think Pieces

Reflections of a Filipino in the Netherlands

Posts Tagged ‘PNoy’

Compel Lawmakers to Understand Filipino

Posted by butalidnl on 25 August 2011

On 24 August, during the House debate on the RH Bill, Representative Apostol of Southern Leyte demanded that Rep. Bag-ao be compelled to speak in English. Bag-ao replied that Filipino is an official language and that she had all the right to speak it in Congress. This was upheld by Deputy Majority Floor Leader Magtanggol Gunigundo who said that indeed Filipino is an official language. To this, Apostol said Filipino is not his official language, and that if Bag-ao persisted, he would then demand to have an interpreter.

This exchange may sound quite trivial, but it has bigger implications. Filipino IS an official language, and one of the implications of this is that government officials should be fluent at it. Being an official language also means not only that Representatives are allowed to speak it; but that the other representatives should be able to understand what she is saying. Otherwise, it would not effectively be an official language; because why have it as an official language if it cannot be used?

In Switzerland, they have four official languages ( German, French, Italian and Rumantsch). While the parliamentarians are not required to be fluent in all four, they ARE required to understand other parliamentarians speaking them. It is fascinating to attend such sessions, where the MPs speak in German (actually, the Swiss dialect of German), French, Italian or Rumantsch, and they don’t have interpreters! (When Italian or Rumatsch speakers want to make sure the others understand the nuances of what they say, however, they speak in either German or French) I think it would be unthinkable to have a lawmaker there who cannot speak fluently at least two languages.

I believe that Philippine government officials need to be fluent in Filipino, and not merely be able to comprehend it. I applaud PNoy’s consistency in speaking Filipino during his speeches. I note that he is speaking ‘ordinary’ Filipino, and not the version that is too ‘deep’ or ‘classical’. It has many borrowed words from Spanish and English.

The use of Filipino as an official language should also extend to our foreign relations. Erap Estrada was the first, I think the only, Philippine president who talked to US officials in Filipino; forcing the Americans (Sec. of State Albright) to hurriedly look for an interpreter. I think PNoy should follow Estrada’s example and talk Filipino to Americans, just to make the point. Talking in English to the Americans is a courtesy; the Americans should return this courtesy sometimes by listening to us speaking Filipino. I suggest that when Filipino officials talk to Americans in the Philippines, they speak Filipino; and if they talk to the Americans in the US or elsewhere, that they talk in English.

I understand the sensitivity of people like Apostol, who is a Cebuano speaker, to the predominance of the mainly Tagalog-based Filipino over other languages such as Cebuano. I am a Cebuano myself, and my father raised me to be English-speaking. But c’mon: Representative Apostol lives in Manila; he speaks colloquial Filipino every day. Why can’t he learn just a bit more Filipino to understand official talks in it? It isn’t really that difficult, a couple of months of study should do it. I know, I did it too.

The barrier to learning Filipino is more a question of arrogance, rather than difficulty. I bet that Rep Apostol couldn’t also make an official speech in Cebuano (his native tongue) either. He does all official duties back home in Southern Leyte in English (even though he surely speaks colloquial Cebuano fluently.)  It is really a question of an ‘air’ that he is educated, a lawyer, and speaking Filipino or Cebuano in official functions is below him.

I think this is a matter for the Supreme Court to decide. We could not have lawmakers declaring that Filipino is not THEIR official language. They should declare that having Filipino as an official language means that lawmakers should be able to comprehend it. They should decide to compel Apostol and other lawmakers to understand Filipino.

Posted in Cebu, Philippine education, Philippine politics, Philippines, politics | Tagged: , , , , , , , , | Leave a Comment »

Taxing Self-Employed and Professionals

Posted by butalidnl on 31 July 2011

President PNoy pointed out in his State of the Nation Address (SONA) that many professionals and businessmen understate their income in order to evade taxes. Tax compliance  is difficult to achieve for them because their income is irregular and receipts are seldom given. Most lawyers, doctors, dentists, architects and businessmen pay income tax based on what they declare; and they declare very little.

In the SONA,  PNoy said that 1.7 million self-employed and professionals paid a total of P9.8 billion income tax in 2010.  This comes out to an average of P5783 income paid last year per person, meaning that they earned an average of only P8500/month (which is lower than the minimum wage). There is obviously a lot of tax evasion going on here.

I would suggest that the government take the following steps to enforce tax compliance among professionals:

* doctors, lawyers, architects, businessmen etc. should be required to file a Statement of Assets, Liabilities and Net Worth (SALN). Exempted from this requirement would be General Practitioner doctors who work in 3rd class or poorer municipalities. The SALNs should include all property, including those abroad (including bank balances). If they declare liabilities, they should waive their bank secrecy – so that the government could also check their deposits and investments;

* all professionals should be assessed a taxable income on the basis of the minimum income of a government employee of the same skill level;

* businessmen should be taxed on their personal income from their business.  If their business is a single proprietorship or partnership, the amount they received from the business, as profits (or withdrawals) should be declared as income. The tax paid by the business (divided accordingly if partnership) should then be credited as taxed paid, avoiding double taxation.  If they manage a corporation in which they also own shares in, their taxable income should be their salary from the corporation, or a salary equivalent to a national government supervisory position of an equivalent level (i.e. supervising a similar number of people), whichever is higher.

* conduct regular life-style checks to see whether the SALNs and Income statements are correct;

* exempt the services of professionals (but not businessmen) from other taxes like documentary stamps, receipt tax, VAT, etc. (they are difficult to enforce anyway, so just get rid of the requirement to simplify administration).

The rules have to be changed to encourage tax compliance. If all the government does is to preach about it, and perhaps sue a number of tax evaders, it will not push professionals to pay more taxes.

Tax compliance among self-employed professionals could only be achieved by fixing the rules. With these new rules, full disclosure of income and the payment of proper taxes will become the norm, rather than the exception.

Posted in Philippine economics, Philippine politics, Philippines | Tagged: , , , , , , , , , , | Leave a Comment »

Open Skies?

Posted by butalidnl on 29 April 2011

Lance Gokongwei (president and CEO of Cebu Pacific): Open skies without reciprocity is like Pacquiao with one hand tied.[ Gokongwei: Open Skies without Reciprocity is like Pacquiao Boxing with Left Hand]  This was in response to President Aquino’s signing an Executive Order 29 on “Pocket Open Skies” [Aquino signs ‘open-skies’ orders, finally].  Gokongwei expressed the view of local airlines; but President Noynoy should act on the basis of the advantage such a policy would have for the Philippines as a whole, and not only for the airline industry.

I think that an open skies policy is good for the country, even when it is not reciprocated. Though  it would be probably be better if it was reciprocal. Why will this be good, even if done unilaterally?

Increased inbound travelers. Tourists, businessmen etc would come in if a foreign airline opens a line between one of their cities and a provincial destination in the Philippines. The foreign airline is the one who needs to work in order to generate the traffic; after all, it is its own investment. This traffic is new for the most part. For example, imagine a line from Singapore to Caticlan (Boracay). This will generate more passengers for a direct route; at the same time, it may divert some from going to Manila first, and then transferring to a local airline to go to Caticlan. Because many of the new arrivals may not have come without the new direct line, there will be a net gain in tourist arrivals. A reciprocal line from Caticlan to Singapore will not really add too much.

Cheaper Airfares for Filipinos. Increased number of direct flights will mean cheaper airfares – either because of competition, or because shorter routes will be available.

Improved Air Travel Infrastructure. When foreign airlines open routes to provincial destinations, they will most probably use local resources and personnel for passenger processing, cargo handling, even catering. This will help to improve facilities and services at those provincial airports. It can also result in cheaper air transport costs.

Improved transport costs do not only affect passenger travel. Businesses could also benefit from the increased air routes into provincial destinations. Business travel to those places will be cheaper, and transport of goods by air is also facilitated.

Increased Local Travel. A provision in the Open Skies policy states that foreign airlines are not allowed to transport passengers between destinations in the Philippines. The foreign passenger, once in the Philippines, would need to take local transportation to travel within the country. This means that local airlines stand to gain from the increased number of tourists, etc. in the country, since some of them also want to go elsewhere in the country.

Thus, even if unreciprocated, the Philippines stands to gain from Open Skies. If other countries don’t reciprocate, those countries’ nationals would not benefit from the lower airfares, better access, improved airport facilities, higher passenger traffic, etc. that the Philippines will. It would be their loss.

Gokongwei also talked about unfair competition by foreign airlines because these receive subsidies from the government. True, some foreign airlines may receive subsidies. But this would mean that the other country is subsidizing their airline to fly a route into the Philippines. That  country’s taxpayers are thus paying for something which benefits the Philippines. To this, I would say: Thank You.

Posted in Philippine economics, Philippines | Tagged: , , , , , , , , , , | Leave a Comment »

Limit Government Corporation Salaries

Posted by butalidnl on 17 August 2010

President Noynoy Aquino made a big issue of the excessive bonuses paid to the board of the MWSS during his recent State of the Nation Address (SONA). It seems that there are a lot of other government corporations which also pay their boards quite richly. Is there a way to limit the pay of these people? How high should their salaries and bonuses be, then?
One angle that the Senate is looking into is whether these Government Owned and Controlled Corporations (GOCCs) comply with RA 7656, which require GOCCs to remit at least 50% of their annual net earnings to the government. Apparently, some GOCCs are not remitting their earnings, and have funneled these instead to their own pockets, by way of bonuses and other benefits to their managers.
But, if we take aside the issue of whether or not a GOCC is remitting its earnings to the government, there should still be a limit on the salaries of their executives. The question of what constitutes excessive pay needs to be answered.

I  suggest that limit for the compensation for GOCC executives, should be the salary that the president receives himself. It should be reasonable enough to establish the salary of the president as the maximum “norm” for government salaries. After all, as the chief executive of the country, he should be the highest paid government official. But, how will this work when the boards of MWSS and other government corporations and institutions are governed by their own charters?

The Netherlands
In the Netherlands, there is a “norm” regarding how high the salaries of publicly owned corporations can be; and this is the salary of the prime minister. This norm is called the “Balkenende Norm”, which is the name of the current prime minister, and who earns about Euro 188,000 per year. However, the government could not impose this as a formal limit, . So, the Dutch parliament passed a law requiring the publication of the list of government officials (as well as officials of government owned or controlled corporations) who earn more than the Balkenende norm. And, since this law was passed in 2006, there has been immense public pressure put on those who do earn more than the premier, but who don’t really deserve to (according to the public, that is). This has led to many managers being forced by their boards to return “excessive bonuses”.

In the Netherlands, people accept that people like the head of the Central Bank, the AFM (equivalent to the SEC) and other financial regulators, need to be paid high salaries; because, otherwise, you will not be able to get the most qualified people for these jobs. But they frown upon some hospital directors (these are public corporations here) who get higher salaries than the prime minister, for instance.

“P-Noy Norm”
In the Philippines, I think it would be a good idea to have a “PNoy Norm” , which will set the president’s salary as the norm for the highest salaries in government. The Congress should also pass a law requiring all officials (especially those from GOCCs) who earn more than that to declare how much they earn, and that this should be published in the internet and in other media. This way, the public will have the possibility to assess whether these officials deserve such high salaries.

The PNoy norm should be set above the president’s nominal salary. After all, he has some non-salary benefits e.g. free lodging in Malacanang, free travel, etc. So, let us say we put the norm at Php 1.8 million a year (Php 150,000 a month), and this would include salaries, bonuses and other fringe benefits. So, GOCC executives earning more than this should declare it.

The government could put this norm in effect simply by the power of an Executive Order.  And, and the same time, the president could set up a commission to review the salaries of all executives who receive more than the “P-Noy Norm”. And I am sure that public pressure will come to bear on officials who receive more than the PNoy norm, but who cannot justify such a high level of compensation.

And of course, the Senate should continue with its investigation of whether funds which should have gone to the government have instead gone to the pockets of GOCC managers.

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