IN THE two previous articles, we reported on President Rody Duterte’s ambitious public infrastructure program by which this administration hopes to further accelerate the momentum of economic growth.
The program, estimated to cost more than P8 trillion over the next few years, will be funded thru the following means:
1. By improving tax collection efficiency through the approval and implementation of the proposed tax reform package.
2. By continuing to tap the private sector for big ticket infrastructure projects.
3. By covering the shortfall through increased domestic, rather than foreign borrowing.
The proposed tax reform package is moving slowly through the legislative mill, raising concerns that revenue collection efforts may suffer because of the delay.
Meantime, we received suggestions on how to further maximize revenue generation.
Specifically, the proposals refer to 1.) plugging the huge customs revenue leakage and 2.) enhancing the public-private partnership.
Finance Secretary Carlos Dominguez III has pinpointed why customs collection efforts have consistently fallen short of target year after year. This has to do with the huge gap (something like 280 billion yearly) between export figures as reported by exporting countries and import figures as reported by local agencies.
Jose Ma. Buñag, who graduated at the top of Ateneo Law class '68 and a former BIR commissioner, has this to say:
“That problem has already been noted even while I was still with the BIR. One particular commodity were tiles. Customs records show very little importation compared to UN records on China's exports of tiles to the Philippines. Basically, this is a customs problem, really smuggling.
“I have not seen much yet by way of new measures by the present administration to root out smuggling, other than putting an outsider as Customs Commissioner who apparently is not corrupt.
“It is a hard problem to crack but other countries, like South Korea and Singapore, have done it.
“What I noticed is that in cracking this problem, full, almost undivided, attention by the top honcho (read the President) must be given to it.
“Response must be swift by way of confiscating smuggled goods and putting erring officials and importers to jail.
“Shipping companies and air cargo companies should also be put on notice that smuggling will not be tolerated and they risk their permits as well as jail terms for their people if they are found shipping items without the correct papers.
“Informers should be amply rewarded quickly.
“The whole government machinery must be united in this objective, including the police and the courts.
“Everybody cooperates behind the President, exercising active and energetic leadership.
“This war should equal, if not better, the present war on drugs.”
On the matter of enhancing public-private partnership, let us hear it from Oscar I. Violago.
Violago graduated in the middle of the pack when we graduated from Ateneo Loyola in 1964. But Violago’s credentials in terms of successful implementation of public-private initiative are just awesome. After all, he is credited with having put together the US Dollar 680 million Casecnan Multi-Purpose Power and Irrigation Project, which has resulted in increased energy production and thousands of hectares in irrigated lands. All these, at no cost to the government!
He has a litany of suggestions, some of which we reproduce below:
“Protect and support our private partners in the implementation by, first and foremost, not changing the rule in the middle of the game. We must honor contracts.
“Cut the red tape. DENR officials have too much power to delay. Red tape is temptation for corruption. Time limits should strictly be enforced. NEDA should act yesterday, not 3-5 years later, making some projects obsolete. No more analysis-paralysis.
(With apologies to Secretary Dominguez) “Tap PFVR as the head of the economic team. He has done a great job before. Full of experience and wisdom.” (Note that PFVR was the ultimate author of the BOT arrangements and its various permutations.)
“No favoritism. No vengeance. Everybody equal.
“Government must react ASAP to prevent/reduce backlog.
“Government must protect and enforce right of way. Pass laws in Congress and Senate that nobody can unduly and unreasonably stop right of way for infrastructures like road right of way, transmission lines, etc.
“Make it a criminal offense for government officials to give permits to lands needed and already designed for government.”
Violago cannot over-emphasize the importance of infra spending.
“Proper spending on infracture will bring about so much multiplier effect on our economy. But our infrastructures must be big time (no piece meal), consequential, harmonious and complimentary to each other.”
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