The Three Biggest Financial Scams of the Aquino Administration in 2012

The Three Biggest Financial Scams of the Aquino Administration in 2012

By Dr. Bayani Katigbak of Worldwide Filipino Alliance

The year 2012 is coming to an end and the year 2013 beckons. The crony media has been bannering the supposed “gifts” of Aquino to the Filipino people. “Gifts”? Are you serious? It’s about time the adage “beware of Greeks bearing gifts” gets an upgrade.

AQUINO AND HIS MERRY MEN – IN YELLOW TIGHTS PUTS THE GREAT TRAIN ROBBERY TO SHAME

This time around it should read “beware of Filipino politicians and government officials bearing gifts” – because YOU are paying for it. Eat your heart out – Arroyo and Estrada – you don’t come close to the plundering committed by Aquino and his allies. Here are the top three scams of the Aquino administration.

Scam #1 – Sin Tax Law

Amount: P33.96 billion

In its first year of implementation, the measure is expected to generate for the government additional revenues worth P33.96 billion, of which P23.4 billion will come from cigarettes, P6.06 billion from distilled spirits and P4.5 billion from fermented liquors.

Pro: The prices of sin products in the Philippines are significantly lower than those in other countries.

Con: Just because the sin products are significantly lower than those in other countries is not a justification for increasing it. The lower price is a competitive advantage. Why are we racing to become uncompetitive?

Pro: Contrary to claims by lobby groups, Aquino said tobacco farmers would benefit from the measure in terms of assistance and access to alternative livelihood.

Con: The assistance is lower than direct revenues from competitive pricing. Alternative livelihoods that do not provide the same revenue as the ones currently enjoyed by farmers – not to mention the capital expenditures that will be incurred when switching to alternatives.

Pro: Eighty percent of the incremental revenues after deducting the support for tobacco farmers under RA 7171 will be allocated for universal health care under the National Health Insurance Program, and 20 percent will be allocated nationwide for medical assistance and health enhancement facilities program.

Con: The health care industry is highly protected thus there are limited health enhacement facilities nationwide. Increased public spending for medical assistance is an inferior solution. The superior solution is to open the economy and allow foreign investors to own up to 100% equity in locally registered businesses that operate health enhancement facilities.

Scam #2 – RH Law

Amount: P2.5B

The proposed budget of the Department of Health for next year, a total of P21,792,981,000 is related to RH services.

The amount allotted to RH includes P2.539 billion for family health and responsible parenting, which he said includes P245 million for family planning commodities and pills, P91 million for injectibles, and P170 million for IUDs.

Pro: Under the bill, the State shall promote programs that enable individuals and couples to have the number of children they desire with due consideration to the health, particularly of women, and the resources available and affordable to them with due consideration to their religious convictions.

Con: Does promotion by the state necessarily entail more public spending? Non-profits can promote these same programs at lower cost. Individuals and businesses can be given tax deductions when they donate to non-profits. Making resources available does not necessarily mean more public spending – these same resources can be made available via private outlets. Taxes on sales of RH commodities can be reduced. Opening the economy so people can have jobs which makes them able to pay for their own RH needs does not entail a tax burden.

Pro: RH bill aims to inform and educate adolescents, 10 to 19 years, of their reproductive health, responsible teenage behavior, gender and development, values formation, and children’s rights, among others.

Con: Informing and educating adolescents does not necessarily need more public spending. Non-profits can promote these same programs at lower cost. Individuals and businesses can be given tax deductions when they donate to non-profits. Opening the economy so that there are more education providers who can increase message distribution does not entail a tax burden.

Scam #3 – The CCT Subsidy

Amount: P44.2B

Abad said the budget law included P44.2 billion for conditional cash transfer.

The three-year-old scheme gives up to P1,400 a month to the poorest families who meet certain criteria, like keeping their children in school and bringing them, as well as pregnant family members, regularly to government health clinics.

More than 26 percent of the country’s population of about 100 million are deemed by the government to be living in poverty.

Pro: Government officials said this gives their children a better opportunity to get out of destitution.

Con: When parents have jobs, they are able to afford to pay for their children’s needs so that their children can stay in school. In promoting the CCT the poor are led to the “welfare trap” and dependency on the state instead of working.

People are living in poverty because they don’t have jobs. The constitution restricts the inflow of job-creating investments. Removing the 60/40 economic restrictions on all sectors of the economy will allow the influx of foreign investments to generate jobs, provide more choices and reduce costs to the huge consumer population.

Philippine schools are already churning out lots of graduates but jobs are nowhere to be found. The graduates of the CCT subsidy will also face the same predicament – the lack of jobs and the perpetuation of their poverty.

Setting the Stage for Wholesale Plunder

A bigger bureaucracy with more funds to disburse provides a fertile plain for massive corruption.

The experience in implementing the CCT subsidy as shown in a COA report that CoA, in its 2010 report, the beneficiaries included people who owned hectares of land, cars, a six-door apartment, an Internet shop and a grains trading business not to mention the smartphones for the use of DSWD staff.

The massive increase in government spending from P1.5 trillion in 2010 to P1.8 trillion (20% increase) in 2011 to 2 trillion in 2013 (11% increase) has not led to positive gains for Filipinos – but it certainly has increased the revenue of the suppliers of the different government agencies.

Stagnant Job Market

Unemployment remains steady at 7%. Unemployment was at 7.4% in 2010, the start of Aquino’s administration. Unemployment averaged 7% in 2011. Unemployment still averaged at 7% in 2012. (source: NSO)

Underemployment remained high in 2012 , it started at 18.8% in February , increased to 19.3% in May, increased to 22.7% in July, and went down to 19.0% in October (source: Bloomberg).

The minimum daily wage can vary based on region and industry (Non-agriculture, agriculture-plantation, agriculture non-plantation.

NCR has the highest minimum daily wages – $8.18 to $8.92 for non-agricultural workers, $8.38 for agricultural workers.

Other regions minimum daily wage vary from $ 4.64 (ARMM) to $5.70 (Central Luzon) for non-agricultural workers. For agricultural workers in plantations the minimum daily wage ranges from $4.20 (CALABARZON) to $5.40 (Central Luzon). Minimum daily wages for non plantation agricultural workers range from $3.80 (CALABARZON) to $5.16 (Central Luzon).

According to the Employers Confederation of the Philippines the country already has the highest minimum wages in Asia. Data from ECOP showed that the minimum daily wage in Metro Manila stands at almost $10 a day compared to $2.20 in Vietnam, $2 in Cambodia, $2.90-$3.00 in Indonesia,$5.20-$5.90 in Thailand and $3.75-$5.00 in China.

The high minimum daily wage of the Philippines is driven by the high cost of living in the Philippines considering that the country has the highest power rates and telecom rates in the region. The limited number of providers in the face of high demand leads to high prices.

Cronies Raking it In

While Filipino consumers and jobseekers are wallowing in poverty, hunger, and joblessness the situation of the constitutionally protected cronies of the Aquino administration are at an all time high. The few companies who monopolize the Philippine economy have been benefiting the huge consumer demographic.

This has not gone unnoticed by foreign portfolio investors who recognize the killing to be made in a market without competition, thus the spikes in the PSE indexes. Take for instance the following crony companies:

* Security Bank income climbs 55%

* San Miguel profits rise as of September

* Ayala Corp. grew profits in the nine months to September on strong performance of its property, banking, and water utility units – BPI profit up 37% as of Sept.

* Maybank profit surges 151%

* SM Investments raises $500 million

* Real estate exposure hits record high

* SM Prime Holdings, Inc. will open on Sept. 28 SM Lanang Premiere, its second in this city and touted as the biggest shopping mall in Mindanao.

The obvious impact of such inflows is that it attract speculators, replenishes the coffers of Filipino big business monopolies, and leads to the phenomenon of jobless growth.

Who are providing the revenues to these companies when the domestic Filipinos have low purchasing power? The answer would be the remittances from overseas Filipinos. The very Filipinos who were driven overseas to search for job opportunities due to the lackluster compensation by these crony companies are unwittingly fuelling the growth of these same economic vampires.

And that doesn’t even include the awarding of government contracts to these same cronies – at taxpayers’ expense. As of September 2012, The Philippine government’s debt climbed to P5.2 trillion ($104Billion). Each government agency needs to spend on real estate, power, telecom and these services will be provided by the crony companies. And since the debt was incurred by government, who are left to foot the bill? That would be – you guessed it right, the taxpayers.

The Bottom Line

The RH Bill is a gift? The CCT subsidy is a gift? The Sin Tax is a gift? Filipinos need these gifts like they need a hole in their head.

The proverbial bottom line is that Filipinos continue to remain in the red, while government and its cronies are in the black.

The government and its cronies are quite happy with the presence of two-bit financial scam artists involved in pyramid schemes – these are convenient distractions to the plunder in broad daylight.

Oh well, pinoys are proud to be plundered by Aquino. In voting for Aquino and supporting the scamster programs peddled by Lagman, Soliman, Abad and Purisima Filipinos perpetuate the poverty they deserve.

After all poverty is not the lack of choices – rather poverty is the act of making really bad choices!