Game show stampede: 74 dreams crushed

By Luige A. del Puerto, Edson C. Tandoc Jr., Volt Contreras
Inquirer

Editor's Note: Published on page A1 of the February 5, 2006 issue of the Philippine Daily Inquirer

THEY came in the tens of thousands, some camping out for days, hoping fortune would favor the earliest to get in among them . All they wanted, each of them, was a stadium seat, a free raffle ticket, and a stroke of luck that could end a life of poverty.

Yesterday, the impatient buildup of dreams exploded into a mad, deadly rush.

Red Cross officials said 74 people who had come to watch the first anniversary presentation of the popular ABS-CBN noontime show Wowowee were crushed to death in an early morning stampede at the Philsports Arena (formerly Ultra) in Pasig City, a shocking spectacle many saw as a telling measure of the hard times.

About 500 others were injured, Red Cross officials said.

In a telegram to the Bishop of Pasig, the Vatican said: The Pope asks Almighty God to grant solace to the injured and to those who are mourning the loss of their loved ones.

Cause-oriented groups expressed concern that the stampede may have been caused by extreme poverty and despair which they said were so prevalent among Filipinos that one of their main hopes for a better life was a TV show offering a quick windfall: It's not P51 to the dollar, they said, but 70 lives to the peso.

It was one of the deadliest, if not the deadliest, incident involving a stampede to occur in the country in years.

The victims were predominantly from the poorest parts of the metropolis and nearby provinces, generally jobless and lured by the show's promise of instant millions.

Some came from as far as the Visayas.

The victims included the elderly, pregnant women, toddlers, entire families or neighborhoods who since Monday had taken shelter in jeepneys or slept on mattresses and newspapers in the open street leading to the gates of the Arena.

Many of the dead were women crushed against a closed steel gate at the bottom of a slope or trampled underfoot. At least one child was killed, hospital officials said.

It was not the first stampede to occur at the Arena.

President Macapagal-Arroyo ordered a thorough probe and the submission of results within 72 hours, Press Secretary Ignacio Bunye said.

Bunye said Transportation and Communications Secretary Leandro Mendoza had ordered the National Telecommunications Commission to look into any possible culpability of ABS-CBN (owned and managed by the Lopez family).

In a text message later, Bunye said that Local Government Undersecretary Marius Corpus, chair of a fact-finding team, had subpoenaed ABS-CBN executive Charo Santos-Concio, Wowowee host Willie Revillame, the head of the affair's organizing committee and the chief of the security of the Ultra event to appear before the DILG at 1 p.m. today.

Show cancelled

ABS-CBN cancelled the anniversary celebration of one of its most-watched TV shows, which has sparked a ratings battle with other noon shows, particularly Eat Bulaga.

About 50,000 people were waiting to get inside the stadium when the mayhem erupted, Pasig Mayor Vicente Eusebio said, according to the Associated Press.

Casualty reports were conflicting.

The Eastern Police District listed 79 dead and 328 injured as of 7:30 p.m. But Philippine Red Cross chairman Sen. Richard Gordon said the official Red Cross count was 74 dead, including one person who died of injuries last night at the Medical City.

Vice President Noli de Castro also initially reported 79 killed but later said he was told by health department authorities there had been a double-counting of names.

ABS-CBN officials told reporters their figure was 70 dead but its website, at 6:25 p.m., reported 79 killed.

The deaths occurred in a fairly small area of a passageway leading into the football field, suggesting the victims were trapped in a spot where they had nowhere else to go. The spot where they died bore no bloodstains.

Guard Juner Empelina recalled seeing entire rows of bodies falling over and three more layers of bodies piling up on top of them.

Six hours after the stampede, some of the injured were still checking into hospitals.

Eusebio said the melee erupted as the crowd pushed and surged toward the gates, pinning and trampling those in front.

The gates were being partially opened then shut, said Myrna Britania, 42, who had spent all night in line and was one of the injured. People at the back of the line were pushing not knowing there were already people dead lying on the ground in front.

Eusebio and police denied reports that the stampede was caused by somebody shouting Bomb! bomb!

Several hours after the incident, tearful survivors were still looking for missing parents, children or relatives.

Half-eaten food

The once-swarming street outside the stadium was strewn with slippers and shoes, bags, umbrellas, articles of clothing, and half-eaten food.

Oddly, though, the day's tragedy seemed to reveal something bizarre in the Filipino psyche: Instead of going home, thousands of Wowowee fans who made it to the stadium before the stampede decided to stay put, holding on to their tickets and their seats, still hoping the show would go on.

By 1:30 p.m., comic host Revillame, reduced to a sobbing, bowed figure, climbed the stage and apologized to the galleries and those watching from their homes.

Nobody wanted this to happen. I hope you understand that today's show is being cancelled, he said in Filipino. Let's pray for those who died or were hurt this morning.

Noli's appeal

His show, he said, was for Filipinos who think they have lost all hope.

The audience cheered him on, some shouting It's not your fault, Willie!

From backstage, De Castro, who was once ABS-CBN's biggest media celebrity, joined Revillame to appeal for calm and understanding.

It's not proper that we continue having fun here while there are 79 people dead and more than 200 others injured in hospitals right now, De Castro said.

De Castro led the crowd in a minute of silence for the victims.

Security lapse?

There appears to be a lapse in security, Mayor Eusebio told the Inquirer. The management got a permit from the City Hall, but they should have also coordinated with us for the security measures, especially with a crowd this big.

Most of those killed were brought to the Medical City before they were transferred to the Arlington Funeral Homes in Pasig City.

We did not expect this would happen. We just want to make people happy every day. We hope people will understand that we just wanted to help, Revillame said in a press conference at the Arena.

Outside, other hosts of the programs hugged one another and broke into tears. Soon, ABS-CBN officials, including its chair and owner Gabby Lopez, arrived.

'We're devastated'

It's insensitive to continue the show, said ABS-CBN's Concio. We're all devastated.

The Catholic Bishops Conference of the Philippines offered prayers and condolences.

Our hearts bleed in sorrow for the victims who, coming from the poorest of the poor, had no other intention but to be entertained and probably get some prizes given out by the show, CBCP President and Jaro Archbishop Angel Lagdameo said.

President in black

Ms Arroyo formed a five-man team to look into the tragedy.

De Castro said the team would be composed of representatives from the DILG, the local government of Pasig, the Department of Health, the Office of Civil Defense, and the National Capital Region Police Office.

The team will find out what really happened, who was responsible, and recommend measures to prevent a repeat of the tragedy.

The President wore a black blouse when she left Malacanang at noon to visit the injured being treated at the Rizal Medical Hospital. She was seen on TV kneeling down in front of a middle-aged woman who had suffered a leg injury.

Caused by poverty

The Ultra stampede is the real state of the economy. It's not P51 to the dollar. It's 70 lives to the peso, said Sanlakas president Wilson Fortaleza.

Bayan secretary general Renato Reyes said: The real tragedy is the poverty that pushes people to pin their hopes in game shows. That is what is saddening.

Yesterday's incident was not the first time fans had stampeded to try and watch an ABS-CBN show.

In Cebu last year, chairs and pieces of metal railings flew as zealous spectators surged toward the stage during a mall show of the network. No one was hurt among the spectators but some the stars suffered bruises.

Network officials said their shows in the provinces were peaceful.

In 2003, eight people were injured when crowds jostled their way into the Philsports football field to watch Taiwanese celebrities Vaness Wu, Ken Zhu and Barbie Xu.

In September 2005, four young men were trampled to death in a stampede during a rock concert at the Amoranto Stadium in Quezon City. Gil C. Cabacungan Jr., Cynthia D. Balana, Norman Bordadora, Tina Santos

Copyright 2006 Inquirer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.Editor's Note: Published on page A1 of the Jan. 30, 2006 issue of the Philippine Daily Inquirer

Comments? Questions? E-mail us at editor@mypad.net

Arroyo offers moratorium to appease bishops

By Gil C. Cabacungan Jr., Blanche S. Rivera
Inquirer

Editor's Note: Published on page A1 of the February 4, 2006 issue of the Philippine Daily Inquirer

PRESIDENT Macapagal-Arroyo has offered to suspend the issuance of new mining permits to try to appease Roman Catholic bishops strongly opposed to the country's new Mining Act, a top Malacanang official said yesterday.

But mining industry executives warned such a move would make the Philippines a pariah to foreign investors whom Ms Arroyo had aggressively wooed to put their money in the country after the Supreme Court upheld the constitutionality of the Mining Act in 2004.

A senior Palace official, who was privy to Ms Arroyo's talks with the bishops in Malacanang Monday night, said the proposed moratorium would not cover the existing mining permits with a total of $6 billion in investments that should keep the local industry busy over the next four years.

Earlier, acting Presidential Chief of Staff Mike Defensor had indicated to reporters during Ms Arroyo's visit to Albay the other day that Malacanang was no longer keen about issuing new mining permits.

The Palace official clarified that nothing was final yet.

Pinaplano pa lang yan ... Yan ang offer namin sa mga bishops (That is still in the planning stage. That was our offer to the bishops), said the official, who asked not to be identified, saying he had not been officially authorized to talk about the meeting.

The official said the proposed moratorium on new permits for both large- and small-scale mining would be in place until the government and the Church had agreed on a fool-proof system to ensure the protection of local communities-specifically the indigenous people-and the environment.

The official said suspending the issuance of mining permits would immediately address the bishops' concerns on the entry of mining firms in greenfield areas.

This could mean limiting mining activity in areas that have been traditional hosts to these activity, the official said.

Country's credibility

Last Sunday, the Catholic Bishops Conference of the Philippines issued a pastoral statement calling for the repeal of the Philippine Mining Act of 1995, saying that it destroys life.

The bishops also called for the cancellation of all approved mining concessions and the junking of pending applications.

Patrick Caoile, treasurer of the Philippine Mine Safety and Environment Association, said the Philippines' credibility would take a hit with the plan to impose a permits' moratorium.

The President went around the globe inviting mining companies supposedly with open arms to explore one of the richest mineral countries in the world. We'd become a pariah if we tell them that no permits will be given, Caoile said.

A source from the Bicol group of bishops said that a closer look at the data released by Malaca¤ang to hype the mining industry would show that mining was just a filler in the country's investment strategy not worth the social costs and political risks.

New jobs, more taxes

By 2010, new mining projects would have generated 43,635 jobs, P27 billion in new taxes, P684 million for social development funds and P1.7 billion in royalties for the indigenous people. The government estimated that mining projects would bring in P240 billion in investments up to 2010.

However, the Church group said only 20 percent of this would remain in the country as the bulk would go to the payment of project loans and repatriation to parent companies.

The Church has deemed the 20-percent return as too modest for an extractive, non-repeating resource business.

Main example

The Rapu-Rapu mining incident has become the Church's main exhibit of possible environmental disasters. The two cyanide spills on the island has caused fishkills and reportedly endangered Albay's tourism potential.

Caoile said the Rapu-Rapu controversy could have been averted had the mining firm Lafayette taken in a local contractor to help build their tailings dam.

They used an all-Australian team, including equipment and technology. Australia does not have that much rainfall as the Philippines and that's just one of the biggest differences that they did not take into consideration, Caoile said.

No need for rush

In his talk with reporters in Albay, Defensor said that what the Palace had told the bishops was ayusin na lang natin yung existing (permits)-let's make the existing permits work. Then let's not approve anything anymore, Defensor said, adding this was basically their message to the bishops.

Let's make do of them. Let's not anymore approve permits, Defensor said. We have enough now for the country to move the economy. Let's not rush things. Let us perfect what we have now.

40 concessions under review

At least 40 proposed mining concessions covering 1.6 million hectares are being reviewed by the government to check if the concession areas overlapped with any protected areas and timber concessions, Environment Undersecretary for Mining Deinrado Dimalibot said yesterday.

The Department of Environment and Natural Resources has sent out intents to cancel to 40 companies applying for Financial and Technical Assistance Agreements (FTAAs) as early as September last year.

We are also doing a reassessment of the viability of those areas for mining and the social acceptability of the projects, if the people really agreed to the projects, Dimalibot said in an interview.

He said that while the Mines and Geosciences Bureau continued to accept applications for mining concessions, the government was not inclined to approve more applications soon.

There is that trend because the President is already satisfied with the 24 priority mining project sites, Dimalibot said.

Hopes on mining

The administration is banking on the revitalized mining industry to prop up the economy, identifying 24 mine-rich areas that the government is promoting on its mining road shows abroad.

The government had suspended the processing of the 40 FTAA applications because of the Supreme Court case that contested the provision of the Mining Act allowing full foreign ownership in mining projects.

Dimalibot said the DENR wanted to see if the firms were still interested in pursuing their mining applications and if they had complied with the documentary requirements.

Four of the 40 FTAA applications under review have foreign partners, Dimalibot said. Another 19 FTAA applications are pending with the MGB, the agency tasked to review and process all mining applications.

With a report from PDI Southern Luzon Bureau

Copyright 2006 Inquirer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.Editor's Note: Published on page A1 of the Jan. 30, 2006 issue of the Philippine Daily Inquirer

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0% kickback for solons
Fertilizer fund scam detailed in Senate

By TJ Burgonio
Inquirer


Editor's Note: Published on page A1 of the Feb. 3, 2006 issue of the Philippine Daily Inquirer

A BROKER for a virtually unknown medical supplier yesterday exposed an alleged conspiracy between Department of Agriculture officials and local politicians to skim off the DA fund for liquid fertilizer.

Testifying at the Senate inquiry into the P728-million fertilizer fund scam, Jose Barredo Jr. said he met with congressmen, governors and mayors in their homes to persuade them to avail themselves of the DA fund by dangling an offer -- a 30-percent commission.

The fertilizer fund was said to have been used to ensure the victory of President Gloria Macapagal-Arroyo in the May 2004 elections.

In a clear, candid testimony, Barredo rattled off the names of the officials who allegedly took hefty commissions and even dictated the amounts they should receive.

He said that at times, he personally delivered to some of them the commissions and the liquid fertilizer, some of which was diluted and overpriced.

The officials mentioned by Barredo included Representatives Monico Puentevella (Bacolod City), Edgar Espinosa (Guimaras), Florencio Miraflores (Aklan) and Reylina Neneng Nicolas (Bulacan); former Iloilo Representative Oscar Garin; Governor Vicente Bermejo (Capiz) and Kalibo Mayor Reymar Rebaldo.

Some of the officials issued denials.

Barredo said that between January and April 2004, he worked with one Maritess Tess Aytona, believed to be one of the owners of medical supplier Feshan Philippines Inc. and an agent of then Agriculture Undersecretary Jocelyn Jocjoc Bolante.

He said it was Aytona who took care of getting the required papers signed, and having the necessary funds as well as the commissions released.

Identifying himself as a broker of Feshan, Barredo said Aytona had claimed that the DA fund was being managed by Bolante, the alleged chief architect of the fertilizer fund program.

The Senate tried to serve a subpoena on Aytona at the Feshan office at 16 Sgt. Esguerra Avenue, South Triangle, Quezon City, but found the place abandoned.

Overpricing

At the same hearing, Commission on Audit (COA) officials said the suppliers and non-government organizations that received a huge portion of the P728-million fund from the DA for eventual distribution to farmers' groups overpriced the cost of the fertilizer by millions of pesos.

Sorsogon board member Rebecca Aquino testified that the provincial government received P5 million from the DA and used it to purchase over 2,000 liters of Bio Nature Liquid Fertilizer.

She said the fertilizer -- sold by local suppliers at between P180 and P350 per liter -- was bought at the padded cost of P1,500 per liter from Feshan itself, and turned out to be inappropriate for rice and corn.

After the hearing, Senator Ramon Magsaysay Jr. told reporters: In effect, we have further strengthened the truth that the [DA] down to the RFU (regional field unit) level had made use of the fund to commit such large-scale overpricing and under-delivery.

If this is not reversed, we will continue to bleed, and our farmers will continue to be impoverished.

Magsaysay, chair of the investigating committee on agriculture and food, said it was up to the COA to pick up from where the committee had left off: The COA itself can file cases.

But the senator said he was not keen on inviting the lawmakers mentioned by Barredo. He said the House of Representatives' committee on ethics should look into the broker's claims.

'SOP'

In his testimony, the bespectacled Barredo said he worked with Aytona on the sale of medicines to local government units from 1997 to 2003.

He said that in January 2004, Aytona invited him to work with her in the sale of liquid fertilizer to local officials, with the funds coming from the DA and the fertilizer to be purchased from Feshan.

Barredo named a Julie Gregorio as the president of Feshan, which, he said, had connections to Bolante and was authorized by the latter to supply fertilizer to local government units.

She (Aytona) told me that funds from the DA would be given to the LGUs to buy the fertilizer. According to Tess, the fund is being managed by DA Usec Bolante, Barredo said, reading from a sworn affidavit.

Initially, Barredo said, he and Aytona met with Mayors Castillo and Pagdanganan of the Bulacan towns of Pulilan and Calumpit, respectively, and Bulacan Representative Nicolas to inform them they had funds ranging from P3 million to P6 million.

He said Nicolas declined to accept the fertilizer, and decided to accept cash only.

I learned that if the fund, for instance, was P3 million, the SOP (standard operating procedure or commission) would be P900,000 (30 percent of P3 million), and the rest would be used to buy fertilizer, he said.

For his work, Barredo said Aytona promised him P10,000 a month, plus 3-5 percent of the commission.

Demands

After his stint in Central Luzon, Barredo, being an Ilonggo, was instructed by Aytona to concentrate on Region 6 (Western Visayas).

There, he said, he made the same offer to officials who included Congressmen Puentevella, Garin and Espinosa, Governors Bermejo and Miraflores and Mayor Rebaldo.

He said Puentevella, who was allotted P5 million, accepted the offer, but insisted that only 25 percent be used to buy fertilizer and the rest be converted to cash.

Tess Aytona was with me at that time, Barredo said.

Garin, who was allocated P5 million, also received a commission equivalent to 30 percent of the fund, Barredo said. He said Espinosa got a P3-million fund and a 30-percent SOP.

Barredo said that when he and Aytona met with Bermejo at the Roxas capitol, the governor asked about the amount of the commission and was told that he would get 20 percent.

The governor retorted that a supplier had given a 40-percent offer, and instructed Tess to call Usec Bolante. I saw and heard Governor Bermejo and Usec Bolante talk on the phone, Barredo said, adding that he eventually delivered the first tranche of the commission to the governor.

The one who rejected offer

Per Barredo's testimony:
He visited Puentevella at the latter's home in Bacolod in April 2004 to present the memorandum of agreement, but the lawmaker signed it only a few days later.

Miraflores did not sign the MOA until he received the P1.5-million commission a day before the May 2004 elections.

Rebaldo did not agree to the initial offer of P600,000 in commissions and demanded more. The additional money was delivered.

Iloilo Representative Arthur Defensor did not accept his allocation from the DA but requested that this be distributed to Mayors Alex Centena of Calinog, Mayor Mario Malones of Maasin and Mayor Ramirez of Lambunao.

Before the elections, we also met with Congressman Lacson, Congressman Marañon and Governor Marañon, but the release of their allocations did not push through after they switched sides and supported FPJ (Fernando Poe Jr., standard-bearer of the opposition), Barredo said.

Copyright 2006 Inquirer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.Editor's Note: Published on page A1 of the Jan. 30, 2006 issue of the Philippine Daily Inquirer

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CBCP: Quit option stays
Lagdameo explains pastoral statement

By Nestor P. Burgos Jr., Christian V. Esguerra
Inquirer

Editor's Note: Published on page A1 of the Feb. 2, 2006 issue of the Philippine Daily Inquirer

ILOILO CITY -- The president of the Catholic Bishops Conference of the Philippines (CBCP) yesterday said that resignation remained an option for President Gloria Macapagal-Arroyo to resolve the Hello Garci controversy.

Archbishop Angel Lagdameo also brushed aside criticisms that the Catholic Church was interfering in politics. When people do not like what we are saying, then we will be criticized as interfering in politics, Lagdameo said.

The archbishop of Jaro said that the resignation option was contained in the July 10, 2005, pastoral statement issued by the CBCP at the height of the wiretapping controversy that nearly unseated Ms Arroyo.

In last year's statement, the bishops stayed away from mounting calls for the President's resignation but said she should not ignore them.

Asked if last week's pastoral statement, issued after the prelates' first plenary this year, reflected what the CBCP felt about the unresolved political crisis, Lagdameo said: Probably.

Partly, we can say that that is a statement of frustration.

We did not change (the July 10 statement). So it still stays that the President listen to the voice of the people, Lagdameo told reporters here after the launching of the People's Graftwatch of Iloilo Inc.

3 options

The voluntary resignation of the President was one of three measures the CBCP proposed last year to put a closure to the worst political crisis hounding the Arroyo presidency.

The two other options were impeachment and the creation of a truth commission to look into allegations Ms Arroyo manipulated the May 2004 presidential election.

The opposition said wiretapped phone conversations purportedly between Ms Arroyo and former Election Commissioner Virgilio Garcillano suggested fraud was committed in the 2004 balloting.

Ms Arroyo's dominant allies in the House of Representatives killed the impeachment case against Ms Arroyo last September. No effort has so far been made to set up the truth commission.

Evasion and obstruction

Sunday's CBCP statement recommended that the search for truth in the wiretapping controversy be pursued relentlessly, noting that last year's effort was marked by evasion and obstruction.

In Manila on Monday, Bishop Teodoro Bacani said the CBCP's latest pastoral statement was clearly prompted by the failed impeachment case against Ms Arroyo and Garcillano's recent testimony before a joint House inquiry into the wiretapping scandal.

In his three appearances during the House inquiry, Garcillano denied allegations he conspired with the President to rig the 2004 election. He also said he could not identify the voice caught in the tape. He admitted he did not think anyone believed his testimony.

The impeachment case and the Garcillano testimony were not yet present when the CBCP came up with its first statement on the crisis last July, Bacani said.

Before we did this new statement, Lagdameo said, we first talked among ourselves and had a national consultation. We got the minds of all bishops.

Addressed to Arroyo

Lagdameo said prelates were so involved in last week's discussions that he recorded 137 interventions -- the number of times a bishop spoke on a specific issue -- while they were deliberating on the pastoral letter.

We examined the document, line by line, so bishops could put their specific concerns, he said.

Bacani said that some bishops pushed for the inclusion of the impeachment issue in the statement to indicate strongly that it was specifically addressed to the President.

'Impeachment'

Before, it was not there, he recalled. But we thought that without it, it would seem that the President was not covered by the statement. So we included the word 'impeachment' to make things clear.

Bacani said what came out was a pastoral statement unmistakably attacking Ms Arroyo.

Now, more evidence surfaced that there really was cheating during the last elections, Bacani said. What we just don't exactly know is how big the cheating was, but it was indeed big. Things are clearer now to the bishops.

We just didn't name Gloria but on many items, it was clear that she's the one being referred to, Bacani said, noting the acts of evasion and obstruction in the Garcillano wiretapping mentioned in the statement.

Who else would do that besides the President and her allies? he said.

Bishop Antonio Ledesma of Ipil also said the plenary essentially dismissed ousted President Joseph Estrada's appeal to the CBCP to intervene in the plunder case against him. He said he thought the issue was not that pressing.

Also glossed over during the CBCP plenary was a similar plea for intervention by the imprisoned Oakwood mutineers.

Copyright 2006 Inquirer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.Editor's Note: Published on page A1 of the Jan. 30, 2006 issue of the Philippine Daily Inquirer

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Oil, power, fare rates up
12-percent VAT takes effect today

By Gil C. Cabacungan Jr., Abigail L. Ho, Michelle Remo
Inquirer

Editor's Note: Published on page A1 of the Feb. 1, 2006 issue of the Philippine Daily Inquirer

EFFECTIVE TODAY, the prices of diesel and gasoline will go up by 60 to 70 centavos a liter and power rates in the franchise area of Manila Electric Co. by an average of 10 centavos per kilowatt-hour because of the increase in the rate of the expanded value-added tax (VAT) from 10 percent to 12 percent.

Albay Representative Joey Salceda, President Gloria Macapagal-Arroyo's economic adviser, described the 12-percent VAT rate as a short-term pain for long-term growth to address poverty.

She is really a lucky woman because the surprisingly strong fourth quarter economic growth and stabilizing inflation have provided her with a benign climate to exercise the 2-percentage point option, Salceda said.

While the stock market welcomed the higher VAT rate, consumers and militant groups did not.

Despite her low approval ratings, Ms Arroyo yesterday approved the 2 percentage-point increase in the VAT rate three months after imposing the tax on previously exempt products and services such as oil, power, medical and legal services, and domestic air and sea transport.

Under the VAT Reform Law, a key part of the government's fiscal reform program, the Department of Finance (DoF) must recommend to the President an increase in the VAT rate if any of these two conditions were met in 2005: A VAT collection-to-gross domestic product (GDP) ratio of more than 2.8 percent, and a budget deficit-to-GDP ratio of more than 1.5 percent.

With the country's GDP for 2005 hitting P5.38 trillion and VAT collections reaching P156.82 billion, the VAT-to-GDP ratio stood at 2.9 percent. The national government's budget deficit settled at P146.5 billion, resulting in a deficit-to-GDP ratio of 2.7 percent.

Vote of confidence

Francis Chua, president of the Federation of Filipino Chinese Chambers of Commerce and Industry Inc., said the increase in the VAT rate should end all doubts about Ms Arroyo's commitment to doing what is good for the economy and the people in the long term by making a sacrifice in the near term.

I think the fund managers would give the President a vote of confidence with the VAT rate hike, Chua said.

True enough, share prices closed higher yesterday amid optimism that an increased VAT rate would solve the government's fiscal problems, dealers said.

They said gains delivered the benchmark to a two-week high, a day before the government raised the tax rate.

Too much

About 200 members of the militant Bagong Alyansang Makabayan picketed the Bureau of Internal Revenue (BIR) main office in Quezon City yesterday, according to Bayan spokesperson Renato M. Reyes Jr.

The VAT hike is too much for people who earn too little, Reyes said. New tax burdens would further erode what little is left of the purchasing power of the ordinary Filipino.

The imposition of the 10-percent expanded VAT, after a four-month, court-induced delay, last Nov. 1 and its immediate impact on prices pummeled the President's popularity ratings, making her the most disliked Chief Executive in the country since this type of poll was taken.

Energy Secretary Raphael Lotilla said at a briefing that fuel prices would rise by an average of only 1.8 percent despite the 2-percentage-point increase in the VAT rate.

This is the result of mitigating measures that we have put in place, including tariff reductions and the removal of excise taxes on certain products, he said.

The increase in the VAT rate will raise the prices of diesel by 60 centavos a liter, unleaded and premium gasoline by 70 centavos a liter, regular gasoline by 65 centavos a liter and kerosene by 55 centavos a liter.

Oil firms raise prices

Oil firms Eastern Petroleum Corp., Seaoil Petroleum Corp. and Flying V increased their prices by those levels at 12:01 a.m. today.

Computations by the Department of Energy showed that the VAT hike should raise diesel prices by 58 centavos a liter, unleaded gasoline by 67 centavos, regular gasoline by 63 centavos, kerosene by 60 centavos and liquefied petroleum gas by between P8.90 and P9.80 a kilogram.

From P31.67 a liter, diesel is estimated to now sell at an average of P32.25 a liter.

Prices of unleaded gasoline are estimated to go up to P37.25 from P36.58 a liter, regular gasoline to P35.06 from P34.43 a liter, kerosene to P33.78 from P33.18 a liter and cooking gas to between P498.10 and P550 from between P489.20 and P540.25 per 11-kg cylinder.

Electricity rates

Households using up to 50 kWh a month will have to pay an additional P4.85, while those consuming 51 to 70 kWh will shell out P6.78, and those who use 71 to 100 kWh, P9.68.

These consumers are all lifeline users, who are entitled to discounts of 50 percent, 35 percent and 20 percent, respectively.

Those consuming 101 to 200 kWh a month will see their bills increase by P19.37; those using 201 to 300 kWh, P29.06; 301 to 400 kWh, P38.75; 401 to 500 kWh, P48.44; 501 to 600 kWh, P58.13; 601 to 700 by P67.81, and 701 to 800 kWh by P77.50.

Some economists say the VAT increase may dampen consumer spending in the first half, which could hurt economic growth. Consumption makes up 70 percent of Philippine GDP.

More infrastructure

The administration plans to allocate an additional P20.3 billion for infrastructure and basic services from revenues from the higher VAT rate.

The VAT Reform Law is expected to yield P75 billion in incremental revenues this year, and the government intends to use 30 percent of the amount, or P22.5 billion, for pump priming, according to the DoF.

The remaining 70 percent will be used to reduce the budget deficit.

Finance Secretary Margarito Teves had said that the VAT Reform Law would help the national government achieve its goal of wiping out the budget deficit two years earlier, or by 2008, instead of the original target of 2010.

Budget Undersecretary Laura Pascua said that of the P22.5 billion, P20.2 billion would be spent on infrastructure like roads, airports, ports and irrigation systems. The remaining P2.3 billion will be used to enhance the delivery of services like education and health.

The P22.5 billion will be on top of the P35 billion that Malacañang earlier ordered the budget department to use for infrastructure development.

Upgrade in credit rating

The DoF said incremental revenues from the VAT Reform Law would hit P90.61 billion in 2007, P103.27 billion in 2008, P104.56 billion in 2009 and P120.44 billion in 2010.

Analysts have said the higher VAT rate would improve the chances of the Philippines being upgraded by credit rating agencies this year.

But some said the anticipated gains from the expansion of the sales tax last November and the higher rate might not be achieved fully due to chronic tax evasion, corruption and inefficiency. With reports from Ronnel W. Domingo and Inquirer wires

Copyright 2006 Inquirer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.Editor's Note: Published on page A1 of the Jan. 30, 2006 issue of the Philippine Daily Inquirer

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2005 economic growth slower but surprising
Michelle V. Remo
Inquirer

HIGH OIL PRICES, sluggish exports and weak agricultural output slowed Philippine economic growth to 5.1 percent in 2005 from 6.0 percent the previous year, officials announced Monday.

Even so, most market analysts were pleasantly surprised the economy surpassed their average forecast of a full-year growth of only 4.8 percent -- thanks to an estimated $10.85 billion in income remittances from overseas Filipino workers (OFWs) that spurred consumer spending.

The gross domestic product (GDP), the value of goods and services produced within the country, last year rose 5.1 percent to P5.379 trillion. The gross national product (GNP), which includes remittances of OFWs and other income from abroad, slowed to 5.7 percent from 6.2 percent in 2004.

The agriculture sector, which employs nearly four in 10 Filipinos, moderately expanded by 2.0 percent, compared with 4.9 percent in 2004, as the El Niño dry spell that tempered the growth in production of crops, livestock and poultry, Economic Planning Secretary Augusto Santos told a news conference.

The key services sector also eased to 6.3 percent from 7.1 percent, said the National Statistical Coordination Board (NSDB).

But the industrial sector expanded by 5.3 percent, compared with 5.2 percent in 2004. Santos said all sub-sectors in industry posted remarkable growth, except for utilities, which suffered because of reductions in government spending to achieve its fiscal deficit target.

The economy regained the growth momentum that got derailed during the third quarter, said NSDB Secretary General Romulo Virola. All major sectors contributed positively to the growth of the economy despite the persistent increases in oil and consumer prices and the political turmoil that continued to hound business and government.

Although GDP expansion missed the high end of the government target of 4.2-5.3 percent, President Gloria Macapagal-Arroyo said that last year's growth was an achievement, considering the higher oil prices, weaker global demand for Philippine products and political squabbling.

Arroyo said money sent home by a bigger number of OFWs, many of whom had landed higher paying jobs abroad, provided a strong pillar for the economy.

Remittances were estimated to rise 23 percent to $10.85 billion in 2005 compared to $8.81 billion the previous year. More than eight million Filipinos work abroad, representing about one-tenth of the country's population.

Even critics of the economy say we are resilient. We are more than resilient, we are tough, said Dennis Arroyo, director for policy and planning of the National Economic and Development Authority.

David Cohen, director for economic forecasting at Action Economics in Singapore, admitted he and other private sector analysts had harbored doubts the Philippines would post a growth higher than 5 percent.

So now I hope people will be satisfied, Cohen said. It does echo the strong year-end performance we had seen across the region.

4th-quarter growth less than expected

The economy registered a seasonally adjusted growth of 2.7 percent in the fourth quarter of 2005, way below market estimates of 3.2 percent. Even so, it was still the strongest quarterly growth figure in eight years.

Despite the upsurge in remittances of the country's OFWs, the continued hike in the prices of goods and services set back consumer spending in the fourth quarter, Virola said.

Although the higher prices of oil and basic commodities crimped consumer spending, consumption grew at a seasonally adjusted rate of 8.0 percent in the fourth quarter from the third, when it rose by only 1.0 percent.

Consumption makes up about 70 percent of the GDP, and the fourth quarter is traditionally a period of brisk spending as people prepare for the Christmas holidays.

Shipments of electronic products, which make up two-thirds of total exports, have suffered from competition with China, especially after Japan's Toshiba Corp. moved a laptop manufacturing plant from the Philippines to China in late 2004.

In the first 11 months of 2005, exports grew by just 2.7 percent from the same period in 2004. The government had an export growth target of 10 percent in 2005, but the central bank had said exports might only rise by 6.0 percent. Exports grew by 14.1 percent in 2004.

This year, the government is aiming for GDP growth of 5.7-6.3 percent. While that target, set in December, is below the government's original 6.3-7.3 percent, it is well above the median forecast of 4.7 percent in a poll of analysts.

Analysts see slower consumer spending as a key risk to growth this year, as Filipinos cope with an expected rise in the value-added tax (VAT) rate next month to 12 percent from 10 percent.

The expanded VAT is a key part of the fiscal reforms aimed at raising chronically weak revenues and ensuring a balanced budget by 2008 at the earliest.

For 2006, the global picture remains supportive and there is reason to hope that the Philippines can participate, especially with continued strength in remittances, Cohen said. However, rising oil prices can again potentially derail everything.

The continuing political crisis hounding the Arroyo administration would remain the major challenge to the economy this year, according to analysts.

Arroyo survived an impeachment bid in Congress last year, but her popularity remains in the doldrums over allegations she cheated in the 2004 polls. Allies have deserted her and calls for her resignation continue.

Increased spending

Even so, Santos said a recovery in agricultural production and increased infrastructure spending should also help the economy achieve the government's GDP growth target this year.

The challenge now is to sustain and accelerate growth to a level where we can significantly raise the standard of living of majority of Filipinos, Santos said.

Dennis Arroyo -- no relation to the President -- said a boom in the mining industry and huge revenues from the higher consumer tax could generate up to P77.5 billion in extra revenue this year.

Since the Supreme Court in December 2004 threw out a legal challenge to the law that liberalized the mining sector, 24 mining projects have generated $339.7 million in investments, creating some 5,000 jobs.

Santos said that while the fiscal position remained weak, it was continually improving.

The government is aiming for a budget deficit of P124.9 billion, or 2.21 percent of the GDP this year, from P146.5 billion recorded in 2005, he said.

Solita Monsod, an economics professor at the University of the Philippines, voiced concern over the way the Arroyo administration was dealing with the huge budget deficit. She said the government should be careful about cutting down on expenditures and instead raise more revenues.

Monsod said cutting government expenditures would adversely affect economic growth. Gil Cabacungan Jr., Inquirer wires, and INQ7.net

Copyright 2005 Inquirer, INQ7.net. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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CBCP: Truth on wiretap scandal must be pursued
Bishops oppose ‘No-El’ proposal

By Christian V. Esguerra
Inquirer



Editor's Note: Published on page A1 of the Jan. 30, 2006 issue of the Philippine Daily Inquirer

IN CLEAR and unmistakable language, influential Filipino bishops yesterday called on President Gloria Macapagal-Arroyo to pursue relentlessly the truth behind the “Hello Garci” controversy and to stop moves to call off elections next year.

The Catholic Bishops Conference of the Philippines said the CBCP had observed a “failure of political processes to make public servants accountable,” citing the “acts of evasion and obstruction” in the Virgilio Garcillano wiretapping.

“We recommend that the search for truth be relentlessly pursued through structures and processes mandated by law and the Constitution,” the bishops said in one of two pastoral statements issued at the close of a three-day plenary in Manila’s Pope Pius XII Center.

“They did not really pursue the truth,” said newly elected CBCP president Angel Lagdameo at a news conference, referring to the killing of the impeachment complaint against Ms Arroyo by her majority allies in the House of Representatives in September last year. “They stopped at technicalities.”

The impeachment attempt was triggered by the release last June of wiretapped phone conversations purportedly between Garcillano, a former election commissioner, and Ms Arroyo. Opposition politicians said the recordings were evidence Ms Arroyo manipulated the 2004 presidential election.

Saying the President was acknowledging the CBCP statement “with humility and an open mind,” Press Secretary Ignacio Bunye said Ms Arroyo was “open to all just and fair means under the law to ferret out the truth surrounding all controversies affecting the presidency.”

“She wholeheartedly supports the renewal of our public life through moral values, national solidarity, the ascendancy of truth, the welfare of the poor and heroic Christian citizenship,” Bunye said.

The CBCP plenary produced two statements -- on “renewing our public life through moral values” and on “mining issues and concerns” about claims of massive environmental damage and displacement of indigenous peoples in affected areas.

Said Ipil Bishop Antonio Ledesma, CBCP vice president: “It is still a wide open search for truth and we do hope that with some moral orientation, we can really reach the bottom of this problem.”

The root of the problem, the 119-member CBCP said, was a “crisis of moral values, a crisis of truth and justice, of unity and solidarity for the sake of the common good and genuine peace.”

Transactional politics

“Truth has become a victim of political partisanship as well as of transactional politics,” said the statement read by Archbishop Lagdameo of Jaro, Iloilo, to reporters at the news conference broadcast live by several radio stations. He said the statement was addressed to Ms Arroyo and all Filipinos.

The latest pastoral statement was ostensibly more to the point than the one issued last July at the height of the wiretapping controversy. The CBCP then said that it could not join mounting calls for the President’s resignation but she should not dismiss those calls altogether.

The Church’s refusal to join the resignation calls and former President Fidel Ramos’ declaration of support for Ms Arroyo were largely credited for saving her administration last year from its worst political crisis since she came to power following the ouster of President Joseph Estrada.

The CBCP suggested that the search for truth be done through the Ombudsman, Commission on Audit, Commission on Human Rights, Sandiganbayan, Congress and citizens’ groups.

Need for probity

But it made clear that these bodies must first be “led and run by credible people, persons of integrity and probity.”

Last month, Ms Arroyo’s handpicked Consultative Commission recommended the scrapping of the 2007 elections to pave the way for the adoption of a federal-type parliamentary system in 2010.

On this issue, she has locked horns with Ramos who, while supporting the shift to parliamentary system to provide Ms Arroyo with a “graceful exit” amid a cloud of doubt over her legitimacy, has insisted that the balloting next year should proceed as scheduled.

“Elections in 2007 should not be cancelled,” the four-page CBCP statement said. But it said “confidence and trust in our political processes have to be restored.”

“As a first step, we strongly urge our political leaders to undertake electoral reforms posthaste. The Commission on Elections has to be transformed into a competent and reliable body beyond reproach,” the CBCP said.

Comelec resignation calls

“The call for resignation or even prosecution of a number of the commissioners should not be lightly brushed aside. The electoral process, including the counting of votes, needs to be reformed and modernized before the next elections,” it said.

Comelec Chair Benjamin Abalos has rejected calls for his resignation, including one made recently by Senator Joker Arroyo’s blue ribbon committee over shenanigans in the commission’s automation program.

Abalos has insisted he could only be removed through impeachment as provided for in the Constitution.

The CBCP agreed that certain aspects of the Constitution probably needed revision. But any changes, it said, should be made only after “widespread discussion and participation” among all stakeholders.

“This is best done through a Constitutional Convention,” it said. “The reasons for constitutional change must be based on the common good rather than on self-serving interests or the interests of political dynasties.”

Asked what action the Church would take if the President ignored the CBCP’s calls, Lagdameo said: “We will cross the bridge when we get there.”

Coups denounced

In resolving the political crisis, the bishops reiterated their call against any form of violence or counter-constitutional means. “These measures would only bring about new forms of injustice, more hardships and greater harm in the future,” they said.

Bunye said Malacañang was committed to implementing electoral reforms through “concrete programs,” appointments to the Comelec of people beyond reproach and stern enforcement of the rules of suffrage.”

He said the Palace supported “full participation in all aspects of Charter change, transparency and relative serenity that allows for rational discussion and debate.” With a report from Christine O. Avendaño

Copyright 2006 Inquirer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.Editor's Note: Published on page A1 of the Jan. 30, 2006 issue of the Philippine Daily Inquirer

Comments? Questions? E-mail us at editor@mypad.net

30 January 2006