Tuesday, February 09, 2010

PhP 175 Million down the drain (PART 1)

History will be the ultimate judge whether what the Sangguniang Panlalawigan of Ilocos Norte did with the RA7171 Monetization was right or wrong.



As a member of the SP, I am obliged to tell my point of the story so that farmers and their children will know about and understand what happened to their tax money.

Let's start with the source: Republic Act 7171. This law, which was passed in 1992, apportioned 15% of the total taxes collected on locally manufactured Virginia-type of cigarettes for the Virginia-tobacco producing local government units (LGUs), namely, the Provinces of Ilocos Norte, Ilocos Sur, Abra and La Union, including all their cities and municipalities.

That 15% shall be divided by the LGUs on a pro rata basis.

The law does not specifically say when and how often the money would be given to the LGUs except that it should be directly remitted to them. That's it.

I do not believe any Implementing Rules and Regulations (IRR) was ever released and published, so until this day implementation is rather hazy.

Ever since the law was passed, LGUs never knew when the money from the Tobacco Excise Tax would come. I was told by some mayors that there would be some years that they wouldn't receive any money at all. And when they got money, they considered themselves very lucky.

When I was elected Provincial Board Member and we received our share in 2007, I asked for a computation. We got 11.5 Million that year. I asked my elder colleagues how we arrived at that amount, and no one could explain it to me. One of them even told me that although there was a formula, it was just too complicated to understand, and so we should just accept the 11.5 Million.

We had no computation, no running balance, and practically no relevant data whatsoever. Just 11.5 Million which was our supposed share for 2006. I asked if we could defer passing the measure until we could invite an official of the National Tobacco Administration (NTA) to explain to us how the whole system work, but my proposal was shot down. I had to yield to my more learned colleagues.

So, from what I understand, the Province, or any LGU for that matter, does not know how much it would get from RA 7171, or even when it will arrive. We just wait and receive whatever is given. Ganun ang patakaran. Ganun ang napagsanayan. That was the message relayed to me.

Let's fast forward to November 2009. A resolution was presented to us hiring a consultancy firm to broker for us some money from RA 7171. Apparently, based on the computations of NTA and other government agencies, the National Government owed the Virginia-tobacco producing LGUs a total of 5 Billion Pesos--accumulated since 2002. The resolution said this consultancy firm would work for the fund's monetization so that the money will be released immediately. In return, the consultant will take away a 5% professional fee.

I objected to this resolution on the basis that the consultancy firm was based in HongKong. I did not want us to deal with a foreign consultant. I told my colleagues if we were going to hire a consultant to broker for us, might as well make it a Filipino company. That way, if $%# hits the fan, at least we can take them to court. Kung foreign based company yan, mahihirapan tayong habulin sila. Despite my manifestation, the Provincial Board passed the resolution. This is now Provincial Resolution 138-2009. You can get a copy from the SP Office. And you can even see who voted in favor.

Fast forward to January 2010. Two resolutions were presented to us regarding the Province's participation in the RA 7171 Monetization Program. Based on my understanding of PR 138-2009, I knew that these twin resolutions were outputs of the consultant we hired in November. Eto na yung resulta ng pag-broker niya. Since PR 138-2009 was still good law, we were bound by it. And so, based on PR 138-2009, approval of the twin resolutions should be ceremonial.

Imagine my surprise when there was a split vote! 7 in favor and 6 against. (Although majority, not enough votes for a qualified majority)

Those who voted for it were Barba, Nalupta, Salenda, Peralta, Ong Sin, Lazo and myself.

Those who voted against were Chua, Marcos, Ranada, Castro, Galano and Farinas.

I was so surprised because most of those who voted against were the same people who voted in favor of PR 138-2009. In fairness, Marcos was absent in that November session, while Farinas voted against. The rest (Chua, Ranada, Castro and Galano) voted in favor of PR 138-2009 in November, so I did not understand their vote in January.

These guys first agreed to hire a consultant to broker for the RA 7171 Monetization Program and practically gave that consultant the blanket authority to do whatever was needed to be done, and then later on they don't want to approve an agreement the consultant entered into on behalf of the provincial government?!

I told them back in November to read the fine print, but they didn't listen to me!!! They still voted for it.

They reason out that they made a mistake.

What do they think, that we were born yesterday?

That's no mistake, my friends. That's GROSS NEGLIGENCE. That's dereliction of duty. Dapat binasa muna ng mabuti yung resolution bago in-approve. Trabaho natin yun.

Ay dios mio.

For me, as long as PR 138-2009 is valid, then the SP has no choice but to "follow-thru" and approve the twin resolutions. Otherwise, we may even be later on held civilly liable by the consultant for breach of contract.

Now if they really thought that PR 138-2009 was a mistake, then they should've proposed a resolution repealing it first. With PR 138-2009 repealed and gone, then we are no longer bound to the consultant and we are not obliged to approve the twin resolutions.

Ganun dapat yung ginawa para maayos at nagkaintindihan ang lahat, hindi yung nangyari. Sa pag-aaway namin sa isa't isa, hindi naman kami ang kawawa--ang mga tobacco farmers ang kawawa, and so I would like to apologize to all tobacco farmers. Sorry po, at hindi kami nagkasundo sa SP. At dahil dito, kayo po ay nawalan ng tulong pinansyal na umaabot sa 175 milyon pesos.

Dumawatak ti dispensa yo, apo.

to be continued...