January 23, 2017
TRANSCRIPT OF HEADSTART INTERVIEW WITH SEN SONNY ANGARA
"HEADSTART" HOSTED BY MS KAREN DAVILA
ON THE DOF'S PROPOSAL TO IMPOSE EXCISE TAX ON DIESEL:
SJEA: It's quite aggressive basically the DOF package is quite aggressive. From zero pesos no excise tax you're going to six pesos. Diesel is a very wide used commodity; it is used by fishermen, it is used by the transport sector; it will affect the prices practically everything is used in powerplants actually. If you reach a certain alert level, meaning some powerplants break-down and you have to have substitute measures you resort to diesel. So these are all maybe unintended consequences we really have to think it through. Six pesos for me is a lot and I'd like to see that temper a little bit.
DAVILA: You reaction with Secretary Benjamin Diokno saying essentially that diesel is used by the rich, among of the 4x4's today are all diesel.
SJEA: Yes, but iilan lang naman yun. Karen diba? How many people afford to buy a BMW-X5 or an Audi...it's not that many. Where as, maybe he has a point but you also have to think of how these measure will impact the poor sector. The fisherman for instance subsistence fishermen how are you going to help? I know that the DOF plans to give subsidies to deal those hardly hit sectors. I'd like to hear more of these subsidies. So that's the point of our hearings, you'll hear everyone will be affected and sino talaga yung kailangan ng tulong diyan.
DAVILA: Now hasn't been discussed essentially the prices have been discussed but what hasn't been discussed if it's implemented is the effect on basic goods like basic commodities, the price of cars, and other things. So we have it on graphics, we have Senator Sonny Angara explain that: our first one is essentially, how will it affect the increase of prices of basic commodities in NCR. Can you put that on screen? Alright, have you calculated this?
SJEA: Ito yung proposal ng Department of Finance. Pag six pesos yung sa gasolina at diesel yung pagtaas, roughly 5 to 6% ang increase in food prices. You look at I think you have...
SJEA: So they'll get ten pesos increase.
DAVILA: That's big.
SJEA: 5.5% of 180%. Sa galunggong yung seven pesos that's 5% increase. So yun yung tinatawag natin, ang masasaktan talaga diyan yung mahihirap dahil ang sisikip na ng mga budget nila. Wala ng room yun and then transport is affected by 10% there's sa 10% increase in fares.
DAVILA: So it's impossible for them not to want an increase.
SJEA: So kailangan mo pang isipin, kailangang pag isipan ng gobyerno kung sino talaga ang matatamaan dito at kung sino ang kailangan natin bigyan ng sabsidiya. So I'd like to hear more about that before we pass judgement on this. But yun nga medyo aggressive ang tax package.
ON ANGARA'S INCOME TAX INDEXATION PROPOSAL
DAVILA: But then if you were the DOF how would you do it, I mean clearly they want to implement tax reform when it comes to income and corporate taxes. But they know they have to prepare for losses. What are the alternatives for them?
SJEA: Well, you don't have to be as aggressive; they are very aggressive also on the cutting-side like their proposed income tax reforms are even more aggressive on the lawmakers. That's the irony there.
DAVILA: What did you want?
SJEA: We want just the indexation.
DAVILA: For example?
SJEA: Meaning, dati kasi five hundred thousand, in 1997 the tax code was first done. If you make over five hundred thousand anything over that is 32%. But now, hindi nga na index iyong inflation, 500 thousand is not a lot of money anymore. It is a lot of money to a certain population but kumbaga up to middle class or middle management ka na if you're making that much. Maybe, 10 years in a company or so in a bank. So, someone like that. I think in their proposal they will only be paying 15%.
SJEA: yeah, very aggressive. There's a two phases, 20% muna siya then it will go to 15% at some point.
DAVILA: And what did you want, I think you wanted 22 (%)?
SJEA: Sa amin, we just want to index it to inflation. So, he's taxes will go down but not by that much. Not the factor that they want. The total loss from their package sa income tax side is about a 150 billion a year. That's your income tax collection from employees; from compensation employees. Meaning, people like you and me; like our cameraman, iyong kinakaltasang suweldo, iyong pangkaraniwang empleyado. Meaning you don't own your business and you're just an employee and you get your tax withheld at source; sa pagtanggap lamang ng paycheck mo na with-hold na iyong tax mo. The country collects about 300 billion from this people and the DOF proposal will cut the collection in half by a 150 billion. Sa amin sa lawmakers, ang proposals to cut it or to update the tax brackets and you would lose about 50 billion. Under their package you will lose a 150 billion. That's why they have to be aggressive also on the raising side. So, iyong sa akin, we should not have to be aggressive on both sides because it will shock a lot of sectors.
SJEA: So, I think it's the congress' job to do a bit of reality check by appreciate the DOF has put in and appreciate that they prioritize it. And in accordance with the campaign promised of President Duterte to bring down taxes. Pero, hindi naman niya sinabi na I wipe out iyong collection ng gobyerno ng kalahati.
PROPOSALS TO RAISE ADDITIONAL REVENUE
SJEA: We did suggest a few proposals to raise revenues, like raising in lottery and the PCSO's winning right now ar exempt. And were probably the only country in the world that does that. So there's no reason to exempt. I don't think the winner of the lotto will mind that he's winning 20 million instead of 30 million. Masaya pa rin siya di'ba?
SJEA: So, I think that's a low hanging fruit you can really get that.
DAVILA: Okay. What else?
SJEA: Well, there's a lot of administration oil smuggling is around 200 billion. So, I think we're trying to come up with the administrative measures; administrative reforms. Not necessarily raising taxes but improving tax administration. I think the House is suggesting marking of oil and there's point of sale because a lot of sales are unreported so they might have to require as they do in other countries. Meaning, the moment you sell something, that sale is recorded already with the bureau.
DAVILA: But when it comes to excise on diesel because this is where a lot of sectors have been very vocal about it because 82% actually take public utility transport and 82% of the use of diesel is public utility essentially. Where do you stand on this? Are you willing for a small increase or no increase at all?
SJEA: Well, any increase would have to be really... I think six pesos is too much. It's really too much, and there;'s a reason why Congress exempted it in the first place. It's the poor man's fuel, and it's the fisherman's fuel, it's our power also, so those things. So, if ever, it has to be moderate increase.
DAVILA: Even LPG and kerosene are in the list.
SJEA: Yes, all kinds of fuel, all fuel - aviation fuel, they're all there. So, you have to look at how those things impact, things like tourism, because you're also... observers or economists have said we are the fastest growing economy but we are also one of the biggest... we have also one of biggest number of unemployed or underemployed in the country. So, we have to protect the sectors that have the potential to produce jobs.
ON RP HAVING ONE OF THE MOST COMPLICATED TAX SYSTEMS IN THE WORLD
DAVILA: But then, what would you do considering the Philippines has one of the most complicated tax systems in the world?
SJEA: We really have to simplify I think.
SJEA: Exemptions provides administrative ease I think, that's really with the BIR you know? Because a lot of revenue regulations have come up in the last decade that complicate matters. So, it's not just a function for the legislators, it's also for whoever sits there at the BIR and at the Department of Finance.
DAVILA: When you suggested corporate income tax reform, you would want it from 30% something like 25?
SJEA: Because that's the mean in ASEAN, so you want... if you're looking at a single market and you're a company looking to locate, you have to be in the conversation. If you're in the 30%, you're not in the conversation.
DAVILA: And so far they have not presented?
SJEA: No, but it's already there. I think that's on their radar except that they are trying to figure out who doesn't deserve the incentives and whose incentives should be removed.
DAVILA: How many hearings do you still have on this?
SJEA: First of all Karen, we have to wait for the House, under the constitution you cannot pass a revenue measure until the House of Representatives have passed theirs. So, we have one hearing, I think we need to have many more because these are big issues. And you have to do widespread consultation.
DAVILA: But do you think excise tax on fuel, I mean essentially you have the House that supports President Duterte. So, it might pass.
SJEA: Yes, I think it might pass. But I think it will be moderated, I do believe it will not be in the original form as proposed by the Department of Finance.
DAVILA: So, when you say moderated, so you think it will be?
SJEA: Well, the House has already made a counter proposal. So, I mean it's gonna be somewhere in between or even lower.
DAVILA: But is it even a good idea for you?
SJEA: What you can do is you can index it going forward because that hasn't been done.
DAVILA: Explain that, when you say index it going forward.
SJEA: Meaning, the taxes have remained unchanged since 1997. Just in the same way that our income tax was not indexed. You're taxing people at 1997 income levels, so the peso, the purchasing power's totally different. Dito naman sa oil, bumaba na ang presyo, so ang point ng DOF ay mas magaan siguro na magbayad ngayon dahil mas mababa na ang presyo ng langis.
DAVILA: Will you be able to change the mind of the Department of Finance when it comes to income tax reform? Imagine if they want it down to 15%, I mean everyone's happy but then you do have a slash of a hundred fifty billion.
ANGARA: Well, it's a balancing of interest there because you can please maybe two or three million tax payers but you have millions naman who will be facing higher bills. So, you have to balance it somehow. You cannot put it all here.
DAVILA: But will you be able to influence this indexation?
SJEA: I think all of us, all of the lawmakers will be collectively, we will be able to influence. And we will because ultimately we will be the ones passing it so our judgement will play a big part in the final product.
DAVILA: Alright, we're gonna take a quick break.
ON THE CONTROVERSY SURROUNDING THE MURDER OF A KOREAN NATIONAL INSIDE CAMP CRAME
DAVILA: Other than taxes what's big today is essentially what has happened inside Camp Crame. You have a kidnap for ransom victim who is a foreigner who is essentially rescued and then killed inside Camp Crame by what a police officer claims to see as another police officers struggling him and killing him to death. What do you make on this?
SJEA: I think just everyone like else, we are very disturbed. First of all it happened inside Camp Crame which probably pati na ang pinaka-safe na lugar sa buong Pilipinas ang dami ng pulis dun diba.
SJEA: And secondly, there's this issue of police corruption. And thirdly, it's right in the backyard of the head Chief PNP. So rightly so, he is embarrassed si PNP Chief Bato sabi niya embarrassed siya. But it is also a big opportunity to reinstitute reforms in the PNP. This is the chance, the people will support bold reforms in the PNP. If you want to raise salaries, go ahead; if you want to fire police corrupt cops, have them put it on trial; do it. This is the time to do it because the people are watching and they expect bold measures now that the police have already been put in the spotlight because of the EJK issues. I think this is as good as time to undertake police reforms. And in it's the centerpiece of the program of Duterte administration. It's the issue along with drugs which most interests the President. So dapat magpakitang gilas sila diyan.
DAVILA: Now the President didn't accept General Bato's resignation but do you think he would still effective.
SJEA: I think even more so, he can be because he's been embarrassed, napahiya na siya. So I think I mean as a human being, your incentive would be 'magpapakitang gilas ako, I'll try to improve things'; otherwise I know I could be on the chopping block the next time pwede akong sibakin, diba.
DAVILA: But then Senator is there a wake up call for President Duterte himself, what some critics say police officers have clearly abused his support?
SJEA: I think it has reached that point where his all out support for the police has emboldened some to maybe to take shortcuts in law enforcement. And so it must be clear that yung all out support niya is lawful act form and legal actions. It's not for shortcuts and you know by all means necessary type of police enforcement hindi na pwede yung ganun. Yun ang mukhang interpretation ng ibang pulis siguro, ibahin siguro ang message na idefine.
DAVILA: Clearly I mean, we're experienced not at least in the last quarter the numbers were quite good on growth; we have businessmen that are optimistic about the Duterte administration. But it seems to the public that there's a tolerance and acceptance on the number of deaths that go with the drug war.
SJEA: Well crimes index or what they call index crimes are also down except for murder. Murder is up so, ayun maybe we have to focus on that and now you have sent the message that you mean business but also send the message that you mean business in a lawfull manner. You don't want shortcuts.
ON ALLEGED PLOT BY SOME SENATORS TO UNSEAT KOKO AS SP
DAVILA: Okay alright, when it comes to Senate leadership na moving on from PNP now to the Senate leadership, there's been talk well at least coming from Senator Antonio Trillanes that Senator Koko Pimentel is essentially in danger of keeping his post as Senate President.
SJEA: I've been hearing that from different news reports but no one has talked to me about anything. I belong to a group of young Congressman: Senator JV, Senator Zubiri, Senator Win, Senator Joel and you know, none of us has spoken in changing leadership among us. And we are already five so I don't know where those rumors are coming from.
DAVILA: So you support Senator Koko Pimentel.
SJEA: Yes I am one of his supporters early on and I continue to support.
DAVILA: But there's also a call because I think you have Senator Richard Gordon who already said that the LP should leave the super majority. Now, you are not LP that this matter to you?
SJEA: You know in the Senate, there's really a tension between supporting the administration and being inidependent because senators see themselves as their own mandates. So, there's always that tension, you know. And I think we should allow each other to have the freedom to express views. But at the same time on crucial votes I think members of the majority should support the leadership.
DAVILA: But the supermajority is also had an effect when it comes to the perception of the independence of the senate. Case at point, the Zubiri-Trillanes recently where they almost got into a fist fight. Was it really almost a fist fight up close?
SJEA: Well, it was heated but I think once they were able to express themselves I think the heat cool down.
DAVILA: But then, when you look at the real issue, is the issue on the independence. Senator Trillanes is essentially accused both that if the investigation in the BI went to Gordon there would be a cover up and the accusation was it was done on the EJK report. Did you agree with the EJK report?
SJEA: Well, I haven't read it coz I am not a member of the committee on justice and I'm not require to sign as a non-member. We are not required. And it has not been brought to the panel for a vote yet. So that's the time when you have to study it when you vote on it.
DAVILA: I think you have been very careful with this.
SJEA: I thought it ended a bit early. I think it's a continuing issue. So maybe since it was terminated maybe, you can have a new investigation going forward. There have been other episodes of other alleged EJK. So, that one was closed so you can look at this new incidents.
DAVILA: But, do you still see the independence of the senate coming from that. You have the EJK report which senator Trillanes was essentially- he called it 'trash' actually. Those are his exact words.
SJEA: I think because he was personally mentioned in a not favorable manner. But you have to realize, Karen it's not Senator Zubiri or Gordon who made the report. This report is signed by the majority of the members and voted on by the majority. So you can't just put on the responsibility - if there is a so-called white washed or abdication of independence. It's not one person. It's a decision made many senators. So, it's not just one senator thinking. And although someone like to say that its only one persons opinion. Actually sometimes they give their separate opinions than it makes to appear in public.
ON PROPOSALS TO REIMPOSE DEATH PENALTY:
DAVILA: Now, with the death penalty, the house speaker Alvarez they believe that it will be passed by February, that's very soon. It will reach the senate. Are you open to the death penalty?
SJEA: I am because the constitution says that you put compelling reasons you can have death penalty for heinous crimes. So those are your limitations, your parameters. If there are compelling reasons. So if there is a proliferation of drugs of trading for instance, we can look at the statistics, and then why don't we say 'let's have it for that just crime and for heinous crimes' not limited to murder, drug trafficking, rape, robbery, the violence, like that. But huwag naman doon sa mga possession of small amount of marijuana for instance. It is easy to frame someone like that.
DAVILA: But the house included so many issues.
SJEA: exactly. That's why we have to be careful because the constitution mentions heinous crimes.
DAVILA: For example, bribery do you consider that a heinous crime? That's in the House Bill?
SJEA: Giving an MMDA, 50 pesos is bribery .
SJEA: So, is that worth killing people involved? I don't think so.
DAVILA: Meron pang anti-piracy.
SJEA: Yeah, you can get carried away. I think you have to focus and really... what is your goal there? Is it to kill film piracy?
DAVILA: No, I think...
SJEA: Get your priority straight and we have to talk about the big issues not the little ones.
DAVILA: But one thing is clear, you are open?
SJEA: I am open personally.
DAVILA: Because you have a set of senators that I've interviewed that are really against the death penalty.
SJEA: I respect that, I respect their position because some are based on religious grounds. Some are based on ideological and principle grounds, some and based on evidence so I'd like to study the matter carefully. But you're asking me if I'm open, I am open.
ON DISTRIBUTING CONDOMS IN PUBLIC SCHOOLS
DAVILA: Okay. Now, very interesting is where you stand on the distribution of condoms in public schools, I mean clearly this doesn't need legislation but I'\m curious what you think of it.
SJEA: Well, there's a legal justification for this, sa RH law no? Sa akin maybe you don't have to make it mandatory because some parents might find it offensive that their eleven year old is being given condoms when sex is not even on their mind. So, make it available for those who want it. Who are already, could be possibly more mature and engaging in this...
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