Press Release
January 19, 2018

Recto to Palace: Need to itemize billions BBL will require

Bring out your calculators and count the cost.

Senate President Pro Tempore Ralph Recto today pressed Finance and Budget officials to compute the "price tag" of the Bangsamoro Basic Law, saying that a "clear fiscal picture" will pave the way for BBL's passage.

"We are all for financing peace. Ako, mas gusto ko ang costly peace than a cheap war. But the nation must be told how heavy the burden on the taxpayers will be. Ilang bilyong piso ba? At hanggang kailan?" Recto said.

Recto said debate on BBL will center on "constitutionality and cost."

"It is not that hard to make the bill constitutionally-compliant, which is what President Duterte wants," Recto said. "But what I think might be contentious is where to source the money required to implement the bill."

He said this issue will "definitely crop up" in the course of finalizing the BBL "because the context here is we have just finished with the first installment of TRAIN."

"We are still in the midst of a taxing season. And then by July we will be taking up the 2019 national budget. Kung maisasama ang BBL cost, then this early we must be thinking of where to source the funds," Recto said.

"Tulad ng TRAIN Package One. P90 billion ang net proceeds annually, but on the same week Congress passed it, it also approved the pay hike for our soldiers, which costs P62 billion a year. Kaya pang payroll lang talaga yun, hindi pang-Build, Build, Build," he said.

"It will be interesting to know what BBL's cost will be so we can compare it against the potential yield from TRAIN 2," Recto explained, referring to the Palace revenue bill that will rationalize fiscal incentives.

Recto said BBL "is also an appropriations and revenue bill. It creates financial obligations in the tens of billions of pesos. It decides on the fate of taxes collected."

The BBL drafted by the Aquino government, which is almost a duplicate of the version submitted to Congress by the Duterte administration, had it passed, would have cost P59 billion in its first year of implementation.

The MILF, based on reports, however, gave a higher estimate of P72 billion, while Recto pegged a range of P63 billion to P73 billion.

"Lahat ng mga ito, for first year lang. 'Ika nga, start up cost lang, na ipagpapatuloy sa susunod na mga taon. Itong new BBL version na ito, magkano kaya ang gastos?" Recto said.

Under the BBL draft sent to Congress, "the Central Government shall provide an annual block grant which shall be the share of the Bangsamoro in the national internal revenue of the government."

"The annual block grant shall be automatically appropriated to the Bangsamoro Government, which means it cannot be changed," Recto said.

Also immediately after the ratification of this BBL Law, and for another 5 years, the Central Government shall provide additional funds that would subsidize expenditure for development projects and infrastructure in the Bangsamoro.

The additional funds are on top of its share from the national internal revenue, annual block grant, Special Development Fund (SDF), and funds from National Government Agencies downloaded to the Bangsamoro.

The SDF shall be P100 billion for 20 years, P10 billion of which shall be given by the national government the year following the ratification of the BBL.

Thereafter, P8 billion pesos will released annually for the next four years, and P6 billion annually from year 6 to 10.

The balance will be released in 10 equal annual installments of P2.8 billion.

"The Bangsamoro government would get 75 percent of taxes collected, and may even retain the 25 percent share of the national government for 10 years," Recto said.

Recto said he supports the 75-25 tax sharing formula "in the hope that this will become the template for the entire country."

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