To The Point

Emil Jurado
August 12, 2010 ManilaStandardToday
Does Lucio Tan want PAL to collapse?

Willie Revillame of Wowowee appeared confident when he, along with his lawyers, met media to bid them goodbye. Where Wowowee would be going next, whether to GMA-7 or to Manny Pangilinan’s ABC-5, he didn’t say. But it was evident that he was aware he had the goods on the Lopez-owned ABS-CBN network.

Wowowee, which used to air for three hours every day, made Revillame a sensation not only among viewers here but also to Filipino Americans who could watch him over The Filipino Channel. But the network changed it so that Willie would only appear once a week. That is, in effect, an abrogation of Revillame’s contract. Every lawyer should know this.

Thus, ABS-CBN cannot hold on to Wowowee, a program which gave the Lopez network some P3 million daily (with Willie getting almost P1 million daily). No wonder, ABS-CBN reported a 178 percent surge in income, what with all those political advertisements during the campaign and close to P3.5 billion from Wowowee.

Despite attempts of ABS-CBN to replace Wowowee, new programs sjust don’t do as well in ratings. In spite of all the seduction that ABS-CBN management has tried on Willie, he has clearly had enough of the Lopez network.

I will be writing more about this issue in my next columns because it reflects how ABS-CBN treats its talents. Santa Banana, what’s this I hear that anchor Ted Failon and Korina Sanchez, the love of Mar Roxas, may even leave ABS-CBN?

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I have some good news and bad news.
The good news insofar as Philippine Airlines owner Lucio Tan is concerned is that he’s thinking of collapsing the flag carrier in the wake of its labor woes. There are some 1,600 employees going on strike soon; no wonder Tan is so silent on the PAL problem. He has had enough!

PAL insiders say that Lucio Tan would like to have a lateral transfer of pilots and flight attendants to AirPhil, his budget and express airline which also has a franchise for international flights. The airline management will then have reason to claim redundancy of jobs and thus lay off employees. Neat, huh?

Recall that Air Philippines was formerly owned by businessman William Gatchalian, who sold it to the taipan. At that time with PAL already hemorrhaging because of labor woes, was Tan already thinking of collapsing PAL? Back when Tan bought PAL from government, he told me he didn’t know what he was getting into. Now the taipan, in spite of his successes in his other businesses, like cigaret manufacturing, brewery, banking and real estate development, certainly knows better.

With the PAL going belly-up, what will happen to the many labor problems the flag carrier is facing? What about its P3.6 billion debt in landing fees to government? And what about the fact that the Board of Airline Representatives, which PAL heads, has reneged on the payment of P350 million in overtime and meal charges for Customs, Immigration and Quarantine personnel at the three terminals of the Ninoy Aquino International Airport and at the Mactan International Airports?

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As expected, a petition for declaratory relief on the constitutionality of the 12-percent value-added tax, with a prayer for protective cover for those using the North and South Expressway, the Coastal Road and all other expressways where toll fees are charged, has been filed before the Supreme Court.
The petitioners are former Nueva Ecija Rep. Renato Diaz, who heads the Center for Strategic Initiative, and Ms. Aurora Ma. F. Timbol, a frequent North Expressway user.

They in fact represent all other users of the expressway in objecting to the scheduled imposition of the tax by the Bureau of Internal Revenue on Aug. 16.

Diaz himself was the principal author of House Republic Act No. 8424, otherwise known as the Comprehensive Tax Reform Act of 1997 and one of the co-authors and sponsors of Republic Act. No. 7716, otherwise known as the Expanded VAT Law.

I have written much against this move of the BIR. It is obvious that revenue officials have not read the EVAT law, nor are they aware of the fact that those of us using the expressways are already paying a tax in the form of toll fees, which make the VAT a tax on a tax. This constitutes double taxation, which is illegal and unconstitutional.

It’s even worse because the BIR would be penalizing the poor who ride buses and transport farm-to-market goods. This would give rise to higher prices of prime commodities.

Santa Banana, all for what? Just to raise the collection of BIR? Unless President Aquino does what he is expected to do—stopping this insanity and stupidity—his administration will be seen as anti-poor.

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Clearly, the BIR is so eager to please President Aquino that its officials are not thinking. If they do their homework, they should not by implication nor interpretation expand what legislators enumerate as covered by VAT under the law. Thus, to include matters which the legislators did not intend to include is considered dangerous, as it is in effect, an intrusion into the Legislature.

Taxation is an exact science, just in case the BIR doesn’t know. Thus, when something is excluded, it is not included.

Oh yes, if the BIR only did its homework, it would have known that on July 20, 2006, the Supreme Court, in the case of Manila International Airport Authority versus Court of Tax Appeals, City of Parañaque et al, docketed as G.R. No. 155650, ruled that toll fees were called users’ tax. Thus, to impose VAT on a tax is double taxation. Above all, VAT is imposed only on the sale of goods and services.

BIR should also know that after a judicial construction has been adopted by the Supreme Court, it becomes part of the law and remains so unless it is overruled or amended.

There’s also the fact that VAT will impair rights under contracts of partnership entered into by the private sector with government on all roads. The Aquino administration can only send a wrong message to investors.

My gulay, President Aquino should listen to his “boss,” the people who will ultimately bear the burden of this stupid imposition of the value-added tax on toll fees.

With the VAT over and above the increased of toll fees along South Expressway, people will in effect have to deal with a 280-percent increase.

Santa Banana, this strikes deep, very deep into the prices of goods coming from the South. And who do you think will suffer—not the BIR, not the elite around P-Noy, but the poor.

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The malcontent of some senators in the distribution of Senate Committee can’t seem to die. This became clear over an allegation that on July 24, Senate President Juan Ponce Enrile had dinner with President Aquino and Liberal Party stalwarts at the White House of the Aranetas and residence of Mar Roxas and Korina Sanchez.

Among those present were Senator Frank Drilon, Budget Secretary Butch Abad and Enrile himself. This was when Enrile offered the Senate committee on finance to Drilon, ways and means to Senator Ralph Recto, justice to Senator Chiz Escudero and the powerful Blue Ribbon Committee to neophyte Senator TG Guingona.

From the way it was reported, it seemed that Enrile was seeking the votes of the LP and its allies, which was farthest from the truth. I know for a fact that Enrile did not seek the Senate presidency.
Rather, the senators did with their so-called blocs. Neither Senator Kiko Pangilinan nor Senator Manny Villar mustered enough votes so most of the senators ended up voting for Enrile. The so-called hollow block of Senator Ed Angara could not even make a Senate President. Obviously, the so-called “inside story” how P-Noy allegedly captured the Senate came from a malcontent senator claiming to have a bloc.

In any case, if Enrile given the chairmanships to the four Liberal senators, it was a gesture of cooperation with the Aquino administration.

I also know for a fact that while JPE intends to cooperate with P-Noy in priority legislation, the Senate will remain independent as it was during the Arroyo days. I am sure nobody can dictate on JPE, not during his sunset years as statesman.

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If the Aquino administration is truly serious about selling off the two sequestered radio-television networks —RPN-9 and IBC-13—it has to be done as a fire sale. Nobody would be stupid enough to buy anything hemorrhaging.

There were efforts, as far back as the Ramos administration, to sell these two networks. But no way could they be sold because their book value was zero. They don’t have advertisers; people simply don’t watch these two channels. In fact, they serve only as dumping grounds for political proteges who continue to bleed them of taxpayers money.

For one thing, RPN-9 is overstaffed. It has 700 employees and is controlled by a union. Other networks employ half as much.

On the other hand, IBC-13, which owns the Quezon City property where both networks are, is now being privatized. The network entered into a sweetheart deal with the family of Reghis Romero to develop a commercial and residential complex. This one, Malacañang should investigate.