The Journal
Tuesday, December 22, 1998
Diehard
By Hernan Tiu Laurel
Is it justice, at last, for Lucio Tan? After twelve long years of the persecution, is it over for the Filipino-Chinese taipan? We hope it is, after the rejection by BIR Beethoven Rualo of the trumped up charges made by his predecessor Chato, all the tax cases should be thrown out the window.
The only way to define what has happened to the soft-spoken, low-keyed mega-entrepreneur is persecution. How else should one describe what has been thrown at him, cases after cases of trumped up charges that have never found any basis in fact. Take the reclassification of Lucio Tan cigarette products as foreign manufactured brand, everyone knew all along they were Filipino brands. Then the alleged maintenance of a myriad of “dummy” marketing corporations to evade taxes, that hasn’t been proven in the twelve years Chato and her predecessors tried to pursue it.
They were all actually well-contrived lies in a conspiracy to “demonize” Tan and prepare everyone’s mind for the deliberate demolition of a dynamic and productive Filipino business “chaebol”. Look at those who would destroy Tan, the Ramos and Almonte tandem who opened up the floodgates of the Philippine economy to a deluge of smuggling and duty shops. The hard core Coryistas, carpetbaggers of the “comprador” Makati Business Club, all agents of Western companies. Finance secretaries and BIR chiefs under Cory and Ramos were the Club’s lapdogs, and they tried to destroy domestic tobacco and cigarette production in favor of American imports. Now, they would love to see the Philippines’ captured airline routes fall into the hands of British or American airlines.
Tan is a tax patriot when you consider the amount of taxes his cigarette companies deliver to the coffers of government each year. Data from the DoF shows that taxes collected on tobacco products in 1997 was P15.24 billion, some 80% of that amount was paid by the brands of Lucio Tan or anywhere between P12 to P13 billion. And Tan has been paying this major share of the tobacco taxes for the past three decades. When you look at the top taxpayers of the country you will see that no single individual pays more taxes than Tan. Companies like San Miguel or PLDT cannot compare since government owns big portions of those companies anyway.
There are some who would take side with Justice Secretary Serafin Cuevas on the correctness of junking the Tan tax case. But Cuevas, it must be remembered, has more to explain than the BIR right now. Why did he cast doubt on the Tan tax cases earlier, before even the BIR threw out the charges? Is it a case of AC, i.e. attack and collect? Cuevas has figured in more controversial cases, such as the 11 Little Indian drug smugglers for whom he was legal counsel and helped spring from the BID’s clutches.
When Lucio Tan ventured into the Philippine Airlines, he did so when nobody else wanted to shell out more money to refurbish the troubled airline. Many of his closest advisers argued against Tan’s involvement in PAL, but he believed he would be doing his country a signal service by dedicating his personal fortune towards re-establishing Asia’s first airline into its paramount place in the region’s airline history. He personally guaranteed billions of dollars of new money that went into PAL modernization, determined to change the “always late” reputation of the airline with efficiency and promptness that brand only new airplanes can deliver.
Blind and cynical enemies of Tan simply would not give him a chance, and took every opportunity to sabotage him. The pilots’ union ALPAP was instrumental on those efforts to destroy the turnaround of PAL. The ALPAP never put up any constructive proposal, rather its leader seemed to enjoy the gradual bleeding of PAL and the prospects of its eventual demise. In a move that was condemned by the whole nation, the ALPAP launched strikes after strikes that aimed at crippling the airline and not at resolving any concrete labor issue. At one point they proposed to take over and run it themselves which, on hindsight, made their action patently suspicious and self-serving.
Then the other unions joined the fray, carried away by the blind belief that “government will never let PAL close” even in the face of irrational and intransigent union demands. A referendum was held to determine the fate of PAL. It was boycotted, resulting in the PAL shutdown. The boycott denied the majority of its voice, which shows just how inept the union leadership was in representing the true sentiment of its members. A second referendum was held, strike moratorium was passed to allow creditors to resume rehabilitation of the airline and PAL survived. In the meantime, PAL had bled by billions of dollars.
The final fate of PAL is now in our hands. PAL is national treasure, and it is a financial boon for the Filipino people if and when it is completely rehabilitated. The air routes that it possesses are worth billions of dollars just by being there. It was completely ridiculous for Cathay Pacific to put in a zero value for PAL in its negotiations. PAL is a gem, so much so that even Nomura securities of Japan invested millions of dollars into it just before the ALPAP strike. It makes sense for Japan now to dedicate some of its Miyazawa Fund to the revival of PAL.
Beyond the simple economies of PAL is the strategic value of the national airline, one that it can count on during times of crisis and emergency. Name the countries in our region – Singapore, Malaysia, Thailand and others – they all maintain their national airlines despite the challenging times today.
The West will try to scuttle PAL and take over, that’s what its mouthpieces in the local press are preaching – let the Western airlines take over. That’s what you can expect from intellectuals of the American liberal tradition like Doronilla of the Inquirer or Llaguno of Manila Times who can only see reality through the eyes of Western interest, quoting New York Times or other western papers profusely. Filipinos stand to lose billions of dollars over the future decades if, PAL falls into Western hands, we should not let this happen.
PAL must be supported by the Filipino State because it is, in the final analysis, the nation’s treasure. If they wish, buy it back from Tan, but for Juan de la Cruz’s sake, don’t give it away to foreigners.
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