YEARENDER 2004:  HOUSE IN FOREFRONT OF NATIONAL FISCAL SURVIVAL

MANILA, December 29, 2004 (STAR) By Paolo Romero - The economic battle for the nation’s fiscal survival was fought this year in the House of Representatives, which shepherded painful revenue bills and reform measures to put the country back on track at the expense of lawmakers’ pork barrel allocations and similar cuts in spending that to some degree affected their political clout with constituents.

President Arroyo’s declaration in September that the country was in a fiscal crisis, mainly due to an unmanageable public debt, signaled Malacañang’s economic managers to push a "pain package" — basically eight tax bills, increased fees and cuts in pork barrel allocations in the proposed P907-billion national budget, aimed at raising from P80 billion to P120 billion in revenues.

Under the Constitution, all tax proposals must emanate from the House, so it was natural for Malacañang to focus its crosshairs on the chamber to ensure not only the passage of the revenue bills but also to reduce the P20-billion pork barrel — branded by critics as a source of corruption — of both chambers by nearly 40 percent.

Lawmakers bucked the reduction on their precious allotments for Priority Development Assistance Fund (PDAF) and public works, saying Malacañang was again using Congress as a scapegoat for mismanagement of the economy.

Speaker Jose de Venecia Jr. and Camarines Sur Rep. Rolando Andaya Jr., chairman of the appropriations committee, said the combined congressional allotments of both the Senate and the House are less than one-half of one percent of the national budget and act as a catalyst for the economic development in poor urban and rural communities now that the national government cannot attend to them.

The source of the bleeding, Andaya said, is the government-owned and controlled corporations. "The truth is, half a century of PDAF was worth 1,000 days of Napocor’s losses," he said, referring to the National Power Corp. "While GOCCs’ debts left little impact on our people’s lives, our PDAF projects continue to make a big difference on their welfare."

In approving the budget and P50-60 billion in new taxes later this year, the House was asked to fix a problem "we have not created," Andaya said. "Never has the salvation of this country depended on the political will of a misunderstood few."

However, the saber-rattling and fights between the House and Malacañang did not last long. By the time the House completed its work from the inauguration of the 13th Congress last July until its Christmas break, the accomplishment of the chamber overshadowed the performance of any previous Congress during a comparable period.

De Venecia, putting his speakership on the line, immediately rallied support from the majority of the lawmakers for painful reforms in the House and passage of unpopular revenue measures that would stave off a full-blown financial crisis.

"When the national interest called, we responded decisively; we made sure to do our duty by our people," De Venecia said.

The support he mustered in October for his reform drive came after a tightrope act that required all his legendary skills at political persuasion and diplomacy. There were veiled threats to unseat him, and rumblings from disgruntled representatives who believed, as Andaya articulated, that "asking for projects to bring home is not parochial politics but a feature of representative democracy."

De Venecia’s first move was to introduce a line-item budget system as opposed to the lump-sum system in the proposed P907 billion General Appropriations Act to ensure transparency and full accountability in government transactions.

Racing against time, the House passed in November the P907-billion national budget for 2005 that reflected a 38-percent cut in the district allocation for each congressman’s PDAF as pushed by Malacañang.

"To its credit, this House has done more than its share in pulling this country out of the hole," Andaya pointed out in his sponsorship speech. "This present Congress has proven that not only can it talk the talk but it has the political will to walk the walk."

By this he meant House action putting not just a "tourniquet" on public spending but also approving new taxes.

In record time unmatched by the Senate, the House approved five revenue-enhancing measures aimed at reducing the huge budget deficit and averting a credit downgrade for the Philippines by international rating agencies.

This decisive response in legislation resulted in the approval between September and Dec. 17 of five urgent measures that could raise up to P50-60 billion in new revenues. One bill increases excise taxes on alcohol and tobacco products; another, the Performance and Accountability Bill, formulates a system of rewards and penalties on revenue-collection agencies; the third provides one-time tax amnesty for tax evaders who shall be required to declare a statement of assets, liabilities and net worth (SALN) as of Dec. 31, 2003. The fourth is the rationalization of fiscal incentives bill that provides a list of industries and services that shall be eligible for incentives; and the fifth will extend the franchise of the Philippine Amusement and Gaming Corp. for another 25 years.

Of these five House-approved measures, the Senate approved just the so-called "sin tax" bill on alcohol and tobacco products, and both chambers ratified the bicameral conference report shortly before the Christmas break. House leaders blamed the Senate for the delayed approval of the other four measures. They observed that senators were unable to share the "sense of urgency" that House members showed in giving the highest political priority to the approval of vital national legislation.

"The House has been working at a record-breaking pace," Majority Leader Prospero Nograles said in his report to De Venecia. "We have had marathon sessions that lasted till early dawn."

The House passed two other measures in five months: the postponement of elections in the Autonomous Region in Muslim Mindanao (ARMM), and the extension of the Rent Control Act. "Eight major legislation in five months–this is a tough act to follow, a record hard to beat," Nograles pointed out.

What raised the most contentious debates, however, were not the revenue measures, but De Venecia’s initiative to reform the lump-sum pork barrel system, which he described as corruption-prone. "I put my leadership on the line if only to institutionalize this reform initiative and make government allocations fully transparent," he said in November.

Reflecting on the pork-barrel cuts, Andaya said: "This is not the best time to be a congressman." Indeed, it isn’t, and for other reasons as well.

De Venecia and Andaya led the House in pursuing the reform of the PDAF by aligning district projects to the 10-point legacy program of President Arroyo. This means that only classrooms, feeder roads, and projects for clean drinking water and public health will have priority. The projects that enjoyed enormous popularity for years–basketball courts and waiting sheds–fell into disfavor.

As a program to raise new revenues, De Venecia also unveiled a 12-point program to create new wealth for the country. Saying that the present wealth is inadequate for 84 million Filipinos, the Speaker pointed out the revival of the mining industry, reforestation, land reclamation, tourism revival, and the creation of Hong Kong-like enclaves in Subic and Clark as workable programs that will develop new revenue sources. In response, Mrs. Arroyo instructed Economic Planning Secretary Romulo Neri to include De Venecia’s 12-point program, a sequel of the 747 Economic Action Plan, in the Philippine Medium-Term Development Program.

This was just one of De Venecia’s triumphs in what was shaping up to be a bumper year for his pet reforms and advocacies.

In July, De Venecia was elected by perhaps the biggest majority in the post-war chamber to a record fourth term as House Speaker. His triumphs extended abroad.

However, the road to his election was not easy as the President’s young partymates from the Kabalikat ng Malayang Pilipino (KAMPI) was threatening to oust him as part of their crusade to erase what they called "traditional politics" in the chamber.

In September, he secured approval by the ASEAN Inter-Parliamentary Organization (AIPO) in Phnom Penh of his proposal to establish an ASEAN Anti-Poverty Fund. De Venecia envisions this Fund as providing micro-finance credit to the region’s urban and rural poor to enable them to build small enterprises that are job-creating and income-generating. Micro-finance credit has a track record of success in Bangladesh, Pakistan and other Asian countries.

In November, De Venecia’s oft-stated proposal for an Interfaith Dialogue won endorsement by the United Nations General Assembly, paving the way for the launching of multi-faith dialogues to mediate centuries-old religious and ethnic conflicts and communal violence.

"This will avert the clash of civilizations and lead to multi-cultural understanding, which is the basis for peace that will endure," De Venecia said.

Cebu Rep. Antonio Cuenco, chairman of the House foreign relations committee, called the UN endorsement a "major moral and diplomatic triumph for the Philippines and Speaker De Venecia." This followed De Venecia’s speech at the UN Security Council at which he presented the proposal he and Mrs. Arroyo had launched a year earlier at the White House before US President George W. Bush.

One other triumph came in late November that is perhaps De Venecia’s biggest because of its undeniable impact on the future of Asian political and economic integration. The Association of Asian Parliaments for Peace (AAPP) General Assembly in Islamabad approved the Philippine proposal to convert the AAPP into the Asian Parliamentary Assembly in five years’ time and create an Interim APA Secretariat in Manila to map out the transition.

The approval by 32 AAPP member-parliaments is a watershed in Asian parliamentary politics, giving De Venecia the historical stature of being an Asian visionary who one day could be hailed as the father of the future Asian Parliament.

"This is a historic vote, because we in the AAPP represent 60 percent of the world’s population," he said.

Toward year’s end, however, a personal tragedy deeply affected De Venecia. His Dasmariñas Village residence, scene of many of his personal and political triumphs, was destroyed by fire that claimed the life of his 16-year-old daughter, Kristina Casimira or "KC."

Ironically, De Venecia, who is legendary for his long working hours, had just adjourned the last session day of the House for 2004 to rush revenue bills shortly before 10 p.m.

His house was already on fire when he arrived in Makati City — and by then, his daughter was beyond rescue.


Reported by: Sol Jose Vanzi

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