BIZ  COLUMN:  DEPT  OF  FINANCE  ROW?

MANILA, MAY 27, 2007
(STAR) HIDDEN AGENDA By Mary Ann Ll. Reyes - Our fellow coffee shop habitués were apprehensive over what they perceive as an expression of displeasure by Finance officials over our recent pieces of unsolicited advice. We hastened to assure our colleagues that the frank exchange is not in any way evidence of a gap since this column had always been supportive of the department’s initiatives, especially the revenue generation efforts of Finance Secretary Gary Teves.

The unsolicited advice was part and parcel of our concern for the good secretary who cannot but be currently perceived as “hostage” to informal advisers who might not be exercising the greatest prudence — which in turn puts the secretary’s goodwill with important sectors at risk.

The apparent lack of prudence on the part of the informal advisers has also been seen as the possible reason for the hasty, although quiet, exit by the much-respected and beloved ex-National Treasurer Omar Cruz. Cruz who appears to have left in a huff just before the elections under a cloud of suspicion that he may have been at odds with the powerful group advising Teves.

Cruz has been an advocate of “reasonable revenue targets”. He was upbeat over the performance of the Bureaus of Customs and Internal Revenue last year, in stark contrast to the tone at the DoF’s power circle where some quarters were crying “shortfall”.

Cruz’s upbeat view was justified after the 2006 year-end figures came out and showed that both DoF line agencies performed well, besting the 2005 levels and meeting their fair goals. Cruz also proudly announced the pre-payment of foreign loans. And then resigned in a huff.

It cannot be helped that the timing of Cruz resignation be viewed with doubts. It came at about the time when the DoF was talking again about “shortfalls” and the gloomy prospects of revenue collections this year. The forlorn outlook was underscored by former Finance Undersecretary Milwida Guevarra on TV where she pointed out that the prospective poor collection performance spells doom for the Arroyo government.

Guevarra, which Teves’ staff admitted continues to be consulted by the Finance chief, is an out-of-the-closet GMA critic.

The speculation is that there is an uneasiness between the informal advisers and the revenue collection front-liners. The view has been further fueled by the apparent assault on the capability of current customs chief Napoleon Morales who appeared to have been pilloried for a single month’s collection downtrend — something that was altogether beyond his power to prevent. The reason was the delay in oil importation which in turn cause delays in the payment of ad valorem taxes on oil importation. Not much was said about the reason; the focus was on the single month’s shortfall forgetting that Morales was a winner last year.

The uneasiness in the relationship between the informal advisers and the front-liners may also be taking its toll on the BIR. The view is that the informal advisers have prevailed on Teves to keep what appears to be unreasonably high 2007 targets — never mind that the government is cutting its borrowings by half and would therefore not be under pressure to collect the projected revenues. The question being asked in finance circles is this: is the pressure on Teves all about budget deficits or the inner circle’s reported dislike for some personalities in the BIR?

It would be of great help to the President if those advising the secretary at close range would be working in harmony with, and supportive of the front-liners. There are already too many hecklers in this country. The customs and the BIR can do without hecklers from the secretary’s own circle.

Major embarassment

I have always admired Lilia de Lima, the Philippine Economic Zone Authority (PEZA) first — and so far — only director-general since the office’s creation in 1995.

She has worked under three presidents and her reputation for honesty, and accessibility has made her a favorite in the business world. With her no-nonsense “but warm” attitude, De Lima has accounted for 98 percent share of the total investments in the country.

She has always emphasized hard work, integrity and honesty among PEZA employees.

So imagine my surprise when I met Mary Jane Arada, PEZA Clark Special Economic Zone OIC.

Not a few businessmen stationed at Clark have complained how Arada has been acting like she has no accountability whatsoever. She bosses her way around, shouts at and embarasses investors who do not follow her wishes. In the kingdom known as Clark, ever since PEZA took over just a few months’ back, Arada is the ruler.

But of course, you don’t believe everything you hear. Until you experience it yourself.

Just last Thursday, Carolina de Jesus, former president and agent of Mark Sensing Philippines, invited me through a common acquaintance to meet at EDSA Shangrila for a chance to explain her side on the brewing controversy involving her former company and PEZA which I wrote about in this corner.

Mark Sensing Philippines is a wholly owned subsidiary of Mark Sensing Ltd. of Australia. The parent company is a highly respected publicly listed company in Australia. It has been a long-time supplier of betting slips for the Hongkong Jockey Club. It also supplies lottery tickets in China as well as the ticket requirements of China Rail. In the Philippines, Mark Sensing Philippines has a contract with the Philippine Charity Sweepstakes Office for the supply of lottery betting slips and thermal paper, supplying around 70 percent of the country’s requirements.

The company’s problems started when MSPI was registered with PEZA last January following the proclamation of CSEZ as a PEZA Special Economic Zone. Last Jan. 26, MSPI’s broker brought in imported articles on the basis of documents approved and issued by CDC on Jan. 16 and expiring April 16. The temporary importation of bet slips in finished form was required since the machines used by MSPI for local production of bet slips were under repair.

Out of the blue, Arada accused MSPI of violating PEZA rules when the company allegedly failed to use PEZA prescribed forms for the importation. This was followed by other accusations: alleged overages on finished products, certain missing machinery, smuggling, to name a few. The importations were approved by CDC. PEZA has no power to confiscate items brought into Clark, a power vested in the customs bureau. Arada simply refused to recognize the permits issued by CDC.

In that column, questions were raised as to whether de Jesus, who has a pending money claim for commissions with her former employer, has been working with Arada.

In the spirit of fairplay, I agreed to meet de Jesus at EDSA Shangrila. Emmet Penson, her long-time associate, and I went to the business center at around 6:30 p.m. only to find Arada already in the room. Emmet was not told by de Jesus that she invited Arada. We felt the tension inside the room so we stepped out. Emmet called de Jesus to tell her that he can only vouch for her and not for Arada so we went to the coffee shop where we met De Jesus at around 7:30 p.m.

When we were about to wrap up dinner, De Jesus asked if she can invite Arada to the table. I didn’t say yes. A few minutes after, Arada joined us and started shouting at me, demanding for an apology, accusing me of having forgotten what I learned in school about good manners and right conduct when I didn’t call her before publishing the article. I was speechless though I wasn’t surprised by the way she was acting because I was forewarned. I decided to leave the hotel.

This is the same Arada who is now the subject of a complaint filed by personnel of Mark Sensing for grave coercion, trespassing, and robbery. I’ve seen the complaint and I cannot imagine someone working under the charming and well-mannered De Lima treating foreign investors that way. Arada is an embarassment to De Lima, and to the government. And to think that she is just an OIC.

Mark Sensing has withdrawn its registration from PEZA. But Arada continues to harrass the company, watching over its warehouse like a guard dog, entering company premises using picklocks, intimidating and coercing and using excessive force against its personnel. Is this the kind of public official that we would like our foreign investors to be dealing with?


Chief News Editor: Sol Jose Vanzi

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