House bucking Duterte’s legislative agenda

The pro-Duterte supermajority at the House of Reps keeps saying it supports the President’s legislative agenda. Yet on three major admin bills it defies him. And he relents.

First is the 2019 national budget that the House returned to the Malacañang-led Development Budget Coordinating Council. Congressmen dislike the new cash-based budgeting, and wanted DBCC to revert to obligation-based.

Cash-based will quicken project completions, save funds, and stir the economy, Budget Sec. Benjamin Diokno said. Projects should be finished within the year, or else be delisted. Monitoring is simpler. For big works that take more than a year, agencies must secure multi-year obligational authority. No longer may they underspend. The Dept. of Public Works and Highways in 2017 had disbursed only a third, P230 billion, of its P663-billion road-works obligation. The Dept. of Transport spent only 25.6 percent of its P71.2-billion allocation; 153 of 159 projects either were delayed or unimplemented.

The old obligation-based budgeting is wasteful. Yet congressmen prefer it because supposedly realistic for its two-year cycles. It ensures finish of, say, a schoolhouse, despite unforeseen events like natural disasters, a congressman said. The House is recalling from the Senate the new Budget Reform Bill it had rushed only last Apr. Certified urgent by Malacañang, it would institutionalize cash-based budgeting. The House has changed its mind.

The shift from obligation- to cash-based is essentially an Executive fine-tuning. So what’s in it for congressmen that both the supermajority and four-faction minority banded against it?

2019 is an election year. They cannot tolerate the budget slashes at the Depts. of Public Works, Education, Health, and Social Welfare that cash-based method will entail. Bloated budgets are the source of pork barrels – illegal but vital for campaigns, Sen. Panfilo Lacson exposed. Under cash-based, funds would be allocated where truly needed.

Malacañang understood. The other day it granted congressmen’s wish for a 2019 mix of cash- and obligation-based budget: P3.757 trillion.

This week the House passed a rice tariffication bill. Big users – restaurant-hotel chains, feed millers, traders – may now import rice so long as they pay 40-percent duty. Proceeds – P21.6 billion a year – will modernize and incentivize rice farming. Retail rates can be halved. Inflation might be reduced by four percent. All fine on paper.

Yet the bill contradicts the aim of the inter-Cabinet National Economic Development Authority, which the President chairs. NEDA wants import reform. Those who will bring in rice must pay the tariff beforehand, with Customs monitoring volume compliance, and the trade department price stability. The National Food Authority merely would maintain an emergency buffer.

Flawed, the bill retains NFA’s power to pick importers and set volumes. Such discretion breeds sleaze, and causes supply dips and price surges. It defeats Duterte’s desired benefit for farmers and consumers. Last January’s NFA buffer depletion, due to importer favoritism and non-buying of P5 billion palay from farmers, triggered (along with fuel excise tax) the present 5.7-percent inflation.

The House majority misread Duterte’s mind. Spokesman Harry Roque said on TV recently that the President has noted practices in the NFA that “contributed to our problems of inflation... (He) agrees that there is a need to reform the role of NFA and perhaps to revisit who should lead (it).” By law the agency should be under an inter-department Council that includes the Bangko Sentral and headed by a Cabinet man. Before maligned by corruption talk, Secretary to the Cabinet Leoncio Evasco chaired the Council.

To face rough sailing in a coming election year is the TRAIN-2 (Tax Reform for Acceleration and Inclusion, Part 2). The bill will cut corporate income taxes of 915,000 micro, small, and medium enterprises from 30 to 25 percent. More important, it would scrap protectionist privileges, like tax exemptions and subsidies, of certain industries. About 300 special laws, on which 4,000 favored firms wallow in inefficiency, shall be repealed. That would spur competition and employment. The protected companies have been enjoying the privileges for decades, at huge loss to the state.

The bill is ready for plenary debate. Certain congressmen expectedly will lobby for the retention of special grants to their family or bribing firms. This early there is a smear drive that TRAIN-2 would worsen TRAIN-1. That first tax package consisted of higher exactions on alcohol, sugary foods, cars and – inflationary – fuel. The second can lead to jobs, the hedge against inflation. That’s not how vested interests in Congress see it.

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Metro Manila authorities are resorting to vehicle reduction for EDSA traffic flow. A twin solution should be additional mass rapid transport. But the past transport department messed up acquiring new MRT-3 trains. And the present one, dependent on remnants of the former, has done nothing about it for the past two years.

Had the defective Chinese coaches been replaced at once, 48 new units would now be operational. Running at shorter intervals with the 73 originals, MRT-3 would be ferrying 850,000 passengers a day. At present, under the remnants, it does only 375,000.

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