Neda say more? Conrado Banal III Philippine Daily Inquirer
November 04, 2009
AFTER ABOUT TWO YEARS of pushing and shoving, Finance Secretary Margarito Teves may finally get his pet project in the BIR.
It is the $300-million seven-year contract between the Bureau of Internal Revenue and a foreign firm called Sicpa.
Sic… what? It is a Swiss company, Sicpa Product Security, that has been wooing this cute administration of Gloriaetta on a scheme to monitor cigarette taxes.
It is supposedly a “fool proof” system for the BIR to check on the production of cigarette companies here for their excise tax payments.
When Sicpa first broached the scheme, the National Economic Development Authority, which had a big say in government deals like it, already had misgivings.
For two years, without the Neda blessing, the $300-million proposed contract between the BIR and Sicpa remained just that—a proposal.
The BIR was cold to it, having received word abroad from other Sicpa clients such as Malaysia, Turkey, and Brazil.
Let us just say that the revenue agencies in those countries were not too happy with the results of the supposedly “fool proof” system.
Our dear Secretary Teves meanwhile continued to push for the project, building on allies in the Cabinet, at the same time pestering the BIR to sign the contract pronto.
All of a sudden, from out of the blue, Neda, the same agency that questioned some of the features in the contract for two years, changed its mind.
Today, Neda reportedly is all for the $300-million contract, even as this cute administration’s term is about to expire in seven months.
Something happened along the way, do you think?
* * *
IN OCTOBER 2007, Sicpa came to the Philippines with its “unsolicited proposal,” wanting to use “stamps” and electronic gadgets to check on cigarette companies.
From what I heard, the DOF under Teves has been egging the BIR heads to sign the contract with Sicpa—first there was former BIR Commissioner Jose Mario Buńag, and then there was Lilian Hefti, and most recently Sixto Esquivas IV.
Take note: All those three BIR chiefs resigned. Hmmm.
Anyway, the BIR, under all three commissioners, rejected Sicpa’s offer, describing it as questionable.
I thought the BIR commissioners did not want their names to be dragged into some embarrassing corruption cases before the Ombudsman.
For one, the BIR technical committee that reviewed the Sicpa proposal reported that the Swiss company complied with only 35 out of the 83 technical requirements set by the BIR.
Not only that, Sicpa had a paid-up capital of only 1.3 million Swiss francs, or about P54 million, based on currency exchange rates at that time.
To implement the project, Sicpa would need something close to P2 billion initially. And so its capital was not even 3 percent of the project’s initial cost.
Over the next seven years, the project would eventually cost this country more than P13 billion.
In other words, with only P54 million in capital, Sicpa stood to make, well, a fortune some 250 times over its investments.
At that time, the Neda opined that the contract was against the rules. For example, any company wanting to do business with the government must have a debt-to-equity ratio of 75:25. Sicpa’s was way below the threshold.
How could Sicpa finance its project costing P2 billion, initially, with only P54 million in capital? By borrowing a lot of money of course! The Neda did not like that.
Also, under the proposal, Sicpa would have no risk at all. The proposal required the government to deposit in escrow an amount (still unknown up to now) that should pay for 2 million of those Sicpa “stamps,” initially, whether the BIR would use them or not.
For instance, if cigarette sales would drop—maybe because the “stamps” would add substantially to cigarette prices—and Sicpa could not use up all the two million stamps, the government would have to pay for everything.
By the way, the government would only use our money.
* * *
THE PORT of Manila, as you know, has a new customs collector, a lawyer by the name of Rogel Gatchalian, appointed by the Lola at the Palace only last month.
But even before the turnover of the Port of Manila customs office to Gatchalian, some groups organized a media demolition job against the poor man.
In tandem with the bad press, they filed cases before the courts against Gatchalian, asking for his immediate removal from his new position.
Look at that: Gatchalian had nothing to do with the appointment, correct?
I mean, the appointment came from the Lola at the Palace. It was also signed by the DOF boss Teves himself, not to mention Customs Commissioner Napoleon Morales, who approved of the appointment.
Why did they file a case against Gatchalian? They should have sued the appointing powers, all the way up to the President, right?
The courts had already denied their request for TRO, allowing Gatchalian to assume the position last Oct. 26, or 20 days after the Palace issued the directive for his new assignment.
Now, the media demolition job indicated that Gatchalian got the new post because of a backer, albeit unnamed in the reports.
Between us girls, they were insinuating the backer to be Senate President Juan Ponce Enrile, who has been highly critical of the performance of the Bureau of Customs.
From what I heard, JPE recommended to the Palace a new customs man in the Port of Manila. The previous collectors consistently missed their collection targets, and miserably so. Why, as per JPE, should the government bear with their failure?
Gatchalian came highly recommended apparently because he headed the US Aids-funded RATS (run against the smugglers) program of the BOC.
As its head, the customs unit filed 97 criminal cases, involving suspicious shipments of more than P1 million, with 35 of them actually going to court.
That has never happened in the history of BOC. Need I say more?
