Economic provisions in BBL just enough – GPH panel member August 29, 2015Posted by HERBERT CURIA in PEACE TALK UPDATES.
From the Website of OPPAP
Economic provisions in BBL just enough – GPH panel member
Manila – Government of the Philippines peace panel member Senen C. Bacani today defended the formula for the annual block grant of the Bangsamoro as proposed in the Bangsamoro Basic Law (BBL), saying the amount involved is comparable to what the Autonomous Region in Muslim Mindanao (ARMM) is currently receiving.
According to Senator Ferdinand Marcos, Jr., chair of the committee on local government, the “[the annual block grant] as it is proposed in the Bangsamoro Basic Law is a good one but I left it in so that we could discuss it thoroughly in public…”
According to the draft of the BBL, the formula for the annual block grant is 4% of the net national internal revenue collections of the Bureau of Internal Revenue less the internal revenue allocation of local government units. The bill also stipulates that the computation should be based from the actual collections from the third fiscal year preceding the current fiscal year.
Marcos commented that the formula seemed “to have been snatched from thin air.”
Bacani defended the formula for the annual block grant, commenting that the four (4) percent used in the formula is an approximation of what the ARMM currently receives. For the current fiscal year, 25.2 billion is the subsidy of the national government to the ARMM. Using the formula in the proposed BBL, the Bangsamoro government can expect to receive 27 billion for its initial year of operation, just a slight increase from its current budget of 25.2 billion.
The former agriculture secretary added that the increase, coupled with the other revenue generation and wealth-sharing arrangements, was “just enough for the Bangsamoro to provide basic social services and to catch-up with the rest of the country.”
“The formula was based on a thorough review of the current and anticipated requirements of the region, and takes into account the fact that the region will be responsible for financing the salaries of teachers and health workers, among others,” said Bacani.
The government peace panel member noted that unlike in the rest of the country that is served by the Department of Education, the cost of public primary and secondary education is shouldered by the autonomous region, along with the delivery of all other devolved social and economic functions.
Special Development Fund, power to contract loans scrapped
Among the numerous stipulations removed by Senator Marcos is the Bangsamoro provision for a Special Development Fund (SDF).
According to the original version of the BBL drafted by the Bangsamoro Transition Commission (BTC), a total of P17 billion pesos will be released by the national government to the Bangsamoro “for rehabilitation and development purposes”.
Of this amount, P7 billion will be released following the ratification of the law while the remaining P10 billion will be paid out over five years at the rate of P2 billion per year. Part of the SDF was supposed to finance a women’s peace fund “in support of gender as a cross-cutting concern.” The SDF demonstrates the Philippine government’s commitment to fund the rehabilitation and development of the Bangsamoro and can be used as counterpart funds for grants coming from donor institutions or countries. This leveraging can result to 3 or 4 times more than the amount in the SDF thus maximizing the benefit to the country.
Another provision deleted by Marcos was the Bangsamoro’s power to contract loans, credits, and other forms of indebtedness.
Bacani said, however, that local governments already have the authority to contract domestic loans on their own, including foreign or non-peso denominated loans with the approval of the Bangko Sentral ng Pilipinas (BSP).
He commented that should be clarified by the lawmakers as contracting loans is an essential part of fiscal management.
“Contracting indebtedness is being done all over the world by all kinds of entities and enterprises. Loaning does not automatically mean you are losing money. For instance, the Philippines as a country is both a creditor and a debtor. It is just a means to manage fiscal responsibilities,” Bacani explained.
The former agriculture secretary added that “the purpose of the SDF is for the immediate takeoff of the Bangsamoro, and the loans may come handy in generating economic activity especially during the autonomous government’s initial years.”
In his sponsorship speech on the Basic Law for the Bangsamoro Autonomous Region (BLBAR) filed as Senate Bill No. 2894, Senator Marcos failed to provide an explanation on why the aforementioned fiscal provisions have been deleted.
Bangsamoro’s power on economic zones undermined
Republic Act No. 9054, the implementing law of the ARMM, allows for the establishment of a Regional Economic Zone Authority (REZA) tasked to “encourage, promote, and support the establishment of economic zones, industrial centers, ports in strategic areas, and growth centers to attract local and foreign investments and business enterprises.”
The ARMM implementing law also clearly stipulates that once the REZA is created, “the Philippine Export Zone Authority shall no longer authorize any other economic zone within the autonomous region” and that “any corporation, firm, or entity established within the autonomous region… be placed under the jurisdiction of the REZA.”
However, Bacani noted that the Senate substitute bill now stipulated that the Bangsamoro government must apply with the PEZA before it is able to establish economic zones, industrial estates, and free ports.###