Malacañan Press Briefing with DOF Undersecretary and Assistant Secretary

Department of Finance Undersecretary, Karl Kendrick Chua, and Assistant Secretary Atty. Paola Alvarez speak before the Malacañan Press Corps on 27 January 2017 at the Press Briefing Room, New Executive Building, Malacañang.

Opening Statements

PRESIDENTIAL SPOKESPERSON ABELLA: Good morning. This morning we have special resource persons to deal with the tax reform for acceleration and inclusion. We have Assistant Secretary Paola Alvarez. And prior to her post at the Department of Finance, she served as the official spokesperson of the PDP-Laban political party during the 2016 campaign.

She worked closely with Senate President Aquilino Pimentel III and Secretary Alfonso Cusi.

Atty. Alvarez obtained her law from the Ateneo.

With her is Undersecretary Karl Kendrick Chua, the chief economist and Undersecretary for the strategy, economics, and results group of the Department of Finance.

In his capacity, he helps the government achieve its 10-point socioeconomic agenda. He leads the tax reform program.

He did his MA in Economics and Doctorate in Economics also at the University of the Philippines School of Economics.

Ladies and gentlemen of the Malacañang Press Corps, let us give a warm welcome, the DOF Spokesperson, Secretary Paola Alvarez and Undersecretary Karl Kendrick Chua.

USEC. CHUA: Magandang tanghali po sa lahat. Ang ibabahagi ko po ngayon ay ‘yung programa namin sa tax reform na inihain po namin sa Kongreso ‘yung nakaraang September.

Ngayon po, na-file na ‘to as House Bill 4774 ni Chairman ng Ways and Means Dax Cua.

Ang vision po ng tax reform ay hindi lamang mangolekta po ng revenue o dahil meron tayong deficit na kailangan i-plug. Ngunit, ang dahilan, ang totoong dahilan po dito ay gusto nating makita na umunlad ‘yung bansa natin by 2022.

Gusto natin bumaba ‘yung poverty rate from 22 percent to 14 percent. Gusto natin makita ‘yung bansa natin na maging upper middle income country, kung nasaan… nasa ‘yung China at ‘yung Thailand ngayon.

Tapos kung tuloy-tuloy natin gagawin ‘tong reporma, by 2040, one generation from today, gusto natin na mawala na ‘yung absolute poverty at maging high income country na po ‘yung Pilipinas, tulad po ng South Korea at ng Malaysia.

At wala pong shortcut dito, kailangan po natin mag-invest sa imprastraktura, sa pangkalusugan, sa edukasyon. Ang tantya po namin, on top of the 1.7 trillion na ginagastos po natin sa investment, one trillion additional po ‘yung kailangan natin taon-taon.

Pero sa Duterte administration, dahan-dahan natin iaakyat ‘to, ang kailangan po natin mga 366 billion. Ito po ay alinsunod sa pagtaas po ng budget natin. Pagdoble po ng spending sa infrastructure, education, social protection, at sa health.

At wala pong shortcut dito, pwede po tayo umutang pero siyempre ayaw natin ipasa ‘yung interest payment sa ating mga anak at sa mga apo natin, kaya gusto po natin gawin ‘yung tax reform.

Dalawa pong klaseng tax reform ang ginagawa po namin. ‘Yung una po, ‘yung tax policy, ito po ay dadaan po sa Kongreso dahil may mga adjustment na gagawin sa tax system natin.

‘Yung pangalawa po ay ‘yung tax administration. Ito po ay nangangahulugan na dapat mas maging mabuti po ang implementasyon ng tax natin sa BIR at BOC para hindi po mahirapan ‘yung taong bayan.

At dahil dito ay malaki po ang ating investment gap. Halimbawa po, meron po tayong mga 3,700 kilometers na national gravel road na sana po ay makonkreto po natin.

Meron tayong over 10,000 kilometers na asphalt road na mas maganda kung konkreto. Meron din tayong more than 32,000 kilometers na local roads na gravel. At kung maayos po natin mga ito ay pwede pong bumaba ‘yung bilihin ng mga pagkain kasi mas efficient po ‘yung transportation.

Meron din po tayong more than 7,000 barangays at 23,000 sitios na hindi po konektado sa national road kaya hindi po dumarating ‘yung serbisyo sa kanilang lugar.At meron po tayong more than one million irrigated land na dapat i-irrigate. Ito po’y popondohan ng ating tax reform.

Sa urban areas naman po, ito po ay mga… Ito po ‘yung mga halimbawa po ng projects na ipopondo natin na ihahain sa 2018 project. Kung wala pong tax reform, mahihirapan po tayong pondohan itong mga imprastraktura na ‘to na para masolusyonan po ‘yung mga traffic ay ‘yung mga congestion.

Sa education po, gusto natin 100 percent enrollment at completion rate. Meron tayong kailangan na more than 100,000 classrooms and almost 200,000 teachers para po mas gumanda ang kalidad ng public educations system natin.

Sa health naman po, meron po tayong gustong i-upgrade na mga 700 local hospitals. ‘Yung mga 18,000 na barangay at rural health center na kailangan din itayo dahil kulang po sa rural areas. Gusto natin 100 percent PhilHealth coverage sa mas mataas na kalidad at mas mababang premium. At meron po tayong kakulangan na mga 50,000 health workers.

In short, ito pong programa natin, ito ay alinsunod sa 10-point socioeconomic agenda ng Pangulo. Nag-promise po siya ng tax reform, ng mas mababang buwis, pero nag-promise rin po siya ng walo pang other priorities na kailangan pondohan.

At dahil dito, naisipan po namin na ayusin po ‘yung ating income and other tax system. So ang gusto namin ay maging simpler, fairer, at more efficient ‘yung tax system para po ito ay tumulong po sa pag-unlad ng ating bansa.

Ngayon po, ang good news sa personal income tax, mataas po ‘yung ating tax rates at naiwan na po tayo ng ibang bansa. Kaya ang gusto po namin ay ‘yung first 250,000 magiging exempt na po.

Ito ay makikinabang ‘yung 83 percent ng taxpayers. Kasama na po dito ‘yung personal exemption na 50,000 at ‘yung additional exemption per dependent na 25,000 up to four kids.

‘Yung 82,000 na 13th month at ‘yung bonuses, ito ay exempt pa din, Huwag lang lumampas sa 82,000. Kaya ito ay magbibigay ng ginhawa sa 83 percent ng taxpayers.

‘Yung mga sume-sweldo po na mas mataas sa 250,000, mas mababa na po ‘yung tax rates nila.

Halimbawa ‘yung ngayon po, kung 500,000 a year po ‘yung sweldo niyo, 32 percent na po ‘yung tax rate. Sa tax reform namin, bababa ito sa 25 percent.

Tapos pagkalipas po ng tatlong taon, bababa pa po ito sa 20 percent. So ito ay malaking ginhawa po sa taong bayan. At ‘yung maliliit po na taxpayer, isi-simplify po natin ‘yung tax system.

Halimbawa po ‘yung minimum wage ngayon, wala pong silang binabayaran na buwis at mananatiling zero rin ‘yung ating, ‘yung tax payment po nila.

‘Yung isang clerk na 15,000 ‘yung salary, meron po siyang binabayaran na mga 7 to 8,000.

Under the tax reform, tax pay na rin po ang clerk. Pati na rin po ang call center na 21,000 ‘yung sahod ay makakauwi po siya ng additional 22,000 almost.

At kung dalawa po sila nagta-trabaho, almost 40,000. At marami po ang makikinabang dito. Pero malaki po siyempre ang mawawala sa ating budget at kailangan pondohan po natin ‘yung mga, ‘yung mga kakulangan po sa imprastraktura, sa edukasyon, at sa pangkalusugan.

Kaya po naisipan po namin una ay ito po ‘yung clerk, tapos next is ‘yung call center.

‘Yung una pong gusto namin gawin ay ayusin po natin ‘yung VAT system natin. ‘Yung VAT kasi natin 12 percent VAT pero meron po tayong 59 lines of exemptions sa tax code.

At sa labas po ng tax code, 59 lines, 59 special laws, ‘yung nagbibigay ng exemption. Ito po ay napakagulo at hindi pa fair. Kasi maraming nagbabayad ng VAT pero marami din po ang exempt. At ito ay nagli-lead po sa malaking leakage, kaya aayusin po natin.

Ang good news po dito, ang senior citizen VAT exemption at sa PWD ay hindi tatanggalin pero ang gagawin po natin ay aayusin po natin ‘yung sistema. For example through a national ID para ‘yung leakage ay maiwasan, na ang benepisyo lang ay mapupunta sa tamang tao.

‘Yung ibang exemption po ay para lang maging fair at kung kailangan pong tulungan ‘yung mga coops, ‘yung mga low-cost housing, gagawin po natin ito sa mas mabuting paraan, sa pamamagitan ng subsidy sa budget side, hindi po sa tax side.

‘Yung pangalawa po, ‘yung oil excise. Ito po ay very sensitive. ‘Yung unang mungkahi po natin ay taasan ito ng six peso per liter, whether gasoline, diesel, kerosene, LPG.

Bakit po? Kasi ito ay hindi nagalaw ‘yung nakaraang 20 taon. At itong six peso, ito po ‘yung nawalang halaga ng excise tax. ‘Yung over the last 20 years.

At dahil nakinig rin po kami sa mga concerns ng mga stakeholders, sa taong bayan, ang gagawin po natin ay staggered ‘yung increase. Three peso muna tapos sa susunod na taon, additional two, and sa 2019 additional one.

Marami pong nagsasabi na ito ay anti-poor pero ang katotohanan po nito, ‘yung top 10 percent po, ‘yung pinaka-mayaman na 10 percent na Pilipino, sila ay kumokonsumo na ng 50 percent ng mga oil products.

Tapos, ‘yung top 1 percent ay 13 percent dahil po sila ay may kotse at maraming kotse. ‘Yung mga sumasakay po ng jeep, ng bus, hinahati naman po nila ito with 20 or 40 other people.

Meron din kaming concern na dapat masolusyonan ‘yung congestion, ‘yung traffic, ‘yung pollution, ‘yung health cause ng paggamit po ng mga maduduming sources of energy.

Ang susunod po ay ‘yung automobile excise. Ito po ay solusyon din sa traffic at sa congestion. Pero gagawin rin natin very progressive. ‘Yung mga mas mura kotse ay mas mababa ‘yung tax at ‘yung mas mahal, ‘yung SUV at ‘yung mga luxury, mas mataas.

At ang gusto ko hong iparating dito, kahit aakyat po ‘yung excise sa automobile, mas malaki po ‘yung pagbaba ng income tax kaya sa isang average Filipino na bibili rin ng kotse, let’s say a Vios or Innova, mas marami po siyang savings even if he/she chooses to buy a car.

Ang net effect po sa revenue natin, magbibigay po tayo ng 139.6 billion in the form of lower income tax so malaki po ‘yung makukuhang additional pay ng mga taxpayers pero kailangan rin natin pondohan ‘yung mga priority programs ng administrasyon kaya ang babawiin po natin sa VAT sa excise sa fuel at sa automobile. Pero nakadisenyo po ito para maging very equitable, na ‘yung mayaman, mas malaki ‘yung babayaran at ‘yung mahirap, mas maliit.

At ang net effect natin 162.5. Kailangan natin ‘to para mapondohan ‘yung 2018 budget na magtutugon sa problema natin sa kahirapan at inequality.

‘Yung next slide po, ito ‘yung example kung bumili po ‘yung isang taxpayer ng Vios o Innova. ‘Yung nakikita niyong yellow, ito po ‘yung increase in their take home pay. Mas mataas po ito kaysa ‘yung dagdag na babayarin nila sa oil excise kahit bumili po sila ng kotse o kahit tumaas ng bahagya ‘yung inflation rate dahil sa pagtaas po ng oil.

Ngayon po, paano naman ‘yung mga hindi taxpayers, ‘yung minimum wage and below. Ang naisipan po natin ay tataasin natin ‘yung VAT threshold.

Kasi ayon sa current regulation natin, pag ‘yung micro enterprise, ang gross sales niya bababa sa 1.9 million VAT exempt, ito ‘yung mga sari-sari store or karinderya, tataasin po natin sa 3 million para mas hindi maaffect ‘yung mga poor. At ‘yung sa oil excisepo ay may tatlo po kaming pino-propose na subsidy:

Una po ‘yung cash transfer na mga 300 per month for one year. Temporary ‘to na ibibigay natin sa pinakamahirap na 10 million households para ‘yung moderate and sudden increase ng inflation ay hindi sila maapektuhan masyado. After one year usually ang inflation ay nagmo-moderate na.

Pangalawa po ay Pantawid Pasada. Ito po ay ginawa sa nakaraang dalawang administrasyon. Ang gagawin po natin ay ibabalilk natin para ma-subsidize po ‘yung mga public utility vehicles para walang pass through po sa jeepney fares or sa other public transport fares.

At ‘yung pangatlo po ay tutugunan po natin ‘yung problema ng mga public sector na inefficient ngayon, ‘yung jeep modernization para ‘yung kanilang engines maging more efficient.

Halimbawa po, pag nag-modernize po ‘yung jeep, ‘yung kanilang 4 kilometers per liter na efficiency ay magiging 8 to 10 kilometers so bawing-bawi po kahit na mag-increase pa tayo ng diesel excise.

At ang susunod po, may mga — ito po ay ating epekto sa income ng mga taong bayan. ‘Yung green ay ‘yung positive increase sa income for the poor. ‘Yung D1 ay decile 1, meaning ‘yung bottom 10 percent po ng population. Sila po ay makikinabang talaga once na ‘yung ating tax reform ay ibalik natin sa pamamagitan ng mas mabuting social assistance and public services. Syempre ‘yung mga mayayaman po, ‘yung negative na red, sila po ay dapat mag contribute dahil gusto natin very progressive ‘yung tax system

May mga concerns po na ang inflation ay tataas pero hindi naman po totoo. Ang estimate po natin, ‘yung inflation natin na 1.8 ngayon ay tataas lamang ng 1.5 so ang total maximum is 3.3 percent sa 2017 or 2018 kung kelan ma-implement itong tax reform at ito ay within ‘yung Central Bank target na 2 to 4 percent at pinagawa po natin ‘yung ating social assistance, mas mababa pa ito.

‘Yung next slide, ‘yung history po natin, ‘yung tinaas po natin ‘yung VAT sa 2004 at ‘yung naging over 100 po ang Dubai price crude. Ang totoo po ay ‘yung inflation natin tumaas pero moderate lang at ang GDP natin bumaba pero moderate lang.

Pero ng dahil sa magandang reporma ng nakaraan, ito po ay nagdulot ng mas magandang ekonomiya para sa atin ngayon. ‘Yung investment rating natin, maganda; ‘yung ekonomiya natin almost 7 percent growth, fastest in East Asia, at ‘yung inflation moderate at marami pong nakikinabang, lower poverty, lower unemployment.

At dahil sa repormang ito ay kaya natin sabihin na ang gagawin nating tax reform ay mas makakabuti sa ating bansa. So, at ‘yung huli po, nakita po natin na, syempre may mga concerns na pag nagtaas po tayo ng diesel o ‘yung oil, dapat bababa po ‘yung car sales

Pero ‘yung totoo po kahit tumaas po ‘yung presyo ng gasoline, diesel nung 2008 saka 2011 ‘yung umabot na po ng 60 per liter ang gasoline at 45 ‘yung diesel, ‘yung car sales tumataas pa rin dahil ‘yung tax o ‘yung presyo, isang bahagi lamang ‘yan sa desisyon ng household kung kelan sila bibili.

Nandiyan din po ‘yung income, ‘yung pag tumataas po ‘yung income, syempre ‘yung real income mas kaya na nila po ‘yun gawin.

So in summary, itong tax reform natin kailangan natin tingnan natin as a package. Hindi lang po dapat ‘yung oil lang, automobile lang. Dapat as a package po natin tingnan kasi ‘yung totoo po, for majority of Filipinos, ‘yung lowering of personal income tax ay makakadagdag po sa welfare or income nila.

At kung gamitin po natin itong mga tax revenues para sa mga mahihirap at dahil dito, in-earmark po namin ang revenues na makokolekta namin only to infrastructure, education, health and social protection. Sa tingin po namin ay walang dahilan kung bakit hindi natin masolusyunan ‘yung kahirapan at makita natin ‘yung Pilipinas na maging mas maunlad sa next generation. So salamat po.

Kami po ni Asec. Paola ang magte-take ng questions.

Questions and Answers

Celerina Monte (Manila Shimbun): Good morning po.

ASEC. ALVAREZ: Magandang umaga po.

Ms. Monte: Oho. Regarding this proposal, I believe your target is to pass this reform measure within the year. So was this factored in in the budget that will be proposed for next year?

ASEC. ALVAREZ: Ah opo. So ‘yung sa budget po na pino-propose natin next year, target po kasi sana natin is mag-increase ng additional one trillion on top of our budget. So ngayon po, iba-budget po natin ‘to as additional revenues kung maipapasa po natin siya within the year. Kasi po, ang implementation po natin, for example for oil, at saka po ‘yung automobile is sa 2018 pa po so meron po tayong isang taon para po maglagay po ng measures kung paano natin mami-mitigate yung ating impact po lalo na sa mahihirap.

Ms. Monte: So we’re eyeing like 3.8 trillion for next year di ba? So if ever, that will become 4.8 or sa 2019 pa ‘yun?

ASEC. ALVAREZ: Sa 2018 po.

Ms. Monte: Ah sa 2018, so next year?

ASEC. ALVAREZ: Opo

Ms. Monte: So ano ‘yung worst case scenario just in case na you fail to pass — Congress fails to pass this proposed measure within the year?

ASEC. ALVAREZ: Ang mangyayari po, hindi po natin — gagalaw po ‘yung lahat ng ating infrastructure na pinaplano, hindi po natin sila masisimulaan kasi po ang ine-aim po sana natin is kung makakuha po tayo ng dagdag na revenues, masisimulan na po natin ‘yung mga infrastructure spending na gusto ng ating Pangulo. Pero since, kung hindi po natin ito maipapasa, wala po tayong pagkukunan nung extra budget so ‘yun po ‘yung magiging repercussion niya.

Ms. Monte: So how big ‘yung sa infra if ever na maaapektuhan? Meron ba kayong ballpark figure na — alin-alin ‘yung mga projects if ever at ilan lang ‘yung magpu-push through if —

ASEC. ALVAREZ: Opo. ‘Yung makakaapekto po is hindi po tayo makakaraise ng 162 billion at malaking bagay po ito dahil nasa pipeline na rin po ang ating iba’t-ibang mga infrastructure program. So talaga pong magiging malaking setback kasi hindi po natin magagawa ‘yung ating nakaschedule po na mga project.

Ms. Monte: Last question. Pero di ba we are eyeing like ODA from China, Japan and other bilateral partners so hindi ba doon tayo kukuha nung pondo natin para sa infra?

ASEC. ALVAREZ: ‘Yung mga bilateral agreements po natin, although meron po tayo, hindi po siya sapat para po doon sa tinatarget nating infrastructure spending.

So ‘yung mga MOU po natin, nagpropose na po sila ng iba’t-ibang project pero kulang pa po in terms of, for example ‘yung dagdag na ospital, dagdag po na mga irrigation, ‘yung dagdag po na mga classroom facilities at saka kung gusto po natin magtaas ng sweldo ng ating mga government employees tulad ng mga guro, hindi po ito aabot.

Benjie Liwanag (DZBB): Right now ho doon sa Congress, pinaguusapan na ‘to eh. Ang nagiging — may proposal si Congressman Salceda, has the same. Nagja-jive ba kayo nung —

ASEC. ALVAREZ: Opo. Sa katunayan po, sinusuportahan po ni Congressman Salceda ang ating proposed bill. Ang difference lang po is ‘yung doon sa staggering of oil so parehas lamang ito at pwedeng i-reconcile kasi yun lang po ‘yung pinagkaiba. ‘Yung dun po sa naunang proposal mas nakita po niya na mas beneficial sa economy kung ibibigay natin ng buo yung pag akyat ng oil excise pero yung ibang mambabatas naman po iniisip nila na mas hindi mararamdaman pag naka stagger so yun lang po ang pinagkaiba.

Mr. Liwanag: Follow up lang doon kay Celerina, ma’am. The thing is, ‘yung tanong kasi kanina meron ba tayong alternative? Kasi yung sinabi ninyo kanina, it’s just, hindi natin maipapatupad yung mga projects especially on infrastructures, but the thing is, meron ba tayong another proposal or papaano natin, adjustment kaya, na pwedeng —- kasi maraming hindi, ngayon pa lang yung sinasabi ninyo staggered basis ‘yung 3, 2 and 1 idadagdag natin for about a year parang hindi pa rin ito tanggap ng masa. Although pinaliwanag na natin, maganda naman ‘yung paliwanag but the thing is, ano po yung alternatibo na ibibigay ng Department of Finance para dito sa Kongreso, ma’am?

ASEC. ALVAREZ: Opo. Yung hindi naman po siya alternatibo pero isa po sa kino-consider natin is ‘yung pag iimplementa na nga po ng fuel marking. Ito pong fuel marking yung ating iimplement para po mabawasan ang oil smuggling pero kahit po ma-implement natin ito ng 100 percent kukulangin pa rin po yung revenues na ating kakailanganin para ma fulfill yung ating infrastructure gap. So sa ngayon po, naghahanap tayo ng ibang alternatibo.

Pero ‘yung mga nakikita natin na pwedeng maimplementa natin agad-agad ay hindi pa rin po aabot para dun po sa kakailanganin po nating budget so magkakaroon pa rin po ng kulang.

Mr. Liwanag: Hindi ho ba makakatulong yung investment packages na pumapasok from other countries? Kasi di ba si Pangulong Duterte maraming —

ASEC. ALVAREZ: Opo. Yung sa investment packages po, marami po sila. Pero kung ang plano po natin ay hanggang 2022, kulang pa rin po kasi po ang target po natin is by 2022, yung status of living kumabaga na tinatawag ng mga Pilipino ay umangat po na kagaya ng kung nasaan po ang for example po Thailand at by 2040 yung base po sa ating gagawing reporma ngayon, ay magiging ang ating income ng ating household ay para na po yung sa Korea or sa Japan.

Mr. Liwanag: Thank you very much, ma’am.

Ina Andolong (CNN Philippines): Hi Ma’am, just a point of clarification first, your projected budget for infrastructure next year already includes or you already factored in ‘yung ODAs ba?

ASEC. ALVAREZ: It’s not yet there coz it’s a, we have to propose it pa so it’s late pa po, within March I think.

Ms. Andolong: Okay. And then Ma’am, I understand si Secretary Dominguez and the team is in China and I’m not sure if they already returned. Can you give us specifics on the projects they agreed to have for the ODAs there from China?

ASEC. ALVAREZ: Okay, we don’t have the exact list of the MOUs that they already signed but we’ll release it after, we’ll get the exact list.

Ms. Andolong: How about ma’am, maybe just a description on the priority sectors that the Chinese laid out for us?

ASEC. ALVAREZ: The ones that we already know is more on railway po. Railway tapos yung ating connecting roads at tsaka yung rural development, so yun po.

Joseph Morong (GMA-7): Hi ma’am, good morning po. Ma’am sa figures lang. Magkano yung kailangan for infra?

ASEC. ALVAREZ: We need an additional 1 trillion per year po.

Mr. Morong: Per year. Then dun sa 3.8 wala sa 2017 ‘to na budget, right?

ASEC. ALVAREZ: Opo. ‘Yung sa 2017 po kasi nagawa na po siya yung previously so inaadjust lang po natin at hindi pa po siya nate-take into account.

Mr. Morong: For implementation ng 2017, ilan yung mga nasa pipeline na?

ASEC. ALVAREZ: We don’t have the exact figures pero I think the last we know is we have 62 projects already. Most of this are already in the pipeline and for implementation. Yung iba po, inaantay lang po natin yung mga clearances.

Mr. Morong: And they have the budget, the 62?

ASEC. ALVAREZ: This is mostly from ODAs. Pero yung gusto po natin, hindi pa po natin na isasama.

Mr. Morong: Ma’am, I’d like to focus on the auto excise tax. Would you be able to quantify kung magkano ‘yung, how much it will reduce the, yung mga nabebenta na kotse if implemented?

ASEC. ALVAREZ: ‘Yung dun po sa auto excise, ang amin po kasing dato is kahit po nagtataas tayo ng presyo, tumataas pa rin po yung mga sales nila kasi po ang determining factor, ‘yung mas malaki pong nakakapag-determine is yung income. So dahil po mababa ang ating interest rates, yung mga auto plan na makakabenta pa rin po sila kasi po nadi-divide nila ‘yung amount ng kotse at kung mas malaki na yung takehome pay ng mga manggagawa, mas marami po silang pera to invest yung para po sa mga car loan.

Mr. Morong: So in terms of sales mukhang walang masyadong epekto?

ASEC. ALVAREZ: Yung sa datos po namin umaangat po yung car sales kahit po yung price ng oil at tsaka yung sa kotse tumataas po.

Mr. Morong: Parang hindi rin mare-reduce?

ASEC. ALVAREZ: Opo.

Mr. Morong: Okay, Thank you.

Pia Ranada (Rappler): Hi ma’am. ‘Yung dun po sa tax reform package. How onboard are the other sectors on this? Were you able to consult for example, yung automobiles? Are you expecting thus any opposition when the law is being passed?

ASEC. ALVAREZ: Yung sa iba’t ibang sectors po, inuutos natin yung mga transport groups lalo na po yung sa public transportation kasi po sa tingin namin sila yung mas malaki ‘yung concern. Nakipag usap na po kami sa kanila at hanggang ngayon po nagda-dialogue pa po kami kung ano po yung mga concern nila para po yung kanilang pagpasada, like yung sa ating mga jeepney sectors, paano po natin sila matutulungan para yung — ‘Yun nga po, yung sa jeepney modernization act, nakikipag ugnayan po tayo kung paano natin ‘yun maiimplement ng mas maayos. Yung sa mga bigger companies po like yung manufacturing of automobile na businesses, hindi pa po natin sila kino-consult kasi dinadahan-dahan po natin na ‘yung mas poorer sectors po ‘yung ating inuuna.

Ms. Ranada: I just want to follow up lang po doon sa China trip. Kasi si — we heard also that the President might return to Beijing in May. So by any chance, was his May visit discussed during the trip of Finance Secretary and [unclear] economic agenda during the trip?

ASEC. ALVAREZ: We don’t have any information yet if he will come back in May. I think it’s still being fixed or it’s still being scheduled. But as of now, Secretary Dominguez as well as the economic managers are yun nga po, already talking to our other development partners and they are already signing some of them but some of them, we still have to review so that we are sure if these contracts will be more beneficial for the Philippines.

Ms. Ranada: Ma’am, any idea when the loans will be available to mga MSMEs? You mentioned that they signed contracts already.

ASEC. ALVAREZ: We don’t have the exact timeline yet so we’re still waiting for it.

Tina Mendez (Philippine Star): Ma’am good afternoon. Can you please explain ‘yung exemptions sa mga vehicles such as trucks, cargo vans, jeeps and special purpose vehicles, cement mixer, crane truck at bakit sila ang mae-exempt?

ASEC. ALVAREZ: Okay. Yung exemption po kasi ng mga vehicles na ito kung titignan niyo, ito po yung vehicle na ginagamit pang pasada, ginagamit po yung mga trucks sa mga probinsya, yun mga utility vehicles so hindi po sila kasali sa excise tax kasi po ang idea po natin behind the excise tax ay yung privilege po na nakakabili ng sasakyan, yun po ang ating tina-tax. Since itong mga klase ng vehicles naman po na ito ay ginagamit sa trabaho tulad ng pampasada at saka pang deliver ng mga goods, hindi po sila kasama doon sa excise tax.

Ms. Mendez: Ma’am how about yung mga cement mixers, crane trucks sa mga big businesses naman ang meron no’n.

ASEC. ALVAREZ: Ito po kasi ginagamit rin po siya for public use so yung mga pagko construct po in general hindi na po sila tinatax ng malaki kasi po ang gamit po nila ay sa, pag yung business nga poat trabaho. So hindi po yun yung privilege kumbaga na as compared to nakakabili po ng luxury vehicles, yun po.

Ms. Monte: Ma’am can you confirm. There’s this plan daw of the economic team also to go to Japan to make similar, like, follow up on the one trillion yen loan na inooffer ng Japan?

ASEC. ALVAREZ: Opo. Sa ngayon po hindi po natin alam yung kanilang exact schedule pero ang alam po natin is everytime po kunyari meron tayong offer at for example may MOU na po ang Presidente at saka ang isa pa pong bansa, yung ating economic managers kailangan po nilang i-clarify kung ano po yung mga MOUs na isasama doon at kung paano po natin ito mas maiimplementa na mas maganda po yung scheme.

Ms. Monte: So we’re sending a high level delegation?

ASEC. ALVAREZ: We don’t know yet if when or if they will be going there anytime soon.

Ms. Monte: Ma’am regarding doon sa infra, di ba yung target this year ng government is 5.4% of GDP. So if ever hindi maipasa itong proposed measure na ‘to, how would that impact on our target na ma-increase yung infrastructure yung sa GDP yung ratio?

ASEC. ALVAREZ: Ah mas ma — [do you want to explain?]

USEC. CHUA: Yung budget po natin ng 2017 pinasa na po, so we will implement it. So yung sinasabi po natin ay yung 2018 budget. Magsisimula ito sa March yung preparation. So kung hindi po natin naipasa yung tax reform, mahihirapan po tayong pondohan itong mga infrastructure. So nandiyan po siya sa budget pero unprogrammed fund siya. Ibig sabihin hindi sila pwedeng magsimula kung wala pong sapat na pondo.

Ms. Monte: So that means di ba ang target natin is para makalevel tayo with the other Asian countries is at least 5% of GDP?

USEC. CHUA: Yes.

Ms. Monte: So it’s unlikely to achieve that target if ever Congress won’t pass this measure?

USEC. CHUA: Tama po iyan. No tax reform, no infrastructure. So we will just muddle through.

Ms. Monte: So mga gano kababa lang yung magiging target if ever?

USEC. CHUA: Well ‘yung target po ng DBM is 7% of GDP that is one trillion pesos in a few years time. Kung tayo po ay hindi aakyat ng more than 5, yung GDP growth natin mas mabagal. Kasi kahit na gusto pa natin na mag-grow yung business natin kung wala naman yung infrastructure at 3 to 4 hours yung biyahe natin syempre yung productivity ho natin mababa. Kaya sa tingin ko mas kailangan natin bigyan ng pansin itong paano pondohan itong 7% of GDP ng infra na dapat maachieve natin by 2022.

Ms. Monte: So, so far ano yung feedback from Congress and the Senate on the possibility of passing?

USEC. CHUA: Kami po ay nagda-dialogue with Congress. Almost every week may hearing. So ang kailangan siguro po ay tignan natin in a package. Ano po yung over the long term at hindi lang perceptor. Ano po yung mas maganda para sa buong bayan. At syempre nakikinig rin po sila. At inaayos rin po namin yung communication namin para mas maintindihan po ng mga taong bayan yung tax reform.

PRESIDENTIAL SPOKESPERSON ABELLA: We see more silver linings in the socioeconomic political landscape. Thousands of families in waterless communities nationwide now have access to potable water. That’s coming from the DILG.

Around 300,000 households nationwide who belong to the waterless communities are now benefiting from the completed 554 potable water supply projects under the Sagana at Ligtas na Tubig sa Lahat or SALINTUBIG program since it started in 2012, according to the DILG.

Secretary Sueno said that SALINTUBIG program provides levels 1, 2, and 3 potable water supply systems to municipalities and barangays which are waterless and or with low water service coverage with high incidence of poverty and water borne diseases.

He explained the Department allotted 770,000 in 2012 for the implementation of 262 SALINTUBIG projects. Of these, 259 have been completed; two are ongoing implementation, and one is on procurement stage.

Another one?

The Philippine-Malaysia market trade reopens this coming February 1. On the first of February, barter trade between Sabah, Malaysia and the island provinces of the ARMM will reopen as announced by the Mindanao Development Authority Secretary Abdul Khayr Alonto on Wednesday, January 27. It had been shutdown for almost a year already.

The chief minister of Sabah… Sabah, Malaysia Musa Aman announced the lifting of the trade embargo which came about after a string of kidnapping incidents involving Malaysian victims by the terrorist ASG group in the island provinces.

The reopening of the cross-border trade will be, initially, in the three island provinces. However, it will eventually expand to other territories of the ARMM, even to General Santos City.

Plans of putting up a consular office in Kota Kinabalu to attend to the needs of the Filipino – Muslims have also been revealed by Secretary Alonto.

Also, we have here… the message from President Rodrigo… Rodrigo Roa Duterte regarding the Chinese New Year:

Each beginning signals new chances and vast opportunities for change — and change can mean forward, move, a rising, or a leap towards a better station, a steady ground, a reason to be grateful for and proud of the gift of life, and the fulfillment of our aspirations.

The government shares the joys and hopes of our Chinese friends and Chinese – Filipinos who have found a root and reason for staying in the country.

They have enriched the Filipino culture and history on their own. They’ve contributed to the economy by trade and investments and their cuisine has been dearly familiar to many family homes, Filipino homes.

The philosophy and attitude in life are a wellspring of practical lessons that all of us, regardless of nationality, can learn from.

May all of us develop a more profound appreciation of our heritage as two distinct yet intertwined peoples. And further… and further fortify the goodwill that we have shared over the years.

To everyone else who believes in the miracle of beginnings and who makes a choice for hope against fear, my best wishes on this auspicious season of the Chinese New Year.

Signed, Rodrigo Roa Duterte, the President of the Philippines.

We will now take a few questions.

Mr. Liwanag: Sir, good afternoon.

PRESIDENTIAL SPOKESPERSON ABELLA: Good afternoon. Yes?

Mr. Liwanag: Sir, may reports na nag-resign na raw… or si AMLA, ‘yung head ‘nong AMLC na… si Abad, si Julia Abad?

PRESIDENTIAL SPOKESPERSON ABELLA: We need to confirm that.

Mr. Liwanag: No, no confirmation?

PRESIDENTIAL SPOKESPERSON ABELLA: There’s no official statement.

Mr. Liwanag: That’s it. Thank you very much sir.. The DOF is right there. Baka alam po nila?

PRESIDENTIAL SPOKESPERSON ABELLA: No information.

Mr. Liwanag: No information? Thank you, sir.

Leila Salaverria (Philippine Daily Inquirer): Sir on the Senate hearing yesterday, it appears that there are more cases of police involvement… using drug operations to harass foreigners and other people. Sir, does the Palace think… because the President has promised to protect police officers involved in drug operations. Is there a need to rethink or maybe repackage the President’s message?

And does he think… does the Palace think that promise has emboldened police officers?

PRESIDENTIAL SPOKESPERSON ABELLA: Has emboldened?

Ms. Salaverria: Rogue police officers to use the drug operations as a cover for their shenanigans?

PRESIDENTIAL SPOKESPERSON ABELLA: Again the… again like we would say, the proceedings are running on parallel tracks, you know. One is to address the apparent [how do you put it?] apparent proliferation… not proliferation but the apparent existence of rogue cops.

On the other hand, the… as the President has said, he continues to protect their efforts, assuming regularity, assuming regularity. But it’s running on parallel tracks and the President has said that he will deal quite severely with those who are erring.

Ms. Salaverria: So, kasi of now, there’s the… police officers are denying involvement. So just want to make it clear, they will not receive any legal protection from–?

PRESIDENTIAL SPOKESPERSON ABELLA: The President has said he will deal severely with those who are found to be engaged in… found to be guilty of. So let us, let us see how it proceeds.

Ms. Salaverria: Sir, I just want to clarify kasi in the case of the police officers involved in the killing of Mayor Espinosa, he has backed their version of events. So I just want to know how he will deal with the police officers being tagged in the killing of Mr. Jee Ick Joo?

PRESIDENTIAL SPOKESPERSON ABELLA: I would say yes that we will just follow the precedings and let it unfold as it does. Thank you.

Ms. Salaverria: Thank you.

Ms. Ranada: Sir on the same issue. So did the President ever explain to Cabinet members or could perhaps the Palace explain the difference between the two cases involving Mayor Espinosa and then Jee Ick Joo? Because both had NBI findings on the case, there were NBI findings on the case and despite that, the President seems to believe more on the case of Jee Ick Joo. He seems to find it more credible the NBI findings here because as he said, he admits that or he also believes that the perpetrators were police.

So can the Palace explain the difference between these two cases, despite the fact there were NBI findings for both. Did the President ever explain why he believes more on NBI findings in this case?

PRESIDENTIAL SPOKESPERSON ABELLA: No… Let us put it this way. The President has declared that he is… definitely will back up police operations. However, as has been revealed already, he has also allowed the due process.

So like I said earlier, he’s pursuing a two track thing– one is he supports the police operations and secondly, he will also not allow those who are rogue to be, to go undealt with.

So if you’re asking what are the differences, there’s— If he has explained it or if he has actually discussed it with the Cabinet or with his advisers. He simply has… There’s been no discussion regarding the finer points between the two. But that, you know, this is his position. He has already declared his position.

Mr. Morong: Sir, may nabanggit na ba siya sa Cabinet meetings, how he felt about this case?

PRESIDENTIAL SPOKESPERSON ABELLA: Which one?

Mr. Morong: The Sta. Isabel?

PRESIDENTIAL SPOKESPERSON ABELLA: No, there hasn’t been any Cabinet meetings since then. But he has certainly said, he’s express his severe displeasure regarding the matter in his public speeches.

Mr. Morong: Sir, mag-shift lang ako ng topic. ‘Yung sa… pagdating sa nag-slide down tayo sir sa Corruption Index ng nine places down. So any comment lang sir? Reception?

PRESIDENTIAL SPOKESPERSON ABELLA: Well… When also if you noticed, if it does also the numbers increased. The number of a… the number of countries has increased.

So the so-called decrease maybe relative but this is also, I would say that this is also a situation in which we’re seeing that the continuing operations, the continuing operations are revealing the actual depth of crime, corruption and situation of… and law and order in the Philippines.

Ms. Andolong: Sir, will there be any action or directive from the Palace following Senator Ping Lacson’s… when he showed the video of supposedly police officers planting shabu in areas that they were raiding?

Are you… Do you want an investigation on this? Is there a directive to the PNP to look into officers engaged in these acts?

PRESIDENTIAL SPOKESPERSON ABELLA: Alright. In terms of actual directive, we have not heard any, any new directives. But pursuant to the, to the actual direction that the President has given, if this is part of his, this is his part of his agenda, his three-point agenda that he wants to deal of course with inclusive poverty, which is why we have the tax reform explanation here.

And secondly, also to the reduction of crime, corruption and the illegal drugs. So this is going to be part of that. We assumed that for example if… in a sense, it’s no surprise, it’s a surprise that we discovered these things. but definitely, this is, this is in alignment with the President’s efforts to deal with crime and corruption, especially within government.

Mr. Morong: Doon muna tayo sir sa South Korean killing. There was a, there is a South Korean presidential candidate Moon Jae-in and he said that what happened to his compatriot is a diplomatic disrespect and he’s surprised that the President instead of castigating the police chief, went to his birthday and seemed to coddle him.

PRESIDENTIAL SPOKESPERSON ABELLA: So your question is?

Mr. Morong: What do you think of that statement, sir that the President, parang the action of the President hindi nila nagustuhan na parang kinampihan pa ‘yung chief of police, when we have this kind of situation?

PRESIDENTIAL SPOKESPERSON ABELLA: Well, we understand where the South Koreans are coming from. They feel deeply about it. And the President has also expressed his deepest and profoundest apologies.

However also, let us be cognizant of the fact that it’s also being spoken by a political hopeful. So it may be nuance by some interests.

Mr. Morong: 84 percent sir ng Filipinos say we should assert our rights, our WPS?

PRESIDENTIAL SPOKESPERSON ABELLA: Yes, already there has been a statement by the President… by the Secretary of National Defense regarding that.

The President has said that he’s not giving up our claims in the EEZ according UNCLOS. It just so happened that the Chinese government has reclaimed three of the islands there and they also have a presence in Scarborough.

The Secretary stated, in the dialect, he said: na huwag nilang… huwag na nila tayong gawin proxy. Is because, if you remember, when the ruling was promulgated in July 12, we got a lot of bragging from countries around that we should forcefully assert the ruling in favor of the Philippines.

But our government shows instead a soft landing. The President chose to have a bilateral talk with the Chinese government, which gave as some advantage.

In other words, what the President is doing it, he’s asserting it. But in a different diplomatic style. ●