March 2014

By Perry Diaz

BIR Commissioner Kim Henares

BIR Commissioner Kim Henares

Recently, members of the House of Representatives – the people’s representatives – blasted Bureau of Internal Revenue (BIR) Commissioner Kim Henares for suggesting to repeal or amend Republic Act (RA) 1405, also known as the Bank Secrecy Law, in order for the BIR to look into taxpayers’ bank accounts. Henares said that repealing or amending the law is needed to give BIR greater access to bank accounts suspected tax evaders. She said that the law hinders the government’s investigation of suspected money launderers and corrupt officials who’d use banks to hide their ill-gotten wealth. She believes that repealing or amending the law could help detect tax leakages, improve collections, and increase voluntary compliance.

Money-exchangeSection 2 of RA 1405 states: “All deposits of whatever nature with banks or banking institutions in the Philippines including investments in bonds issued by the Government of the Philippines, its political subdivisions and its instrumentalities, are hereby considered as of an absolutely confidential nature and may not be examined, inquired or looked into by any person, government official, bureau or office, except upon written permission of the depositor, or in cases of impeachment, or upon order of a competent court in cases of bribery or dereliction of duty of public officials, or in cases where the money deposited or invested is the subject matter of the litigation.”

Little did Henares know that her move to repeal or amend RA 1405 would meet virulent resistance from lawmakers who are masquerading as protectors of the people’s wealth or is it the unexplained wealth of corrupt officials that they’re really protecting?

Pork barrel scam

Napoles, Enrile, Estrada, and Revilla

Napoles, Enrile, Estrada, and Revilla

The recent scandal involving the Priority Development Assistance Fund (PDAF) — or pork barrel — typified the modus operandi of kleptocrats in Congress who are stealing from pork barrel funds earmarked for projects that would benefit the people. And what is really disgusting is none of them had ever admitted to stealing from their pork barrel allocations nor had they expressed sympathy for the people who had suffered from the gigantic scams perpetrated by these lawmakers who are in cahoots with the biggest scam operator that inhabited this hellhole we love to call Inang Bayan.

But while all these shenanigans are happening, President Benigno “P-Noy” Aquino III touted the government’s “success” in fighting corruption. He even claimed credit for the exposure of the P10-billion pork barrel scam allegedly pulled off by Janet Lim-Napoles who is currently detained for an unrelated crime but has yet to be charged of plunder. Makes one wonder, what’s preventing the government from prosecuting Napoles?

Hiding ill-gotten wealth

Corruption-in-the-Philippines.2In my article, “Institutionalized corruption” (November 21, 2012), I wrote: “In many countries, like the United States, people with ill-gotten wealth deposit their money in banks in Switzerland or the Cayman Islands, where bank secrecy laws protect the identity of depositors. But in the Philippines, a corrupt official, a drug lord or a jueteng operator doesn’t need to go abroad to hide their dirty money. Yep, they can go straight to their local bank and open a foreign currency deposit account and nobody can see it, not even government investigators.

“Known as ‘Foreign Currency Deposit Act of the Philippines,’ Republic Act (RA) 6426’ ‘was signed into law by then President Ferdinand E. Marcos in 1974 during the martial law era. The law states that any information can only be disclosed ‘upon written permission of the depositor.’ Many believe that it was enacted for the purpose of hiding the ill-gotten wealth of Marcos and his cronies.

Speaker Feliciano Belmonte Jr.

Speaker Feliciano Belmonte Jr.

“But RA 6426 survived when the people power revolution toppled the Marcos dictatorship. Oddly, it remains in the books to this day. Perhaps, the lawmakers find it useful.” Yes, indeed.

Is it then surprising that the legislators are against repealing or amending RA 1405 and RA 6426? Speaker Feliciano Belmonte Jr. said that scuttling the bank secrecy law could result in capital flight, as it would affect depositors’ confidence in the banking system. In the Senate, Sen. Sergio Osmeña III was the only one who expressed support for the proposed amendment.

Freedom of information

Another bill that has been tossed around like a ping-pong ball was the Freedom of Information (FOI) bill. FOI has been debated in Congress for the past 10 years. When P-Noy ran for President in 2010, he promised to sign an FOI bill into law if he won the election. But after he was sworn in as President, he showed reluctance in supporting it. However, he recently said that he wanted the FOI bill passed after the Senate passed it. The question is: will it pass in the House? Some congressmen were saying that without P-Noy’s active support for FOI, it will fail to pass. Many believe that P-Noy was just paying lip service to FOI.

FOI.5If P-Noy really wants to fight corruption, he needs more than just slogans to do it. He should – nay, must — have the ability to track where the dirty or ill-gotten money went. And to do that, he needs tools like FOI and anti-money laundering law to catch the culprits. And only then can he claim that he is really serious about fighting corruption.

The bottom line is that unless P-Noy actively supports and encourages his allies in Congress to repeal or amend RA 1405 and RA 6426, his reform agenda will fail and he might as well kiss it goodbye.

At the end of the day, for as long as the Bank Secrecy Law and the Foreign Currency Deposit Act are in effect, corruption will flourish with impunity.


Associated Press

In this handout photo released by the Malacanang Photo Bureau, President Benigno S. Aquino III, back row secon from right, Malaysian Prime Minister Najib Razak, back row second from left, Moro Islamic Liberation Front (MILF) Chairman, Al Haj Murad Ebrahim, back row left, and Secretary Teresita Quintos-Deles, seated left, Presidential Adviser on the Peace Process, back row right, witness the signing of the Comprehensive Agreement on the Bangsamoro (CAB) by MILF chief negotiator Mohagher Iqbal, Datu Tengku Gnafar, seated center, and Miriam Coronel Ferrer, seated right, of the Philippine government in a ceremony at the Malacanang Presidential Palace in Manila, Philippines on Thursday March 27, 2014. The Philippine government signed a peace accord with the country's largest Muslim rebel group on Thursday, the culmination of years of negotiations and a significant political achievement for President Aquino.(AP Photo/Malacanang Photo Bureau, Benhur Arcayan) The Associated Press

In this handout photo released by the Malacanang Photo Bureau, President Benigno S. Aquino III, back row secon from right, Malaysian Prime Minister Najib Razak, back row second from left, Moro Islamic Liberation Front (MILF) Chairman, Al Haj Murad Ebrahim, back row left, and Secretary Teresita Quintos-Deles, seated left, Presidential Adviser on the Peace Process, back row right, witness the signing of the Comprehensive Agreement on the Bangsamoro (CAB) by MILF chief negotiator Mohagher Iqbal, Datu Tengku Gnafar, seated center, and Miriam Coronel Ferrer, seated right, of the Philippine government in a ceremony at the Malacanang Presidential Palace in Manila, Philippines on Thursday March 27, 2014. The Philippine government signed a peace accord with the country’s largest Muslim rebel group on Thursday, the culmination of years of negotiations and a significant political achievement for President Aquino.(AP Photo/Malacanang Photo Bureau, Benhur Arcayan) The Associated Press

MANILA, Philippines (AP) — The Philippine government signed a peace accord with the country’s largest Muslim rebel group on Thursday, the culmination of years of negotiations and a significant political achievement for President Benigno Aquino III.

The deal grants largely Muslim areas of the southern Mindanao region greater political autonomy in exchange for an end to armed rebellion. But it will not stop all violence in a part of the country long plagued by lawlessness, poverty and Islamist insurgency. Implementing the ambitious accord also will be challenging.

Aquino and leaders of the Moro Islamic Liberation Front witnessed the signing of the agreement in the presidential palace in Manila. Malaysian Prime Minister Najib Razak, whose country brokered the peace talks, attended the ceremony.

“In signing this agreement, the two sides have looked not to the problems of the past, but to the promise of the future,” Najib said. “After so many years of conflict, and so many lives lost, it is a momentous act of courage.”

About 1,000 people attended the signing ceremonies, including guerrilla commanders wearing business suits instead of military uniforms who were stepping into the palace for the first time.

“For generations, fellow Filipinos in the (southern Mindanao) region were embroiled in a cycle of poverty, injustice, and violence,” Aquino said. “If we are to truly address the root causes of conflict, we must close the gap between the region and the rest of Filipino society.”

Some in the crowd wiped away tears as presidential peace adviser Teresita Deles said in a speech, her own voice breaking: “No more war! … Enough!”

The peace accord concludes formal negotiations that began in 2001. A cease-fire agreement had been in place since 1997 and has been largely observed by both sides.

More than 120,000 people have died in separatist violence since the 1970s in Mindanao, the main southern Philippine island. It is home to most of the country’s 5 million Muslims, but Christians remain the overall majority.

Previous presidents, including Corazon Aquino, Aquino’s mother, tried but failed to resolve the conflict, which has stunted growth in the region and helped foster Islamic extremism in the country and elsewhere in Southeast Asia.

Other insurgent groups in the south have vowed to keep fighting for full independence. The region is also home to the Abu Sayyaf, a Muslim extremist network with international links that the Philippine army is battling with American support.

“I will not let peace be snatched from my people again,” Aquino said. “Not now, when we have already undertaken the most difficult and most significant steps to achieve it. Those who want to test the resolve of the state will be met with a firm response based on righteousness and justice.”

Under the accord, called the Comprehensive Agreement on the Bangsamoro, the Moro Islamic Liberation Front agreed to end violence and a demand for separate state in exchange for broader autonomy. An existing five-province Muslim autonomous region is to be replaced by a more powerful, better-funded and potentially larger region to be called Bangsamoro.

Bangsamoro is the term used by the rebels to refer to Muslims as well as other ethnic groups in the southern Philippines.

Rebel chairman Murad Ibrahim lauded the “shared victory of the Bangsamoro and the Filipino people.”

He said the agreement “finally brings with it the restoration of the identity, powers and resources of the Bangsamoro. These three things which have been ours since time immemorial unjustly taken through colonization and occupation are now returned to us.”

A 15-member commission comprising rebel and government appointees is to draft a law creating the new autonomous region.

The deal calls for rebel arms to be put “beyond use” by 2016, chief government negotiator Miriam Ferrer said. The decommissioning of rebel forces and weapons has already been flagged as a potential stumbling block in a region where even politicians have private armies and guns are easy to obtain.

U.S. and EU-funded conflict resolution groups have been backing the peace process. International monitoring groups have long been in the region and will continue to support the deal for years to come.

The Catholic Bishops Conference of the Philippines welcomed the agreement and urged the government and the Moro group to reach out to those “antagonistic” toward the peace deal.

“We pray that this first courageous breakthrough will be followed by more steps leading to true and lasting peace in Mindanao,” said Archbishop Socrates Villegas, the group’s president.

The national government and the new Moro government to be formed will have to counter four other armed Muslim groups, including a breakaway faction called the Bangsamoro Islamic Freedom Fighters.

Kristian Herbolzheimer, a director of Conciliation Resources, a conflict-resolution group, said even small numbers of fighters could potentially derail the accord.

“Success will depend very much on the performance of the peace process. If they are able to deliver something to the people to show that change is coming, I think that will be major deterrent against any threat,” he said.

A 1996 accord with the then main rebel group did not end the fighting because guerrilla fighters under its chairman, Nur Misuari, continued to hold on to their weapons. Misuari’s followers and government forces clashed in September 2013 in southern Zamboanga city, killing more than 200 people.


Associated Press writers Jim Gomez and Teresa Cerajano in Manila and Chris Brummitt in Hanoi, Vietnam, contributed to this report.

By Aurea Calica and Delon Porcalla
The Philippine Star

President Aquino and Malaysian Prime Minister Najib Razak look on as peace panel heads Mohagher Iqbal and Miriam Coronel-Ferrer shake hands following the signing of the Comprehensive Agreement on the Bangsamoro at Malacañang yesterday. Also in photo are MILF chairman Al Haj Murad Ebrahim, facilitator Tengku Dato Abdul Ghafar and presidential adviser on the peace process Teresita Quintos-Deles.

President Aquino and Malaysian Prime Minister Najib Razak look on as peace panel heads Mohagher Iqbal and Miriam Coronel-Ferrer shake hands following the signing of the Comprehensive Agreement on the Bangsamoro at Malacañang yesterday. Also in photo are MILF chairman Al Haj Murad Ebrahim, facilitator Tengku Dato Abdul Ghafar and presidential adviser on the peace process Teresita Quintos-Deles.

MANILA, Philippines – After 17 years of an often bloody struggle, the government and Moro Islamic Liberation Front (MILF) yesterday signed a comprehensive agreement for lasting peace in Mindanao.

“Today, we celebrate the shared victory of the Filipino and Bangsamoro people. This is a fitting solution to the undying aspiration of the Bangsamoro,” MILF chairman Al Haj Murad Ebrahim said as he expressed gratification for the peace pact.

President Aquino said the peace agreement could only be sustained through vigilance and perseverance.

He shared his vision for Mindanao as the Comprehensive Agreement on the Bangsamoro (CAB) was signed between the government and the MILF as a vanguard against the spread of extremism and to help foster an economic gateway in the Association of Southeast Asian nations (ASEAN).

He rallied people to remain vigilant and do their part in making sure these dreams for the Land of Promise would happen.

“What is being presented before us now is a path that can lead to a permanent change in the status quo in Muslim Mindanao. But as with all change, its success depends on our continuous vigilance. We must admit that there are those who will champion the status quo to preserve themselves in positions of power and wealth. Maintaining this requires holding back the majority, for any sign of individual or collective advancement is a threat,” Aquino said.

Malaysian Prime Minister Najib Abdul Razak – who left Kuala Lumpur to witness yesterday’s signing of the peace agreement – assured the Philippine government of their continued help in achieving peace.

“This promise stands, for as long as it is needed. Malaysia remains a partner for peace and development,” Najib said.

He said that four decades of armed conflict in Mindanao only “robbed a generation of healthcare, of education, of income.”

“This peace process has strengthened the bond of trust between our countries. As we look ahead to a brighter future for Bangsamoro, I pledge Malaysia’s continued support,” Najib said.

Amid the festive atmosphere during the signing of the agreement at the sprawling Kalayaan grounds in Malacañang Palace, attended by more than a thousand people from different parts of the world, Aquino laid down in his speech the work ahead without downplaying what had been achieved so far.

The majority deserves the chance to improve their lot in life, Aquino said, and urged everyone not to miss this bandwagon for peace and prosperity again.

“To those who will not join us, I ask: Are you really that confident that we will have another singular opportunity like the one we have today? Do you really think that the confluence of factors such that exists today will happen again – when the Filipino people and their government are committed to redressing a historic injustice; where the international community has thrown its full support behind the achievement of peace; and when we have already fixed an electoral system that was designed to subvert the sovereign will of the people?” Aquino said.

“May this also stand as a warning to those who wish to derail our path to a final, lasting peace, those who wish to sow divisiveness for self-interest, and those who continue to wield arms to pursue their own agendas: So many people have suffered for so long; so many of our stakeholders have worked so hard to arrive at this point. I will not let peace be snatched from my people again. Not now, when we have already undertaken the most difficult and most significant steps to achieve it. Those who want to test the resolve of the state will be met with a firm response based on righteousness and justice,” Aquino said.

‘Bridge of moderation’

Aquino shared his gratefulness with the Filipinos and the international community during the historic occasion, stressing that there would be no true peace and development in the country without Mindanao experiencing these.

If the momentum for peace is sustained, Aquino said the MILF would have shed its identity as a military force by 2016 and transformed itself into a political entity, casting its stake in democracy by vying for seats in the Bangsamoro elections.

“The Bangsamoro shall form a perimeter of vigilance against the spread of extremism; it shall act as a bridge of moderation among the great faiths of the various constituencies in ASEAN. From this shared security, we shall enhance the era of prosperity that is dawning upon our region, and harness its energies towards creating a regime of opportunity and inclusivity where no one is left behind,” Aquino said.

“As the Bangsamoro matures, it shall serve as the gateway to trade, investment and cultural exchanges within the Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area and its environs – igniting a virtuous cycle of security, development and equitable progress for the peoples of the entire region. This is our vision for the Bangsamoro,” the President said.

And just as the agreement signed did not appear out of thin air, Aquino said so too would the next steps have to involve the same trust and long-term thinking that brought the Philippines to this shared triumph.

Role of Congress

At this point, Aquino said the Bangsamoro Transition Commission was hard at work drafting a Bangsamoro Basic Law that would be equitable, practical and empowering, and serve the interests of the entire nation.

“It is a law that will have to pass my personal muster as a President pledged to do justice to all, before it is submitted to Congress. My administration will go all out to forge a principled consensus for enduring security and prosperity; I expect the deliberations in Congress to be characterized by a sincere desire to improve on the Bangsamoro Basic Law – and not by self-interest that only aims to perpetuate an untenable status quo,” Aquino said.

He said the mission now was to draft and pass this law so that it would be presented to the people for ratification in a plebiscite.

The goal is to have the Bangsamoro Transition Authority in place by 2015, when it will serve as the interim Bangsamoro government until the elections in 2016, Aquino said.

“In this manner, the people themselves will turn the tide of strife into an era of peace and equitable progress; they themselves will prove that the democratic space is vast enough to address every Filipino’s grievances and concerns,” Aquino said.

The leadership of the Senate has given assurance that the Bangsamoro Basic Law bill would be given the utmost priority in its legislative agenda once it is submitted to the chamber for approval.

Senate President Franklin Drilon called on his colleagues to take an active role in the crafting of the Bangsamoro Basic Law by participating in the debates and making sure that all bases are covered in the final version.

“We cannot afford to err on this most sought after piece of legislation, if we truly want to secure this peace in Mindanao which we have now realized after decades of hostilities,” he said.

‘Crowning glory’

Murad, for his part, said the CAB was the “crowning glory” of their 40-year struggle to seek independence in Mindanao.

“This is the crowning glory of our struggle,” the veteran Muslim rebel leader said.

Murad also assured other factions among Muslim rebels in Mindanao that the MILF will not claim sole credit or monopoly over the historic peace agreement, saying it belongs to all Bangsamoro people.

“MILF will not and never claim sole ownership of the Bangsamoro. It will not be a government of MILF but a government of the Bangsamoro people,” Murad said.

He said the MILF are merely “gatekeepers” of the pact.

Their only interest is the full implementation of the reforms that the Aquino administration has promised.

MILF vice chairman for political affairs Ghazali Jaafar said the signing of CAB signifies a new beginning for the partnership between the government and the MILF that will create the Bangsamoro government.

Jaafar has been at the forefront of the Bangsamoro struggle and was among those who were in the early stages of the peace negotiation in 1997.

Jaafar said he could not hide his happiness when he woke up yesterday to a “new morning” with the thought of the signing of the CAB later in the afternoon.

War weary

Presidential Adviser on the Peace Process Teresita Deles also verbalized what people were possibly thinking about the Mindanao conflict all this time: “Enough. We are all tired of it.” – Pia Lee-Brago, Marvin Sy, Edith Regalado

By Federico D. Pascual jr.
The Philippine Star 

Government troops and MILF rebels (File Photo)

Government troops and MILF rebels (File Photo)

WHAT PEACE?: This observer and 74 percent of respondents in a PhilSTAR survey believe that the scheduled signing today of a supposedly final peace agreement with the Moro Islamic Liberation Front will not end the Moro armed struggle in Mindanao.

If the MILF leadership cannot even unite and discipline its own followers, how can it bring peace and progress to the entire Muslim Mindanao, even with the help of Malaysia and its friends in Malacañang?

The political and economic flowering of that island of promise down South is not in the hands of the MILF minority but rests on the consensus of a wider community that embraces diverse, although dominantly Muslim, stakeholders.

The basic question is still unanswered: By what democratic process was the 10,000-strong MILF chosen as the authentic voice and representative of the four million Muslim population?

* * *

MYOPIC VIEW: The Aquino administration has allowed the internationalization of the Mindanao problem, actually a domestic issue, but has failed or refused to find solutions beyond the tight cordon of the MILF.

While the MILF is part of the solution, it is not the solution. It is myopic of Malacañang to think it is.

Having coddled the MILF, Malacañang now needs billions to buy off or mollify many of the other elements awaiting their deserved recognition and participation in hammering out what is being passed off as the Final Solution.

An indication they are not sure that enough has been spent or done to ensure peace is their placing military and police forces in Mindanao on red alert and staging today’s show in the sterilized Palace grounds instead of a supposedly pacified MILF redoubt.

* * *

GIFT TO MILF: The Bangsamoro to be created from the carcass of the Autonomous Region of Muslim Mindanao — which President Aquino has interred in his mind as a failed experiment — is a gift to the MILF, not to the larger population.

Ignoring other sectors and rebel groups, Malacañang chose to talk only to the MILF, with Malaysia whispering behind the curtains as facilitator.

Only the MILF, and no other secessionist faction, had a ready draft of what it wanted and Malacañang negotiators chewed it as the only working copy from the other side.

In the preparatory commission created to draft the Bangsamoro Basic Act (the new state’s Constitution), of the 15 members, eight (majority) are all MILF representatives, including the chairman. With open eyes, Malacañang was outnumbered and outmaneuvered.

* * *

LEGAL BASIS: There are no members from the Moro National Liberation Front with which the government has an agreement, none from the Sultanate of Sulu whose Sabah claim is in danger of being sold out, and none from the respected Muslim families, scholars and religious leaders.

Why only the MILF? Because the MILF’s being central to the creation of the proposed Bangsamoro was suggested by foreign governments too influential to ignore.

It seems most people have forgotten that the ARMM’s creation was mandated by the Cory Constitution of 1987 together with the Cordillera Autonomous Region which President Aquino allows to continue while dismantling the ARMM.

While the ARMM has constitutional basis, the Bangsamoro has none. Precisely, they are still drafting the basic law that will give it a semblance of legality.

* * *

NO CONSULTATIONS: The talks have been an MILF show all throughout. And what is likely to emerge when the closed door opens is an MILF federal-type state, with other consenting elements given non-essential roles and concessions.

It is sad, as we have pointed out elsewhere, that the Palace has placed the cart before the horse. From the start, it devoted its attention to the MILF, hardly heeding what other elements, including congressional leaders, may have wanted to contribute.

It is only now that the Palace is pretending to consult them. Sensing objections, it is now trying to talk to sectors outside the MILF – only now when the Bangsamoro is almost a done deal except for the needed legislation to formalize it.

* * *

NO GUARANTEE: Since the MILF does not represent or speak for all Muslim sectors and rebel groups, what is the guarantee that it can enforce the peace and efficiently manage the economic uplift of the region?

Assuming the MNLF and the Bangsamoro Islamic Freedom Fighters (the prickly splinter plucked from the rib of the MILF) agree not to fire a shot while the signing zarzuela in Malacañang is being staged, what guarantee is there that they will not go berserk later?

Having seen that it pays to rebel, that violence does pay, will not other armed bands not party to the MILF deal follow the same lucrative path that the MNLF and later the MILF have followed?

After laying down their arms as agreed in the annex on normalization, how can the MILF enforce discipline and keep the peace among those who refuse to yield their weapons?

* * *

S.C. INTERVENTION: Both sides and their cheering squads keep muttering the mantra of empowerment. The truth is that among the folk to whom the message is being beamed, real empowerment is wielding a weapon and waving lots of money.

President Aquino may have bitten off more than he could chew, that he led off with the wrong foot talking only to the MILF, and stumbled on, led on by wily manipulators.

There is not much we can do now except to pray that the Supreme Court will intervene as it did when then President Gloria Arroyo was led into a similar political odyssey — until she woke up in the nick of time.

* * *

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By Jess Diaz
The Philippine Star 

Feliciano-Belmonte.2MANILA, Philippines – The House of Representatives will not allow the lifting of the secrecy of bank deposits and other transactions, Speaker Feliciano Belmonte Jr. said yesterday.

He said scuttling such protection could result in capital flight, as it would affect depositors’ confidence in the banking system.

“I am against it. Certainly, volume of deposits will be affected. We should not allow the erosion of public confidence in our banking industry,” he said.

Belmonte was commenting on the proposal of Commissioner Kim Henares of the Bureau of Internal Revenue (BIR) to lift the secrecy of bank transactions to make it easier for her agency to flush out tax evaders.

Other House leaders echoed Belmonte’s fears.

Isabela Rep. Giorgidi Aggabao, a deputy speaker, said Congress would be committing a “big mistake” if it agrees to Henares’ proposal.

“I think that will be a big mistake. If the veil of bank secrecy is lifted, I am almost sure capital flight would ensue,” he said.

Marikina Rep. Romero Quimbo said the legislature might violate the citizens’ constitutional right to privacy if it lifts the secrecy of bank deposits.

“One of these rights under the right to privacy is the secrecy of bank deposits. We cannot allow a carte blanche and unqualified access by the BIR to taxpayers’ bank deposits. There must be very specific and carefully crafted grounds for the BIR to start opening bank accounts, otherwise this will be abused,” he said.

“For instance, there must be some degree of determination that a taxpayer is already found prima facie to have been evading taxes before you can open bank accounts. Anything more liberal than this will be deemed unconstitutional,” he said.

Quimbo chairs the committee on ways and means, where any BIR proposal is scrutinized.

Rep. Luzviminda Ilagan of party-list group Gabriela described Henares’ suggestion as “dangerous.”

“It sends a chilling effect to investors. Money laundering abroad will become an option that can impact negatively on our economy. Privacy is violated. The BIR should focus on the big violators,” she said.

Valenzuela Rep. Magtanggol Gunigundo, a deputy majority leader, said he does not see any reason why Republic Act 1405, or the Bank Secrecy Law, should be disturbed at this time.

He said he does not understand why Henares wants to pry bank accounts open directly or indirectly.

– – – – – – – – – – – – – – –


Henares’ move to junk bank secrecy law nixed

Source: The Daily Tribune

Kim Henares

Kim Henares

A ranking member of the House of Representatives yesterday blasted Bureau of Internal Revenue (BIR) chief Kim Henares for her attempt to do away with the bank secrecy law in order for the agency to pry into the bank accounts of taxpayers.

Rep. Magtanggol Gunigundo, during the weekly Ugnayan sa Batasan Media Forum, reminded Henares that bank records are highly confidential and that information about bank depositors should not be revealed to third parties and even to law enforcers.

“The BIR is not thinking out of the box. The problem with its attitude is that it treats taxpayers as tax evaders. Taxpayers are nation builders. They should be treated with dignity and respect,” Gunigundo said yesterday, adding that under the Bank Secrecy law, bank officials are prohibited from disclosing the information of their clients to third parties, even to law enforcers. Such secrecy is only waived if the client gives the bank the consent to divulge his or her account details or if the client is being prosecuted for grave crimes such as plunder. The grave crimes, however, do not include tax evasion.

“When Congress drafted the Bank Secrecy law in the 1950s, there was a debate on whether we run after tax evaders or prevent individuals from hoarding money. What carried greater weight is the effect of individuals hoarding money in our economy. That is why bank records are absolutely confidential,” Gunigundo explained.
The Valenzuela City lawmaker stressed that a good tax regime has to impose simple tax policies instead of stifling the taxpayers.

“Taxpayers should not be lumped together as tax evaders. Otherwise, who would put money in our banks? People will keep their money to themselves. Money won’t circulate. Worse, foreign capital will leave the country,” Gunigundo stressed.

Ako Bicol Rep. Rodel Batocabe had opposed Henares’ proposal. He said that lifting the Bank Secrecy law for the BIR is not good for the country.

House Deputy Speaker Giorgidi Aggabao said Henares’ move is extreme.

“The solution of the BIR to ferret out tax dodgers by lifting the Bank Secrecy law is akin to using a sledgehammer to kill an ant. The solution is extreme and grossly disproportionate,” Aggabao said.

“I am not in favor that we lift our Bank Secrecy policy because it will erode the confidence of the public in our banking system. It is not the job of the banks to go after tax cheats. The only way for banks to help the BIR is through the AMLA,” Batocabe said referring to the Anti-Money Laundering Act which provides for a monitoring system for transactions over P500,000.

In the Senate, however, one senator at least backed Henares’ move to lift the bank secrecy law, saying he has always been in favor of lifting it but acknowledged that such a congressional measures will never get passed in the Senate and the House.

Sen. Sergio Osmeña lll stressed that he agreed that lifting the bank secrecy law would help improve tax collection as well as the government’s fight against tax fraud due to the the difficulty of going after tax evaders in the Philippines due to existing laws, as compared to other countries.

“In our country, when you say I’m violating the law, you have to prove it. When you say I’m evading taxes, you have to prove it. In America, it’s the other way around. When they say you’re evading taxes, I have to prove that I earned it and how I earned it so, so there it is easier,” Osmena said.

He said the House should pass the lifting of the bank secrecy act first, saying “I want them (House) to pass it first because if this (bill) is brought to the Senate, we can pass this here. But if the House does not act on this (bill) then it is just a waste of time.”

Gerry Baldo and Ange M. Rosales


GMA News

Leila de Lima and Janet Lim Napoles

Leila de Lima and Janet Lim Napoles

The former husband of Justice Secretary Leila de Lima accompanied pork barrel scam suspect Janet Lim-Napoles when she visited the National Bureau of Investigation (NBI) headquarters prior to her surrender last year.

Plaridel Bohol

Plaridel Bohol

This was according to dismissed NBI deputy director Reynaldo Esmeralda, who told reporters that Napoles was accompanied by De Lima’s erstwhile husband, lawyer Plaridel Bohol, and two other lawyers, including Freddie Villamor, when she met with then-NBI director Nonnatus Rojas.

“They were there for Napoles,” said Esmeralda of the three lawyers.

Esmeralda and fellow dismissed NBI deputy director Ruel Lasala earlier presented a closed-circuit television footage of Napoles’ visit to the NBI. The date indicated in the footage was September 2013, but Esmeralda said the meeting took place in May 2013 but the CCTV camera failed to synch the actual date that time.

Ad hoc committee probe

Reynaldo Esmeralda

Reynaldo Esmeralda

On Wednesday, Esmeralda and Lasala faced members of an ad hoc committee from the NBI who are investigating the supposed meeting with Napoles.

De Lima refused to comment on the supposed involvement of her former husband in Napoles’ visit at the NBI.

“I don’t want to comment on that because of the ongoing ad hoc committee investigation. I’ve already been aware of that long before but I don’t want to say anything that might affect the NBI investigation,” said De Lima.

Apart from Rojas, Esmeralda and Lasala confirmed that the second NBI official who had met with Napoles while she was being pursued by arresting authorities was NBI Deputy Director Rafael Ragos.

Esmeralda said Ragos had met with Napoles three times although none of the meeting was caught on CCTV camera. He said one of the meetings took place at the Manila Hotel.

“And he was proud telling us na siya ang nag-advice kay Napoles na sumulat kay Presidente,” Esmeralda said.

Ragos also refused to comment on the issue: “In deference sa ad hoc committee, sa kanila muna ako sasagot regarding statement in Esmeralda. I hope you understand in due time sasagot po ako.”

After facing the ad hoc committee members, Lasala told reporters: “We are satisfied the way the NBI is handling the probe. They are very impartial. We want to reiterate that we have nothing to do with Napoles and that our conscience is clear. We have no connections [with her].”

Clear our names

Esmeralda, meanwhile, said he only wants his and Lasala’s names be cleared in the controversy as he plans to retire afterwards.

Esmeralda and Lasala also said that the NBI panel would soon be issuing subpoenas to three NBI agents the two had identified as having knowledge of the meetings with Napoles.

Asked why it took them almost a year before they decided to release the CCTV footage to the public, Esmeralda said he was forced to show it only now after they were dismissed due to accusations they are conspiring with Napoles.

“Kaya tiniyaga kong i-review ang CCTV footage,” said Esmeralda, who was NBI deputy director for intelligence services.

Rojas had earlier confirmed that Napoles had once dropped by his office while he was still NBI chief. He resigned from the NBI last September following reports that two of his deputies had tipped off Napoles about her impending arrest.

Authorities had failed to arrest Napoles, until she surrendered in August that year.

A criminal complaint had been filed against Napoles for allegedly holding her employee Benhur Luy, a whistleblower in the pork barrel scam, against his will.

Rojas said the eventual upholding of the illegal detention complaint against Napoles and the filing of a case in court were the results of “exhaustive documents to the investigating prosecutor.” — KBK, GMA News

By Jaime Laude
The Philippine Star

Filipino Marines are stationed aboard the grounded Philippine naval vessel BRP Sierra Madre

Filipino Marines are stationed aboard the grounded Philippine naval vessel BRP Sierra Madre

MANILA – Despite harassments from China, the Philippines is determined to keep its small military detachment on Ayungin Shoal stationed on a grounded World War II era landing ship, Defense Secretary Voltaire Gazmin said yesterday.

Gazmin declined to discuss details of the government’s action plan for keeping the military’s precarious hold on the garrison but said it’s the mandate of the armed forces to protect and preserve the country’s territorial integrity.

“When it comes to issues involving Ayungin Shoal, you talk with the Department of Foreign Affairs because if I take up this issue, people will get mad at me,” the defense chief said on the sidelines of the Philippine Army founding anniversary celebration held at Fort Bonifaco, Taguig City. When pressed to elaborate, he said, “It is within our mandate to protect and secure what is ours.”

A senior security official said the Navy is conducting repairs in the rundown BRP Sierra Madre to keep it intact and safe for a handful of Marines assigned to guard the shoal, which is well within the country’s exclusive economic zone.

“There’s no plan to put up any structures in Ayungin. What we are doing there is conducting repairs inside the ship to keep it from disintegrating,” the security official, who asked not be named, said.

He said steel joints and beams inside BRP Sierra Madre are deteriorating and if not immediately repaired, the vessel may just collapse.

“We’re not leaving the place because it’s ours,” the official said.

He said the detachment in Ayungin as well as those in other garrisons being coveted by China would be given provisions regularly.

Ayungin-Shoal.2China is demanding the removal of BRP Sierra Madre from Ayungin and even threatening to hold the Philippines responsible – in case hostilities flare up – for its “illegal occupation.”

Ayungin Shoal is situated along the supply route from mainland Palawan to Kalayaan town, an island municipality located in Pag-Asa Island in the hotly-contested Spratlys.

Ayungin is also several nautical miles away from the oil-rich Recto Bank, also known as Reed Bank. – With Aurea Calica, Pia Lee-Brago

By Bobit S. Avila
The Philippine Star 

Subic Bay

Subic Bay

June 15, 2014 marks the 23rd anniversary of the eruption of Mt. Pinatubo, considered one of the major natural disasters that the world had ever seen. Three months later, the Philippine Senate in a historic vote of 12 to 11 voted to reject the new 10-year US Bases Treaty that the Bush Administration prepared with the Philippine government headed by then President Cory Aquino. Of course the leftists and Communist Party of the Philippines (CPP) were overjoyed that finally, the hated American imperialists were booted out of their military bases in the Philippines.

But in my book, to say that the 12 Philippine Senators is solely responsible for rejecting the new US Bases Treaty isn’t exactly the whole truth. The real truth why the Americans had to leave their US military bases in the Philippines happened three months earlier when Mt. Pinatubo erupted and sent the US military to hurriedly depart out of Subic Naval Base and Clark Air Force Base. The only thing that the 12 Senators did was stab the dead corpse of this US Bases Treaty.

For the record, I supported the continued stay of the US military bases in the Philippines for the simple reason that US military bases produce jobs for many Filipinos who are directly hired by either the US Navy or the US Air Force. Back in the old days, before the era of the Internet, we would learn about the happenings on the US military via the sidewalk stores in Avenida Rizal where I had a favorite magazine dealer who sold me my favorite Air Force magazines and the US Navy’s Proceedings magazines. That disappeared when the Yanks pulled out from Clark and Subic.

But we know well enough that the presence of US servicemen in our country had a huge negative effect on our women folk. If at all, I wanted the Americans out, it was only for this reason… that the US Servicemen exploited the poverty of our Filipino women. This was the leftist line and I also took it because I saw it all when I visited the US Naval Base in Subic and my tour guide was no less than Mayor Richard “Dick” Gordon. I wasn’t a journalist at that time, but the Avila family and the Gordon family had the same business — moviehouses — and that is why I already knew Dick Gordon then.

So when Mt. Pinatubo blew up (I was a witness to the June 16 eruption because I just came from Dagupan City on my way back to Manila for my flight to Cebu and it was pitch dark at 3 p.m.) the Americans literally abandoned their bases in Clark and Subic and at that time, nobody knew if they would ever return because of the enormous cost of rehabilitating those bases. And, above all, no one knew when the eruptions would end.

But in my book, the biggest casualty of the Americans leaving their bases here was the Philippine military. I remember Filipino Air Force pilots would tell me that whenever they were running out of fuel, all they needed to do is land in Clark or in Subic and get free fuel for their planes. This is not to mention that they also got a lot of spare parts for the Philippine Air Force planes were mostly made in the USA. Today, the Philippine Air Force is a shell of what it used to be… it’s mostly air without a force.

So the big debate that many pundits are having in coffeehouses of Metro Manila is whether the Aquino regime should welcome the Americans back to their bases in Clark and Subic? Of course, this means a new treaty would have to be signed. But at this point, I would rather wait until after the 2016 presidential and senatorial elections because the Philippine Senate today no longer speaks for the Filipino people because they’ve got their hands dirtied by the pork scam and worse, they removed a sitting Chief Justice of the Supreme Court because President Aquino gave them more pork funds. How these monies were given and to whom are in the Senate’s and the Department of Budget (DBM) records.

In a few short weeks, US President Barack Obama is coming for his Asian Tour and I just hope that the US President won’t “pressure” President Aquino for this new treaty because he now controls both houses of Congress, the Senate and the House of Representatives. It would be disastrous for the US to have a new US Bases Treaty signed by members of the Senate that the Filipino people no longer trust.

Sure China today is threatening the Philippines but we never ever had any problem with China until President Aquino took power in Malacañang and refused to apologize to the people of Hong Kong for the Aug. 23, 2010 massacre of eight Hong Kong tourists out on holiday in the Philippines. But after the term of P-Noy, I strongly believe that out ties with China would improve vastly. As for the US Bases in the Philippines my take on this is simple. They can return to their bases here on condition that they would revive the Philippine military to its former glory.

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By Rob Garver 
The Fiscal Times

President Barack Obama makes a statement on Ukraine, Thursday, March 20, 2014, on the South Lawn at the White House in Washington before departing for Florida. President Barack Obama said the US is levying a new round of economic sanctions on individuals in Russia, both inside and outside the government, in retaliation for the Kremlin's actions in Ukraine. He also said he has also signed a new executive order that would allow the U.S. to sanction key sectors of the Russian economy. (AP Photo/Charles Dharapak)

President Barack Obama makes a statement on Ukraine, Thursday, March 20, 2014, on the South Lawn at the White House in Washington before departing for Florida. President Barack Obama said the US is levying a new round of economic sanctions on individuals in Russia, both inside and outside the government, in retaliation for the Kremlin’s actions in Ukraine. He also said he has also signed a new executive order that would allow the U.S. to sanction key sectors of the Russian economy. (AP Photo/Charles Dharapak)

He may not take shirtless horseback rides across the steppes, or have a black belt in judo, but on Thursday, President Obama sent a message to Russian president Vladimir Putin about strength. Specifically, economic strength.

The message was this: Whenever I decide to, I can pick up a pen, and kill a significant financial institution in your country.

Related: Does Putin Want to Carve Up Ukraine and Take the Spoils?

Obama’s victim was the St. Petersburg-based Bank Rossiya.

In response to Russia’s takeover of Ukraine’s Crimean peninsula, Obama yesterday authorized the Treasury Department to add 20 members of Putin’s inner circle, as well as Bank Rossiya, to the Office of Foreign Asset Control’s list of “specially designated nationals.”

The designation makes the individuals named ineligible to do business with U.S. financial institutions, which is likely a major personal inconvenience. But for Bank Rossiya, the designation is something like the kiss of death.

Bank Rossiya is not the largest bank in Russia by a long shot, but its significance lies in its clientele rather than its size. In announcing the sanctions, the Treasury Department noted that Bank Rossiya “is the personal bank for senior officials of the Russian Federation” including members of the Ozero Dacha Cooperative, an exclusive community where members of Putin’s inner circle live. In addition, it provides financial services to the single largest segment of the Russian economy – the oil, gas, and energy sector.

Essentially, this is a credit union for oligarchs, with a side business in financing the Russian energy industry. Its customers include many more high-profile Russians than just those named in the Treasury statement. As of Thursday it is, for all intents and purposes, out of business.

If account holders want to do any kind of business at all short of paying their utility bills and using Russian ATMs, they are going to need to go elsewhere, said experts.

“They’ve got to go to another bank,” said Lester M. Joseph, former principal deputy chief of the Department of Justice’s Asset Forfeiture and Money Laundering section. “That bank is pretty much a pariah.”

Currently the international investigations manager at Wells Fargo Bank, Joseph said when heard about the sanctions on Bank Rossiya, the first thing he did was check to see if it was a customer of his institution. “It is not, thankfully,” he said.

The impact doesn’t stop there, Joseph explained. His next step, which is ongoing, is to see if any banks that Wells Fargo has relationships with are also doing business with Bank Rossiya, and to make sure that none of those banks are routing transactions from the Russian bank through Wells Fargo’s system. “If a transaction from that bank is coming from another bank, we would have to block it,” he said.

Joseph said that every other bank in the U.S. is – or ought to be – doing exactly the same thing.

Considering the volume of international wire transfers that flow through the systems of U.S. banks, he said, this essentially shuts down Bank Rossiya’s access to a huge portion of the worldwide banking system.

As one U.S. official told Reuters, Bank Rossiya will be “frozen out of the dollar.”

And it only gets worse.

Even if governments in other countries don’t join the U.S. in sanctions against Bank Rossiya, their bankers will have a very strong incentive to stop doing business with the Russian bank if they have any ties at all to U.S. institutions – which virtually all significant international banks do.

“If they are doing business with that bank, and they are also doing business in the United States, if something slips through,” then suddenly they’re facing U.S. regulatory action, said Robert Rowe, vice president and senior counsel for the American Bankers Association. International wire traffic is voluminous and largely automated, he said, making it easier for an international bank to simply stop doing business with Bank Rossiya rather than trying to route transactions associated with it away from the U.S.

Rowe said this would affect not only individuals who do their banking at Bank Rossiya, but perhaps more importantly, the oil and gas companies that arrange their trade financing through the bank.

“That’s where it’s going to have an impact,” said Rowe.

Banking experts said that one of the uncertainties surrounding yesterday’s move is how Russia will respond. The Russian government immediately released a widely mocked list of U.S. officials whom it said would be blocked from doing business in Russia.

Politicians named on the list rushed to Twitter to boast about being sanctioned and to leave sarcastic comments about being forced to forgo vacations in Siberia.

However, according to John Byrne, executive vice president of the Association of Certified Anti-Money Laundering Specialists – a trade group for bankers and law enforcement professionals who deal with issues including OFAC compliance – that’s likely not the end of it.

“There’s no question these sanctions are an appropriate and effective national security tool,

he said, “but this is a country that can fight back.”

How Russia reacts to the sanctions, Byrne said, will be closely watched by the financial community. And that reaction is by no means predictable. In general, major industrialized countries don’t try to shut down each other’s financial institutions without evidence of blatant illegal activity – which does not appear to exist in the case of Bank Rossiya.

“This is a new thing,” said Joseph. “It’s not a rogue bank. It’s a bank in a country where we do a lot of business. It’s not involved in a criminal case.” Compared to other actions by past administrations, he said, “It’s much more complex.”

By Val G. Abelgas

Grace Pulido Tan

Grace Pulido Tan

Two feisty woman officials reminded us last week why campaigns against corruption in the Philippines never succeed. They don’t succeed because after the corrupt acts are exposed and publicized, there is no follow-up, much less prosecution of the accused.

Chairman Grace Pulido-Tan of the Commission on Audit (COA) has ordered the agency’s officials to monitor compliance with recommendations contained in annual audit reports to ensure that government agencies and institutions take them seriously and act to implement such corrective measures.

Tan hopes the new system would put an end to auditors reporting the same recurring problem every year because there are no follow-ups to recommendations. Audit findings will then not suffer the same fate as dreams in the song “Mona Lisa,” Tan said, where they “just lie there and die there.”

Sen. Miriam Defensor Santiago, on the other hand, is exasperated that no charges have been filed in court against those named in numerous exposes and Senate committee hearings, and said the Ombudsman should start filing cases against those implicated in the P10-billion pork barrel scam.

“Since it has been six months, I think it would be best if the Ombudsman could at least file some of the cases in court now because the public are getting jaded with these public revelations in the Senate probe plus they are not seeing any action,” Santiago said. “We don’t want public interest to die on this matter because it’s just too important. Plunder is just too important to the national economy.”

One wonders why despite the voluminous evidence and the many witnesses who have willingly testified to the extent of the corruption involving the Priority Development Assistance Fund (PDAF) or the congressional pork barrel, the Disbursement Acceleration Program (DAP) or the presidential pork barrel, the Malampaya Fund and several programs of the Department of Agriculture and the Department of Agrarian Reform, the Ombudsman has not filed any formal charges before the Sandiganbayan against those implicated in the shameless scams.

Are the exposes being squeezed dry by the administration and its allies to damage the reputation of some leaders of the opposition and possible contenders for either the presidency or the vice presidency? Is the Aquino administration really serious in prosecuting the big fishes in these scams regardless of party affiliations, or will these scandals go the way of previous corruption scandals that have been left unresolved?

Let us look at the numerous corruption scandals that have shocked the nation in the last few years, but have remained unresolved:

The P1.3-billion election computerization deal with Mega Pacific to supply the Commission on Elections (Comelec) which the Supreme Court voided because the deal was tainted “with graft and legal infirmities;” the alleged P532.9-million overpricing of the President Diosdado Macapagal Boulevard in the Manila Bay reclamation area, which the Ombudsman deemed as overpriced by 250 percent and the bridge by 67 percent;

The P200-million Jose Pidal case, wherein Sen. Panfilo Lacson accused Mike Arroyo of amassing more than P200 million from campaign contributions of her wife and putting the money in secret bank accounts, including that of “Jose Pidal”; the $503-million Northrail project, which former Senate President Franklin Drilon described as one of the “colossal corrupt deals” of the Arroyo administration; the $329-million National Broadband Network; the $466-million Cyber Education Project; the P728-million fertilizer fund scam; the still to be probed P3.1-billion irrigation project just before the 2004 elections whose funds the Kilusang Magbubukid ng Pilipinas claims were diverted to the campaign; the P455-million ice making machine scam also under the Department of Agriculture; the P5-billion swine scam; and the P120-million Ginintuang Masagani Ani (GMA) project scam.

Add to these the P10-billion pork barrel scam, the P900-Malapampaya fund mess, the billions DAP funds illegally doled out to senators and congressmen before, during and after the impeachment trial of Chief Justice Renato Corona, and the billions more in agriculture funds that were allegedly coursed through fake NGOs.

In most of these cases, the culprits remain free, the whistleblowers have either been silenced or are now six feet under, and only the case against Abalos and Neri in the NBN-ZTE deal has been filed by the Ombudsman, and the Executive Department has blocked investigations by fraudulently invoking executive privilege.

The only case that landed in court – the $2-million bribery case against former Justice Secretary Hernani Perez – was obviously mishandled by the Ombudsman and was dismissed two years ago.

All these corruption scandals hogged the headlines for days, only to die down when another scandal, either in government or in show business, displaced them on the headlines. In the Philippines, corruption scandals are never resolved; they just fade away.

Or as the COA chief said: “They just lie there, and they die there.”