04 September 2005

New Domain

This blog has now moved to www.rickycarandang.com

Speaker Puno, part 2

Assuming that after impeachment is killed, President Arroyo takes seriously her state of the nation promise to convene Congress into a consituent assembly, how can she deliver when the numbers for a conass just aren't there in the senate?
Conventional thinking has it that without the senate's approval conass is dead.
But unconventional thinking says there may be a way.
The law says that two thirds of Congress can convene itself into a consituent assembly in order to amend the constitution. Today's thinking is that "two thirds" means two thirds of the senate and the house voting separately; meaning 161 members of the house and 15 members of the senate must approve.
But there is a legal argument that goes like this: a two thirds vote of congress could mean two thirds of the senate and the house COMBINED. Meaning with 240 reps and 23 senators, you would need 176 members of congress--regardless of which chamber--to approve conass. Under this interpretation, even if every single senator voted against conass, all you need is 176 congressmen and you've got your conass.
Although the framers of the constitution apparently meant two thirds per chamber, the document itself is silent on this specific interpreation of a two thirds majority.
One can expect the senators to argue strenuously against this interpretation, but a determined administration, with the help of a complicit Lower House could turn to the ultimate arbiter of the law to get a clear cut ruling that not even the senators can defy: The Supreme Court.
IF the Supreme Court ruled that two thirds of the congress combined could form a constituent assembly the senate would have no choice.
But would it do that?
The High Court is expected to rule on the merits of the legal arguments put forth by the petitioners and oppositors. But cynics think the justices--- being merely human despite being clothed in papal-like powers on legal infallibility--- would be vulnerable to the same pressure, the same stick-and-carrot maneuvers, that the palace and its allies exert on lawmakers when it wants its way with them
JDV and FVR would have very little direct influence with the Justices, but cynics may argue that most of the High Court would have been appointed by GMA and would thus be susceptible to pressure, coercion, or even positive inducement by her.
Cynics would point out that resigned secretary Cesar Purisima suggested that the TRO on the VAT was issued by the Supreme Court at the behest of Malacanang.
Cynics would point out that the Court, did not address the question about their integrity, but chose instead to cite Purisima on contempt rather than explore the allegation.
Cynics would point to quiet talk in high legal and political circles about how this or that Justice are the sometimes the "ponente" of Malacanang when it comes to making rulings that the palace wants.
Cynics would claim outright that the Supreme Court's decisions in some controversial cases were made to simply please the palace.
Others would say "Damn the cynics."
"Damn the conspiracy theorists. How dare they question the actions of the Supreme Court."
As a character in my favorite movie once said, "I'm shocked! Shocked to find that there is gambling in this establishment!"

Speaker Puno

The next two or three days could be the end of the road for impeachment. With President Arroyo scheduled to leave within days for the United Nations, the informal deadline for her allies to kill the impeachment is fast approaching.
I understand the president is very closely monitoring the events...not just on TV but by calling her allies in the House several times a day. She seems increasingly anxious about the much anticipated final vote scheduled for Tuesday or Wednesday. I'm told she's not sleeping much.
Understandably so. No head of state wants to address the UN with a cloud about their legitimacy hanging over their head. Even if her allies in the House manage to kill the impeachment Tuesday, that would only be a temporary reprieve for her.
That is because there is a price to be paid for the cooperation of Lakas CMD. And that price will be apparent a few months after the impeachment is killed.
That price is for her to deliver in one year on her promise of irreversibly beginning the process of shifting to a parliamentary form of government.
For people like President Fidel Ramos and Speaker Jose de Venecia who have risked much political capital and even their place in history to support GMA now, the deadline is not extendible. If the constitution is not amended ASAP, JDV's third and final term ends in 2007 after which he will have to sit on the sidelines for an excruciating three years. FVR believes that this is probably the last good chance the country has to shift to a parliamentary form of government, something he has always felt is in the country's long term interest. So if she does not deliver IN ONE YEAR, I suspect JDV himself will move to impeach her after the one-year ban on impeachment cases expires in July 2006.
But how can GMA deliver on her promise if she cannot win the support of the Senate? That's something I will explore in a future posting.
In the meantime, this current scenario is not without risk for the Speaker. If GMA has no intention of shortening her term to accomodate JDV and FVR, she will surely be working in the next year to remove the threat of impeachment by ousting JDV from power and replacing him with a more friendly and supportive Speaker of the House....someone like Rep. Ronaldo Puno.
As the pro-impeachment bloc creeps closer and closer to their goal of 79 votes by Tuesday, our two protagonists will get more and more worried. More pressure will be brought to bear on members of Congress. Perhaps an attempt will be made to kill the complaint on Monday and not Tuesday or Wednesday as scheduled. In which case many of the opposition's maneuvers, scheduled for execution Tuesday, will be rendered moot and academic.
Given all of this I suspect GMA is not the only one who will have sleepless nights this coming week.

01 September 2005

VAT's All Folks

As expected, the Supreme Court lifted the TRO on the VAT today and markets will heave a sigh of relief that President Arroyo's much touted fiscal reform program is not completely in shambles. But that sense of relief will be short lived.
If they're lucky or if they actually try, the VAT will allow the BIR to pick up P15 billion in additional tax revenues this year. That is, if their estimates are correct. Do i sound I skeptical?
Well, despite warnings by almost every single economist in the country, the sin tax measure--which the government estimated would bring in P15 billion in additional revenues this year --has only brought in some P800 million in incremental revenues.
Excise tax collections on tobacco products actually went down. At the rate they are going, the higher sin taxes will bring in a measly P2 billion in added revenues this year...if they are lucky.
Why the dismal revenues? Ask the UP 11. Ask former undersecretary of Finance Nene Guevarra. Ask the Foundation for Economic Freedom. Ask anyone with a college degree in economics. Just don't ask President Arroyo, former finance secretary Cesar Purisima, Senator Ralph Recto, or Congressman Jesli Lapus. After all, a multi-tiered tax rate based on cigarette prices in 1997 was their idea.
Now repeat after me: "We told you so!"
Given the discrepancy between government estimates and actual collections on the sin tax, any logical person must now take the estimates of the revenue from the VAT with a gigantic grain of salt.
The problem is, when those revenues start falling woefully short about a year from now the authors of those brilliant tax measures will come back to us...the middle class taxpayer...and
look for ways to raise taxes once again in order to prevent the national government from going bankrupt.
With more than half of the country believing the president stole the election and the outrage in many parts of the country over the way the impeachment was handled, will President Arroyo have the political will and the capital to go back to ordinary people and ask them to pay more taxes?
Even without the Garci tapes hanging over her head it took a full year for her to convince Congress to enact her deeply flawed tax measures. And these measures were only passed after special interests found ways to ensure that they would bear a disproportionately smaller share of the tax burden.
Now with the issue of election cheating unresolved in the public mind, fears of another public backlash, a largely hostile senate, and an opposition sure to challenge her, can President Arroyo muster the political courage to come up with new taxes to impose on the public before its too late?