Govt. & Taxes, Philippines

Tuesday, September 05, 2006

Bureaucracies in exporters' lives

Early this year, the Export Development Council and a number of Philippine exporters have requested the Department of Finance (DOF) to abolish various export fees and regulations administered by some 22 different agencies. Estimates by the DOF show that foregone taxes if various export fees are scrapped is only around P29 million a year.

The main issue of the exporters is not so much the published fees, but the bureaucracy where exporters actually pay up to 4x of the stipulated export fees to the bureaucrats who make things and procedures complicated, unless they pay under-the-table to them. There are indeed many roadblocks to free trade. The protectionists -- NGOs, labor groups, business groups, media, politicians, others -- from the importing countries, and the government bureaucracy, especially the corrupt among them, who invent various regulations and paper work so exporters and importers will have to go through them, secure their signatures, before they can trade. This process immediately creates opportunities for bribery and corruption.

Last August, the President issued EO 544, scrapping the various fees on export-related permits and clearances, except those by specific laws. Mind you, there are 21 agencies collecting P20M, and 4 government corporations collecting another P9M a year on average. You'd wonder what some of these agencies are actually doing why the signatures of their officers are needed by exporters: Bureau of Fisher (BFAR), NFA, BPI, BAI, SRA, NMIC, NTA, FPA, MTRCB, PITC, FMB, EMB, BFD, MARINA, PNRI, DOTC, PDEA, Copper & Clearance Office, National Museum, BOI's cement dept., DTI's Reg. Devt Group offices, Optimal Media Board, Oil Industry Mgt. Bureau, Intl. Coffee Org. Certifying Authority, others.

Now some bureaucrats in these offices are unhappy that there will be less people who are coerced to go to their offices to get their signatures. Because that would mean lesser opportunity for extortion.

Budget 2007

Total budget of the national government (NG), in P Billion:
(Note that budget of local government units {LGUs} not included here)

2003 = 825.11
2004 = 867.01 (+ 41.90, 5%)
2005 = 947.55 (+ 80.54, 9%)
2006 = 1,053.28 (+ 105.73, 11%)
2007 = 1.136.6 (+ 83.3, 8%)

Where to get the money to finance such ever-expanding expenditures, in P Billion:
(Also, taxes and fees by LGUs not included here)

2003: (a) taxes = 537.68
(b) other revenues = 88.95

2004: (a) taxes = 598.01
(b) other revenues = 101.75

2005: (a) taxes = 705.61
(b) other revenues = 110.54

2006: (a) taxes = 881.62
(b) other revenues = 92.51

2007: (a) taxes = 1,028.20
(b) other revenues = 90.56