• Purisima: Aquino’s biggest liar

    21

    Finance Secretary Cesar Purisma must be one of President Aquino’s biggest liars. There may be actually bigger ones, but the trouble with Purisima is that he even broadcasts his deceptions, and conceals his complicity in what could have been an economic meltdown in 2005.

    Purisima is the biggest liar since he has been spreading the biggest lie that, through constant repetition, unfortunately many believe: that our economic growth in the past four years has been due to Aquino’s daang-matuwid government.

    Purisima published in two mainstream newspapers at the start of the World Economic Forum for East Asia the other day his article “Good governance is good economics.”

    He wrote: “Reforms have the power to alter a country’s economic destiny. This is why they inspire confidence from markets, businesses and citizens. The Philippines provides an example of how reforms can change perception and reality.”

    That’s true of course. But then he goes on:

    ”Since assuming office in 2010, President Aquino III has transformed the country from being ‘the sick man of Asia’ to an economic success. He undertook reforms that economists have been urging and politicians shirking.”

    What reforms?

    Purisima can name only one: “[T]he Sin Tax Law, which increased taxes on alcohol and tobacco products…”

    But that law took effect only at the start of last year. And how much did that raise government revenues? Just 0.4 percent of the GDP value, according to the World Bank’s most recent economic update released March 2014.

    Aquino and Purisima’s—supervision over the country’s fiscal situation is in fact not something to crow about. They even pushed for the “sin tax law” in desperation in 2013, as revenues were not improving as expected.

    True, revenue effort in 2013, was 14.9 percent, higher than the 14 percent in 2009, former President Arroyo’s last full year in power. But 2009 was the height of the global financial crisis that broke out in 2008, which hit nearly all countries, with the Philippines’ GDP growth rate slowing to 1.1 percent. The global economy has since bounced back from that crisis, with our own GDP galloping at 7.2 percent last year, yet government revenues haven’t increased significantly.

    Yet they brag about it: Tax and revenue efforts still below Arroyo’s peaks. Purisima with Aquino. (Revenues, from taxes, and from customs as a percentages of GDP. Data from Department of Finance.)

    Efforts below Arroyo’s

    The data (see accompanying chart) based on the finance department’s own figures, show that the Aquino administration’s total revenue and tax efforts (total revenue and then taxes as a percentage of GDP) since it came to power has not even exceeded the peak 13.7 percent and 15. 6 respectively, of the Arroyo administration in 2006.

    Why? Because other than the sin tax law, no other reforms have been undertaken. Purisima even failed to prod the two bureaus under him, customs and internal revenue, to collect bigger amounts.

    Aquino himself had admitted that smuggling had become rampant under his watch that even rice and vegetables, were being smuggled. Finally, after nearly two years of media exposes and much public outrage, did Aquino fire his buddy Ruffy Biazon as customs head only last December.

    For all of Kim Henares high-profile campaign against tax evaders, even shaming doctors and celebrities as well as running after boxing champion Manny Pacquiao, the BIR’s revenues rose only to an insignificant 10 percent in 2012, still below the 10.4 percent peak in 2006 to 2007, during Arroyo’s watch.

    Yet Purisima claims the Aquino regime’s mediocre results in revenue generation are responsible for making the country an “economic success story.”

    So why has our economy been doing fairly well in the past four years?

    Quite significantly, obviously a nudge to Aquino and Purisma that says “Don’t brag too much,” the World Bank’s September 13, 2013 Philippine Development Report had a highlighted box entitled “Fiscal consolidation in the last decade led to macroeconomic stability. “

    The WB report’s important paragraphs (my emphasis):

    “Tax administration measures were initiated in the revenue agencies in 2003 and 2004, which slowed but did not stop the decline in tax effort . . . The deficit of the power sector increased sharply, from 0.2 percent of GDP in 2001 to 1.8 percent of GDP in 2004 and was as pressing as the national government deficits.”

    “After the 2004 elections, the government began to address the fiscal crisis seriously. In August 2004, President Arroyo declared a state of fiscal crisis and asked Congress to enact a number of tax policy reforms that included raising excise tax rates on tobacco and alcohol and a Comprehensive Tax Reform Package. “

    “This package included, among others, i) removal of exemptions from value-added tax (VAT) on oil, power, medical, and legal services, ii) an increase in corporate income tax from 32 to 35 percent, before reverting to 30 percent in 2009, and iii) authority for the president to increase the VAT rate from 10 to 12 percent in January 2006 upon satisfaction of certain conditions prescribed by law . . .”

    “The reforms significantly reduced fiscal and macroeconomic vulnerabilities and brought back investor confidence.”

    “Higher tax revenues permitted the government to increase real spending in 2007 for the first time in seven years. The improving fiscal balance, aided by a steep appreciation of the peso, helped trim down the national government debt to 54 percent of GDP by end-2007 and then to 50 percent of GDP in 2011.”

    The World Bank study concludes:

    “The Arroyo Administration’s resolve to put its fiscal house in order was critical in bringing back macroeconomic stability.”

    Stimulus package

    Together with its P330-billion stimulus package that responded effectively to the 2008-2009 global crisis, the Arroyo administration’s fiscal reforms strengthened the country’s economic fundamentals, which Aquino and Purisima are now foolishly and dishonestly claiming credit for.

    Does anyone in his right mind believe that Aquino’s campaign to remove Ombudsman Merceditas Gutierrez and Chief Justice Renato Corona, which ate up his time and political capital in his first two years in office, and later to imprison Senators Juan Ponce Enrile, Jinggoy Estrada, and Bong Revilla strengthened the country’s economic fundamentals?

    The episode over the Comprehensive Tax Reform Package, which was contained mostly in the Expanded Value Added Tax Act, exposes Mr. Purisima’s character. You judge:

    Arroyo had spent almost her time and expended all of her political capital in early 2005 to push for the Comprehensive Tax Reform Program. I was still in Arroyo’s Cabinet then and within her inner circle, and several of us were intrigued by Purisima, who became finance secretary February 15, 2005 because of Mar Roxas’ intense lobbying.  But Purisima then didn’t seem be keen in pushing the tax reform program. It was Arroyo herself who was moving heaven and earth to have it passed, despite the very strong political and popular resistance against it.

    Purisima tried to fuel anger against Arroyo by claiming that the E-Vat Law had triggered such a mass outrage against her that she ordered the Supreme Court to issue a temporary order to stop the implementation of the E-Vat law. (He was cited for contempt by the High Court and forced to eat his words.)

    Purisima was one of the few people in the country who knew in much detail the depths of the country’s fiscal crisis at that time that required the E-Vat law. Yet right after its passage, he joined a conspiracy that added a political element to the emerging economic crisis.

    If Arroyo had not pushed the E-Vat law or if Purisima’s Hyatt 10 conspiracy—that included the Liberal Party, Aquino, and his mother Corazon—succeeded in forcing her out, the country would have entered again another cycle of a fiscal crisis creating an economic crisis, resulting in a political instability and ultimately, as happened in 1986, a severe economic recession that would have thrown millions of Filipinos into poverty.

    The E-Vat Law was finally passed in May 2005, which added fuel to the frenzy then against Arroyo. It turned out that Purisima was with the so-called Hyatt 10, who resigned on July 8, 2005 as part of a conspiracy to force Arroyo out.

    Many thought that Purisima’s resignation would deliver the oust-Arroyo movement’s coup de grâce. While the market wouldn’t care much about the resignation of such officials as the secretaries for education (Abad) or social welfare (Soliman), it could panic with the finance secretary’s desertion. However, it didn’t, and his replacement Margarito Teves proved to be more capable than Purisima, and remained at his post five years until Arroyos term ended.

    Most of us in the Cabinet, though, concluded that Mar Roxas had lobbied to put Purisima as finance secretary in February as some kind of mole,  so that his resignation five months later could have a devastating impact on Arroyo’s government.

    What gall this Purisima fellow has to lie and claim that his fiscal management and Aquino’s leadership are responsible for economic growth in the past four years.

    tiglao.manilatimes@gmail.com
    FB: Rigobero D. Tiglao

    Share.
    loading...
    Loading...

    Please follow our commenting guidelines.

    21 Comments

    1. Tiglao, the ultimate Aquino critic and GMA lackey. It seems to me Manila Times columnist are mostly biased and anti Aquino, no wonder the publishing company is at the bottom of the list among most read newspaper in the nation.

      • I think you should read the article. I have the feeling you didn’t read it all. I’m actually looking forward with the WB report on how Aquino’s Administration survive it’s term due to the Arroy’s Administration.

    2. Edgar Orven M. Mortel on

      Thank you for exposing the lies being peddled by perennial liars in present administration. Others can only criticize noynoy and his ilk. But with you, kaya mo silang hubaran.

    3. onettepalileo on

      Right you are sir, economic gains cannot be felt within four years of this Administration who is very busy running after their perceived enemies.

    4. The problem with malacanang occupants is they believe their own lies.
      Another one is if it is good they grab the credit,if it is bad they disown it.

    5. Abnoy si Puri on

      Asa pa kayo kay Purisima eh kaya yumayaman yan di para sa kanyang pamilya lang, isipin na lang natin na kung bakit nagsusumiksik sa gobyerno eh maliit naman ang suweldo! Eh ano pa? Di magnanakaw lang ng pera ng mamamayan! Pwe, makapal na talaga ang mga mukha at di na tinatablan ang mga kumag na ito!

    6. Jose Mario Bunag on

      Amb. Tiglao, you did not mention the BIR Commissioner in 2005 and 2006 who achieved the highest tax effort so far in 2006.

    7. other than the insignificant sin tax, pnoy has not made any major economic move. he could not even pull the trigger on biason.

    8. It was and is the RECTO’S LAW that keeps the economy going. Delete this law and Aquino will be in kangkungan.

    9. Most countries dont trust their politicians, they say politicians lie & are corrupt. Now if that applies to the uk then i wonder how much more does it apply to the philippines. Its strange how to raise more tax he went along with these rich politicians who wanted to raise the sin tax. Yes they tell you its a sin to drink & smoke. Well it isnt a sin. Drinking in moderation is fine & can be good for you. Smoking has no benefits at all. The wealthy & people who have good paying jobs like doctors & lawyers are still getting away with paying very low tax. Employ more tax collectors & investigate every single one of these people. They have no qualms taking so much money from everyone that passes through their doors.
      We have a saying in the uk, how do you know when a politician is lying. His lips are moving

    10. IF PURISIMA IS ONE OF THE GREATEST LIAR IN THE AQUINO’S, BESIDES THE PMAliars, ADMINSITRATION, MR. TIGLAO, THEN WHO IS THE GREATEST LIAR? WHY ARE YOU AFRAID TO TELL US THE TRUTH, IS IT PNOY HIMSELF MR.TIGLAO? TANONG LANG PO, SIR, NG ISANG ORDINARIONG MAMAMAYAN?

    11. It is refreshing to read the truth regarding the economic gains being experience by the country at the moment. The program aired by ABS-CBN, with notable guests like MVP,
      Sec. Jimenez and some CEO’s of various companies, keeps on glorifying Abnoy as if he has become the best President the Philippines has ever had. Karen Davila, like a good soldier of ABS-CBN, keep on asking what will happen to the country when Abnoy is no longer the Pres. She even hinted an extension on the Presidency of Abnoy, getting the cue from a Malaysian delegate about a one term Presidency is too short. I hope you continue to write about the lies this Administration keeps on peddling to us.

    12. While there a lot of sense and validity to this column, it is quite unfortunate that very few have the luxury of time, access and objectivity to read and evaluate what is being articulated. On the other hand, people just have to rely on “False” Asia.

    13. While your article give clarity and confirmation to many news both negative and positive reports I read , on who was really behind the remarkable economic growth , that this current administration is trying hard to get the full credit, by misleading the people vs GMA, it was during the tenure of former President GMA economic policies contributed greatly for Philippines economic growth from which President Obama said to GMA then ,” How did you manage to stay afloat amidst the global crisis?” Truth of many lies and accusation will come out eventually, God never sleep .

    14. Mr. Tiglao finally you have cut the throat of snake pretending to be lamb. Even in simple man’s logic, the economic gains that the Philippines is enjoying today could have not been from a four years of aquino’s corrupt na daan. Considering all the times he spent in running after his enemies. As you said the sin tax law that was passed under his term could not be the reason for such increase in GDP. It is an insult to our mind to think that the economic gain aquino trumpeted today could have just drop fromt he sky. I don’t know how the liars from malacanang could multiply a thousand lies to cover up the ineptness of the president. Well done Sir and keep writing what is true.