Palace officials brace for protest rallies vs EVAT implementation

Malacañang is bracing for protest rallies against the implementation of the expanded value-added tax (EVAT) law but maintained that the controversial economic measure will be fully enforced.

Executive Secretary Eduardo Ermita and Press Secretary Ignacio Bunye, in separate interviews, welcomed the Supreme Court’s decision to lift the temporary restraining order (TRO) on the EVAT law and gave assurances that enough safeguards are in place to prevent unscrupulous businessmen from unduly increasing prices of prime commodities.

Ermita stressed that authorities are prepared to face expected rallies against the EVAT’s implementation. But Bunye said he is not expecting the protest actions to be massive.

"This is not the first time we have been threatened with big rallies, as what happened last July 25 during the President’s State of the Nation Address, last June 12 and this August. It is the job of authorities to prepare for that," Ermita said.

"The EVAT must be implemented," he emphasized. "There are pros and cons but in the end, we always say that this is a bitter pill that we have to take."

Ermita pointed out that through the law, the government would be able to raise enough funds to carry through its socio-economic projects and reduce the fiscal deficit. Bunye, for his part, said the additional revenues would be allocated for education, health and infrastructure projects.

Raw agricultural products along with other socially sensitive products will remain VAT-exempt while other items that require VAT payment will be strict monitored by concerned agencies, he said.

Excise taxes on petroleum products, on the other hand, have been reduced to offset the cost of VAT as part of the government’s measures to cushion the effects of the tax.

"The Department of Trade and Industry and the local government units would effectively monitor prices so that there will be no price gouging as a result of the implementation of the VAT," Bunye said.

Senators and congressmen, however, had mixed reactions on the SC decision upholding the constitutionality of the EVAT.

Senate Minority Leader Aquilino Pimentel Jr., who led a group of senators in questioning the constitutionality of several provisions of the EVAT law before the Supreme Court, said that the ruling would inflict "hardships on the people."

Another opposition senator, Jinggoy Estrada, said it would trigger more rallies in the streets as it is expected to add more burdens to the poor.

"The people are already suffering and now their suffering would be compounded by the SC’s order. So we are headed to the doldrums," Estrada said, predicting the SC’s ruling would further damage the political career of President Arroyo.

Taking a more balanced stance, Sen. Sergio Osmeña III said that the lifting of the TRO has actually both positive and negative effects. The country, he said, would benefit from a healthier balance sheet and improved investor confidence.

Almost all of the government’s economic projections for 2006, prepared by the administration’s economic managers, were based on the full implementation of the EVAT law which is expected to generate around P130 billion in new revenues.

The P1.053-trillion 2006 national budget is also premised on the full implementation of the EVAT law.

However, Osmeña said the political cost of the SC ruling could be heavier than the benefits and it may be the proverbial last straw for a public battered by rising prices on oil and basic commodities, though it would definitely please the country’s creditors.

In the House of Representatives, Majority Leader Prospero Nograles said that Filipinos need to follow and implement the law.

"It’s going to cost us, but the long-term effect will benefit the economy. We need to cut our costs and our borrowing," he said.

Albay Rep. Joey Salceda, one of President Arroyo’s economic advisers, said it is unfortunate that the High Tribunal made its ruling on EVAT while Congress is not in session. "We cannot act on pending bills seeking a selective deferral," he said.

Salceda has been calling for a deferment of VAT coverage on electricity and petroleum products like gasoline and diesel.

Deputy Minority Leader Rolex Suplico, who has a pending bill seeking the scrapping of the VAT on power and diesel, said the people would have to brace for higher prices of electricity, diesel and gasoline and other consumer goods.

"This is a sad day for all Filipinos. We will now see the marriage of two crises: the political and the economic," he said.

Bayan Muna Rep. Teddy Casiño claimed that the upcoming implementation of EVAT would mean a bleak Christmas for the nation who will bear the brunt of higher prices on power and oil products. — With Marvin Sy, Jess Diaz