Inundated

The city has rejoined the sea. And the storm season has just started.

A train of potential storms are lining up in the Pacific Ocean. One shudders at the thought things could even get worse than this.

By one account, about 5,000 streets in Metro Manila and adjacent cities are suffering flooding problems. This is simply a tedious way of saying the entire metropolis is submerged.

On account of flooding, work is interrupted and classes suspended. When we decided to pile up our holidays, no one thought of the number of days we usually lose to natural calamities. Our productivity suffers. The yawning learning gap that dooms the next generation of Filipinos just grew wider.

The toll will continue to mount. Food price spikes will be conveniently attributed to crops lost to flooding. Delays in every aspect of our economy – infrastructure projects included – will be blamed on the same.

Shortly, we will be given some numerical estimate of the destruction caused by rain. It will always be an understatement. It cannot possibly quantify all the horrors, the discomfort, the dislocation, the loss of productive time and the great heroism put in by our small army of rescuers – all these escape national accounting.

We are wrapped in an overpowering sense of helplessness inflicted on our people by incessant calamity. My phone is full of calls for prayer from those completely daunted by the warning that rains will continue pouring the coming days. Having given up on government, our people are pleading for divine intervention.

Last year, the President boasted 5,500 flood control projects were completed under his administration. That boast is not likely to be repeated next Monday, when this year’s SONA is delivered to a country knee-deep in floodwater.

Those 5,500 projects might exist on paper. But they do not constitute an integrated plan. And up to 70 percent of the money allocated for them is estimated lost to corruption.

When our people are angry these days, we attack with memes. If these memes could kill, our streets would be filled with blood and government overthrown several times over.

My favorite meme this week is a photo of a signboard put up by Caloocan mayor Malapitan. It claims credit for a flood-control project and informs citizens about where their taxes go. The billboard was half-submerged in floodwater.

At around this time every year, urban planner Jun Palafox comes on television reminding all who would care to listen that the World Bank funded a study during the 70s about how to solve the flooding problem. The major recommendations of that study – including the Parañaque spillway and the dredging of Laguna de Bay – were never done.

The floods we endure are a testament to the weak state we always had.

Misplaced

Almost snowed under by the blizzard of public indignation over the flooding is the vivid public anger over the 20 percent tax imposed on the interest earnings of savings held over five years. Unfortunately, this matter is very often misinterpreted and the anger misdirected.

If there is anything Filipinos hate more than incessant rains, it will have to be incessant taxation – especially as evidence mount of unbridled corruption in nearly all public agencies.

Finance Secretary Ralph Recto has been unjustly targeted by the outrage over what is perceived as new taxes imposed on savers. The law that brought this about is called the Capital Markets Efficiency Promotions Act (CMEPA). This was passed by Congress in 2023 and signed into law by President Bongbong Marcos.

Recto was not the author of this law. He was not even Finance secretary when the new law was passed. But it is now his duty to enforce the law, being the country’s chief revenue officer – regardless of his opinion of the law.

For accuracy: the law does not impose taxes on the total amount saved by the depositor. It withdraws the exemption from the final tax on interest earnings that used to be enjoyed by those who had the luxury to keep a deposit account for at least five years. Even before CMEPA was enacted, all deposits kept for less than five years were already subject to the 20 percent final tax.

Much of the outrage that flooded social media was based on an inaccurate interpretation of the law. The anger was unwarranted. Only a very small portion of the country’s savers maintained deposit accounts for five years or more. These are obviously people who had the luxury to keep their deposits for a longer term. They could hardly be count as the nation’s poor.

The proponents of CMEPA in fact argue that exempting long-term deposits is unjust. It favors the rich while the poor who regularly draw from their savings pay taxes on interest earned.

Beyond that, the removal of exemptions for long-term deposits is seen as benefiting the growth of our capital markets. Time deposits earn very little. They do not earn enough to keep ahead of inflation.

Instead of keeping their savings in stagnant time deposits, the removal of the tax exemption on interest earned will help redirect these funds to other financial instruments that will benefit the economy more. The funds could move to equities to improve the capitalization of our industries or even to government bonds that will help us avoid foreign borrowing.

Those condemning Recto are misplaced.