Financing the country's future

MANILA, Philippines –  Finance Secretary Cesar Purisima is one happy man these days. The eye bags, he tells STARweek, are the result not of weariness or exhaustion, or even his confirmation at the Commission on Appointments which is supposedly threatened by the opposition of one member, but simply lack of sleep given the round-the-clock demands of his work as head of the country’s Finance portfolio.

He is also wont to assume that other people keep a similar 24/7 schedule. He once sent a text message to us at 3 a.m. reacting to The Philippine STAR’s banner story for that day’s issue which had yet to hit the newsstands. It turns out Purisima regularly checks the online version of the day’s stories on his iPad when he wakes up at odd hours.

That, he said, is part of his life as the country’s Finance chief.

“It’s a 24-hour thing for me. When I’m at home, I enjoy talking to my wife. We talk about things. When I can’t sleep, I talk to people. I check the Internet. I listen. It’s important to hear from the grassroots,” Purisima says.

The pace may be hectic and sleep a luxury, but Purisima is not complaining. On the contrary, he finds great fulfillment in his job.

“I’m enjoying my job more than the first time around. The Cabinet as a team is very inspired and energized by the President. When you like your job, when you like the people you’re working with, when you like your boss and what he’s fighting for, everything is aligned,” Purisima says with obvious satisfaction.

Jonjon Vicencio/Star

The whole country saw how in 2005, Purisima led a group of disgruntled Cabinet officials – who came to be known as the Hyatt 10 – in leaving the corruption-riddled administration of then President Gloria Macapagal-Arroyo.

Purisima was Finance secretary then after a successful stint at the Department of Trade and Industry in 2004 in place of the former Trade chief Manuel Roxas II, who had quit the Cabinet for a successful run as senator in the 2004 elections.

Prior to his work in public office, Purisima belonged to the prestigious and possibly the country’s largest auditing firm Sycip, Gorres & Velayo (SGV & Co). His resumé lists long years of experience in accounting. He was area managing partner as head of the Asia Pacific Assurance Practice of Andersen Worldwide from 2001 to 2002.

He was regional managing partner as head of the ASEAN operation from 2000 to 2001 and was a member of the Global Board of Andersen Worldwide from 1999 to 2002 and the Global Executive Board of Ernst & Young from 2002 to 2004. He was chairman and managing partner of SGV & Co. until January 2004.

His extensive experience in public accounting is also backed by extensive education here and abroad.

Purisima obtained his Bachelor of Science in Commerce, with majors in Accounting and Management of Financial Institutions, from De La Salle University in 1979 and his MBA from the JL Kellogg Graduate School of Management of Northwestern University in Chicago, Illinois in 1983. In 1979, he was among the top placers in the Philippine Board examinations for certified public accountants.

The Finance chief’s undersecretaries Gil Beltran, Rosalia de Leon and Jeremias Paul, Jr. Jonjon vicencio/Star

However, nothing could really prepare an individual for a job as Finance secretary, that one individual responsible for leading a government agency tasked to ensure that the state has enough funds to meet the needs of its people.

It is definitely no easy task, the 50-year-old official admits.

Purisima likes to say that the six-month old administration of President Aquino stepped onto a treadmill that is moving uphill. It has, after all, inherited a budget deficit of P196.7 billion in the first six months of 2010 or when Aquino took office last June 30. The January to June 2010 deficit is 28.2 percent more than the P153.4-billion budget gap recorded in the same period in 2009.

Latest data from the Department of Finance show that the government’s budget deficit stood at P269.8 billion as of end-November, narrower than the P272.5 billion recorded in the same period in 2009. The government hopes to have contained last year’s budget gap at P325 billion or 3.9 percent of gross domestic product.

It won’t be easy, Purisima readily admits, but he’s straining at the bit to have a go at it and wouldn’t trade it for anything.

I believe in contributing to the betterment of my country,” Purisima says, adding that the fight is against corruption, against wrong policies and wrong infrastructure.

He believes that once corruption is significantly reduced, the government would have more funds for social services such as health and education and that if the country has the right infrastructure, it would be able to attract significant investments.

Purisima meets with Executive Secretary Paquito Ochoa Jr. and Public Works Secretary Rogelio Singson at “Infrastructure Philippines 2010“ Mike Amoroso/Star

A large part of his energy and inspiration comes from his good working relationship with his boss.

“I really believe in the goals of President Aquino and in accelerating the growth path of the country. We’re growing but poverty is increasing because the growth level is low, so the challenge is to increase it. To do that, we must reduce corruption, have the right policy, improve infrastructure,” Purisima stresses.

The Finance chief likes the way President Aquino works.

“I love (President Aquino’s) working style. It is designed for execution, to get things done. Before (in the previous administration), we have weekly Cabinet meetings. We prepare and we sit down and then you spend the whole week to prepare for the next meeting the following week. Now, I’ve seen the President more often than my previous boss because we really sit down and work as a team,” Purisima explains.

The teamwork, he says, is what moves him. “We work together. That’s why I’m enjoying it. His working style, he empowers you. He holds you responsible and he listens to you,” Purisima says of President Aquino.

After just half a year in office, Purisima believes he has led the Finance department in putting in place measures that would help raise revenues.

“Setting the tone” is what he calls it.

BSP governor Amando Tetangco Jr. presents President Aquino with a complete set of bank notes bearing his signature as the Finance secretary looks on Ryan Lim/MalacaÑang photo bureau

“Here at the Finance department, I believe that I’ve energized them. I don’t believe I’ve succeeded all the way to the bottom yet, but I’ve set tones,” Purisima said.

In the area of debt liability management, for instance, Purisima believes the administration has made substantial strides already.

“We’ve generated the momentum towards that. We launched the global peso bond swap in September,” he says, referring to the launch of the first-ever peso-denominated global bonds instead of the usual dollar-denominated debt.

The government successfully sold $1 billion in peso global bonds in September last year and $1.25 billion this month. Both offerings were significantly oversubscribed. Purisima believes that peso bonds would help cushion the government from foreign currency fluctuations.

He is also elated at the upgrading earlier this month of the government’s foreign and local currency bond ratings by Moody’s Investors Service from stable to positive, following on the heels of a ratings upgrade by Standard and Poor’s – from BB- to BB – last November.

“We appreciate the decision of Moody’s to change the outlook of positive from stable. This shows that Moody’s also recognizes the developments in the Philippines. There is no question on our ability or willingness to pay. We have always honored our debts. The Philippine economy has been growing positively for the past 47 quarters. The Philippines was growing even at a time when most of the first world went into crisis and that is strong proof that our credit history is strong,” the Secretary said in a statement.

President Aquino is joined by Purisima in witnessing the signing of a Letter of Intent worth $3.4 billion in investments between Marubeni Corporation president and CEO Teruo Asada, Energy Secretary Jose Rene Almendras and Trade and Industry undersecretary Adrian Cristobal Jr. Jay Morales/MalacaÑang photo bureau

“On the revenue side, we’ve set our targets also. The goal is to reduce our deficit to two percent of GDP and to increase our tax effort to two percent of GDP. I believe we’re headed towards that,” he says.

To raise revenues, Purisima has also initiated a program of filing cases before the Department of Justice every week against smugglers and tax evaders, alternatively, by the Bureau of Customs (BOC) and the Bureau of Internal Revenue (BIR).

Since the Aquino administration started, the BIR and the BOC have filed at least ten cases before the Justice department. Purisima believes the filing of cases has been effective in sending a “strong signal” to taxpayers.

“They know we’re serious, that this is not for show. It sends a strong signal and it is effective. The team we have is a team of very honest people,” Purisima says.

“Our thrust towards intensified revenue collection while maintaining fiscal discipline has gained strong response and increased taxpayer compliance. We are strongly committed to fiscal sustainability and consolidation in the near-term.”

He nonetheless conceded that there have been delays in courts because of various issues, but Purisima is determined to pursue this route of fixing tax administration instead of slapping new taxes.

“It’s like a pail of water with a lot of holes. Let’s reduce the number of holes first. Then we ask for new taxes. The opportunity to do this is there. Let’s fix the administrative problems first. I believe we can continue to increase revenues so long as we improve collection,” Purisima says.

Indeed, Purisima is optimistic the job can be done. As a matter of fact, he says in jest, he considers his increasing weight a bigger problem. “We love to eat,” Purisima says of his habitual dining out with his wife.

The couple also enjoys walking their two dogs outside their home in a Makati village. His wife, he says, is the ultimate reminder that he is a normal person, not some government executive surrounded by a battalion of bodyguards.

“I don’t have bodyguards. I have a driver and an aide but only during office hours. After that, I walk around normally. I go to the grocery. My wife tells me to push the cart,” he says.

Hopefully, someday – sooner rather than later – it will be a bunch of kids they would be going to the grocery with, Purisima says. “When God gives us a child, we will happily accept. Who doesn’t want to be a father? We want as many as we can be blessed with.”