Press Release
August 10, 2011


Senators rebuked Finance Secretary Cesar V. Purisima for errors in his presentation at the Development Budget Coordination Committee (DBCC) hearing yesterday which classified certain laws passed by Congress as negative revenue measures.

Senator Franklin M. Drilon, chair of the Senate Committee on Finance, pointed out that Republic Act 9856, the Real Estate Investment Trust (REIT) Law, and RA 10083, the Creation of a Special Economic and Freeport Zone in Aurora, were listed as having cost the government P2.7 billion and P3.0 billion in foregone revenues, respectively.

"I suppose the Secretary of Finance would want to make a correction," said Drilon, adding that the REIT has yet to be implemented since it took effect last year, while the Aurora Pacific Economic Zone and Freeport Authority (APECO) do not have locators on-site yet.

Purisima acknowledged the error, saying "We stand corrected because that should not be in that list."

Nevertheless, Senator Loren Legarda urged the Department of Finance (DoF) to put these so-called negative revenue measures in proper context. Instead of saying that certain laws passed by Congress eroded government revenue, the DoF should also assess and quantify the benefits they generate in terms of new jobs, income and investment.

"May we request a more multidimensional assessment of the laws we have created because to be told that what we've worked on for the past three years created negative revenues is not helpful not all," said Legarda.

"I understand that what the DoF did is simply focus on the numbers but as we all know, life is not all about numbers and revenue losses," she added.

Senator Edgardo J. Angara, sponsor in the Senate of the REIT Law and the law creating APECO, echoed his colleagues' calls, saying that the government should plug leaks in revenue collection, such as smuggling, to improve the country's fiscal position.

"These laws should not be seen as eroding the tax base. We, in Congress, studied and debated these at length before we passed them. These laws will yield enormous long-term benefits that will far outweigh the short-term loss in government revenue," said Angara, who is also vice-chair of the Senate Committee on Finance.

News Latest News Feed