Cabinet revamp

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With the BBM administration entering its fourth year, a Cabinet revamp/reshuffle is in the offing as its members have been asked to tender their resignations.

The President has already accepted the courtesy resignation of Foreign Secretary Enrique Manalo, Environment Secretary Toni Yulo-Loyzaga, and housing czar Jerry Acuzar. Manalo will be appointed instead as the country’s permanent representative to the United Nations come July succeeding Antonio Manuel Lagdameo while Loyzaga will be given another Cabinet-rank position at a future time.

Foreign Affairs Undersecretary Ma. Theresa Lazaro would be the next secretary of the Department of Foreign Affairs

Acuzar, who will be named presidential adviser on Pasig River development, will be replaced by Human Settlements and Urban Development Undersecretary Jose Ramon Aliling. As housing undersecretary, Aliling was in charge of the Pambansang Pabahay Para sa Pilipino Housing (4PH) program and the Pasig Bigyang Buhay Muli project.

Acuzar, founder of the New San Jose Builders Inc. and brother-in-law of former Executive Secretary Paquito Ochoa, who was a law partner of First Lady Liza Araneta-Marcos, is said to have under delivered on his target of one million housing units a year.

Under Acuzar’s leadership, the Department of Human Settlements and Urban Development (DHSUD) was aiming to build six million housing units from 2022 to 2028.

The big question is of course can Aliling deliver as promised by Acuzar or will he lower his target to a more realistic level?

After all, the country has been suffering from a massive 6.5 million housing units backlog especially for informal settler families and low-income earners for many years now, with the number expected to increase to 10 million units by 2028 due to urbanization and population growth.

A report by UN-Habitat meanwhile has estimated that housing need in the Philippines is projected to increase from 6.5 million to 22 million by 2040.

In an earlier piece, I made mention of a suggestion for local governments to instead focus on constructing either condominium buildings or subdivision-type housing units on government-owned lands including foreclosed private lands and then renting this out at low monthly rates instead of insisting on home ownership, which informal settlers and low-income settlers could not afford in terms of monthly amortizations due to low incomes.

The 4PH Program, which is the national housing program of the government, was launched in September 2022 with the goal of having zero informal settlers by 2028.

Why does our government insist on giving informal settlers access to home ownership when so many middle-class Filipinos could likewise not afford to buy their own homes and are instead renting? Maybe this is something that Aliling should ponder upon.

Meanwhile, DENR’s Yulo will be replaced by Energy Secretary Raphael Lotilla while Energy Undersecretary Sharon Garin is being eyed as officer-in charge of the Department of Energy.

When asked if Loyzaga underperformed, Executive Secretary Lucas Bersamin, who the President has decided to keep, responded “perhaps,” adding that there has been a perception that she has been out of the country most of the time, a perception which may be fair or unfair.

As DENR secretary, Lotilla will also have to look into the need to rationalize local laws with national laws, an issue that has been a bane to investments not only in mining but in other industries as well. The Supreme Court has already held that provincial ordinances and resolutions completely banning all large-scale mining activities within their jurisdiction are unconstitutional and exceed the local government units’ powers under the Local Government Code.

For instance, the $5.8 billion Tampakan copper-gold mining project in Mindanao, considered the country’s biggest mining project, has been delayed for decades partly due to a 12-year ban on open pit mining imposed by the provincial government of South Cotabato. The Philippine Mining Act of 1995 under Republic Act 7942 does not prohibit the open-pit mining method.

President Marcos meanwhile has rejected the courtesy resignations of his economic team whose members include Trade Secretary Maria Cristina Roque, Finance Secretary Ralph Recto, Budget Secretary Amenah Pangandaman, Economic Secretary Arsenio Balisacan, and Special Assistant to the President for Investments and Economic Affairs Frederick Go.

The Philippine Chamber of Commerce and Industry (PCCI), considered the country’s biggest business organization, has welcomed the President’s decision to retain his economic team, calling it a positive step towards policy continuity and investor confidence. The PCCI was joined by other business groups, including the Makati Business Club, the Employers Confederation of the Philippines, and the Philippine Exporters Confederation.

But the economic team should also look into more innovative ways of raising funds for the government instead of imposing more if not higher taxes. The middle class, in particular, has been the most disadvantaged in terms of taxation.

The Philippines has the highest value-added tax (VAT) rate in the ASEAN region at 12 percent, compared to Indonesia’s 11 percent, Singapore’s nine percent, Vietnam’s eight percent, Malaysia’s six percent, Thailand’s seven percent, and yet countries manage to deliver world-class services to its citizens. Hongkong does not have a VAT or sales tax.

Meanwhile, the Philippines implements a progressive personal income tax (PIT) rate of up to 35 percent and a corporate income tax of 25 percent.

Thailand, Indonesia, and Vietnam’s PIT are also up to 35 percent while Malaysia is only up to 30 percent and Singapore, 24 percent.

The corporate tax rate in Indonesia is at 22 percent, Thailand 20 percent, Malaysia up to 24 percent

There are meanwhile talks about Solicitor General Menardo Guevarra being replaced by UP College of Law Dean Darlene Berberabe, former CEO of Pag-IBIG Fund. Guevarra, the default lawyer of the government in any case filed against it, has recused from defending the Marcos administration in the Supreme Court petition filed by former president Rodrigo Duterte over his arrest and transfer to the International Criminal Court. The Office of the Solicitor General is of the position that the case of the Philippines was not admissible and that the ICC failed to timely exercise its jurisdiction.

If true, Berberabe would be an asset to the Marcos administration given her impeccable track record whether as a public servant or as a private individual. But how the OSG will position itself in connection with the Duterte case if ever Berberabe takes over remains to be seen but however she positions the office will definitely stamp her mark in the legal profession, whether in a good or a bad way.

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