Salceda sees P432B loss if reclamation remains stalled for 5 years
MANILA, Philippines — The Philippines will lose P432 billion if the reclamation projects at the Manila Bay, which were ordered suspended by President Ferdinand Marcos Jr., would be stalled for up to five years, Albay 2nd District Rep. Joey Salceda said on Monday.
According to Salceda, the House Committee on Ways and Means, which he chairs, was able to get that figure after its hearing on reclamation projects based on a computation of possible earnings from the documentary stamp tax (DST), capital gains tax (CGT), and the value-added tax (VAT).
“The government is losing a lot due to the suspension, our estimates [if suspension goes on] within the five years — because most of them are one-time transactions, right […] — with DST, CGT, and even VAT, that reaches up to P432 billion,” Salceda said in Filipino.
Salceda, who is an economist by profession, also noted that even companies behind the reclamation projects were losing profits.
“And the losses pile up — especially those that have started their projects, the three companies: Waterfront [Manila Premier Development Inc.], the one with Charlie Gonzales [Ulticon] and SM [Prime Holdings Inc.] — which have good plans and the capability to increase jobs and add to the value,” Salceda said.
Raising revenues without raising taxes
He added that if reclamation work could be done right the revenues from the projects alone could be “enough to retire the country’s debt.”
“It’s a great way to raise revenues without raising taxes. We already considered funding the military pension system out of reclamation rights during the time of PNoy [the popular monicker of then-President Benigno Aquino III]. But the idea was ultimately shelved because most reclamation projects are local government projects,” Salceda said.
“But there are still national government tax implications. Reclaimed land is basically new land. So the land taxes that result out of it are really a way to conjure up new tax sources.”
Suspended due to several concerns
Last August, Marcos ordered the suspension of reclamation projects due to several concerns, including ecological ones, as many pro-environment groups claimed that the projects would cause the sea level to rise and eventually cause flooding in coastal communities.
The United States Embassy in Manila also raised security concerns as some of the companies involved in the reclamation projects were said to have been involved in China’s creation of artificial islands in the West Philippine Sea.
But according to Salceda, reclamation projects can be beneficial for the country — which he said has prompted his panel to mull creating a fiscal regime for such activities.
If the fiscal regime would be implemented, Salceda said the panel would want to stress the implementation of the Urban Development and Housing Act of 1992. According to him, the law “requires that at least 50 percent of the income of the Philippine Reclamation Authority shall fund the National Housing Authority’s land acquisition projects.”
He said the framework would also include a rule that 20 percent of reclaimed land should be used for low-cost housing — “or some sort of alternative compliance.”
“This is what Singapore did,” he pointed out.
“We might consider minimums for terms of sharing of proceeds from reclamation. That new fiscal framework could fund President Marcos’s ambitions for decent, affordable, and dignified housing in the country.”
Still, Salceda said the panel would invite other stakeholders in the next hearing, such as those from the Department of Environment and Natural Resources (DENR) and its Environmental Management Bureau (EMB) to balance discussions.
“That’s why next week, we will balance it — because last time we were entertaining environment-oriented groups. So we want to listen to the other side. That’s why we would call on the EMB, DENR,” he said.