Dollar deposits of senators in spotlight

Senator Franklin Drilon

Senators are set to decide the fate of Chief Justice Renato Corona mainly on his failure to declare $2.4 million in deposits and P80.7 million in commingled  funds in his statements of assets, liabilities and net worth (SALNs).

But as Corona supporters argue that “he who comes to court must come with clean hands,” did any of the 23 senator-judges declare their dollar or other foreign currency deposits in their respective SALNs for last year?

Hard to tell, according to Estrella Martinez, a former Bureau of Internal Revenue (BIR) director who collected taxes for the government for 32 years.

The Philippine Daily Inquirer showed the 68-year-old Martinez, a CPA-lawyer still in active practice, copies of the most recent SALNs filed by the senators.

Matinez noted that all declarations on cash assets were in pesos apparently in accordance with Republic Act No. 8183 (An Act to Assure the Uniform Value of Philippine Coin and Currency).

Despite the absence of any clear dollar declaration, senators—like the impeached Chief Justice and other government employees—were not required to disclose dollar deposits in their SALNs because of the rule on “absolute confidentiality” under the Foreign Currency Deposit Act (RA 6426), Martinez said.

“If the dollar depositor takes a strong exception by consenting to the examination or much less declaring [the amount] in his SALN, that will be valid,” she wrote in a paper she sent to senators over the weekend.

“But if the dollar depositor does not consent or does not declare it in his SALN, there is no flagrant violation of the Constitution, the SALN law, or RA 6426,” she said.

3 senators

In an informal survey by the Inquirer, three senators on Sunday said they had disclosed their dollar deposits in their 2011 SALNs, which might not be a good idea according to Martinez.

Martinez said the move would expose the declarant to possible “double taxation,” noting that dollar deposits had already been subjected to a final withholding tax of 20 percent according to the tax code.

“For those patriotic dollar depositors who declare their dollar deposits in their SALN, the acquisition cost should be in pesos, which will be part of net worth and will be  taxable at 32 percent under the tax code,” she said.

Martinez said there was no such thing as parenthetical declaration only of dollar deposits. “It has to undergo the regular process in the normal computation of net worth.”

Drilon no response

Senator Franklin Drilon, who has been criticizing Corona for excluding his dollar deposits in the SALN, did not respond to the Inquirer query.

He earlier rejected Corona’s challenge that he, together with the 188 members of the House of Representatives who affixed their signatures to the impeachment complaint, sign a waiver on his bank deposits. Corona submitted his own waiver to the Senate impeachment court on Friday.

Drilon was among the richest senators in 2011 with a net worth of P44,937,599.85. He declared cash assets worth P7,526,219.72 and investments worth P14,554,600.

Pangilinan’s $6,000

Senator Francis Pangilinan said he declared the “peso equivalent of about $6,000 (more or less P250,000) as part of cash and other investments in the SALN.”

In the document, he had a net worth of P14,564,768.94, of which P2,752,368 was declared as “cash in banks.”

Senator Aquilino “Koko” Pimentel III said he had around $20,000 in a time deposit account in The Bank of Philippine Islands. “I converted this to pesos in my head then added the amount to my peso assets both on hand and in banks,” he said in a text message.

In his 2011 SALN, Pimentel declared a total cash asset of P2.5 million. His net worth was P17,078,225.

Osmeña’s $1,200

Senator Sergio Osmeña III said he had also included his dollar deposits in his SALN where he declared P49 million under “cash and securities.”

But he said he had only one “very rarely utilized” dollar savings deposit worth $1,200. He said the account was used to “pay for cancer drugs of my wife and some books not available locally.”

“The peso value is about P50,000 and included in my SALN,” said Osmeña, whose net worth was P105,470,000.

Martinez said a government official’s declaration of his assets and liabilities “does not per se recognize his honesty.”

Correct tax

“The ultimate question is, did the government official pay the correct income tax based on the increase in his net worth and based on his honest declaration of his dollar deposits?” she said. “If not, he is guilty of tax evasion always.”

Martinez said the BIR could use the ongoing impeachment process to “generate more taxes,” noting that the government could “ferret out” tax evasion simply by examining the SALNs, including those of Corona.

“If you want to collect a tsunami of taxes, go to the SALN,” she said. “If Corona did something wrong, it’s the BIR that should run after him (for possible) tax evasion.”

Cash assets

Among senators with the biggest declared cash assets was Ramon “Bong” Revilla Jr. with P81,371,669.91 in “cash and receivables” on top of P8,168,679.25 in stock investments.

Senator Miriam Defensor-Santiago declared P44,222,627.00 while Senator Panfilo Lacson had P23,208,028.71.

Senator Pia Cayetano had P20,846,218.95 cash on hand and in bank, including P30,311,679.09 in “receivables, other investments, other assets.”

Senator Manuel Villar—the richest senator with a net worth of P854,213,716—declared no specific cash on hand or in bank in his 2011 SALN. He had P219,228,941 in stock investments and P630,396,156 under “other real and personal properties.”

Senate President Juan Ponce Enrile declared a total of P11,235,042 in cash on hand and in bank. He had notes receivables worth P31,380,938 and marketable securities amounting to P1,206,096. He also declared investments worth P68,048,903.

Explain to public

A defense lawyer said Drilon and the 188 members of the House who impeached Corona owed the public an explanation for their refusal to follow the Chief Justice’s lead in signing a waiver for his bank accounts.

Speaking with the Inquirer over the phone, lawyer Rico Paolo Quicho said Corona answered the Aquino administration’s challenge for public accountability when he voluntarily signed an unconditional waiver to open his bank deposits for scrutiny.

“Their decision not to submit a similar waiver would hound their political careers. That’s certain,” Quicho said, referring to Drilon et al.

Election issue

“After everything is done and over with, this will be a political issue. Next elections, the people will ask them, Why did they not sign a waiver and disclose their SALNs to the public?” he added.

“That’s the implication of what they did. What the Chief Justice did is now beyond the impeachment trial,” the defense lawyer said.

Quicho argued that Drilon and Iloilo Representative Niel Tupas Jr., the lead House prosecutor, virtually admitted that they also owned dollar accounts when they declined Corona’s “call for unity and transparency.”

Quicho said the lawmakers apparently shared Corona’s interpretation of the absolute confidentiality clause of the Foreign Currency Deposits Act since they did not want to disclose their own dollar accounts in their SALNs.

“Tupas and Drilon said they are not on trial. But because of the Chief Justice’s voluntary submission of his waiver, they are now on trial and the people demand no less because they are saying that public office is a public trust,” he said.

“How can the people trust them if they don’t want to open up their bank accounts? After the impeachment of the Chief Justice, whether he’s convicted or acquitted, the people deserve an explanation from them.”

Quicho also assailed the prosecution for saying that Corona’s waiver would no longer help his case and that it was just an “afterthought” on the part of the Chief Justice to open up his bank deposits.

“They are just afraid of the truth. They are also afraid that they will be expected to do the same. They are after self-preservation and politics is self-preservation,” he said.