Did tobacco plant in Batangas sway Recto?

Please explain this, Mr. Senator.

Antismoking groups on Saturday warned that if Sen. Ralph Recto failed to explain how his “watered down” sin tax bill would help curb rising cancer rates in the country, this could fuel suspicions that the presence of a $300-million Philip Morris plant in Batangas helped sway his decision.

Secretary Manuel Mamba, head of the Presidential Legislative Liaison Office (PLLO), said “big lobby money” was the main reason past administrations did not approve this measure for the past 15 years.  “There’s big money in it,” he said.

Mamba stepped up the pressure on lawmakers to reject Recto’s sin tax version that would cut government’s projected tax income from P60 billion to P15 billion. “Anyone who would not support this very popular measure is subject to suspicion that he has received lobby money or that he was bribed by the lobby groups of big multinationals,” said Mamba.

Recto immediately denied insinuations he was on the take.

“Why should I give (Mamba’s remarks) any importance? As far as I’m concerned that’s not true,” Recto said.

“Let’s discuss the structure of the measure. Let’s discuss the rates,” he said adding that the debate should focus on the merits and demerits of his version of the sin tax measure.

As to the presence of the Phillip Morris plant in Batangas allegedly influencing his committee report, Recto said, “That is not true.”

“All of them went to the Senate. We had hearings. You saw all of them there,” Recto said of the various sectors he listened to in the course of preparing his committee’s version of the measure.

“One day all the tobacco (representatives); one day all the distilled spirits; one day all the fermented liquor; one day the officials of the Department of Finance; one day the Department of Health (came),” he said.

Recto said all his meetings with the stakeholders were done at his public office in the Senate.  He said that on Monday he had a meeting scheduled with a group of doctors.

“There were no secret meetings,” Recto huffed.

Senate President Juan Ponce Enrile had earlier come to Recto’s defense, saying the executive branch should just let the Senate do its job of crafting laws.

Palace not giving up

But Malacañang is clearly not giving up the fight.

“The debates are still to come and these will be the opportunity to reemphasize the health and revenue arguments in favor of a more substantial bill,” Budget Secretary Florencio Abad, senior political adviser to President Aquino, said in a text message.

Abad said the debates should not be billed as a Malacañang versus Senate fight.

“A lot of vigilance and advocacy will be exercised by the critical stakeholders that can influence the fate of the committee report,” Abad added.

The administration wants to impose a uniform tax rate on all tobacco and alcohol products.  Recto’s bill has a multi-tier structure.

Sen. Franklin Drilon said he hoped to wrap up the debates and pass the sin tax reform bill by the middle of November, before the Senate begins plenary discussions on next year’s national budget.

Finance officials had hoped Recto’s version would improve on the House version of the bill that would generate a little over P30 billion. Instead, it reduced projected revenues to P15 billion.

Santiago goes ballistic

One of the principal authors of the bill, Sen. Miriam Defensor-Santiago, raised a howl after Recto presented his committee proposal, saying it bore little resemblance to her original bill increasing sin taxes.

Drilon, a member of President Aquino’s Liberal Party, believes the revenue measure can still be made to provide revenues nearer to the government’s desired P60 billion target.

Recto is also a Liberal Party member.

But Recto insisted “my version increases revenues. It is possible that their (Malacañang’s) version would decrease revenues.”

“When you change the structure radically from a four-tier to one-tier at a very high rate, there’s a chance of losing revenues,” Recto said. He said the P75 billion in revenues brought in by sin taxes in 2011 might even be decreased if what the administration wants is enacted into law.

Tobacco industry representatives had warned that many workers would lose their jobs if higher taxes forced many people to stop smoking.

Drilon said he had talked to Recto and they “agreed to disagree” on the floor.

Drilon said he had in mind a transitory two-tier tax rate. “After two years, there should be only one rate (for the high and the low in tobacco),” Drilon said.

Alcohol too

“On the alcohol, my only concern is that we comply with the World Trade Organization (WTO) standard,” said Drilon, pointing out that the Philippines signed the related protocol last year. The gist is it must not discriminate between local and foreign brands,” he added.

But antismoking advocates stressed that health concerns, not tax revenues or business concerns, should underline the discussions on the measure.

Emer Rojas, spokesperson for laryngeal cancer survivors, said Recto “needs to explain to the Filipino people why it is more important to protect the multinational tobacco industry than to save children and the youth from getting cancer.”

The Department of Health (DOH) earlier warned that a lung cancer epidemic could hit the Philippines  in the next 10 years unless taxes on cigarettes were raised to curb the smoking habits of an estimated 17.3 million Filipinos—the highest smoking prevalence in Southeast Asia. With a report from Norman Bordadora