Press Release
January 9, 2018

Transcript of Interview of Akbayan Senator Risa Hontiver via ANC's Headstart with Ms. Karen Davila

Karen Davila (Q): Joining us this morning, she is the lone dissenter in the senate version of TRAIN. Why were you the only senator who dissented the senate version considering the other members of either the Liberal Party voted yes with reservations, but you completely dissented that version?

Senator Risa Hontiveros (Senator): As Akbayan Senator, I believe that the TRAIN lost steam. Mayroon siyang original na layunin to reform our tax system and to make the tax burden lighter especially on the poor and on ordinary people. Pero kalaunan ang nangyari, I will describe na parang nasagasaan ng tren ang mga mamayan at natamaan tayo ng tren last year at ngayon lang natin nararamdaman ang sakit nito. People are starting to feel the pain, trauma iyan, bumabalik, at soon itong mga balita ng pagtaas ng presyo ng kuryente, mayroon ding fare increases and the prices of basic commodities.

Q: What exactly in the TRAIN didn't you agree on, because you agreed to coal tax? When you said tataas ang kuryente, you agreed to coal tax and it is bound to happen?

Senator: Yung pinakaimportante sana, actually sana it's the bottomline for me, ang pinakaimportante sana na reform that I was pushing together with Senator Ping ay ibaba natin yung VAT (value-added tax) from the current 12%, which, by the way Karen, was the original proposal of the Philippine congress way back in 2005, noong ipinasa yung VAT law.

Q: Was it in the DOF proposal?

Senator: No, it was not but this was inputted in the senate deliberation at ang sabi ko nga ay highly reasonable dahil 10% is the original proposal at the start. Ang sabi ko, after reducing it to 10% dapat sana this year 2018, eventually kapag naging 4.5% ng gross revenue product ng Pilipinas to further reduce it to 8%. Again, that would have been very reasonable kasi sa ngayon pa lang that is the average VAT rate in the ASEAN region, more or less ay 8%. Ang Thailand nga ay umaabot nasa ganoong percentage ng GDP on the VAT revenues on a mere 7%, 8% lang nga ang pino-propose ko.

Q: But then, did you also want less exemptions on the VAT? Along with 12% in the Philippines, we also have the most number of exemptions in ASEAN. Everything is almost exempted here. There are two things: in other ASEAN countries VAT is lower but less exemptions. They don't exempt senior citizens, they don't exempt so many.

Senator: Well yung exemptions ng mga vulnerable sector tulad ng senior citizen that would come a little later several years down the road kapag mas naging efficient na ang yung mga direct taxes, tulad ng ginagawa ng other ASEAN countries. There are other colleagues of mine in the Senate na nag-champion ng pagbabawas ng mga exemptions, but I felt the critical tax reform, yung talagang kakamit sana sa layunin ng TRAIN originally, kasi tax reform for acceleration and inclusion should have been the lowering of the VAT para to increase the buying power lalo na ng mga working people, to leave more money and profit at the end of the month, and to lift more Filipino families out of poverty.

Q: But was that really the promise?

Senator: Yes.

Q: I remember the campaign promise of President Duterte, the VAT had nothing to do with it. It's really to change the 32% unfair taxes when it comes to P500,000 earner because they are taxed as much as those earning P1 million, P2 million or P5 million. Didn't they fulfill that promise?

Senator: In fact yung isang sinuportahan ko yung pagbaba ng personal income tax, pero siyempre Karen...

Q: The goal really is to...

Senator: Pero tatlo yung layunin ng TRAIN. At the start, TRAIN promised that magiging mas progressive, gagaan ang tax burden sa mahihihrap. Sa ngayon with the lower income tax, which I supported, ang makikinabang talaga, na dapat naman din, ay yung mga regular working people, salaried income earners. Pero paano yung, halimbawa, nasa lower income deciles n gating populasyon. I also supported early on the proposal of Senator Sherwin Gatchalian to increase to income decile 7 yung mga mako-cover ng unconditional cash transfer. But even those 1.7 million near-poor families, dahil sandal lang yung pagbigay ng cash transfer, two years at saka maliit lang yung halaga, hindi pa rin ma-offset yung impact, yung dagok ng increase on excise taxes on consumption.

Q: But will the lowering of personal income tax, I will be honest, give more buying power?

Senator: Doon sa may mga job.

Q: For instance, a teacher will take home P2,000 more and that's a lot.

Senator: P2,000 more is a lot in terms of absolute cash, pero ma-offset pa rin nga napipintong pagtaas ng kuryten, pagtaas ng presyo ng pamasahe, posibleng pagtaas ng presyo ng pangunahing bilihin. Those people who work and earn a regular income but who are tax-exempt from the beginning, dahil walang silang personal na income mas kakagat ng malaki at mas masakit sa bulsa nila yung pagtaas ng presyon ng pangunahing bilihin.

Q: Were you for the excise tax on fuel?

Senator: I look at that as something na pwedeng mag-shift tayo sa mas healthy na energy mix, away from coal, away from fossil fuels, towards a renewable energy, na mas healthy na energy. Ang hirap din, halimbawa doon sa area na kakaunti lang yung gas stations, kakaunti lang yung mga diesel fuel, kakaunti lang yung nagbebenta ng LPG, yung cooking fuel ng karaniwang Pilipino, ay pwedeng magbigay daan sa collusion sa price setting, pwedeng lumagpas sa price set by the DTI.

Q: Were you for or not?

Senator: I was for the coal tax but not for a progressive tax on fuels, so that we could ride for the global wave and other countries as well shift to renewable energies. Pero pagtingin natin sa mga socially-sensitive na mga fuel products, yung mga may epekto sa pamasahe; most working people ride public transport to work. hindi may-ari ng mga private and luxury vehicles. Kailangan talaga ng suporta na hindi matamaan ng fuel prices increases, yung expected siguro na fare increase at probably yung expected na wage increase.

Q: But senator we don't live in an ideal world. If you cut taxes today, you'll lose at least P130 billion a year. You have to offset it somewhere else. Now they chose to put it on this, which could be anti-poor and pro-rich. The question is, where could they have put that under because the accusations against the TRAIN now is there'll be less taxes on the rich, expensive cars are less tax, Innova is more tax. Why did that happen?

Senator: Yun na nga ang debate namin.

Q: Documentary stamps...You have senators that actually supported less collection for the government, they lowered it, that's the question: what else could they have taxed that didn't hit the poor and would have allowed BIR to not lose collections?

Senator: My main suggestion Karen talaga is to lower the VAT. That may seem like a cut in revenues, pero kasi kapag mas mababa ang VAT you preserve the buying power of the working people including yung mga nasa informal sector na ngayon pa lang ay walang regular na income dahil hindi sila swelduhan, pero mas maraming pera ang naiipon dahil.

Q: And they end up buying more? Makes sense.

Senator: Yes, more buying power. Kapag bumili tayo ng anumang produkto, kapag nagbayad tayo ng anumang serbisyo, mayroong revenue iyan sa huli. At the end of the month, kapag may natirang kahit kaunting pera o sweldo sa bulsa ay pwedeng iimpok sa bangko o pwede yan sa katapusan ng taon. Kung may naipong kaunting puhunan ipuhunan sa isang micro o anumang maliit na negosyo and this creates a virtuous cycle that could be supported by a more progressive taxation system to lift people out of poverty, pakapalin yung middle class natin.

Q: This is to those who don't earn ha?

Senator: In the first place, wala silang personal income. Yeah, wala silang increased income tax exemption sa ngayon pero dahil sa mas tinono natin ang income tax system, mas naging mapagbantay tayo sa usapin ng presyon, inflation, lahat ng mga ganyang indicators, ay mas maiaangat yung mas maraming pamilya?

Q: Is the panic unfounded?

Senator: No, it's not.

Q: Secretary Sonny Dominguez is saying that the inflationary impact of TRAIN is manageable. In one of my conversations he cited a fact that during the time of former Pres. Arroyo when the VAT was imposed, he said that when it is a two to three percent inflationary rate, you barely feel the increase. In fact he claims that there is no increase.

Senator: Pero hindi nasabi sa inyo ni Sec. Dominguez na na-temper yung inflationary effect noon hindi dahil okay lang yung ganyang rate ng inflation kundi dahil sa intervention noon ng Bangko Sentral ng Pilipinas. So there was government intervention and aside from the fiscal policy ng BSP, isang importanteng intervention na pwede at sana ay nagawa ng gobyerno dito sa TRAIN ay doon sa taxation system. This is a tax law. Sayang. We ran out of steam. We lost the TRAIN na sana gawing mas progressive yung taxation system.

Q: What do you see as a possible option? You have the Makabayan lawmakers who plan to go to the Supreme Court to stop the TRAIN. Do you believe that that is like a waste of time? I mean, you could have stopped that from happening at one point.

Senator: Well may mga other paths of actions na nakikita ko. Gusto ko sanang mag-call to action na sana i-consider ito. I will file a bill to lower our VAT rate.

Q: Pwede separate iyon?

Senator: Pwedeng separate iyon. Panahon na talaga para ibsan ng pamahalaan ang yung regressive tax measure nito. Ibaba muna natin yung VAT sa 10%, the original proposal.

Q: But are you willing for less exemptions. You can't have both.

Senator: That is already part of the TRAIN package right now. Pero para lamang i-offset yung dagok ng TRAIN through the indirect taxes, which the VAT itself is regressive, ibaba muna natin sa 10% at at a certain point in time, ang proposal ko ay 2022 o ang Secretary of Finance muna ang mag-ascertain na okay sa GDP ng bansa natin ay 4.5% ang share doon ng VAT revenues, ibaba natin to 8%. Anyway, gusto naging maging consistent dito sa protocols natin dito sa ating region, ASEAN, more of less 8% ang VAT rate sa ASEAN.

Q: You wanna go for 10%?

Senator: Initially, then kapag nasa 4.5% na ng GDP ang VAT revenues ibaba pa natin sa 8%. Secondly Karen, pinag-uusapan natin ang DTI, they are optimistic na mababantayan daw nila ang presyo ng mga bilihin, dapat ay mag-price watch talaga sa presyon ng bilihin, presyon ng kuryente, presyo ng pamasahe alang-alang din sa ating transport sector. Kailangang bantay ng DTI ang mga presyo ng pangunahing presyo ng produkto at bilihin.

Q: They're doing that.

Senator: Yes they're doing that there must be a real price watch and more pro-active watch. I would like to call on the Philippine Competition Commission to watch out for anti-competitive behavior on the part of monopolist, ego-polistic industries. And last but not the least, at the start ng pagraragasa nitong TRAIN, I'm calling on the Energy Regulatory Commission na bantayan din.

Q: But the ERC does not even have commissioners right now.

Senator: That's right, medyo in disarray sila ngayon.

Q: Nothing is moving in the ERC apparently.

Senator: That's a gap that has to be fielded with qualified, dynamic, pro-active people na since papasok sila as the TRAIN is leaving the station, dadaan yung train na iyan sa buong populasyon natin, it's for the ERC to really be on the lookout, foe example, for the impact of higher energy and electricity rates.

Q: Are you convinced with the subsidy program of the government? Subsidy is a vicious cycle.

Senator: Subsidy can be a vicious cycle but more at the outset, lifeline lang. salbabida, pero heto nga pagkatapos hindi binigyang daan yung lower VAT rate, which, for me, isa the bottomline. I still hold on to the hope to vote for the TRAIN bill kaya lang naging deal breaker, na patin yung portion reserved for socially-mitigating measure, the earmarks, Karen, niliitan at niliitan.

Q: By how much?

Senator: Originally it was proposed to be at least 40% of the revenues, niliitan lalo to 27%. But in principle, subsidies earmarked for health spending, for first 1000 days nutrition, for pregnant women, for babies...

Q: Isn't that in the GAA already?

Senator: It was somewhere already in the GAA, maybe under the DOH budget pero maganda sanang naitali na yung revenues sa TRAIN ay naka-earmark din para sa ilang mga subsidies. That's still a part of the TRAIN bagama't limited na lang.

Q: Were you for sugar tax?

Senator: I think the sugar sweetened beverage na selective dahil in-exempt name at the outset yung 3-in-1 coffee, kasi kailangan natin ng kape para buhayin yung diwa natin sa umaga, all working people need coffee, exempted yun.

Q: And also milk.

Senator: Yes, also milk. Pero as a health measure maganda na tiered sana na yung high fructose na pinakamasama sa kalusugan natin ay siyempre yung indirect competition, yung mga imported, sa local sugar producers natin, who also deserve in a fully developed industrial policy a rational support.

Q: Do you think kulang?

Senator: Kulang pa. There was an attempt pero na-watered down. Maybe it's a step in the right direction pero, in any case, just like the bill I intend to file to lower the VAT rate, we can still file piecemeal health and revenue measures para i-offset o i-compliment yung mga negatibo at positibong epekto ng TRAIN.

Q: On cosmetic tax, the surgery tax has been a controversy with Senator Drilon's spiel on Vicky Belo on the floor, but removing all that, what's interesting is it was the senate committee that actually proposed a 20% tax - it did not emanate from the House - it came from the senate and Drilon said it suddenly disappear, and it's down to 5%. It' not part of the big pie but...

Senator: Well, symbolically. Kasi hindi ba, bakit hindi binigyang daan yung lowering of VAT to 10% na para sa mahihirap, para sa working people, pero binigyang daan, una, para kalahatiin yung nasa seante version, and then further kinalahati to 5% sa bicam version. Bakit hindi natin binigyan ng kasinglaking relief yung mga mahihirap sa basic necessities tulad ng binigay sa mga mas afford at sa hindi namang basic, in fact a luxury?

Q: Actually it's not to hit on any particular doctor or any cosmetic business but it's the whole concept that we can't save the fisherman from the increase in the excise tax on fuel, why would you save someone who wants a beauty treatment? Parang ganon.

Senator: Yeah, right, hindi naman health necessity.

Q: Yeah.

Q: What is your reaction to the statement of the Department of Finance that he said, the next round of tax reform, which is next quarter of this year, is meant to make the system fair?

Senator: Kahit mula sa Department of Finance, yung package two nila on lowering exemptions on corporate income tax and rationalizing yung industrial policy, in the end ang sabi nila mismo is it's going to be revenue-neutral. Yung debate naman sa budget, related din sa TRAIN, ang sabi ko, we actually need an industrial policy from the government.

Q: How do you make the next round...I agree with you on the VAT that putting it down to 10% could be a balance served, what else can be done? Have we saved wealthy? I mean, let's be blunt.

Senator: I think that's one, largely, we have, which is not to say that we should damn the wealthy. Hindi eh. The whole idea of TRAIN, from the mouth of the TRAIN itself is to make our taxation system more progressive, fair and equitable, na gaanan yung tax burden sa mahihirap, and hayaan o hilingan o i-demand sa mas mayaman to bear the biggest share of burden dahil mas kaya naman nila. Kung nation-building ang pag-uusapan lamang, kaya naman. Dito sa package two, yung corporate income tax yung pag-uusapan; titingnan yung corporate incentives. I think kung ginaanan natin yung personal income tax para sa working people, working class, pero kulang yung pag-ayuda natin sa mahihirap through a lower valued-added tax, then we should look at what greater share should, especially the large corporate entities, put into the tax pie. Pero yung pagbawas lang nila sa mga incentives ng mga corporation, ang tingin ko ay huwag nilang tingnan lamang sa piecemeal na package two ng TRAIN. I hope they will look at it to improve our overall industrial policy.

Q: You go allover ASEAN, the corporate tax rate is lower than the Philippines, if you have ASEAN hitting at 22 or 23%, that's where the confusion lies. Will lowering income tax actually...immediately it sounds very anti-poor, pro-rich, but in the long term, will it be much better for everyone?

Senator: Even the long term in the US kailangan pa nating tingnan. Kasi kaka-run through pa lang ng republican allies ni President Trump sa senate. That also gives the argument for kung lower yung corporate income tax sa ASEAN at iniisip habulin ng Pilipinas iyon, bakit hindi rin yung VAT? Kung yung private sector natin, we want them to bear a lower tax rate, dapat yung consumers din, dapat yung mga mahihirap din para sabay-sabay na nakikinabang sa isang efficient, mas high revenue dahil mas malawak yung base, not just among the corporations but among the individual taxpayers, lalo na yung mga mahihirap lalo na yung working people.

Q: With the coal tax, I do understand the fact that the coal industries have been protected for 30 years, the essence of the presidential decree is actually to spare the business.

Senator: Which now, it has.

Q: It has already. Would there have been a way to actually implement the coal tax but without them actually passing it to the consumers?

Senator: Yes, for ERC to be fully staffed, led and to their job para bantayan yung oligopolistic behavior or abuse of behavior on the part, of example, of certain coal-fired power plant. Tingnan natin, globally, other countries around the world, the shift is really away from coal, not just on the part of the civil societies, not just on the part of the government na nag-iiba ng policy, private sectors allover the world, alam nila that the age of coal is passing. Kaya huwag tayong pahuhuli, pa-trap doon sa age na iyan. It's passing.

Q: Totoo naman, it's finite.

Senator: It's finite. Saka nagigigns na ang buong mundo at ibang-ibang bansa na mas incentivized talaga na mag-shift sa healthier energy mix, mas malaki na yung share ng renewable energies. You can see that as well for the Philippines. Kahit yung mga dating coal industries sa ibang bansa, sila mismo gradually nagsi-shift din towards renewable energy. Bakit tayo paiiwan? Bakit tayo pahuhuli? It would have been possible to take more steps towards that in the TRAIN. Meron namang kahit papaanong steps in that direction but they could have been bolder. Ang original proposal naming ni Sen. Loren, for example.

Q: But you're against incineration?

Senator: Yes.

Q: You look at the European countries, they incinerate and actually make trash into energy. Our clean air act is (patterned) from the European countries.

Senator: Totoo. Much less strictly implemented.

Q: Exactly.

Senator: Maganda ang batas. We lack on implementation.

Q: Yes. We still have landfills.

Senator: We still have landfills, even open.

Q: Could we make that a possibility because you can make trash into energy? It's innovative.

Senator: Totoo. In that sense it's innovative. It's a whole menu that's already in the solid waste management act, in the clean air act, in the renewable energy act. Marami tayong batas that will make our energy sector more modern, more progressive, healthier as well. We just need to implement them and also be awake to regional and global trends.

Q: Federalism, the possibility of a no-el. Speaker Alvarez said that the main priority is to convene the Congress into a con-as, this January, to already vote on a possible plebiscite on May 2018.

Senator: At gusto na niyang ipagpalit yung plebiscite na iyan for elections, so no-el scenario bundled together with his project of a sham, for me, a sham federalism and then constitutional amendments. Naku Karen, isa itong death blow. It will be part of a death blow to Philippine democracy. It would be a repudiation of the 1986 People Power Revolution. Kitang-ktia natin yug trends na tinatahak nila: it's a aggressive consolidation of political power, just one branch of government, the executive, specifically the Office of the President, dismantling the mechanisms of accountability, and kapag isinaman mo pa sa recently-reported na compromise agreement (with the Marcos family), it's a repudiation talaga of our effors in the past three decades na i-dismantle, i-abolish, yung dikatadura noong 1972-1986, to make that regime accountable, to prevent future abuses. Parang gusto lang ulitin yung historical nightmares na yun.

Q: Senator, do you a con-ass is even possible for January?

Senator: Pwede nilang sabihin kung anog ang gusto naming gawin ay subukan at least with their numerical superiority in the House, kaya bahagi ng package nila y con-ass then voting jointly. Parang irrelevant ang senado, irrelevant ang Magnificent Seven sa House, dahil sa overwhelming superiority of numbers nila sa House. Pero kahit yung con-ass as a mode, Karen, I really would not accept that. Iyan yung talagang hindi participatory na mode of amending our constitution. Ang con-con pa rin, ie ever. But still, we need to ask, do we nee to amend our constitution? Anong mga provision diyan at anong mode?

Q: But then the speaker, it would be participatory if, on May 2018 elections, during the barangay and SK elections, I'm not sure of the questions - are you in favor on the Federalism - would that make the people participate?

Senator: They're loading too much on the plate of the public. Ngayon pa lang ang dami ng scenarios, mga proposals. Actually, nililito nila ang public to keep us off balance. Ganoon din ang mangyayarin kung gagawin nila ang plano na kasabay ng barangay at SK elections, isasabay nila yung plebiscite, about a thing as important, as substantial as constitutional reforms, federalism. Naku kahit yung federalism, ang daming requirements niyan. Hindi naman yan overnight lang.

Q: Exactly.

Senator: Ano ba ang ibig sabihin ng federalism? Ang requirements ay hindi maliliit. We have to dismantle political dynasties. We have to abolish private armies. Kailangan nating siguraduhin na yung mga magiging components ng federal republic of the Philippines ay may financial capacity, sustainability. Hindi iyan basta-basta magde-decide ang Malakanyang na oh bukas, federal na tayo. It's not an automatic, overnight cosmetic change. There are changes necessary in the political culture of citizens para may buy-in lahat at para may capacity talaga.

Q: But you have lawmakers saying no-el may be necessary.

Senator: Imagine, that is unconstitutional. Ang simpleng utos ng constitution natin ay dapat may regular na halalan para pwedeng ibigay muli o bawiin ng mamayan sa mga nakaupo ang mandato nila or to give fresh mandate to new parties and candidates. Kailangan ang election para siguraduhin na may accountability ang elected officials sa mga mamamayan, sa mga botante. Otherwise, how do we ascertain in a simple manner, hindi iyan sapat?

Q: What do you do when your Senate President Koko Pimentel that is also, honestly, in a bind? I mean, he may be thinking that all of you, given, of course, the background, his father's training, where he stands, but he's also with the President?

Senator: Yes.

Q: So he's a guy who is trapped.

Senator: The senate is not trapped, Karen. The senators are not trapped. Dapat, bilang primus interpares namin, dapat our Senate President is not trapped, kasi siya yung pinuno ng isang institution na ang legislature is separate and co-equal branch of government ng executive. We should not be party. We should not feel trapped dito sa proyektong ginagawa ng executive, ng Office of the President, na parang, progressively, disempowering the two other branches of government, hanggang siya na lang ang nakatayong center of power.

Q: What's your reaction, Senate President Pimentel, at one point, said that a possible term of extension for Duterte is possible?

Senator: Yes, sinabi na yung term extension kung magiging amenable ang president. Huwag namang sana parang utang na loob pa natin na maging amenable si President sa term extension.

Q: Are you alarmed?

Senator: It is disappointing. Hindi nakakabawas sa slowly growing sense of alarm sa pag-normalize ng mga irregular practices or beliefs about what should constitute a democratic system of government. Kasi term exrtension, hindi nga iyan contemplated ng Constitution. Sinasabi, halimbawa, ang president one term with no extension. Para sabihin natin na term extension para sa president, this caused into question constitutional principles at dapat maging subject ng constitutional debate. And thinking na hindi iyan simpleng usapin ng statement sa publiko or kahit sa media, napakabibigat ng mga usapin na ito: no-el, federalism, con-ass, na hindi pwedeng diktahan lamang ng presidente o ng isang branch of government.

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