A Break from your usual habit

Fund for the greedy

In current events on August 23, 2013 at 3:15 PM

Last 2012, my Statement of Income Tax return showed that I gave the Philippine Government  around one hundred thirty thousand pesos (Php 130,000). This does not include the sales tax (E-VAT) that the government collected from me. I must admit that my taxable Income does not really reflect “All income” that I have received in that year. I still owe the government. But I’m glad that I did not declare everything because now there’s proof that It only goes to greedy politicians and to some people who are using our hard earned money to get rich or fund their personal activities.

According to Wikipedia: “The Philippine government generates revenues mainly through personal and income tax collection, but a small portion of non-tax revenue is also collected through fees and licenses, privatization proceeds and income from other government operations and state-owned enterprises.” As of 2010, 85% of the Government revenue came from income taxes.

So as tax payers, each of us contributes money to fund the Government. Below is a breakdown of where our money was spent (supposedly) last year – 2012 (based on the budgeting done by DBM):

2012 Budget
Social Services

31.60%

economic services

24.30%

general public services

17.70%

defense

6.10%

debt burden

20.20%

Total

99.90%

One of the funds that our money are put into is the the Priority Development Assistance Fund (PDAF) or commonly known as “Pork Barrel”. 70 million pesos is given to each Congressman and 200 Million to each Senator each year – take note.. each year! They use this to supposedly provide assistance to individuals or a group of people through “projects” initiated by the politicians themselves – thru their own groups – or by third party groups known as Non-Governmental Organizations or NGOs.

In 2012, 1.37% of the total budget was allotted for PDAF amounting to Php 24.819B . 85% (or 1.16%) of this figure came from income tax collection and the remaining 15% (or 0.21%)  from non-tax revenue (as explained in the second paragraph) (1.16% + 0.21% = 1.37%).

However, it has been an open secret how some politicians and some government employees misuse the people’s money by:

  • Overpriced projects;
  • Ghost projects;
  • Ghost employees/contractors;
  • Ghost items;
  • Hard/tangible projects of low quality (like roads and bridges);
  • and other schemes.

And the bottom line in doing this is to get a portion of our money a.k.a. kickbacks! Meaning, some of our dear politicians whom we voted to protect us and our assets, are the ones who are robbing us and doing us injustice.

Let’s say that each congressman and senator is guilty of kickbacks (but I firmly believe that not all of them do this). And let’s say they pocket 20% from their PDAF.

  • Congressman’s Kickback = 14M /yr
  • Senator’s Kickback = 40M /yr

But wait, what about the cohorts? Let’s say they get another 10%. 10-20 people (sometime more) are involved and the money gets divided unequally among them. In total, 30% of the PDAF is being pocketed.

Now I want to know how much of my money these greedy guys are getting.

  • First I need to compute how much of my money went to PDAF: my 130k tax x 1.16% [this is the portion of income tax collection allotted to PDAF] = I gave Php 1,500 to fund PDAF.
  • So 1,500 X 30% (kickback rate) = Php 450

If the Kickbacks are true, then I gave Php 450.00 of my salary and went to the pockets of greedy politicians, supposedly publics servants, and some civilians. Well this is just for me who paid 130k in 2012. Others pay higher taxes but I think most pay lower.

Now, Let’s take the case of the 10 Billion pesos Pork barrel Scam allegedly top billed by a certain Janet Napoles plus Public Officials + Politicians + other individuals. How much did they get from me?

  • My 130k income Tax is just a mere 0.000013% of the Total Tax Collection for 2012 (Because the funds for the Pork Barrel mostly comes from taxes).
  • 10B x 85% (this is the portion of income tax collection allotted to PDAF as explained in second paragraph) = Php 8.5 B
  • Php 8.5B x  0.000013% = Php 1,087.60

I got robbed of Php 1,087.60. Individually, the amount may seem small. But collectively, totalling 10B, the alleged mastermind was able to buy several houses in executive villages, several condos and hotels here and abroad (one near Disneyland US), buy more than 30 luxury cars, and basically live a luxurious life. The politicians were able to fund their bids for re-election or election of their family member/s and/or relatives. Plus it’s as if all of them did not pay their taxes – even if they technically paid them, they got it back.. with interest!

Hmmm.. if the PDAF kickback amount is 450 then it looks like the 10B scam was carried out in the last 2 years only. But we all know that this system has been going on for decades. Which means……. It’s more than 10B! Oh My…. And mind you, this is only for PDAF. This is just 1.16% of our money. There are other “funds” and agencies where our money goes to.

There are been calls to abolish the current PDAF. But I think this is just a quick and short term solution to the problem. Our dear politicians will surely bring it back, with a new name but it will still be the same system. Plus, where will our politicians get funds to help their constituents – real help like build school buildings, roads, provide for monetary assistance? Because crooks as they are, they also provide real assistance and mostly real projects, it’s just that they get a portion of it (30%).

Why can’t we implement the same procedures/measures being done by private companies? If there is a disbursement, it should have proper liquidation. And because we don’t trust our politicians with our money, then let us increase transparency.

I have listed below some of my suggestion for the revised Pork Barrel Fund system:

Budgeting:

  1. There should only be specific items that can be funded by PDAF;
  1. Politicians to identify projects for the year (they already have these plans when they were campaigning).
  2. They will allocate budget for each project.

Disbursement:

  1. When it’s time to do the project, it will go to a procurement process where bidding will take place and the with qualified bidders. This will be facilitated by DBM. Example, for an NGO to qualify, they should have been in business for at least 3 years (to avoid fly by night NGOs), should have been submitting proper documents to SEC, BIR, etc. They should also show audited financial statements.
  2. There should be a retention fee and will only be given 3 months after the end of the project;
  3. There should also be a warranty period.
  4. The project and its details will be posted on the website of DBM for people to see (including results of bidding, amounts disbursed (if staggered), ect.).
  5. The project will go to the winning bidder.

Actual Project:

  1. The Bidder shall be required to submit regular (monthly/Quarterly) project updates to DBM and office of the politician.
  2. The politician shall update the public (his/her constituents)of the status of the project either via a billboard in his hometown and/or via the internet.

End/Closure of Project

  1. Once the project is done, a project completion report should be submitted by the project contractor;
  2. A Project Acceptance form or letter should be approved by all concerned government agencies.
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