Get all the perpetrators including the masterminds, lock them up, and throw away the key.
This is the only way for the Arroyo government to redeem itself after it allowed a violent carnage in Maguindanao province and showed signs of going easy on the suspected masterminds, Sen. Panfilo M. Lacson said Thursday.
"Now that the European Union, United Nations and other leading countries have condemned the Maguindanao massacre, and rightly so, as it is unprecedented in any election-related violence anywhere in the world, the only redeeming value left for our country is to account for all the perpetrators of the crime and lock them all up in jail forever," Lacson said.
More than 50 people were killed in the gruesome massacre in Ampatuan town in Maguindanao province last Monday.
Investigation so far showed the carnage stemmed from a political feud between the Ampatuan and Mangudadatu clans.
As of early Thursday, Philippine National Police chief Director General Jesus Verzosa said some suspects had been arrested, while Datu Unsay town mayor Andal Ampatuan Jr. agreed to surrender.
On the other hand, Lacson said it was equally deplorable that the Ampatuans even served as smiling hosts to presidential adviser on Mindanao Jesus Dureza, who Mrs. Arroyo designated as head of a crisis committee handling the carnage.
Dureza met with the Ampatuans Tuesday even after Buluan Vice Mayor Esmael Mangudadatu had indicated the Ampatuans were behind Monday’s massacre.
"It is equally condemnable that the Ampatuans served as smiling hosts to Mrs. Arroyo's emissary Sec. Jesus Dureza following the massacre, and after initial evidence gathered already pointed to the Ampatuans as the masterminds. Truly, only in the Philippines," Lacson lamented.
o0o
Wednesday, November 25, 2009
Monday, November 23, 2009
Lacson to Arroyo: Shun Political Solutions, Go All-Out vs Maguindanao Murderers
Instead of settling for another "political solution," President Arroyo must now go hammer and tongs against the perpetrators of Monday's gruesome massacre in Maguindanao province - and shoot the perpetrators if necessary.
Sen. Panfilo M. Lacson issued this challenge Tuesday to Mrs. Arroyo, saying this is one test that her administration cannot afford to flunk.
"This is one test that I insist the Arroyo administration must pass for a change. The entire Filipino nation must act as one in challenging Mrs. Arroyo and all our law enforcement agencies to lose no time in arresting the perpetrators of this abominable act and if necessary shoot to immobilize them," he said.
"The Arroyo administration must be cautioned this early that a political solution of any form is not acceptable as it is unconscionable," he added.
Members of the Ampatuan clan - credited for Mrs. Arroyo's poll "victory" in Maguindanao in 2004 and those of her senatorial bets in 2007 - were linked to the gruesome killing of at least 36 people, including journalists.
Authorities believe the incident was related to the 2010 elections.
Lacson said that while cheating in elections is forgettable though not necessarily forgiveable, killing political opponents and incurring "collateral damage" is a different matter.
Such senseless killing and violence must be dealt with firmly just to show the rule of law can still prevail in a part of the country where the Ampatuans act like "gods," he said.
"Cheating in every election in Maguindanao by the Ampatuans to deliver the votes to Mrs. Arroyo in 2004 and her senatorial candidates in 2007 – in which I was one of the victims, having gotten zero vote in the province – may be forgettable, but not necessarily forgivable,” he said.
“But killing political opponents, including those who had nothing to do with the forthcoming May elections is another matter altogether, and must therefore be treated differently if only to show that the rule of law can still reign in that part of the country," he added.
o0o
Sen. Panfilo M. Lacson issued this challenge Tuesday to Mrs. Arroyo, saying this is one test that her administration cannot afford to flunk.
"This is one test that I insist the Arroyo administration must pass for a change. The entire Filipino nation must act as one in challenging Mrs. Arroyo and all our law enforcement agencies to lose no time in arresting the perpetrators of this abominable act and if necessary shoot to immobilize them," he said.
"The Arroyo administration must be cautioned this early that a political solution of any form is not acceptable as it is unconscionable," he added.
Members of the Ampatuan clan - credited for Mrs. Arroyo's poll "victory" in Maguindanao in 2004 and those of her senatorial bets in 2007 - were linked to the gruesome killing of at least 36 people, including journalists.
Authorities believe the incident was related to the 2010 elections.
Lacson said that while cheating in elections is forgettable though not necessarily forgiveable, killing political opponents and incurring "collateral damage" is a different matter.
Such senseless killing and violence must be dealt with firmly just to show the rule of law can still prevail in a part of the country where the Ampatuans act like "gods," he said.
"Cheating in every election in Maguindanao by the Ampatuans to deliver the votes to Mrs. Arroyo in 2004 and her senatorial candidates in 2007 – in which I was one of the victims, having gotten zero vote in the province – may be forgettable, but not necessarily forgivable,” he said.
“But killing political opponents, including those who had nothing to do with the forthcoming May elections is another matter altogether, and must therefore be treated differently if only to show that the rule of law can still reign in that part of the country," he added.
o0o
Join Campaign vs Pretenders to Presidency, Ping Invites Chiz
Now that he has withdrawn from the presidential race, Sen. Francis Escudero should now focus his efforts to fight off pretenders to the presidency next year.
The invitation came from fellow opposition senator Panfilo M. Lacson, who said their common goal now is to make sure Filipinos choose an honest leader.
"Now that Sen. Escudero and I stand on the same ground, I hope we will continue to be one in pursuing our common objective of helping the Filipino electorate choose our next leader worthy of their votes, one who will not take advantage of his power and position to enrich himself in office then engage in transactional politics to cover up for his sins," Lacson said.
Last June, Lacson withdrew from the presidential race, saying he lacked the resources to keep up with his wealthier opponents who can afford frequent daily ads on radio and television.
He lamented that even if he tried to communicate the truth to people, limited funds forced him to "bow" to the reality of the race being for those with access to unlimited funds.
But he said he hopes to have Escudero join him in campaigning against "pretenders" to the presidency who turn out to be traditional politicians intent on fooling Filipino voters before and after the elections.
"I hope Chiz will also join me in campaigning against the pretenders to the presidency who are the traditional politicians out to deceive and fool us all before and after they get elected," he said.
o0o
The invitation came from fellow opposition senator Panfilo M. Lacson, who said their common goal now is to make sure Filipinos choose an honest leader.
"Now that Sen. Escudero and I stand on the same ground, I hope we will continue to be one in pursuing our common objective of helping the Filipino electorate choose our next leader worthy of their votes, one who will not take advantage of his power and position to enrich himself in office then engage in transactional politics to cover up for his sins," Lacson said.
Last June, Lacson withdrew from the presidential race, saying he lacked the resources to keep up with his wealthier opponents who can afford frequent daily ads on radio and television.
He lamented that even if he tried to communicate the truth to people, limited funds forced him to "bow" to the reality of the race being for those with access to unlimited funds.
But he said he hopes to have Escudero join him in campaigning against "pretenders" to the presidency who turn out to be traditional politicians intent on fooling Filipino voters before and after the elections.
"I hope Chiz will also join me in campaigning against the pretenders to the presidency who are the traditional politicians out to deceive and fool us all before and after they get elected," he said.
o0o
Tuesday, November 17, 2009
'Resolution' Not Derailed, Just Put in Proper Place
The so-called resolution seeking to dismiss an ethics complaint against Sen. Manuel Villar Jr. was not derailed but merely put in its proper place.
On this note, Sen. Panfilo M. Lacson on Wednesday defended Senate President Juan Ponce Enrile's decision to toss the document to the Committee on Rules.
"Derailed is not a proper word to describe what happened yesterday. Put in its proper place is more like it. It's unparliamentary, unethical, brazen display of disrespect to the Senate President and the Senate as an institution and abusive of our rules. Kaya dapat lamang na ibato sa committee on rules (It is just fair that it be tossed to the Committee on Rules)," Lacson said.
On Tuesday, Enrile tossed the resolution to the backburner, saying it is “not in order” at this time, adding the resolution effectively preempts the Committee of the Whole, which was formed to look into the ethics complaint filed by Maria Ana Consuelo Madrigal against Villar.
Last year, Lacson delivered a privilege speech on a P200-million double entry mess involving a stretch of road between South Luzon Expressway and Sucat Road. The privilege speech prompted Madrigal to lodge an ethics complaint against Villar.
On the other hand, Lacson noted some senators were deceived into signing the resolution after the one who circulated the resolution for signing made it appear Enrile knew and approved of it.
“It’s very dangerous. If you can deceive your fellow senators into believing it is okay to sign for this or that reason, that’s very dangerous,” he said. "A politician fooling his constituents is virtually an accepted practice. But to deceive a fellow senator into signing a resolution, that’s too much.”
Lacson also questioned Villar’s signing the resolution, saying it was tantamount to the respondent clearing himself.
Meanwhile, Lacson wished Sen. Lorna Regina "Loren" Legarda good luck in her team-up with Villar for the 2010 elections. "They deserve each other. Bagay talaga sila pagdating sa character, pag-uugali at kredibilidad (They are a perfect march in terms of character and credibility). Good luck to Loren," he said.
o0o
On this note, Sen. Panfilo M. Lacson on Wednesday defended Senate President Juan Ponce Enrile's decision to toss the document to the Committee on Rules.
"Derailed is not a proper word to describe what happened yesterday. Put in its proper place is more like it. It's unparliamentary, unethical, brazen display of disrespect to the Senate President and the Senate as an institution and abusive of our rules. Kaya dapat lamang na ibato sa committee on rules (It is just fair that it be tossed to the Committee on Rules)," Lacson said.
On Tuesday, Enrile tossed the resolution to the backburner, saying it is “not in order” at this time, adding the resolution effectively preempts the Committee of the Whole, which was formed to look into the ethics complaint filed by Maria Ana Consuelo Madrigal against Villar.
Last year, Lacson delivered a privilege speech on a P200-million double entry mess involving a stretch of road between South Luzon Expressway and Sucat Road. The privilege speech prompted Madrigal to lodge an ethics complaint against Villar.
On the other hand, Lacson noted some senators were deceived into signing the resolution after the one who circulated the resolution for signing made it appear Enrile knew and approved of it.
“It’s very dangerous. If you can deceive your fellow senators into believing it is okay to sign for this or that reason, that’s very dangerous,” he said. "A politician fooling his constituents is virtually an accepted practice. But to deceive a fellow senator into signing a resolution, that’s too much.”
Lacson also questioned Villar’s signing the resolution, saying it was tantamount to the respondent clearing himself.
Meanwhile, Lacson wished Sen. Lorna Regina "Loren" Legarda good luck in her team-up with Villar for the 2010 elections. "They deserve each other. Bagay talaga sila pagdating sa character, pag-uugali at kredibilidad (They are a perfect march in terms of character and credibility). Good luck to Loren," he said.
o0o
Junking of Impeach Raps vs Mercy Par for the Course
Nothing to be surprised about.
This was how Sen. Panfilo M. Lacson on Wednesday described the junking by the House of Representatives of the impeachment complaint against Ombudsman Merceditas Gutierrez.
"I will be surprised if the House of Representatives impeached her instead of dismissing the complaint," Lacson said.
On Tuesday night, the House of Representatives voted 172-15-1 in favor of the committee report junking the impeachment complaint against Gutierrez due to lack of substance.
Committee Report 2483, prepared by the House committee on justice under Quezon City Rep. Matias Defensor, ruled that while the complaint was “sufficient in form, (it) is not sufficient in substance.”
The complaint was filed by civil society groups and former Cabinet officials led by former Senate President Jovito Salonga.
Lacson noted the administration of Mrs. Arroyo has had a track record of twisting legal procedures to protect its allies from constitutional sanctions, including impeachment.
He said Mrs. Arroyo herself has benefited from such twisting of legal procedures, with her allies saving her from impeachment four times.
"If there’s one big accomplishment this administration has, it’s able to tire us all, yung feeling of resignation prevalent not only among people but even us in the opposition. It’s very tiring ... But we cannot afford to be tired," he said.
o0o
This was how Sen. Panfilo M. Lacson on Wednesday described the junking by the House of Representatives of the impeachment complaint against Ombudsman Merceditas Gutierrez.
"I will be surprised if the House of Representatives impeached her instead of dismissing the complaint," Lacson said.
On Tuesday night, the House of Representatives voted 172-15-1 in favor of the committee report junking the impeachment complaint against Gutierrez due to lack of substance.
Committee Report 2483, prepared by the House committee on justice under Quezon City Rep. Matias Defensor, ruled that while the complaint was “sufficient in form, (it) is not sufficient in substance.”
The complaint was filed by civil society groups and former Cabinet officials led by former Senate President Jovito Salonga.
Lacson noted the administration of Mrs. Arroyo has had a track record of twisting legal procedures to protect its allies from constitutional sanctions, including impeachment.
He said Mrs. Arroyo herself has benefited from such twisting of legal procedures, with her allies saving her from impeachment four times.
"If there’s one big accomplishment this administration has, it’s able to tire us all, yung feeling of resignation prevalent not only among people but even us in the opposition. It’s very tiring ... But we cannot afford to be tired," he said.
o0o
Sponsorship Speech on SB 3519 (The Real Property Valuation Reform Act)
Hon. Panfilo M. Lacson
Chairman, Committee on Ways and Means
November 17, 2009
Mr. President,
Your Committees on Ways and Means, on Local Government and on Finance, has the honor to report back for the consideration and approval of this august body, Senate Bill No. 3519 under Committee Report No. 740, authored by this representation and Senators Lapid, Angara and Biazon, entitled:
“AN ACT INSTITUTING REFORMS IN REAL PROPERTY VALUATION IN THE PHILIPPINES, ESTABLISHING THE NATIONAL VALUATION AUTHORITY AND APPROPRIATING FUNDS THEREFOR”
The Committee Bill is in substitution of the following measures:
* Senate Bill No. 130, authored by this representation, entitled: “AN ACT AMENDING SECTIONS 472 AND 473 OF REPUBLIC ACT NO. 7160 OTHERWISE KNOWN AS THE LOCAL GOVERNMENT CODE OF 1991”
* Senate Bill No. 202, authored by Senator Lapid, entitled: “AN ACT LIMITING THE AUTHORITY GIVEN TO THE COMMISSIONER OF THE BUREAU OF INTERNAL REVENUE (BIR) AND ENCOURAGING THE ACTIVE PARTICIPATION OF STAKEHOLDERS IN PRESCRIBING REAL PROPERTY VALUES, AMENDING FOR THE PURPOSE CERTAIN PROVISIONS OF THE OF REPUBLIC ACT NO. 8424 OTHERWISE KNOWN AS THE ‘NATIONAL INTERNAL REVENUE CODE OF THE PHILIPPINES’, AND FOR OTHER PURPOSES”
* Senate Bill No. 898, authored by Senator Angara, entitled: “AN ACT INSTITUTIONALIZING REFORMS IN REAL PROPERTY APPRAISAL AND ASSESSMENT PRACTICES, IN THE PHILIPPINES CREATING FOR THE PURPOSE THE NATIONAL APPRAISAL AUTHORITY AND FOR OTHER PURPOSES” and
* Senate Bill No. 1645, authored by Senator Biazon, entitled: “AN ACT INSTITUTING REFORMS IN THE REAL PROPERTY VALUATION AND ASSESSMENT PRACTICES IN THE PHILIPPINES, AND FOR OTHER PURPOSES”.
This report is a product of extensive public consultations jointly by the Committees on Ways and Means, Local Government and Finance.
During the tenure of our distinguished colleague Senator Escudero as Chairman of the Committee on Ways and Means, one public hearing and two TWG meetings were held:
When this representation took over as Committee Chairman of the Committee on Ways and Means, nine regional consultations, one TWG meeting and a final public hearing were conducted:
Mr. President, in order to know the sentiments of affected and concerned sectors, shown is a profile of the stakeholders who attended the consultative hearings.
Previous consultations were conducted by the Department of Finance (DOF) with key stakeholders in the government, such as the Department of Budget and Management (DBM), the Commission on Audit (COA), the Civil Service Commission (CSC), the Bangko Sentral ng Pilipinas (BSP), the League of Provinces of the Philippines (LPP), the League of Cities of the Philippines (LCP), the League of Municipalities of the Philippines (LMP), the Provincial Board Members League of the Philippines (PBMLP), the Philippine Councilors League (PCL) and the Union of Local Authorities of the Philippines (ULAP), government assessors and treasurers associations, such as the Philippine Association of Local Treasurers and Assessors (PHALTRA), the Philippine Association of Assessing Officers (PAAO), and the Philippine Association of Municipal Assessors (PAMAS), and the nine basic sectors of the National Anti-Poverty Commission (NAPC).
In the private sector, the following were consulted: the Financial Executives of the Philippines (FINEX), the Capital Market Development Council (CMDC), realty service groups, such as the Institute of Philippine Real Estate Appraisers (IPREA), the Philippine Association of Realty Appraisers (PARA), the Chamber of Real Estate Builders Association (CREBA), and the academic community.
Mr. President, for a better understanding of the bill, allow me to explain the concept of real property valuation.
The International Valuation Standards (IVS) defines real property as referring to all the rights, interests, and benefits related to the ownership of real estate.
While Valuation/Appraisal refers to the systematic and analytic determination and recording of property facts, circumstances, investments, and investigation of other relevant data resulting in a supportable estimate and opinion of value, or a professional conclusion based upon supporting data, logical analysis and judgment as of a specific date for a specific purpose.
Mr. President, real property is the country’s most important resource and biggest financial asset. A World Bank study indicated that 50% to 75% of national wealth is contained in land, alone. Real property, therefore, has the largest potential contribution to national income for funding economic and social developments.
Due primarily to our chaotic, ineffective and inequitable real property valuation system, real property contributes only a meager 6.6% to the gross national product (GNP).
Mr. President, based on a five-year study conducted by the Land Administration and Management Project of the DOF, and from actual experience, the following are the problems besetting the country’s real property valuation system:
FIRST, there are multiple valuation systems and standards in use in the Philippines. At least 23 different national government agencies and the 1,712 LGUs perform valuation functions for their own purposes, such as:
* National taxation (BIR);
* Acquisition, disposition or rentals of public lands (DENR);
* Compensation for agrarian reform (DAR);
* Land conversion (DA);
* Mortgage lending, collaterals (GSIS, Land Bank);
* Acquisition, disposition or rentals of real property (HUDCC, NHA, HGC);
* Expropriation of private property (DPWH, Napocor);
* Litigation and garnishment proceedings (LRA, RD);
* Registration and extraction of fees (LRA, RD);
* Financial /transaction audits (COA); and
* Real property taxation (LGUs).
SECOND, there are wide variations or disparities in valuation of the same property by these different agencies. Based on a 2004 Comparative Study of Land Values in Selected 19 Cities & Municipalities conducted by the LAMP-DOF:
* The Schedules of Market Values (SMVs) of LGUs are lower by 13% to 94% than the Zonal Values of the BIR;
* The Zonal Values of the BIR are lower by 5% to 930% than valuations made by private appraisers;
* The SMVs are lower by 187% to 7,474% vis-à-vis the valuation of private appraisers.
The wide disparities create confusion and make valuation susceptible to corruption, as in the case of the C-5 mess, a controversy which is now the subject of an ethics investigation against a member of this august chamber.
THIRD, it is observed that there is rampant and widespread undervaluation of real property for tax purposes. Conversely, there is overvaluation of property for expropriation and other cases where the government pays. In most cases, the situation leads to lengthy court litigation that delays the implementation of vital infrastructure projects that also multiplies its cost and deprives the public of the early enjoyment of the intended benefits of the project, like what happened in the Calaca port expansion project of the Philippine Ports Authority (PPA) which took the Courts more than a decade to resolve the land valuation issue in the case of PPA vs. Rosales-Bondoc, et.al (GR No. 173392, August 24, 2007), resulting in the multiplication of the project cost and deprived the public of the early economic and social benefits of the Project.
FOURTH, more and more LGUs do not comply with the legal requirement for revision of their Schedule of Market Values (SMVs) as mandated by the Local Government Code. Their non-compliance adversely affects the capacity of LGUs to increase revenues from real property, thereby increasing their reliance on the Internal Revenue Allotment (IRA).
FIFTH, there is no complete, current and reliable database of real property transactions. Data are dispersed among agencies performing valuation—LGUs, BIR, banks, registers of deeds, notaries, real estate practitioners—and are not readily accessible to the public. Moreover, these data are generally unreliable as they do not reflect true values of property at the time of transactions. Often they are deliberately understated to reduce the taxes due on them. This is not conducive to transparency and informed decisions relating to real property.
THE OVERALL EFFECT OF THESE PROBLEMS:
Mr. President, if these problems are not immediately addressed, the Government will continue to starve for resources to finance its development programs, especially for the poor, and may have to rely on the adoption of more tax measures, expansion of foreign debts, and will continue to bleed from corruption.
Moreover, taxation will remain inequitable and biased against the poor. The present system has eroded public confidence on real property valuation system; and on government’s land management capability, in general, thus the erosion of public trust in governance.
THE SOLUTION (THE VALUATION REFORM ACT, ITS OBJECTIVES AND FEATURES)
Thus, Mr. President, your Committees propose the immediate enactment of Senate Bill No. 3519, otherwise known as the Real Property Valuation Reform Act of 2009, with the following features:
* Objective: Promote, develop and maintain a just, equitable, nationally consistent real property valuation based on internationally accepted standards, concepts and practices.
* Establish and adopt a set of Philippine Valuation Standards based on international valuation standards to govern valuation of real property in the country.
* Adopt a single real property valuation base for valuing/appraising real property for various real property transactions by all government agencies and for assessment of all real-property related taxes.
* Create a National Valuation Authority, a lean and mean, highly technical agency under the DOF, as primary agency of government on valuation/appraisal of real property in the country to:
- Develop, adopt and maintain valuation standards for real property for tax and other purposes and ensure compliance thereof:
- Provide technical assistance to government agencies and instrumentalities on real property valuation and conduct, when required, special purpose property valuation;
- Regulate valuation/appraisal activities by compliance monitoring;
- Support the professionalization of appraisers and assessors, and the their organization;
- Train government assessors and appraisers;
- Promote valuation profession, training and development;
- Maintain a roster of government appraisers and assessors, and a national database of real property transactions;
- Promote continuing studies, information base on global and country trends and developments in real property transactions
* Separate the technical function of valuation/appraisal from the political function of taxation by transferring the approval of the Schedule of Market Values (SMVs) from the Sanggunian to the national valuation authority.
* The Appointment of Assessors by DOF Secretary from recommendees of local chief executives;
* Phased implementation of regional Offices to ensure most effective operating setup.
Budgetary Requirements
For the first year of implementation, the NVA will initially require P43.22 million. In the second year it will need P69.67 million, and P93.938 million in the third year of implementation.
The VRA will enhance local autonomy by strengthening the financial capacity of LGUs as shown in the local autonomy triad. The triad is composed of administrative, service delivery and financial autonomy. Accordingly financial autonomy is based on the triad. Without financial autonomy, the 2 other parts of the triad cannot be achieved. The VRA gives substance to and supports the objectives of the Local Government Code of 1991 which objective is to enable local government to enjoy genuine and meaningful local ... autonomy to enable them to attain their fullest development as self-reliant communities and make them more effective partner in the achievement of national goals.
Mr. President, the preparatory administrative arrangements for the smooth implementation of Valuation Reform Act are already in place in the DOF, which is implementing the real property valuation and taxation component of the Second Land Administration and Management Project (LAMP2).
The VRA has been endorsed to your Honor, the Senate President, and the Speaker of the House by the Secretary of Finance as priority policy agenda of the Government.
Pilot Study for Valuation Reform
Under LAMP, pilot studies have been made to ensure effective implementation of these reforms, in Naga City, Iloilo City, and lately in Mandaue City. These cities served as LAMP LGU partners in modeling the proposed revision of the Schedule of Market Values (SMVs).
The Naga City Experience
Using the improved valuation systems and procedures including the valuation standards, the SMV which used to be based on 1994 to 1995 prices was updated to reflect current market conditions. The revised SMV which took effect in January 2009 indicated great potential for increased revenues from real property tax. However, using the present assessment levels and tax rates would have meant sudden increase in taxes. Using the new SMVs, the Naga City adopted a tax structure that would strike a balance between the revenue requirements of the city government and the reasonable and acceptable tax burden that can be absorbed by the taxpayers—hence, a staggered implementation and capping of the tax increase were adopted.
The Iloilo pilot study is still ongoing while Mandaue has just started its pilot study.
Policy Reforms: Executive Order No. 833 Creating the Property Valuation Office (PVO) and DOF Order No. 37-09 Adopting the Philippine Valuation Standards.
Mr. President, to facilitate introduction of the reforms under the VRA, Executive Order No. 833 was issued on October 13, 2009 creating the Project Valuation Office (PVO) in the DOF. The PVO will be the transition organization to the National Valuation Authority (NVA).
On October 19, 2009, the Secretary of Finance also approved and issued Department Order No. 37-09 approving the Philippine Valuation Standards to govern real property valuation.
On the part of the legislative department, we passed Republic Act No. 9646 otherwise known as the Real Estate Service Act (RESA). RESA is a twin measure to VRA. It professionalizes the real estate service and organizes and capacitates the real estate service practitioners for the crucial role they will play under the reform envisioned by the VRA.
Mr. President and colleagues of the Senate of the People, the VRA is the answer to our quest for generating more revenues to fund national development programs, without creating new tax measures. Senate Bill No. 3519 will make real property taxation more equitable and will ensure that our largest natural resource and biggest financial asset contribute its fair share to national income.
In view of the foregoing, I urge the immediate passage of this bill. Thank you.
*****
Chairman, Committee on Ways and Means
November 17, 2009
Mr. President,
Your Committees on Ways and Means, on Local Government and on Finance, has the honor to report back for the consideration and approval of this august body, Senate Bill No. 3519 under Committee Report No. 740, authored by this representation and Senators Lapid, Angara and Biazon, entitled:
“AN ACT INSTITUTING REFORMS IN REAL PROPERTY VALUATION IN THE PHILIPPINES, ESTABLISHING THE NATIONAL VALUATION AUTHORITY AND APPROPRIATING FUNDS THEREFOR”
The Committee Bill is in substitution of the following measures:
* Senate Bill No. 130, authored by this representation, entitled: “AN ACT AMENDING SECTIONS 472 AND 473 OF REPUBLIC ACT NO. 7160 OTHERWISE KNOWN AS THE LOCAL GOVERNMENT CODE OF 1991”
* Senate Bill No. 202, authored by Senator Lapid, entitled: “AN ACT LIMITING THE AUTHORITY GIVEN TO THE COMMISSIONER OF THE BUREAU OF INTERNAL REVENUE (BIR) AND ENCOURAGING THE ACTIVE PARTICIPATION OF STAKEHOLDERS IN PRESCRIBING REAL PROPERTY VALUES, AMENDING FOR THE PURPOSE CERTAIN PROVISIONS OF THE OF REPUBLIC ACT NO. 8424 OTHERWISE KNOWN AS THE ‘NATIONAL INTERNAL REVENUE CODE OF THE PHILIPPINES’, AND FOR OTHER PURPOSES”
* Senate Bill No. 898, authored by Senator Angara, entitled: “AN ACT INSTITUTIONALIZING REFORMS IN REAL PROPERTY APPRAISAL AND ASSESSMENT PRACTICES, IN THE PHILIPPINES CREATING FOR THE PURPOSE THE NATIONAL APPRAISAL AUTHORITY AND FOR OTHER PURPOSES” and
* Senate Bill No. 1645, authored by Senator Biazon, entitled: “AN ACT INSTITUTING REFORMS IN THE REAL PROPERTY VALUATION AND ASSESSMENT PRACTICES IN THE PHILIPPINES, AND FOR OTHER PURPOSES”.
This report is a product of extensive public consultations jointly by the Committees on Ways and Means, Local Government and Finance.
During the tenure of our distinguished colleague Senator Escudero as Chairman of the Committee on Ways and Means, one public hearing and two TWG meetings were held:
When this representation took over as Committee Chairman of the Committee on Ways and Means, nine regional consultations, one TWG meeting and a final public hearing were conducted:
Mr. President, in order to know the sentiments of affected and concerned sectors, shown is a profile of the stakeholders who attended the consultative hearings.
Previous consultations were conducted by the Department of Finance (DOF) with key stakeholders in the government, such as the Department of Budget and Management (DBM), the Commission on Audit (COA), the Civil Service Commission (CSC), the Bangko Sentral ng Pilipinas (BSP), the League of Provinces of the Philippines (LPP), the League of Cities of the Philippines (LCP), the League of Municipalities of the Philippines (LMP), the Provincial Board Members League of the Philippines (PBMLP), the Philippine Councilors League (PCL) and the Union of Local Authorities of the Philippines (ULAP), government assessors and treasurers associations, such as the Philippine Association of Local Treasurers and Assessors (PHALTRA), the Philippine Association of Assessing Officers (PAAO), and the Philippine Association of Municipal Assessors (PAMAS), and the nine basic sectors of the National Anti-Poverty Commission (NAPC).
In the private sector, the following were consulted: the Financial Executives of the Philippines (FINEX), the Capital Market Development Council (CMDC), realty service groups, such as the Institute of Philippine Real Estate Appraisers (IPREA), the Philippine Association of Realty Appraisers (PARA), the Chamber of Real Estate Builders Association (CREBA), and the academic community.
Mr. President, for a better understanding of the bill, allow me to explain the concept of real property valuation.
The International Valuation Standards (IVS) defines real property as referring to all the rights, interests, and benefits related to the ownership of real estate.
While Valuation/Appraisal refers to the systematic and analytic determination and recording of property facts, circumstances, investments, and investigation of other relevant data resulting in a supportable estimate and opinion of value, or a professional conclusion based upon supporting data, logical analysis and judgment as of a specific date for a specific purpose.
Mr. President, real property is the country’s most important resource and biggest financial asset. A World Bank study indicated that 50% to 75% of national wealth is contained in land, alone. Real property, therefore, has the largest potential contribution to national income for funding economic and social developments.
Due primarily to our chaotic, ineffective and inequitable real property valuation system, real property contributes only a meager 6.6% to the gross national product (GNP).
Mr. President, based on a five-year study conducted by the Land Administration and Management Project of the DOF, and from actual experience, the following are the problems besetting the country’s real property valuation system:
FIRST, there are multiple valuation systems and standards in use in the Philippines. At least 23 different national government agencies and the 1,712 LGUs perform valuation functions for their own purposes, such as:
* National taxation (BIR);
* Acquisition, disposition or rentals of public lands (DENR);
* Compensation for agrarian reform (DAR);
* Land conversion (DA);
* Mortgage lending, collaterals (GSIS, Land Bank);
* Acquisition, disposition or rentals of real property (HUDCC, NHA, HGC);
* Expropriation of private property (DPWH, Napocor);
* Litigation and garnishment proceedings (LRA, RD);
* Registration and extraction of fees (LRA, RD);
* Financial /transaction audits (COA); and
* Real property taxation (LGUs).
SECOND, there are wide variations or disparities in valuation of the same property by these different agencies. Based on a 2004 Comparative Study of Land Values in Selected 19 Cities & Municipalities conducted by the LAMP-DOF:
* The Schedules of Market Values (SMVs) of LGUs are lower by 13% to 94% than the Zonal Values of the BIR;
* The Zonal Values of the BIR are lower by 5% to 930% than valuations made by private appraisers;
* The SMVs are lower by 187% to 7,474% vis-à-vis the valuation of private appraisers.
The wide disparities create confusion and make valuation susceptible to corruption, as in the case of the C-5 mess, a controversy which is now the subject of an ethics investigation against a member of this august chamber.
THIRD, it is observed that there is rampant and widespread undervaluation of real property for tax purposes. Conversely, there is overvaluation of property for expropriation and other cases where the government pays. In most cases, the situation leads to lengthy court litigation that delays the implementation of vital infrastructure projects that also multiplies its cost and deprives the public of the early enjoyment of the intended benefits of the project, like what happened in the Calaca port expansion project of the Philippine Ports Authority (PPA) which took the Courts more than a decade to resolve the land valuation issue in the case of PPA vs. Rosales-Bondoc, et.al (GR No. 173392, August 24, 2007), resulting in the multiplication of the project cost and deprived the public of the early economic and social benefits of the Project.
FOURTH, more and more LGUs do not comply with the legal requirement for revision of their Schedule of Market Values (SMVs) as mandated by the Local Government Code. Their non-compliance adversely affects the capacity of LGUs to increase revenues from real property, thereby increasing their reliance on the Internal Revenue Allotment (IRA).
FIFTH, there is no complete, current and reliable database of real property transactions. Data are dispersed among agencies performing valuation—LGUs, BIR, banks, registers of deeds, notaries, real estate practitioners—and are not readily accessible to the public. Moreover, these data are generally unreliable as they do not reflect true values of property at the time of transactions. Often they are deliberately understated to reduce the taxes due on them. This is not conducive to transparency and informed decisions relating to real property.
THE OVERALL EFFECT OF THESE PROBLEMS:
Mr. President, if these problems are not immediately addressed, the Government will continue to starve for resources to finance its development programs, especially for the poor, and may have to rely on the adoption of more tax measures, expansion of foreign debts, and will continue to bleed from corruption.
Moreover, taxation will remain inequitable and biased against the poor. The present system has eroded public confidence on real property valuation system; and on government’s land management capability, in general, thus the erosion of public trust in governance.
THE SOLUTION (THE VALUATION REFORM ACT, ITS OBJECTIVES AND FEATURES)
Thus, Mr. President, your Committees propose the immediate enactment of Senate Bill No. 3519, otherwise known as the Real Property Valuation Reform Act of 2009, with the following features:
* Objective: Promote, develop and maintain a just, equitable, nationally consistent real property valuation based on internationally accepted standards, concepts and practices.
* Establish and adopt a set of Philippine Valuation Standards based on international valuation standards to govern valuation of real property in the country.
* Adopt a single real property valuation base for valuing/appraising real property for various real property transactions by all government agencies and for assessment of all real-property related taxes.
* Create a National Valuation Authority, a lean and mean, highly technical agency under the DOF, as primary agency of government on valuation/appraisal of real property in the country to:
- Develop, adopt and maintain valuation standards for real property for tax and other purposes and ensure compliance thereof:
- Provide technical assistance to government agencies and instrumentalities on real property valuation and conduct, when required, special purpose property valuation;
- Regulate valuation/appraisal activities by compliance monitoring;
- Support the professionalization of appraisers and assessors, and the their organization;
- Train government assessors and appraisers;
- Promote valuation profession, training and development;
- Maintain a roster of government appraisers and assessors, and a national database of real property transactions;
- Promote continuing studies, information base on global and country trends and developments in real property transactions
* Separate the technical function of valuation/appraisal from the political function of taxation by transferring the approval of the Schedule of Market Values (SMVs) from the Sanggunian to the national valuation authority.
* The Appointment of Assessors by DOF Secretary from recommendees of local chief executives;
* Phased implementation of regional Offices to ensure most effective operating setup.
Budgetary Requirements
For the first year of implementation, the NVA will initially require P43.22 million. In the second year it will need P69.67 million, and P93.938 million in the third year of implementation.
The VRA will enhance local autonomy by strengthening the financial capacity of LGUs as shown in the local autonomy triad. The triad is composed of administrative, service delivery and financial autonomy. Accordingly financial autonomy is based on the triad. Without financial autonomy, the 2 other parts of the triad cannot be achieved. The VRA gives substance to and supports the objectives of the Local Government Code of 1991 which objective is to enable local government to enjoy genuine and meaningful local ... autonomy to enable them to attain their fullest development as self-reliant communities and make them more effective partner in the achievement of national goals.
Mr. President, the preparatory administrative arrangements for the smooth implementation of Valuation Reform Act are already in place in the DOF, which is implementing the real property valuation and taxation component of the Second Land Administration and Management Project (LAMP2).
The VRA has been endorsed to your Honor, the Senate President, and the Speaker of the House by the Secretary of Finance as priority policy agenda of the Government.
Pilot Study for Valuation Reform
Under LAMP, pilot studies have been made to ensure effective implementation of these reforms, in Naga City, Iloilo City, and lately in Mandaue City. These cities served as LAMP LGU partners in modeling the proposed revision of the Schedule of Market Values (SMVs).
The Naga City Experience
Using the improved valuation systems and procedures including the valuation standards, the SMV which used to be based on 1994 to 1995 prices was updated to reflect current market conditions. The revised SMV which took effect in January 2009 indicated great potential for increased revenues from real property tax. However, using the present assessment levels and tax rates would have meant sudden increase in taxes. Using the new SMVs, the Naga City adopted a tax structure that would strike a balance between the revenue requirements of the city government and the reasonable and acceptable tax burden that can be absorbed by the taxpayers—hence, a staggered implementation and capping of the tax increase were adopted.
The Iloilo pilot study is still ongoing while Mandaue has just started its pilot study.
Policy Reforms: Executive Order No. 833 Creating the Property Valuation Office (PVO) and DOF Order No. 37-09 Adopting the Philippine Valuation Standards.
Mr. President, to facilitate introduction of the reforms under the VRA, Executive Order No. 833 was issued on October 13, 2009 creating the Project Valuation Office (PVO) in the DOF. The PVO will be the transition organization to the National Valuation Authority (NVA).
On October 19, 2009, the Secretary of Finance also approved and issued Department Order No. 37-09 approving the Philippine Valuation Standards to govern real property valuation.
On the part of the legislative department, we passed Republic Act No. 9646 otherwise known as the Real Estate Service Act (RESA). RESA is a twin measure to VRA. It professionalizes the real estate service and organizes and capacitates the real estate service practitioners for the crucial role they will play under the reform envisioned by the VRA.
Mr. President and colleagues of the Senate of the People, the VRA is the answer to our quest for generating more revenues to fund national development programs, without creating new tax measures. Senate Bill No. 3519 will make real property taxation more equitable and will ensure that our largest natural resource and biggest financial asset contribute its fair share to national income.
In view of the foregoing, I urge the immediate passage of this bill. Thank you.
*****
Monday, November 16, 2009
Statement on the C-5 'Resolution'
Everything is transactional. The C-5 mess started and is about to end using transactional politics. One question immediately comes to mind - what did the 12 senators vote on? There is not even a committee report out for deliberation on the floor.
While it may be true that a majority of senators can express the sentiment of the Senate as a collegial body, it seems inappropriate to vote on a committee's recommendation that is yet to be routed for signing by its members and presented on the Senate floor.
It is a slap on the face of the chairman of the Committee of the Whole who happens to be the Senate President. It is a mess and an ugly one at that.
o0o
While it may be true that a majority of senators can express the sentiment of the Senate as a collegial body, it seems inappropriate to vote on a committee's recommendation that is yet to be routed for signing by its members and presented on the Senate floor.
It is a slap on the face of the chairman of the Committee of the Whole who happens to be the Senate President. It is a mess and an ugly one at that.
o0o
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