Tuesday, November 26, 2013

PACQUIAO: As Champion, Congressman, and Citizen-Taxpayer

As a boxer, Pacquiao had a job to do, and he did it well.  For his performance he got the adoration of Filipinos, the admiration of millions of boxing fans worldwide, and substantial compensation amounting to millions of dollars.

As a public official or Congressman, his job is to make laws and hold the “power of the purse”.  For this, he obtains a salary, allowances, perks and privileges, and until lately, “pork barrel” allocations amounting to millions of pesos

As both, he should prove to be not just an ordinary citizen but also a model one worthy of emulation.  Like most law-abiding citizens, he is expected to obey all laws, and pay all taxes.

Kim Henares, Commissioner of the BIR also has a job to do.  She has to collect taxes from all Filipino citizens who have taxable income from all sources.  This includes Pacquiao - the Congressman, the boxer, and the citizen-taxpayer.

Pacquiao has had substantial earnings from boxing over a period of time.  Henares, bound by her duty, determined that Pacquiao failed to pay taxes on his earnings.  He claims that he had paid taxes on those earnings to the Internal Revenue Service (IRS) of the United States.

Since there is a Tax Treaty between the U.S. and the Philippines and that both believe in the principle of “no double taxation”, any amount of tax paid by Pacquiao in the U.S. would be a “tax credit” deducted from whatever taxes that he owes to the Philippine government.

So, it is just a matter of proof.  Pacquiao should just show the taxes that he paid to the IRS during the period that is questioned by BIR, and it should substantially reduce if not totally eliminate the taxes due.

Henares says that Pacquiao had two years to show proof.  Like in administrative, legal, and judicial proceedings, there are deadlines for filing, responding, answering, replying, and other processes to meet.

Pacquiao, despite leniency that is not accorded to ordinary taxpayers, failed to show the required documentary evidence within the mandated period.  For this failure, he was assessed tax amounting to P2.2 billion pesos.  I assume it includes interest charges and penalties.

Using the remedies afforded the BIR by law, the bank accounts of Pacquiao were garnished.  According to Henares, the garnishment netted P1.1 million – way below what is due and payable.

For the garnishment, Pacquiao cries foul and “harassment”.  He just earned at least $30 million for his last bout.  He probably earned about the same if not more from each of his bouts in the last few years.

What kind of accountants and lawyers did or does he have?  He certainly could afford good ones.  Right now, they are just dealing with civil tax liabilities.  The case could reach criminal tax violations if not averted on time.

My friends and companeros in the Philippines tell me that the BIR today is very different from that of the past.  Presently, you have a fearless, smart and honest “straight-shooting with a straight arrow following a straight path” Commissioner.  

Be a boxing champion and in her you have an avid supporter!  Be a tax-evader, and in her you face an aggressive collector/fighter!  She could actually knock you out of your senses!

Pacquiao is a pride of the Philippines.  He has brought honor and admiration to our country.  He also brings joy and entertainment to our people and to the boxing world. 

Amidst the devastation brought about by the strong and powerful Yolanda, his latest winning fight against former World Lightweight Champion Rios lifted the spirits of the surviving victims and the sympathizing public.  He and the victims showed to the world that the “Filipino spirit is stronger than any tyPHoon.”

The Yolanda victims, who saw Pacquiao fall to unconsciousness like a fallen hero in an earlier fight, saw him rise again.  For them, they saw in him - hope, recovery, rehabilitation, and redemption.

Pacquiao has to realize that he is now more than just a champion boxer.  He is now a public servant who could be a “champion of the masses” – a situation that could propel him to higher glories. 

As a Congressman, he could actively participate in legislating programs that would uplift the conditions of the masses including the Yolanda victims.

But like the masses that he represents, he must settle his tax problems.  He has sufficient resources now, and definitely in the near future to solve them.  Visiting the Yolanda victims is a good gesture.  Donating part of his boxing earnings for Yolanda relief, recovery and rehabilitation would even be better.  In fact, doing so would actually have positive tax consequences.

He can check with his accountants and/or tax lawyers.  OOPS!

Friday, November 22, 2013


Today, November 22nd is the 50th Death Anniversary of the late President John F.Kennedy.  I remember being in a speech class taught by Mr. Ray Cooper at Huntington Beach-Marina High School in California when the news of JFK's assassination was announced.  I was a foreign exchange student under the program, American Field Service (AFS) International Scholarships.  Everyone in class was shocked, many in tears! 
It was in this class where I wrote a winning oratorical piece entitled: “MORAL INTEGRITY: IMPERATIVE for SURVIVAL” heavily quoting JFK’s “City Upon a Hill Speech”.

JFK said, “Our success or failure, in whatever office we may hold, will be measured by the answers to four questions: 

First, were we truly men of courage--with the courage to stand up to one's enemies--and the courage to stand up, when necessary, to one's associates--the courage to resist public pressure, as well as private greed?

Secondly, were we truly men of judgment--with perceptive judgment of the future as well as the past--of our own mistakes as well as the mistakes of others--with enough wisdom to know that we did not know, and enough candor to admit it?

Third, were we truly men of integrity--men who never ran out on either the principles in which they believed or the people who believed in them--men who believed in us--men whom neither financial gain nor political ambition could ever divert from the fulfillment of our sacred trust?

Finally, were we truly men of dedication--with an honor mortgaged to no single individual or group, and compromised by no private obligation or aim, but devoted solely to serving the public good and the national interest.” 

I find them very relevant even today!

One of the most precious gifts that I got during my stint as an AFS Student (1963-64) was a Sketch of JFK that I still have to this day. I am sharing the Sketch with all.


I have not seen a duplicate copy of the Sketch using Google, Bing, and the built-in Safari search engine.  I would appreciate it vey much if someone is able to search for one successfully.

Saturday, November 16, 2013

Acts of Man Responding to an Act of God (Part II)

The Media
Anderson Cooper of CNN
“For the last four days, I’ve been seeing dead bodies in the streets here ... Literally there was a body on the streets of this town yesterday being eaten by rats because this woman had been laying in the street for 48 hours. And there’s (are) not enough facilities to take her up.

Well, I mean, there are a lot of people here who are kind of ashamed of what is happening in this country right now, what is — ashamed of what is happening in your state, certainly. And that’s not to blame the people who are there. It’s a desperate situation. But I guess, you know, who can — I mean, no one seems to be taking responsibility.”

Anderson Cooper of CNN said these words in the aftermath of KATRINA – the typhoon that engulfed the United States in 2005.  It happened to the best of them, the richest of them, and the strongest of them. 

Yes, indeed, for its response to KATRINA, that of the richest, world’s strongest militarily, and touted as the greatest country in the world, Cooper and a lot of Americans felt “kind of ashamed” of their own country at the time.

Eight years later a Super typhoon dubbed as the strongest in recorded history descended upon the Philippines.  Named YOLANDA, this “act of God” was about 5 times stronger than KATRINA.  Devastating a country a lot smaller than the U.S.A., with a GDP of about 1/60th, and a military several hundred times weaker, YOLANDA also merited an Anderson Cooper report on the government’s relief efforts.

You would think that if it could happen to a country like the United States, it would be more understandable if it happens to a much smaller and poorer one like the Philippines, right?

Reporting on the fifth day after the disaster, CNN's Anderson Cooper called out the Philippine government for the slow relief effort, saying it was unclear who is in charge.  
Cooper said,  “It is a very desperate situation, among the most desperate I’ve seen in covering disasters over the last couple of years,"
He went further, There (Tacloban) families, their mothers living having to sleep near the bodies of their dead children having to smell their dead children and this is day 5 and its been going on now for 5 days at that their child has been laying near them, that they have been smelling their child while they search for their other children who are still missing, and they're searching all by themselves or they're searching which such the help of a few relatives but many of those relatives are also searching for other relatives who are missing." -
“You would expect perhaps to see a feeding center that had been set up 5 days after the storm. We haven’t seen that, certainly not in this area. Some food is being brought to people here at the airport, some water being distributed but these are very, very difficult conditions for the people...”
Noticeable in both KATRINA and YOLANDA reporting, Cooper and CNN focused on three areas:  Desperateness of the Situation, Dead Bodies in the Streets, and Government Presence or Responsibility.  It is like a pre-written script.  But Cooper reported what he saw in Tacloban City and the world watched.
Indeed, one can really report a desperate situation in Tacloban City.  The devastation was catastrophic – its effects unexpected, unavoidable, unforeseen and inevitable.  It was cruel and unforgiving.  The local authorities prepared for it and the residents were warned not to take chances days before by no less than the President of the Philippines.
But no amount of preparation could have prevented nor mitigated the desperate situation.  All the material items such as food, medicine, and other necessities for initial relief were washed out.  All the machinery, equipment, transport, and other tools for relief efforts were also washed away.  Manpower resources led by the Mayor, employees, and volunteers were victims themselves.  Many were desperately saving themselves and their families. The offices, buildings and centers for possible packing and distribution of relief goods were flattened and totally damaged.  In the case of KATRINA, many buildings including the New Orleans Superdome remained standing and usable.  In Tacloban, only the airport building was usable for YOLANDA survivors and other operations.
The presence of dead bodies in the streets of Tacloban as in Louisiana and Mississippi is not surprising.  Cooper should have expected it considering the strength of YOLANDA compared to KATRINA.  Furthermore, before the storm, many people from the outlying areas moved to Tacloban thinking that they would get more protection and aid there.
More importantly, unbeknownst to Cooper, there are legal and religious considerations for mass burial in the Philippines.  Even the World Health Organization cautioned the country’s Department of Health against mass burials.  According to its “Management of Dead Bodies in Disaster Situations” manual, immediate mass burials without proper identification may violate some right.
"Burial of bodies in common graves or the use of mass cremation is unnecessary and a violation of the human rights of the surviving family members," it said.

"Practices such as the use of common graves or cremation make identification impossible, besides violating religious and cultural beliefs...identification of bodies should be done so that the desires and the customs of the families are respected."

It noted that the rights of ethnic communities, which are protected by law, might also be violated by mass burials.


PAGASA, the Philippine government’s Weather Bureau has been tracking YOLANDA’S coming for several days prior. 

On November 7th, the day before the storm, YOLANDA entered the Philippine Area of Responsibility (PAR) triggering storm signal No. 3 in the morning.  This was upgraded to signal No. 4 in the evening.

Local governments including Tacloban conducted preemptive evacuations and class suspensions were declared in various parts of the country. PNoy in a televised address also urged Filipinos not to take chances.  The head of NDRRMC, which is FEMA’s equivalent, Sec. Voltaire Gazmin, Interior and Local Governments Secretary Mar Roxas, and Social Welfare Secretary Dinky Soliman arrived at Tacloban to make sure that preparations were made and adequate.

On November 8th, YOLANDA brought monster winds and giant waves - flattening homes and buildings, and wreaking havoc to the population that nobody has ever seen.

The Super typhoon destroyed power and communications.  The government closed down major airports and ports.

Geraldine Uy Wong, an eyewitness who wrote an open letter to Anderson Cooper described the situation this way:

“The super typhoon decimated a big part of the population that so many people are still missing and unaccounted for to this day, and the rest who survived were either maimed and injured, were grieving for the loss of a loved one, struggling to cope with the tragedy that befell upon them, or simply looking for ways to take care of what remained of their family. In other words, everyone was a victim. And who are these people? These were the soldiers, police, Red Cross staff, social welfare staff, airport staff, bureau of fire protection (BFP) people, nurses, doctors, even the officials like the mayor and vice-mayor! And so if we look at things in this perspective, we begin to realize why there were no military and police to protect the people in the first few days, no staffers to repack or distribute relief goods, no BFP personnel to take care of clearing up the roads filled with dead people; in other words, there was hardly anyone there to put order into things as they were all victims themselves. I found out from one of the officials I spoke with that the people who came in much later to fill those places were flown in from Manila or pulled out from the other nearby towns that were not as badly affected. And so, those BFP people I saw clearing the road on Monday, the soldiers who were helping to slowly put order into the place, the red cross staffers who tried to address the health concerns of the victims, and even the DSWD staffers who were being deployed to evacuation centers and relief centers to distribute food and water, were mostly imports and volunteers from other places, and they were only able to start streaming in on the 3rd or 4th day! Therefore, the lack of manpower was not due to a lack of preparation but because of the unexpected loss or absence of these people who were supposed to be the government’s frontrunners!”

When Cooper made the live report on the 5th day out of Tacloban, my research and other media sources had noted the following government actions: 1) The Philippine National Police deployed at least 883 personnel to affected areas, including 400 to Tacloban City, Leyta alone; 2) The Senate proposed the creation of a P10 billion Rehab Fund; 3) PNoy had declared a “State of National Calamity”; 4) The Department of Budget and Management had allotted up to P26.84 billion to help assist victims and rehabilitate affected areas; 5) PNP Chief ordered implementation of price freeze; 6)  In Tacloban City, the government deployed armored vehicles, set up checkpoints, and imposed curfew to help end looting; 7) 540 family food packs were airlifted to Tacloban City on board a C130 of the Philippine Air Force on November 9, 2013; 8) 115,448 food packs (P31.06 million) and other food and NFls (P109.33 million) were readily available for augmentation; 9) As of November 13, 2013, a total of 115,607 food/rice packs were provided to Eastern Samar with hub in Guiuan (16,344 food/rice packs), Tacloban City (44,263 food/rice packs) and Leyte (55,000 food/rice packs); 30 sacks of rice each to BJMP (50kgs per sack), Eastern Visayas Medical Center (30 kgs per sack) and Divine Word Hospital (30kgs per sack); and 35,505 bottles of 500ml water, 35,210 bottles of 1L water and 168 pcs of 5-gallon containers to Tacloban City); 10)DSWD repacked a total of 349,431 food packs.
Cooper reported what he saw in one Barangay out of 30 Barangays in one City out of several municipalities in one province/island out of several provinces/islands affected.  He concluded an absence of government and an officer in charge.  He had no knowledge of government actions in dealing with the crisis in other places, before and during his live report.  He only saw government officials who “baby-sat” him while doing his report in the Philippines.
No wonder that Korina Sanchez, an anchor of ABS-CBN, the country’s largest TV network reacted by saying that Anderson Cooper did not know what he was talking about.  CNN should have known what was happening.  It used many of ABS-CBN’s footages in its coverage before and during the unreasonably severe and inevitable event.  The fact that Sanchez happened to be the wife of Interior Secretary Mar Roxas is irrelevant.  She was always a reputable and effective TV Anchor even before she married Roxas.
I have the highest respect for Anderson Cooper and the CNN.  Their network’s contribution to worldwide broadcasting especially in times of crisis is undeniable. In some way, through CNN, YOLANDA victims are receiving unparalleled aid.
John Crowley, a journalist from TIME had this perspective:
"When journalists focus on looting and slow aid delivery, they miss the point. Information is aid. Their reports are part of weaving the fabric of a global Filipino community back together after a typhoon tore through their hometowns. By showing communities coming together, journalists can amplify the dynamics that save lives."

Thursday, November 14, 2013

Acts of Man Responding to an Act of God (Part I)

An Act of God is an “inevitable, unpredictable, unreasonably severe event caused by natural forces without any human interference.  It is also known as Force Majeure (French for superior or irresistible power) - an event that is a result of the elements of nature, as opposed to one caused by human behavior.  In legal parlance, it is unforeseen, but even if foreseen, it is inevitable.

YOLANDA or Haiyan is considered an Act of God.  It was the fiercest typhoon in recorded history packing winds in excess of 200 mph.  It is stronger than Katrina and Sandy combined.  They are two devastating typhoons that smashed into U.S. territories previously.

Sandy and Katrina were bad for the United States.  YOLANDA is worse for the Philippines.  According to reports, the latter may have killed about 10,000 Filipinos, victimizing hundreds of thousands more, and flattened homes and buildings in several islands.  Severely affected are Leyte, Samar, Cebu, Malapascua, Panay, Boracay, Palawan, Negros islands and many other isolated areas.

Charles Watson of Kinetic Analysis Corp, a disaster-modeling firm, reported that losses to the Philippines from the Super typhoon would be $12 billion to $15 billion.  That’s about 5 percent of the country’s economic output.   Comparatively, Watson considers this catastrophic.

Expectedly, man-made institutions were called upon to respond to the effects of this cruel, merciless, inevitable, and unreasonably severe event.


The President of the Philippines, PNoy first appealed to all that this is the time to help each other.  After personally witnessing, observing, and listening to briefings, he signed Proclamation 628 declaring the state of national calamity. 

The declaration would accelerate the delivery of relief, rescue, and rehabilitation efforts with the approval and quick release of about P26 billion coming from the Calamity Fund, Philippine Social Fund, Savings, and other sources.  Implemented with the declaration are price controls; monitoring, prevention and control by Local Price Coordination Council of overpricing/profiteering and hoarding of prime commodities, medicines and petroleum products; programming/reprogramming of funds for repair of public infrastructures; and granting of no interest loans by government financing institutions.

Congress, on the other hand, decided to give up its pork barrel funds amounting to about P12 billion for YOLANDA victims.

There is no more reason for the Supreme Court to freeze the pork barrel funds since Congress is waiving its right over it in favor of the YOLANDA victims through the Calamity Fund.  Upon representation, the Supreme Court is expected to lift the TRO on the Congressional pork.

The United Nations / Foreign Governments/ NGOs

The United Nations on its part flashed an appeal for the international community to raise $301 million or nearly P13 billion in emergency funding to help YOLANDA victims.  Some 33 countries and international organizations, including the UN have donated P2.37 billion so far.  Among them are the following:

1.     Australia -          $9.3 million + medical personnel + non-food items
2.     Britain -                $16 million + military aid + temporary shelter + other household items
3.     Canada -              C$5 million
4.     Denmark -         KR 10 million
5.     Germany -          23 tons of relief goods
6.     Norway -              KR 20 million
7.     Saudi Arabia    $100,000
8.     Taiwan -              $200,000
9.     Sweden -             Emergency communications equipment
10.  United Kingdom - $9.6 million worth of emergency support package
11.  New Zealand-  $1.7 million
12.   Japan  -           $10 million + 25 strong emergency medical relief team
13.  South Korea -  $5 million + 40-member disaster relief team.  Korea Red Cross - $100,000; Fund campaign - $9.32 million
14.  Indonesia -        Aircraft and logistical aid including personnel, drinking water, food, generators, antibiotics and other medication
15.  UAE -                       $10 million
16.  United States   $20 million + 90 marines and sailors + aircraft carrier + 4 Navy ships
17.  USAID             Emergency shelter + hygiene materials + 55 tons of emergency food to feed 20,000 children and 15,000 adults for 5 days +  $100,000 for water and sanitation support
18.  The European Commission - $11 million
19.  China -              $100,000 + Chinese Red Cross - $100,000
20.  International Rescue Committee – Emergency team + $10 million appeal for aid
21.  MEDECINS SANS FRONTIERES – 30-people team of medical personnel, logisticians and psychologists + 200 tons of medical and relief items
22.  UNICEF            $1.3 million worth of supplies + water purification tablets, soap,                                medical kits, tarpaulins, + micro nutrient supplements
23.  The World Food Programme – 44 tons of high-energy biscuits, enough to feed 132,000 people for a day + emergency supplies + communications equipment
24.  The U.N. Refugee Agency – emergency airlift to send aid and supplies
25.  The International Red Cross and Red Crescent Movement - $94.6 million to provide 100,000 families with food, water, shelter and other essential relief for 18 months.                                       

The Catholic Church

About 85% of the Philippine population is Catholic.  The Catholic Church is therefore expected to take some leadership in this hour of pain and suffering among its flock.

Materially, the Vatican pledged $4 million in addition to the contribution of the Pope and the Catholic Charities amounting to $150,000 and $134,000 respectively.  It also encouraged parishes in the Philippines to have a second collection for the YOLANDA victims for two Sunday masses. 

Spiritually, Pope Francis led 60,000 people in Sunday prayers for the Philippines.  The Catholic Bishops’ Conference of the Philippines (CBCP) declared November 11 to 18 as days of mourning for the victims of YOLANDA.

At first, I thought that the message and prayer of CBCP’s new President Archbishop Soc Villegas appeared playing the blame game when he said, “How could you, dear Lord, have allowed this to happen to us who call on your holy name?  Have you abandoned us, Lord? Are you punishing us for our sins against you?”

He continued, “Tama na po! Hindi na po namin kaya!”  (Please stop! We can no longer make it!) This contrasts to what protestant former President Fidel Ramos preached a few years ago when he said, “Kaya natin ito!” (Yes, we can do this!)

I never expected a man of faith to even think that God would unleash the wrath of YOLANDA in order to punish so many innocent children and hard-working religious beings in some regions supposedly for their sins!

But to be fair, Archbishop Villegas also said, “The super typhoon was strong but our faith in YOU is stronger.”  This echoes the message of his predecessor as President of CBCP, Archbishop Jose Palma who said, “The Filipino Soul is Stronger Than YOLANDA!”

The Philippine Business Community

The corporate world in the Philippines also responded to the call for help.  The SM (ShoeMart) group set-up a P100 million Calamity Fund.  The Citi Foundation pledged $250,000 disaster relief grant.  The Jollibee Group Foundation is accepting donations through coin banks in its over 2,000 stores nationwide.  Harbor Star Shipping Services Inc. is helping the Coast Guard transport up to 8,000 metric tons of goods, or the equivalent weight of 150,000 sacks of rice.

The Alagang Kapatid Foundation raised P21 million in a telethon and is sending 12,000 units of one-liter bottles, 15,000 one-gallon jugs, and 10,000 pieces of bottled water.  Aboitiz Foundation raised P30 million.  Sharon Cuneta is giving a total of P10 million while Union Bank is giving P25 million through Alagang Kapatid Foundation.

There are many more donors like the San Miguel Foundation, Petron Corp, and the PLDT-Smart Foundation who represent the business community.


The individual donors in the Philippines and abroad are countless.  Some friends have actually emailed me on what is the best way to send help.  I responded that my wife and I sent our contribution via the Philippine Red Cross (www.redcross.org.ph).  I thought that it has the best structure for delivery; the widest reach; and proven to be the most reliable.


Next Article:  Acts of Man Responding to an Act of God (Part II)