Monday, June 20, 2011

Privatization 8: Government Debts: Military Camps and Spratly Issue

The hawks' noise, suggesting bigger military funding to "challenge" China in the Spratlys, keep ringing. Citing national pride, national sovereignty, national boundary for their claims, they are now counting how many billion pesos per year in additional funding to the Philippine Navy will be needed.

I oppose more taxation, more borrowings to finance more military spending for the Spratlys adventure. 

(Data source: Bureau of Treasury, Fiscal Performance 2010)

The budget deficit of P300 B per year is not enough, we need to raise it further? Perhaps to P350 B a year, or P400 B a year, or more? 

We should privatize Camp Aguinaldo, the DND and AFP can get the money for AFP modernization, and the DND, AFP HQ and their golf course can move somewhere. They should sacrifice somewhere in order to finance what they think is an important program. But if they insist that I and many other Filipinos will part more of our hard-earned money to finance AFP modernization, then it is something that I will not support. 

There are endless and yearly demand from all government agencies and sectors. Education and health will say "we need more money". Public works, housing, environment, justice will say "we need more money." Agriculture, credit, agrarian reform will say, "we need more money"; local governments, legislators, police, social work, CCT, etc. will say "we need more money." And soon, population control and condomeria will say "we need more money." Everyone in government is a sucker for more tax money. It's a bad culture in the government.

(Data source: Bureau of Treasury, National Government Debt, March 2011)
Advocates of "more taxes for military in Spratlys" proposal should produce sensible numbers, that their idea will not produce more adverse implications in the country's public finance and other components of the economy. They should also produce good arguments why Basilan or Sulu or Tawi-tawi provinces and archipelago, clearly in our territory, zero territorial dispute, remain undeveloped, and now they want more adventure to "develop" the Spratlys.

The BCDA Law of 1992 or RA 7227 stipulated that 32.5 percent of the proceeds of the privatization of military camps in Metro Manila and nearby provinces will go to finance the transfer of AFP camps, the construction of new camps, AFP modernization, housing and livelihood assistance to AFP personnel, rehabilitation of AFP medical facilities. 

Fifty percent (50%) will go to finance the conversion of Clark and Subic into commercial uses. Five percent for housing of the squatters of Metro Manila, Olongapo City and Angeles City. The balance to be appropriated by Congress.

Some sectors of the AFP said that they "practically got nothing" from the Fort Bonifacio privatization, so they are not in favor of privatizing Camp Aguinaldo. Well, they can keep that camp and its wide golf course, but please, they should NOT call for more taxes, more borrowings, to finance AFP modernization.

A friend suggested that the DOF and BIR should efficiently collect more taxes. These agencies know they should do it, it's just that the bad governance culture in the government simply disallows them to become efficient. Besides, a medium size corporation in the Philippines pays 47 diff. taxes and fees every year, compared to just 4-5 different taxes and fees in Singapore and Hong Kong. Supposedly capitalist Philippines actually has more business taxes than socialist China and Vietnam. Check the WB-IFC annual report, Doing Business 2011,

Someone suggested the repeal of RA 7227 so that the whole sale of military camps will go to the AFP and not to the BCDA and other sectors mentioned above. That since the AFP modernization law was enacted in 1995, the AFP received the first release of about P5.4B in year 2000, and this was AFP's share for the sale of Fort Bonifacio. Congress NEVER included in the GAA any modernization money until it released P5B in 2002.

I can support that repeal or amendment to the BCDA law. Many people were actually asking, why give money to Clark and Subic when they have no debt, they have vast tracts of land which are clear assets, not liabilities. These are relatively easy to convert into cash for the BCDA.

We can ask one important question here: Is there any REAL external threat to the Philippines, a country that wants to invade us soon or in the medium term? 

If the answer is Yes, then we will need soldiers trained to fight invaders. If the answer is No, then abolition of the AFP is a logical move. The real threats in the country are internal -- killers, murderers, rapists, kidnappers, hold-uppers, carnappers, land grabbers, extortionists, thieves, drug pushers and other criminals. Both in government and the private sector. Even the communist NPAs and the Muslim rebellion are internal threats and should be a police function, not AFP function.

Some hawks insist that China and Vietnam are external threats to the Philippines. Wrong. As I repeatedly argued here earlier, China became richer by sending thousands of ships of cheap goods to the Philippines and elsewhere. China is now the world's 2nd largest economy (GDP size) next to the US, even without sending a single warship or a single tank to invade any country (except, well, its Tibet occupation). China and Vietnam will continue enriching themselves through trade. But vested interests who are salivating at the multi-billipn peso deals for military equipment are fanning the war dance rhetoric.

Someone suggested that China setting up drug labs, make us a dumping ground, do human smuggling in Chinatown, head the intellectual piracy, steal our natural resources, overfish, steal our coins and bring to China, and threaten our boundary by setting up military structures and send warships to patrol the area, as examples that China is an external threat.

Drug labs -- Chinese, Filipinos, others do it here. Human smuggling -- chinese, pinoys, europeans, do it here. Dumping of cheap goods, it's good. Only the very rich who do not need to go to Divisoria or Baclaran or elsewhere don't appreciate cheap goods from China. Intellectual piracy -- chinese, pinoys, indians, others do it here. Stealing of coins -- chinese, pinoys, do it here too. Where's the external threat there? 

About military structures in the Spratlys, that's why the solution is more foreign diplomacy, expose such actions by China and bring to various international fora. Better that we hire 50 or more new diplomats and researchers, than get 50 new warships, 50 new jet fighters, etc. to do what, "challenge" China?

I am no apologist nor lover of the China government. I can never support any BIG government, much less a communist government. But neither will I support expanding the Philippine government to supposedly "challenge" a fellow BIG government in the north.

See also:

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