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‘Federalism is anti-poor’ as double taxes will be ‘unavoidable’ – Davide

Former Chief Justice Hilario Davide Jr. asserted on Monday that “federalism is anti-poor” as he warned of “at least two kinds of taxes” that would be “totally unavoidable” under a federal form of government.

“People will really be tortured with various problems, as a matter of fact, on the matter of taxation alone,” Davide said in an interview over ABS-CBN News Channel’s Headstart.

Davide explained that one form of taxation under federalism would comprise state tax and federal tax against the people that are inevitable since the citizens would be expected to fund the region as well as the central government.

“Federalism is anti-poor because if you are a citizen of the country, and you belong into a state, the state would be imposed upon you — one form of taxation, that is the state tax; and at the same time, the federal government would also impose a tax against you,” he pointed out.

When asked if it would be possible not to have double taxations, Davide noted: “It is not possible that we don’t have, it has to have.”

“You have to maintain the state of the region and at the same time, you have to contribute to the central government. So, totally unavoidable. There will always be at least two kinds of taxes,” the ex-top magistrate also said.

During the hearing of the Senate constitutional amendments and revision of code committee on the proposed revision of the 1987 Constitution, Davide said that shifting from the prevailing unitary system to federalism would be a “lethal experiment, a fatal leap, a plunge to death, a leap to hell.”

READ: Davide: Shift to federalism ‘lethal experiment, fatal leap, plunge to death, leap to hell’

Davide also earlier said that there is “absolutely no need” to amend the 1987 Constitution, as it remains to be the “best in the world” despite its “imperfections.”               /kA

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Fearless farmers defy Mayon’s anger

This photo taken on January 27, 2018 shows farmer Jay Balindang tending to his water buffalo under heavy rains in a rice field at the foot of the Mayon volcano in the town of Guinobatan in Albay province.
Balindang is among nearly 10,000 farmers who have been affected by the eruption of Mayon volcano that began earlier this month. / AFP PHOTO / TED ALJIBE

As blistering lava spews from the seething volcano nearby, farmer Jay Balindang leads his buffalo through the ash-strewn paddy fields of the no-go zone, creeping closer to danger in a desperate bid to support his family.

Tens of thousands of people have been evacuated from around the erupting Mayon volcano, as a white-hot cocktail of gas and volcanic debris streaks down its flanks, threatening local communities who rely on the fertile land at its base.

Fearing a significant eruption that could engulf whole swathes of the nearby land in burning rock and lava flows, authorities have cordoned-off a nine kilometer (six mile) danger zone around Mayon.

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But that has not stopped defiant farmers like Balindang from tending to crops and livestock that are a crucial part of their livelihoods.

Each day the father-of-eight leaves his children at a government evacuation centre, sneaking past police as he returns to his small farm at the foot of the volcano to feed his precious “carabao” water buffalo.

“I am not afraid of the volcano. We are used to its activity,” the 37-year-old told AFP, at the edge of his rain-lashed rice fields, a few kilometers inside the danger zone.

This photo taken on January 28, 2018 shows Mayon volcano spewing lava ash from its crater, as seen in Daraga town, south of Manila in Albay province. Authorities have imposed a no-go zone around the 2,460-metre (8,070-foot) mountain as they warned of a hazardous eruption within days, leaving more than 77,000 people stuck in crowded shelters, likely for months.  / AFP PHOTO / Ted ALJIBE

This photo taken on January 28, 2018 shows Mayon volcano spewing lava ash from its crater, as seen in Daraga town, south of Manila in Albay province.
Authorities have imposed a no-go zone around the 2,460-metre (8,070-foot) mountain as they warned of a hazardous eruption within days, leaving more than 77,000 people stuck in crowded shelters, likely for months.
/ AFP PHOTO / Ted ALJIBE

Farmers make up around 10,000 of the 84,000 people displaced by the eruption of Mayon in Albay province, some 330 kilometers southeast of Manila.

The lush region is famous for its chili peppers, as well as less fiery crops like rice, corn and vegetables.

All are threatened by the volatile volcano, which has gushed molten lava and belched giant clouds of superheated ash since it began erupting two weeks ago.

Local authorities say that beyond the immediate damage to crops caused by the coating of smoldering embers, there are concerns that heavy rainfall could combine with ash and rock to form deadly, fast-moving mudflows that could sweep away entire settlements and block vital rivers.

“This is a new and daunting challenge to our agriculture workers who in the past had to cope with typhoons, landslides and floods,” Agriculture Secretary Emmanuel Pinol said.

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Farming the ‘Ring of Fire’

Farmers are among the most vulnerable to the meteorological miseries that afflict the Philippines, which is hit by an average of 20 typhoons a year and is in the earthquake-prone volcanic belt around the Pacific known as the “Ring of Fire.”

The 2,460-meter (8,070-foot) Mayon has been both a blessing and a curse to the farmers living near its slopes for generations.

Volcanic ash can kill vegetation immediately after an eruption, but as it seeps into the ground it can also enrich the soil with minerals that sustain future crops.

“If the ash is thin, it would become a fertiliser but if the ash is thick it would mean farmers who had spent money a lot of money to plant the vegetables lose everything,” Renato Solidum, head of the Philippine Institute of Volcanology and Seismology, told AFP.

Vegetable prices have already begun to soar in parts of Albay as the eruption hampers access to key crops.

“We are very famous for these dishes wherein the (taro) leaves are being grown just at the foot of Mount Mayon,” Elsa Maranan, chief of the agriculture department’s local breeding station, told AFP.

“If all this will be destroyed then the production of our delicacies and the income of our farmers will be very much affected.”

Dangerous dash

In a bid to stop farmers from slipping back to tend their own fields, local authorities have set up communal areas, where farmers can graze livestock on ash-free grass.

“We appeal to them not to be stubborn because they are putting the lives of our responders in danger,” Brigadier-General Arnulfo Matanguihan, head of a local task force for the eruption, told AFP.

But many still make a daily hazardous dash back to their own land.

Balindang said the choice was clear — if he ensures that his pigs, carabaos and cows are fed, then his family will also be assured of something to eat.

“It’s very difficult because I don’t know if we will have any rice left to harvest. For now, we have nothing,” he said.

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Going after unjustifiable tax incentives

Corporate income tax collection takes center stage in the second round of the government’s tax reform initiative.

Following up on the previous administration’s collected data from the Tax Incentives Management and Transparency Act (TIMTA), the aim is to reform 360 laws that grant businesses tax breaks and other incentives, as well as plug loopholes.

Reforms will generally be guided by the principle that only businesses that generate jobs, stimulate the economy in the countryside, and promote research and development will continue to receive incentives and that sunset provisions on tax perks are not unnecessarily extended.

The passage of TIMTA in 2015 gave government the ability to promptly measure the value of incentives given to businesses, while at the same time analyzing their economic impact. Through the required reports, the government was able to determine the cost-benefit impact to the economy.

TIMTA requires companies that receive incentives to file their tax returns and pay their taxes through an electronic system with the Bureau of Internal Revenue. Companies should clearly quantify income-based tax incentives, value-added tax and duty exemptions, deductions, credit, or exclusions from the tax base.

Centralized data

The data gathered is centralized at the Department of Finance, and together with the actual information that the BIR and Bureau of Customs collects on tax and duty incentives, becomes a powerful tool to analyze the overall impact on the country.

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The DOF analysis includes sector and industry reports detailing the actual amount of tax incentives availed, the estimated claims during the previous year, the programmed incentives for the current year, and the projected incentives for the following year.

The data collected over the last two years has enabled the DOF to come up with the second tax reform package, this time targeting a flawed and outdated system that provides tax incentives from 150 investment laws and 210 non-investment laws.

Should this second round prove effective, the Philippines would see its collection efficiency rate from taxes of large companies and other private firms rising from the current 12.3 percent to a figure more attuned to what our neighboring countries are achieving.

According to the DOF, Thailand has a lower corporate tax rate of 20 percent, but it collects almost triple the amount because of a 30.5 percent collection efficiency rate. Vietnam has a 29.2 percent tax efficiency rate, while Malaysia has 27.1 percent. We definitely have room for a lot more improvement.

Revenue-neutral

Unlike the first package in the overall Comprehensive Tax Reform Program (CTRP) of the Duterte government, or the Tax Reform for Acceleration and Inclusion Act (TRAIN), this second package – including the next three or more – will be revenue-neutral.

TRAIN is expected to raise P90 billion this year, with the supplemental package (raising motor vehicle users charge, declaring a general tax amnesty, and relaxing bank secrecy restrictions) bringing in an additional P40 billion, if passed within the year.

On the other hand, the second package should raise about P35 billion from the rationalization of fiscal incentives during the first year of implementation, much about the same amount that will be lost when the corporate tax rate is slashed from 30 percent to 25 percent.

Competitive corporate income tax rate

Bringing down the Philippines’ corporate income tax rate was also one of the campaign promises of the President, but this commitment to Philippine businessmen, as well as interested foreign investors, is well-placed to support the country’s bid to attract further investments to spur domestic growth to more sustainable levels.

A 25 percent corporate income tax will be at parity with Vietnam’s, and almost the same as Malaysia’s 24 percent, although still higher than Thailand’s 20 percent. But it will take the Philippines off the list of having the highest corporate income tax take in the ASEAN.

Plugging leaks

While the second package of the CTRP will be a welcome tightening of our existing tax laws, much more needs to be done to plug the leaks in the government’s tax collection system.

Transparency in tax payments should not only involve companies that are registered with investment promotion agencies like the Board of Investments, Philippine Economic Zone Authority, Bases Conversion and Development Authority, and Subic Bay Metropolitan Authority, but all businesses that operate in the country.

The sooner all that operate in the country are mandated to file their returns electronically based on a simplified corporate income tax system, the better for our tax collection efforts.

One of the biggest problems encountered is the existence of corruption – both on the sides of government and the private sector – in the area of tax collection.

While administrative sanctions may be imposed on government servants who negotiate tax payments for personal gain, so should there be a rule that penalizes companies that condone or even initiate measures that would bring down their income tax assessments.

Moving on the right track

The government’s Build Build Build program and its promise of a golden age in infrastructure building will need all the measures that would ensure a robust flow of tax collections for the state coffers. As it stands, the CTRP will be able to raise only a quarter of the P8 trillion of the amount programmed until 2022.

A show of renewed fiscal disciple and commitment to improving tax collections would help assuage foreign investors and credit rating agencies that the Philippines is indeed moving on the right track, and will have enough steam to make it to the finish line.

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Should you wish to share any insights, write me at Link Edge, 25th Floor, 139 Corporate Center, Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at [email protected]. For a compilation of previous articles, visit www.BizlinksPhilippines.net.

CBCP favors full implementation of 1987 Constitution



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P200 additional monthly pension

THE Department of Social Welfare and Development (DSWD)-Davao said Monday, January 29, that indigent social pensioners will be receiving P200 more in monthly social pension, from P500 to P700 starting this year.

DSWD-Davao Director Mercedita Jabagat bared last week that all pensioners will be given P200 more monthly pension following the directive of the national office.

“The pension will be distributed every quarter. With the additional P200, our pensioners here will now receive a total of P2,100 per quarter,” DSWD-Davao public information officer Carmela Duron told SunStar Davao.

Duron said the additional P200 monthly grant is under the Unconditional Cash Grant, provided for by the Tax Reform for Acceleration and Inclusion Law. It will increase to P300 in 2019-2020.

The agency will implement the Unconditional Cash Grant scheme for three years as stipulated in the tax reform. It will release P2,100 in 2018 and P2,400 in 2019 and in 2020 in Davao.

“Our social pensioners will be surely happy. This would be a big help lalo na para sa pambili ng kanilang gamot and/or vitamins, and other stuffs that a social pensioner needed,” Duron added.

Duron also reiterated that only indigent older persons aged 65 years old and above are covered by the Social Pension Program under the Republic Act 9994 or The Expanded Senior Citizen Act.

The law specifies that seniors qualified to receive a monthly pension under the Social Pension Program of the DSWD are those who are frail, sickly or with disability; without any pension from other government agencies; and without a permanent source of income or source of financial assistance/compensation to support their basic needs.

Duron said as much as they would like to include all senior citizens from aged 60 and above, the budget for the Social Pension Program is only limited.

The DSWD-Davao recorded a total of 136,067 pensioners who received their monthly pension with a total fund of P816,404,000 while a total of 107 centenarians received a total fund of P10,700,000 cash grant last year.

New bribery scheme at BOC bared; Sotto, Drilon linked to ‘illegal request’

Published

By Mario B. Casayuran and Hannah L. Torregoza

WRITTEN REQUEST – Barred from speaking, former Customs commissioner Nicanor Faeldon holds up a handwritten note asking permission for a bathroom break from an exasperated Senate Blue Ribbon Committee Chairman Richard Gordon (right). (Jansen Romero)

WRITTEN REQUEST – Barred from speaking, former Customs commissioner Nicanor Faeldon holds up a handwritten note asking permission for a bathroom break from an exasperated Senate Blue Ribbon Committee Chairman Richard Gordon (right). (Jansen Romero)

Senator Panfilo M. Lacson revealed on Monday the existence of a new mode of bribery at the Bureau of Customs (BOC), replacing the regular “tara” (payola) system that prevailed in past Customs administrations.

Lacson called the new bribery scheme as “demurrage,”defined in Webster dictionary as “the payment made to the ship owner by the charterer for exceeding the time allowed for loading and unloading.”

“Pagna delay ang shipment ang pag-release napipilitan sila mag-shell out ng kung anong amount hinihingi sa kanila para ma-facilitate and dokumentong lumakad para ma-release and shipment(When the release of a shipment is delayed, the importer is forced to fork out the amount they are asking to facilitate the flow of documents for their eventual release),” he explained.

Lacson said this is now the common complaint his office has been receiving from importers.

Some10,000 containers arrive daily at the Manila port, Lacson said.

“Umiiyak ang mga importer (Importers are crying),” he added.

Late last year, Lacson, in a privilege speech, alleged that former BOC Commissioner Nicanor Faeldon and his favorites received weekly or monthly tara, an allegation denied by Faeldon and company. Faeldon, who is currently detained at the Senate on contempt charges, eventually resigned his post.

Lacson said he has called the attention of current BOC Commissioner Isidro Lapeña about this new form of bribery “although I know he is busy.”

He said there were times his office sent text messages to Lapeña for him to correct the immoral situation “pero mukhang di pa nako-correct ang common complaint nayan (But it appears that this situation has not been corrected).”

On Monday, Faeldon showed up at the Senate hearing for the first time, but had a heated argument with Sen. Richard Gordon when the former insinuated that the Senate Blue Ribbon Committee’s investigation into the prevailing corruption at the BOC.

During the hearing, Faeldon said Senators Vicente “Tito” Sotto III and Franklin Drilon were among the lawmakers who made “illegal requests” with the agency.

Faeldon was responding to Senator Paolo “Bam” Aquino IV’s question during the continuation of the Senate’s probe into the P6.4-billion shabu shipment and corruption in the BOC, when he dropped the names of Drilon and Sotto.

Before disclosing their identity, Faeldon apologized to the senators after noting that they were not present during the hearing.

“I’ll start with Sen. Drilon. As early as 2016, he requested that I meet with him here at the Senate, twice, to sign a Memorandum of Agreement between the BOC and the office of Maria Serena Diokno, the chairperson of the National Historical Commission of the Philippines (NHCP),” Faeldon told the committee, chaired by Gordon.

Faeldon said Drilon wanted him to sign a document agreeing to have the BOC office in Iloilo City renovated for the NHCP. After the renovation, he was told that the building will be converted into a museum and the BOC will occupy the third floor of the building.

“Twice, I attended his meeting and said sir, hindi po puwede. On the third meeting, I have forcibly changed the provision of the MOA and signed it.”

“I never acceded, why because meron na tayong karanasan, sir,” Faeldon told Aquino and Gordon.

Faeldon said he doesn’t want a repeat of what happened during former President Gloria MacapagalArroyo’s time when she ordered the restoration of the so-called Malacañang of the South in Cebu.

“And until today, yung Cebu employees namin, are housed in a condemned building. So ayaw po natin na maulit po yun na tatanggalin na naman yung mga Customs (employees) dyan at bawal na po silang pagpapalitan,”

“Sa tingin ko hindi po tama itong request ng senador. Kaya tinanggihan ko po siya diyan,” he pointed out.

Faeldon said that Sotto “illegally requested” the appointment of a Customs official as director for intelligence as early as 2016.

“Idol kita sir, pasensya na Sen. Sotto. But this is illegal as far as I am concerned. As early as 2016 twice, he asked me to appoint one official in the BOC as director of intelligence. Eto kasi yan, dalawang beses niya akong kinausap, sabi ko titingnan natin,” Faeldon said.

When he interviewed the said official, Faeldon said he was surprised that the person was already serving the BOC for 42 years but have not yet apprehended any crooked employee nor reported anybody involved in anomalous transactions.

But Aquino and Gordon said they found nothing erroneous on the requests made by Sotto and Drilon.

Drilon clarified that the budget for the renovation he requested was of the NHCP and not the BOC’s.

“(The NHCP) was asking for my help, because their budget was going to revert if it was not used. In fact P9 million was reverted out of the P20 million that they had allocated (for the project),” Drilon told reporters.

“There was nothing illegal, the MOA is to allow the NHCP to do the repairs of the building. In fact, the building is not being owned by the BOC, the title is in the name of the Republic of the Philippines.”

Sotto, for his part, denied he was insisting on the appointment of a BOC employee, although he admitted there was a request for someone’s promotion.

He said the BOC employee who sought his recommendation has long been working in the agency. “What’s illegal in a request?” he asked.

Sotto, in an unsolicited advice, told Faeldon to stick to the issue and instead address the supposed corruption in his former agency that led to the swift release of the P6.4-billion shabu from China.

Meanwhile, Faeldon asked the Supreme Court (SC) to order his release from detention.

Faeldon was cited in contempt, ordered arrested and detained for refusing to participate in the Senate investigation on the P6.4-billion shabu shipment from China.

But even while in detention, President Duterte appointed Faeldon as deputy administrator for operations of the Office of Civil Defense (OCD).

Two weeks ago, he was given a two-week furlough to witness the birth of his child and to be able to take his oath of office as OCD official.

Aside from Gordon, named respondent in his petition was retired Maj. Gen. Jose V. Balajadia Jr., Senate sergeant-at-arms.

Faeldon is expected to be transferred to the Pasay City Jail due to his continued contempt citation.

Gordon said the Senate has agreed to submit Faeldon under the custody of the Pasay City Jail, following the resumption of the probe on alleged corruption at the BOC.

Faeldon may be transferred to the city jail anytime within the day, information reaching Senate reporters said.(With reports from Vanne P. Terrazola and Rey G. Panaligan)

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Rappler takes SEC case to the Court of Appeals

(UPDATED) Rappler’s petition for review cites procedural and substantive processes which were violated, and points out how Rappler’s PDRs were singled out

Published 7:21 PM, January 29, 2018

Updated 12:25 AM, January 30, 2018

PETITION FOR REVIEW. Rappler's counsel from the firm ACCRALAW files the petition for review before the Court of Appeals on January 29, 2018. Photo by Lian Buan/Rappler

PETITION FOR REVIEW. Rappler’s counsel from the firm ACCRALAW files the petition for review before the Court of Appeals on January 29, 2018. Photo by Lian Buan/Rappler

MANILA, Philippines (UPDATED) – Rappler Inc and Rappler Holdings Corporation filed on Monday, January 29, a petition for review questioning the revocation of their certificates of incorporation before the Court of Appeals (CA).

Rappler’s petition was prepared by legal counsel Francis Lim from the firm Angara Abello Concepcion Regala & Cruz Law Offices or ACCRALAW. Lim is a veteran corporate lawyer and the former president of the Philippine Stock Exchange (PSE).

“We have our own legal position on these issues and the Securities and Exchange Commission (SEC) will most likely take the opposite view. Fortunately, there is jurisprudence that can guide the Court of Appeals in deciding the case. We fervently hope that the case will ultimately be decided for the broader interest of the country,” Lim said.

The 68-page petition argues that contrary to the decision of the SEC, the agreement between Rappler and foreign investor Omidyar Network (ON) does not constitute control.

The petition also bares similar agreements between network giants ABS-CBN and GMA News with its foreign investors, which the SEC has not faulted, and which it did not investigate.

PDR and control

The SEC revoked the certificates of incorporation of both Rappler Inc and Rappler Holdings Corporation (RHC) due to a provision in the Philippine Depositary Receipt (PDR) agreement of RHC with Omidyar.

A PDR is a financial instrument that corporations resort to, to secure foreign investments without violating the nationality restrictions prescribed by the Constitution.

The SEC said that it was unconstitutional for Rappler to commit to Omidyar that it should engage in prior discussion or secure 2/3 of the votes of PDR holders before Rappler can amend its articles of incorporation or by-laws, or take action that would prejudice the rights of ON as a PDR holder.

The questioned provision, or Clause 12.2.2 reads as such:

The Issuer undertakes to cause the Company from the date hereof and while the ON PDRs are outstanding: not to, without prior good faith discussions with ON PDR Holders and without the approval of PDR Holders holding at least two-thirds (2/3s) of all issued and outstanding PDRs, alter, modify or otherwise change the Company’s Articles of Incorporation or By-laws or take any other action where such alteration, modification, change or action will prejudice the rights in relation to the ON PDRs.”

The SEC said the provision was equivalent to ceding control to a foreign entity, which means Rappler violated the 100% Filipino control rule.

The SEC’s Implementing Rules and Regulations (IRR) define control as something exercised only by the Board of Directors who shall vote, similar to the definition of control under the Corporation Code.

“Clause 12.2.2 of the Omidyar PDR does not grant control over Rappler to Omidyar because it does not make it a stockholder of Rappler or give it the right to vote the Underlying Shares,” the petition said.

Negative covenant

Rappler’s lawyers explained that because Omidyar is only a minority investor (another PDR holder North Base Media has more), the questioned provision existed “as a mechanism to help ensure that the rights of a minority investor would be protected vis-à-vis other PDR Holders.”

The petition argued that the clause is an example of a negative covenant. A negative covenant is a clause in agreements where parties make a promise not to do something.

Rappler’s lawyers said that a close reading of the provision would show that the agreement only kicks in when the amendment is “prejudicial” to Omidyar. It means, the petition said, that Omidyar does not dictate when to amend the by-laws, only that it has to be consulted and it has to agree if the amendment puts them at a disadvantage.

The petition stressed that this has not yet even happened. “Thus, Rappler and RHC cannot be punished in any way for a violation that never occurred,” said the petition.

Rappler’s lawyers cited Article 1158 of the Civil Code in saying that “if an act punishable by law has not been performed, then, the corresponding penalty under the law cannot be applied to one accused of violating it.”

PDRs of GMA and ABS-CBN

The petition also provides the Court of Appeals examples of PDR undertakings of network giants GMA and ABS-CBN, and said they were similar to Rappler’s PDRs.

See below:

PDRs. Rappler's petition for review before the Court of Appeals says that network giants ABS-CBN and GMA have more 'express' agreements with holders of their Philippine Depositary Receipts (PDR) compared to Rappler. Screenshot from Rappler's petition for review

PDRs. Rappler’s petition for review before the Court of Appeals says that network giants ABS-CBN and GMA have more ‘express’ agreements with holders of their Philippine Depositary Receipts (PDR) compared to Rappler. Screenshot from Rappler’s petition for review

Rappler’s lawyers made the argument that Rappler’s PDR issued to Omidyar requires good faith discussion and a 2/3 vote, while PDRs of the network giants “absolutely obligated the issuers” not to amend their by-laws in a way that will prejudice the rights of the PDR holders.

There should be no reason for the SEC En Banc to find fault in Clause 12.2.2 of the OMIDYAR PDR, which does not even absolutely prohibit the amendment of the Articles of Incorporation and By-Laws of Rappler,” the petition said.

SEC Chairperson Teresita Herbosa said there’s no need to review the PDRs of the network giants, after their decision on Rappler, saying they were different cases.

In the petition, counsels explained that Rappler did not need to register their PDRs with the SEC because the Securities Regulation Code (SRC) did not require registration for sales of securities to less than 20 persons. (Rappler sold only 3 PDRs.)

Nevertheless, RHC notified the SEC of the existence of the PDRs it had issued not only through SEC Form 10-1 but also through the submission of its Consolidated Financial Statements for 2015 and 2016, which the SEC En Banc (adopting the findings of the Special Panel in toto) took note of,” the petition said.

It added: “Clearly, there was no intention whatsoever to conceal the Omidyar PDR from the SEC.”

No due process

Rappler also claimed that due process was not followed, citing the SEC’s own rules. In the graphic below, the lawyers explained how the SEC cut short the process for Rappler, depriving it of the rightful opportunities to defend itself.

This is the standard procedure as per SEC rules, according to the petition:

STANDARD PROCEDURE. Standard Procedure for an administrative action under SEC rules, according to Rappler's petition for review.

STANDARD PROCEDURE. Standard Procedure for an administrative action under SEC rules, according to Rappler’s petition for review.

And this was the procedure applied to Rappler, also according to the petition:

SHORTCUT? The procedure applied to Rappler in the investigation of the SEC, according to Rappler's petition for review.

SHORTCUT? The procedure applied to Rappler in the investigation of the SEC, according to Rappler’s petition for review.

Moreover, the petition also said that the SEC had prejudged Rappler from the time it issued a show cause order against it.

A special panel was created in July 2017 to conduct an “in depth-examination of Rappler” and after a month, on August 2, Rappler was served a show cause order to explain why it should not be held liable for violation of the Constitution.

“The Special Panel did not have the power, authority or jurisdiction to adjudge Rappler and/or RHC administratively liable and to impose administrative sanctions….(but the show cause order) had already made a finding that RAPPLER and RHC were liable under the various laws cited in that order,” the petition said.

It added: “Rappler and RHC, being respondents in this case, were already found to have violated the law and the Special Panel shifted the burden of proof on them to explain why they are not liable. This is in contravention of the established rule the burden of proof is on the complainant.”

The petition also pointed out that on December 11, 2017, Omidyar waived its rights under the questioned provision. But the SEC did not consider it because only a photocopy was submitted, and therefore not counted as notarized.

The fact that only a photocopy of the Waiver was submitted should not have been made an issue by the SEC En Banc for the following reasons: (a) the SEC En Banc did not take issue with other documents submitted by Rappler and RHC which were only photocopies; (b) the original of the Waiver is available, exists and could have been produced by Rappler and RHC at any time if it was requested by the SEC En Banc or the Special Panel to do so,” the petition said.

The petition also cited the PLDT case, wherein the Supreme Court allowed the corporation to “cure” the deficiencies of their structure. The petition maintained that the revocation of the certificates of incorporation was a “harsh penalty” that would have a disastrous impact on businesses, and would discourage foreign investors.

It will not only substantially bring down the foreign investment market in the Philippines but will also create a domino negative impact on the Philippine economy effectively slowing its progress and worse, stifling the Philippine economy,” the petition said.

And even if the PDR clause were assumed to be unconstitutional, the petition said that there is no law that “grants the SEC the power to revoke the certificate of incorporation of a company for the reason that a clause found in a contract it had entered into is void for being unconstitutional.”

“To argue otherwise would expose countless corporations to possible revocation of their certificates of incorporation if any of their contracts happen to contain a void provision,” the petition said. (READ: FAQs: Rappler SEC case)

Press freedom

Rappler also pointed out that it cannot be held accountable for a law applicable to mass media when it should not be classified as only mass media.

The petition pointed out that both Section 11 (1) of Article XVI of the Constitution and Presidential Decree No. 1018 said that “mass media” only pertains to print and broadcast media. Rappler is fully internet-based. (READ: EXPLAINER: How SEC’s Rappler decision is a test case for press freedom)

Nevertheless, the petition said that the “serious procedural and substantive irregularities in the decision” lead to no other conclusion that “its real purpose is to silence Rappler and muzzle free expression.”

It notes the sequence of events of Solicitor General Jose Calida initiating the probe, and the accusations against Rappler by President Rodrigo Duterte in no less than his State of the Nation Address, as a pattern that would prove that its “closure” on corporate grounds has always been about the government’s intent to stop Rappler from publishing.

After the SEC decision, Rappler is now the subject of two separate criminal investigations by the National Bureau of Investigation (NBI): the first for possible violation of the Anti-Dummy Law and “other laws”, and the second for cyber libel over an article published before the Cybercrime Law was enacted.

“Rappler is being made to pay the ultimate price for exercising the freedom of the press,” said the petition. – Rappler.com

PNP Chief Dela Rosa: ‘Bloodless drug war impossible’

MANILA, Philippines — There is no guarantee that the relaunched “tokhang” will not result in bloodshed, Philippine National Police (PNP) chief Director Ronald dela Rosa said yesterday.

At Malacañang, presidential spokesman Harry Roque expressed hope the police “have learned from their experience” and would try their best to make sure community anti-drug operations or Oplan Tokhang “would be less bloody.”

The program made a comeback with an assurance from Dela Rosa that it would be free of violence if offenders agree to go peacefully with police.

But he could not promise a “foolproof anti-drug campaign that would be bloodless,” Dela Rosa stressed, explaining that police were “not dealing with people who are in their proper state of mind.”

“On the way of addressing this problem, we also have to protect ourselves, preserve our own life and the life of the stranger,” he said. “Now, tell me who among the police commanders can do it, and I will be willing to give up my post.

“That’s impossible,” he said.

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“We are just giving you the assurance we will try our best to make it less bloody,” he added. Tokhang operations, he said, would only be conducted between 8 a.m. and 5 p.m.

But Sen. Panfilo Lacson questioned the PNP’s move to limit “tokhang” to office hours and weekdays.

“I don’t understand why drug pushers will have a weekend holiday,” he said.

Lacson said as long as the provisions of the Revised Penal Code and the rules of engagement on arrests, especially warrantless arrests, are followed, “the law enforcement function of the PNP should be continuous.”

In Cebuano, “Tokhang” is a combination of the words “knock” and “plead.”

Besides the visits, police have also run so-called “buy-bust” or sting operations and raided suspected drug dens and laboratories.

In many of these operations, say rights activists, suspects did not get the chance to surrender, but were executed in cold blood. Police insist suspects died because they violently resisted arrest.

Nearly 4,000 drug suspects have died in gun battles with police since June 2016, when President Duterte came to power. The government lost 85 police and soldiers in the drug war, police data show.

More than 1.2 million people had also turned themselves in after the home visits.

Duterte stopped police anti-drug operations twice due to questions over the conduct of the operations.

The President, who has promised to continue his war on illegal drugs “until the last drug pusher is out of the streets,” has also vowed to protect policemen who shoot drug suspects in self defense.

But he has clarified that the protection does not cover law enforcers who commit crimes and abusive practices.

Roque welcomed the PNP’s statement reaffirming police commitment to the rule of law. He said the President has no instructions regarding the re-launched campaign, noting that the PNP has already issued new guidelines for law enforcers involved in drug raids.

Interior and local government department officer-in-charge Eduardo Año has said that the new Tokhang guidelines emphasize accountability of police personnel providing support to the Philippine Drug Enforcement Agency, which has been tasked to lead the campaign.

While the PNP promised a less bloody Tokhang, at least four suspected drug personalities in Quezon City, Pasig and Cavite were killed days before the relaunch of the anti-drug crackdown.

Last year, Duterte removed the PNP from the anti-drug war following the deaths of teenage drug suspects in Caloocan.

He restored the PNP’s role in the campaign after a few months because of the supposed “notable resurgence in illegal drug activities and crimes.”

More than 19,000 “homicide” cases have been recorded since the start of the drug war in 2016, of which only about 2,200 are drug-related, according to PNP.

The PNP has conducted more than 64,000 anti-drug operations, with more than 102,000 arrests.

To ensure transparency, Dela Rosa invited human rights advocates, priests and the media to join the re-launched tokhang.

The police officers involved would also undergo a vetting process to weed out rogue officers, said Dela Rosa, adding that past abuses had involved the police seeking bribes to drop the names of people from the lists they compiled.

“We are certainly hoping that it will be less controversial, because controversy will only blur the real intention, which is really the fight against dangerous drugs,” Roque told reporters.

National Capital Region Police Office chief Director Oscar Albayalde also extended the same invitation to the Commission on hUman Rights (CHR).

“We are inviting the CRH to join all our Oplan Tokhang operations to erase once and for all accusations of EJK (extrajudicial killings) and other illegal activities by our Tokhangers,” said Albayalde in an interview.

Albayalde led the simultaneous re-launching of Oplan Tokhang in Metro Manila as he stressed that Tokhangers strictly passed a vetting process and background investigation.

The NCRPO chief said every tokhang operation would involve at least four policemen and village officials.

The PNP’s Directorate for Intelligence (DI) would pinpoint houses to be subjected to tokhang.

The Tokhangers would be in full uniform and unarmed, but would be accompanied by armed units depending on the security situation in the area of operation.

According to Albayalde, the Tokhangers would be different from the Station’s Drug Enforcement Unit (SDEU) which would separately conduct anti-drug operations in Metro Manila.

Tokhangers, based on rules, should not force subjects to come out of their houses.

“Those who turn themselves in or surrender would be brought to the barangay hall or police station where they would undergo documentation. They would be evaluated and first timers would be recommended for rehabilitation,” he said.

“When their subjects refuse to open their houses, the visiting Tokhangers would conduct a case buildup against them for the purposes of police operation later,” he added.

Dismissed policemen

A total of 352 policemen have been dismissed from the service for various offenses since Dela Rosa’s assumption as PNP chief 18 months ago.

“Since I assumed as chief PNP, I have already dismissed 352 policemen for various offenses, 167 for drugs or drug-related, 155 others for kidnapping, murder, extortion, various offenses,” he told reporters in a press briefing yesterday.

The ranks of the dismissed policemen ranged from police officer 1 (PO1) to superintendent.

He said 329 more are facing administrative and criminal charges and might also be dismissed.

Quoting a report from the Directorate for Personnel and Records Management (DPRM), Dela Rosa said 146 of the 167 policemen dismissed for drug related reasons were found to be drug users.

As part of the internal cleansing in the police force, Dela Rosa reassigned 200 errant Metro Manila-based policemen to Mindanao.

The DPRM records also showed 21 other policemen arrested for alleged involvement in illegal drugs, 72 dismissed for being absent without leave (AWOL), 57 for offenses like immorality, estafa and dishonesty; 22 for murder and 15 for robbery extortion.

Records also showed that nine police officers were dismissed for homicide, illegal arrest, detention or “incriminatory machination,” and parricide – offenses the PNP consider human rights violations.

Eight other policemen were dismissed for charges of kidnapping; one for graft and malversation and one for rape, DPRM records showed.

Dela Rosa revealed the dismissal proceedings against a police senior superintendent remain pending before the Office of the President. He refused to name the officer.

The Office of the President handles dismissal proceedings against officers with ranks of senior superintendent and higher.

“The city director of Iloilo City allowed drugs to proliferate, and Odicta to lord it over the drug trade. There’s a case against the city director,” he said, apparently referring to alleged Iloilo drug lord Melvin Odicta Sr. and his wife Meriam, who were shot dead at the Caticlan Jetty Port in Aklan on Aug. 29, 2016.

Dela Rosa did not disclose details about the police officer.

He also revealed a policewoman is facing charges after she was caught in a casino in Cebu. “Despite our warning, some remain hardheaded,” he said.

Also caught gambling in a casino was a town councilor in Cebu. – Non Alquitran, Marc Jayson Cayabyab, Romina Cabrera