IT SEEMS IRONIC that among the President’s men and women, the most criticized, the most maligned are the top performers.
I refer specifically to Department of Budget and Management (DBM) Secretary Butch Abad and Bureau of Internal Revenue (BIR) Commissioner Kim Henares.
To be sure, we can identify other outstanding Cabinet members. Rogelio Singson of the Department of Public Works and Highways (DPWH), Dinky Soliman of the Department of Social Work and Community Development and Leila de Lima of the Department of Justice have high ratings in surveys.
Worth noting, Enrique Ona and the Department of Health (DOH) achieved a hat trick in 2013. They were instrumental in the legislation of the sin tax reform, PhilHealth and reproductive health.
Cesar Purisima of the Department of Finance (DOF) likewise deserves credit for stabilizing and improving the government’s financial condition, resulting in a credit rating upgrade that is equivalent to investment status. Nonetheless, Secretary Purisima is gracious, preferring to acknowledge the leading role of Kim Henares.
It is indeed in the fiscal arena — revenue generation and increased spending resulting from bold but controversial reforms — where the country chalked up the biggest gains.
Look at it this way: Infrastructure spending, universal health care, or conditional cash transfer would have stumbled if not for the generation of substantial tax revenues and the efficient and responsive disbursements, For that, we thank Henares and Abad, respectively. The figures speak for themselves:
• Tax effort (amount of taxes collected as a percentage of gross domestic product) has remarkably increased from 12.1% in 2010 to 13.3%. This has been achieved mainly through tax administration and the increase in the excise taxes of tobacco and alcohol.
• The sin (tobacco and alcohol) taxes alone contributed 0.4% to GDP in 2013. The incremental revenues from the sin taxes totaled P51.2 billion, which far surpassed the projection. An equally important gain from the sin tax is the decrease in smoking prevalence. Antonio Dans, MD, attributes the decline in smoking prevalence from 31% in 2008 to 25.4% in 2013 to the sin tax.
• Government spending for essential services has dramatically risen since 2010. From 2010 to 2014, the Department of Education’s budget increased by 95%; the DOH’s budget jumped by 197% (mainly because of the incremental revenues generated from the sin taxes); and the DPWH’s budget grew by 57%.
• For the 2015 budget, spending for basic education will increase by 18%, health by 12.6%, and infrastructure by 36.7%.
The sin tax deserves special mention for our purposes. First, it is arguably the most difficult legislation passed during PNoy’s term (the Senate ratified the sin tax by a margin of just one vote). Second, to borrow the term used by the tobacco industry, the sin tax law was “disruptive.” Third, Butch Abad (actually the Abads, husband and wife) and Kim Henares were indispensable in having this unprecedented, disruptive reform passed — a story that still has to be told.
Thus, what really makes Abad and Henares stand out is their resolve to push for disruptive, transformative reforms even as they recognize the present constraints (such as the dominance of patronage politics). In doing so, they take the bold step of stretching the limits of restrictive convention and laws to introduce innovation and institutionalize reforms. The controversies over the Disbursement Acceleration Program (DAP) or the BIR’s tax administration measures should be seen in this light.
But in doing so, they invite harsh criticisms even from friends, supporters and potential allies.
If people would like to have continuity of reforms beyond 2016, Abad or Henares would make a worthy candidate to lead the nation. But just like the awkward attempt to call for a second term for PNoy, that remains a fantasy.
Filomeno S. Sta. Ana III coordinates the Action for Economic Reforms.