Action for Economic Reforms (AER) calls on Senator Grace Poe, the principal sponsor of Senate Bill 1823 (SB 1823) granting a franchise and tax exemptions to San Miguel Aerocity, Inc. to construct and operate an international airport in Bulacan, to inhibit herself from the Senate proceedings on the bill due to conflict of interest. The franchise bill exempts San Miguel Aerocity, Inc., a subsidiary of San Miguel Corporation (SMC), from paying billions of national and local taxes for a period of up to fifty (50) years.
AER urges Sen. Poe to inhibit herself from the proceedings to protect the integrity of the legislative process. The public is well-aware of the strong connection of San Miguel Corporation to Sen. Poe. According to her 2013 Statement of Contributions and Expenditures (SOCE), one of her biggest campaign contributors was Thomas A. Tan, director of San Miguel Corporation, who contributed P10 million. Her 2014 Statement of Assets and Liabilities (SALN) likewise showed that she was a stockholder of SMC, having acquired 8,500 stocks in 2012. Her 2016 presidential bid was also endorsed by the National People’s Coalition, a party founded by the late Eduardo Cojuangco Jr., San Miguel’s chairman and CEO. Senator Poe’s family is also heavily involved with San Miguel – her husband, Neil Llamanzares, worked as a consultant for SMC from 2006 to 2015. He was also a stockholder of SMC.
This connection between San Miguel and Sen. Poe strongly manifested in the way she handled the proceedings for the franchise bill granting tax perks to the corporate giant. On October 5, SB 1823 was passed on second reading in the Senate. The bill was passed after conducting only one committee hearing and one day of Senate plenary session. The Department of Finance, the agency in charge of ensuring that our public financing is afloat, was not able to present its analysis on the revenue and economic impact of the bill. Sen. Pia Cayetano, the principal sponsor of the Corporate Recovery and Tax Incentives for Enterprises Bill (CREATE Bill), even had to beg the Senate for more time to study how this franchise bill would impact the fiscal incentives rationalization objective of CREATE. Clearly, this was an attempt by Sen. Poe and other senators to railroad the franchise bill.
In an earlier statement, AER emphasized the danger that this bill poses to the economy. The proposed airport is redundant because plans to enhance current airports (NAIA and Clark) will be enough to cater to current and future demand for air travel. If San Miguel wants to compete with current airports, they must bear the full cost of such a venture. It also sets a bad precedent that companies can just lobby in Congress to receive tax perks instead of undergoing the processes approved by our economic managers to ensure that the incentives to be given are targeted, performance-based, time-bound, and transparent.
Sen. Poe’s involvement in this bill brings about conflict of interest and puts in danger the objectivity and integrity of the legislative process. The railroading of the bill without thorough consideration of its implied fiscal costs shows that she is eager to push for the bill’s passage, thus making her vulnerable to the charge that she is indebted to the franchisee. We ask that Sen. Poe immediately relinquish her principal sponsorship of the bill. As a lawmaker, her obligation is to serve the Filipino people, whose lives will be directly affected by the construction of this airport, and not corporate interests.
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