Anti-VAT Hike Protest Sends Waves through Senate

As it is, Malacañang seems adamant in its resolve to bat for the bill seeking to raise value-added tax (VAT) rates from the present 10 percent to 12 percent. But whether Malacañang is sure of getting its wish is another matter.


The Philippine Senate remained divided last week whether to support President Macapagal-Arroyo new tax measures shortly after a big anti-VAT multisectoral rally was held near the upper chamber’s building.

But the presidential palace itself raised the alarm bells anew with the President herself insisting that the country faces an Argentina-type crisis in two years if the planned 12 percent VAT increase is thumbed down by the Senate. The new VAT and other tax measures are expected to raise some P80 billion revenues enough, so Macapagal-Arroyo said, to stave off a fiscal crisis.

Sen. Ralph Recto, who is with the administration Lakas-Christian Muslim Democrats, the Senate Committee on Ways and Means which he chairs appeared not too keen on approving a VAT rate increase.

“The 10 percent to 12 percent (increase) would be more difficult to do,” Recto told reporters in an interview Feb. 17. “We are looking at a single rate, possibly 10 percent but expand the base.

“More or less, we will come up with a single rate, and chances are that it will be 10 percent, and lift exemptions.”

Sen. Joker Arroyo, vice-chairman of the Ways and Means Committee, was speaking about political benefits that the Macapagal-Arroyo administration could gain from retaining the 10-percent VAT rate. “It is not that we are dismissing the whole thing,” he said. “We cannot dismiss the reaction of the public so we are trying to balance the whole thing.”

The two senators said all these a day after the multi-sectoral anti-VAT hike rally at the Manila Film Center.

Some volts

It was a rally that appeared to have sent some volts through the Senate. The rally in Manila was replicated in several other cities throughout the country.

“It’s a new political development,” activist Fr. Joe Dizon described the rally that drew about 7,000 people, based on estimates by Bagong Alyansang Makabayan (Bayan or New Patriotic Alliance) secretary-general Renato Reyes, Jr.

Indeed it was. It was one of those few instances when groups and personalities who would not normally be seen together were in a single protest action.

The familiar faces from Bayan were of course there, but with them was a sizeable contingent from the Bangon Pilipinas (Philippines Arise) National Renewal Movement led by evangelist and former presidential candidate Eddie Villanueva.

Bangon Pilipinas’ yellow shirts mixed with the multi-colored flags from Bayan and its affiliated organizations like the Kilusang Mayo Uno (May First Movement), Kilusang Magbubukid ng Pilipinas (KMP or Philippine Peasant Movement), Health Alliance for Democracy (HEAD), Migrante International, Sining Bugkos, and GABRIELA, as well as the white flags from the progressive party-list groups Bayan Muna (People First), Anakpawis (Toiling Masses), and Gabriela Women’s Party (GWP). Bangon Pilipinas members who would break into tears at Villanueva’s invocations jived well with Bayan activists who punctuated the speeches with chants enough to send chill down Malacañang’s spine.

Also in the rally were the People’s Movement Against Poverty (PMAP), the People’s Congress for Authentic Democracy (PCAD), Sanlakas, Partido ng Manggagawa (PM or Workers Party), and Bukluran ng Manggagawang Pilipino (BMP or Unity of Filipino Workers). Congressmen and senators from the major opposition parties were also there, among them Francis Escudero, Teofisto Guingona III, Rodolfo Plaza, Juan Ponce Enrile, Jamby Madrigal, and the mother-and-son tandem Loi and Jinggoy Estrada.


Villanueva talked not just about the need for godliness, but also about what he described as the ungodliness of an administration insisting on imposing an added tax burden on the people without fixing the roots of its failure to raise funds. He lambasted Malacañang for failing to curb corruption and inefficiency.

GWP Rep. Liza Maza talked of how adversely a VAT hike would affect women and the rest of the country’s consumer population. KMU’s Elmer Labog and KMP’s Willy Marbella, meanwhile, discussed how a VAT hike would harm workers and peasants.

A recent IBON study showed that the average daily cost of living for a family of six – the average Filipino family – amounts to P492.19. IBON used data from the National Statistics Office (NSO) for its study.

Conversely, the daily minimum wage amounts to only P202.59 on the average nationwide – P289.60 short of the national average for the daily cost of living for a family of six – based on data from the National Wages and Productivity Commission (NWPC).

Meanwhile, both House Minority Leader Escudero and Bayan Muna Rep. Teddy Casiño assailed the Macapagal-Arroyo administration for bowing to what they called the dictates of the International Monetary Fund (IMF) and the World Bank (WB). Escudero described the current Congress as one in which “The winning votes are always those of the IMF and the rich.”


Carmen Deunida of Anakpawis and Dr. Darby Santiago of HEAD would hit it big with the crowd even with their “Ibagsak si Gloria” (Down with Gloria Macapagal-Arroyo) cries.

Deunida was as always in her element, endearing herself even to the obvious moderates in the crowd despite her famous insults and invectives directed at the present Malacañang occupant. She also spoke of “social unrest” that a VAT hike may unleash. “The Senate mobilization today is an indication of the unrest to come if the added VAT legislation pushes through and the economic effects of its implementation start to hit sectors, ranging from lower middle-class consumers to workers, peasants, urban poor, and fisher folk,” she said.

Despite the heat that day the crowd was unfazed. The rally would end, to the tune of the old familiar “Bayan Ko” (My Country) by Jose Corazon de Jesus and Constancio de Guzman, at early evening with the crowd as thick as when it started – holding candles while those on stage were carrying torches, as symbols of unity.

The Feb. 16 protest is only the first in a series.

The organizers of the Feb. 16 protest are targeting a bigger rally on Feb. 24, this time along Ayala Avenue, the country’s business center. A third big one is scheduled for March 8.

A day before the Feb. 16 rally at the Manila Film Center, just a few steps away from the Senate where the bill is now being deliberated upon by the Committee of Ways and Means, Press Secretary Ignacio Bunye was quoted in various news reports as saying that not even a people-power uprising would stop Malacañang from pushing for a VAT hike. The day after the rally, President Gloria Macapagal-Arroyo was telling the people of the need to raise funds to remedy the government’s fiscal woes.

But whether Malacañang is sure of getting its wish is another matter.

Presently covered by the VAT are: food products (processed meat, canned fish, coconut and vegetable oil, bakery products, noodles, milk, dairy products, coffee, sugar); clothing, footwear, tannery and leather products; drugs and medicine, furniture, pulp and paper; glass and glass products; cement, steel, iron, wood and most construction materials; electrical lamps and equipment; machinery and equipment both for manufacturing and agriculture; wholesale trade and retail trade; pawnshops; restaurants, cafes and other eating and drinking places; employment and recruitment agencies; motion picture production; hotels and motels; and telecommunications (including landline, post-paid and pre-paid mobile phone services).

Last December, the results of a survey by the socio-economic think tank IBON Foundation showed 74.11 percent of the respondents opposed to a VAT increase. Bulatlat

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