DOMINGUEZ NIXES PROPOSED BORACAY AUTHORITY’S ROLES
THE Department of Finance (DOF) and the Boracay Inter-agency Task Force (BIATF) are opposed to the substitute bill in the House of Representatives that establishes the Boracay Island Development Authority (Bida) as a governmentowned and -controlled corporation (GOCC).
In a position paper re-sent to Speaker Lord Allan Jay Q. Velasco on January 28, 2021, Finance Secretary Carlos G. Dominguez reiterated that the proposed Bida is “inconsistent with the government’s ongoing policy to streamline and rationalize the government corporate sector and bureaucracy as a whole.” He underscored the need for more coordination among government agencies in dealing with Boracay’s issues, instead of creating a new government corporation or economic zone.
Separately, Interior Undersecretary for Operations Epimaco V. Densing III told the Businessmirror the BIATF’S stand: “We don’t want [Bida] to be a GOCC but a regulatory office protecting and preserving the island and ensure compliance of environment laws and longterm tourism sustainability. Basically, BIATF’S [proposal] wants Bida to carry out the functions of the current task force in a more permanent manner, to be under the Office of the President,” he said. BIATF’S term is scheduled to expire in May 2021.
The substitute bill, which now has over 100 coauthors, has also been opposed by local government executives and the private sector representatives in Boracay, the municipality of Malay, and Aklan province. (See, “New bill on Boracay regulatory authority opposed,” in the Busi nessmirror, February 28, 2021.)
Existing agencies do bida’s jobs
Dominguez, for his part, said Bida’s functions will just be redundant and overlap with the functions of existing government agencies such as the Boracay Inter-agency Rehabilitation Management Group, “specifically tasked to implement…phase 2 of Boracay’s rehabilitation,” the Departments of Environment and Natural Resources, Trade and Industry, Transportation, Public Works and Highways, Health, Tourism, Science and Technology, National Defense, the Interior and Local Government, and a whole slew of regular line and attached agencies.
“Instead of the creation of new authorities, coordination should be intensified among the above-mentioned national government agencies, councils, and GOCCS, with the LGUS concerned,” he stressed.
Dominguez also noted Bida’s creation “is no longer necessary” as the Philippine Economic Zone Authority is already empowered to administer and manage all ecozones, under Republic Act No. 7916.
no to new ecozone, tax perks
ON the proposed establishment of the Boracay Islands Special Economic and Tourism Zone, Dominguez noted the second tax reform package “mandates that all applications for tax incentives should be accompanied by a cost-benefit analysis and the continued grant of incentives is conditional on the performance of incentivized firms.” As such, this should also apply when creating new ecozones and free trade zones.
“The presence of economic zones does not guarantee economic growth and development of a certain area,” he underscored. “We believe a more holistic approach that includes building the necessary infrastructure, developing our labor force through investments in their education and health, and eliminating multi-layered bureaucracy, to name a few…. The policy direction of this administration is to depart from granting wasteful incentives that denies the government and the public with the resources that will directly benefit those who truly need them.”
Dominguez likewise noted that a number of designated ecozones have yet to be operational. “There is thus a need to go slow with their establishment or to defer the creation of additional or new ones…”
The House Committee on Ways and Means, however, approved tax incentives for Bida investors in December. (See, “Lawmakers OK tax perks in bill for Boracay SETZ,” in the Businessmirror, December 8, 2020.)
The DOF chief said the proposed power of Bida to borrow from local and foreign sources should be “subject to the review and approval” of the Bangko Sentral ng Pilipinas’s policy-making Monetary Board and the DOF, “in line with the policy of promoting fiscal prudence to avoid unduly exposing the national government to potential increase in contingent liabilities.”
The DOF also does not support the proposed establishment of a revenue district office and a customs district office exclusively for Bida and its surrounding municipalities, as “the power to divide the country into such number of revenue and customs districts has been delegated to the Commissioners of Internal Revenue and of Customs,” as per existing laws.