GMA News Online - Sen. Recto resigns as panel chair amid charges of conflict of interest on sin tax bill

15 October 2012

By Amita O. Legaspi | GMA NEWS

GMA_onlineSenator Ralph Recto on Monday tendered his irrevocable resignation as chairman of the Senate ways and means committee and withdrew his committee report on the proposed sin tax bill amid accusations of conflict of interest and that he favored the tobacco industry because of the cigarette factory in his bailiwick Batangas.

The senator said he will "relinquish… [his] position to a senator who can better fight for what the Department of Finance wants," adding he will withdraw the committee report to give the incoming chairman a free hand in drafting a new report.

Senators, however, did not accept Recto's resignation but referred it to the Senate committee on rules.

The matter will be discussed in a caucus on Tuesday.

Senator Ferdinand Marcos Jr. said the Senate should not give in to pressure from Malacañang. "This Senate cannot operate under that kind of clout.

“I object to the motion to accept the resignation of Senator Recto… I object to the withdrawal of the committee report," he said.

The Palace’s stand should not be seen by the senators as a pressure, Senator Franklin Drilon, a Malacañang ally, said.

"We are in a democratic society, there is nothing wrong with the executive branch stating their position on any measure before us," Drilon added.

So as not to disrupt the passage of the sin tax bill, Recto suggested the new committee chair use the committee’s existing records, data, and transcripts pertaining to the sin tax bill.

"These are the threads that will form the new fabric of excise tax bill. They can be easily woven into a new one," Recto said.

Sin tax reform advocates said Recto is in a conflict of interest situation because Philip Morris has a large factory in Tanauan City, Batangas.

This alone should have been cause for the senator to inhibit himself from drafting the bill.

Last week, Recto endorsed a sin tax bill that would yield at least P15 billion in additional revenues for government, or half of the P31.35 billion in the version approved by the House of Representatives and only a fourth of the P60 billion the Finance Department had been aiming for in the administration’s version of the sin tax measure.

“It is easy to see why Recto would water down the sin tax bill, given that Philip Morris has a $300 million plant in Batangas,” Dr. Maricar Limpin, executive director of the Framework Convention on Tobacco Control Alliance of the Philippines (FCAP) said Monday.

“The least Recto could have done was to inhibit himself from crafting the bill,” Limpin added.

The husband of celebrity-turned-politician Vilma Santos, who sits as governor of Batangas, Recto said in a privilege speech Monday, "That role [as chai of the ways and means committee] has always been a thankless job."

Action for Economic Reform (AER), a non-governmental organization, earlier called on Recto to quit his chairmanship of the ways and means committee.

“Obviously, Recto is guilty of a conflict of interest here,” said AER coordinator Filomeno Sta. Ana said Monday.

“At this point in time, Recto should heed our call for him to yield the chairmanship of the ways and means committee to another senator,” he added.

Sta. Ana called on other senators to drop Recto’s proposed version of the bill by making it more responsive to public health by curbing cigarette consumption.

The Philip Morris facility in Batangas was inaugurated in 2003, with officials of the cigarette maker noting that the factory was “the most modern cigarette manufacturing facility in Asia” and was the company’s manufacturing hub for Southeast Asia.

Recto, however, lamented his situation.

"Kung sobra sa buwis, magagalit ang Barangay Ginebra at Republika ng Serbesa. Kung kulang naman, ang pangungutya ng DOH (Department of Health] na hindi napondohan ng sapat ang universal health care dahil kay Recto," he said.

"At the end of the day, kahit makapagraise ka pa ng P40 bilyon, ang sukli sa iyo ay maging scapegoat sa isang batas na tinimbang nila ngunit kulang. Kung makakaltasan ang rates, babaha ang kantyaw na winater down ko," he added.