The government hopes to meet its targeted budget deficit of P130 billion for this year.

If the deficit goes beyond the target, it will be so small that it may as well go unnoticed.

Budget Secretary Emilia Boncodin said today the government remained committed to keep itself within this year’s budget deficit ceiling.

"Gagawin namin ang nararapat para ma-attain ‘yun (We will do what must be done to attain it)," she said in a radio interview this morning.

Boncodin said she was confident the state’s revenue earning agencies like the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BoC) would likewise meet their target collections.

She said that during Tuesday’s Cabinet meeting, BIR and Customs officials reported strides in their collections.

"Noong June at saka July, inaasahan namin na iyong kanilang shortfall ay lumiliit na (We expect a significant decrease in their shortfall in the June and July collections)," she added.

Further, the government’s expenditures have normalized, she said, stressing that there was a big chance of recovery before the end of the year.

Boncodin also disclosed that the budget deficit for the year 2003 was pegged at P138 billion, or only 2.5 percent higher than this year’s level.

"Our budget is getting bigger. We shall be proposing to Congress a budget of P800.7 billion next year. But this would only be 2.5 percent higher than the 2002 budget," she said.

The proposed budget, she stressed, would be spent on a comprehensive program that would promote investments in a strong Republic, "akmang-akma sa SONA (which is very relevant to President Gloria Macapagal-Arroyo’s second State of the Nation Address)."

The fight against graft and corruption in the bureaucracy would not need a big amount of money since it is regulatory in nature. But stabilizing peace and instituting order – through the police, military and judiciary -- to promote investments would need funds, she said.

"We have allocated funds to recruit an additional 5,000 policemen, jail guards and firemen in the effort to bring about peace and order nationwide," she added.

Another focus of next year’s budget is agricultural modernization. Boncodin disclosed.

She noted that under the law, the budget for agricultural modernization should not go below P20 billion yearly. Allocated for this purpose was a budget of P18.7 billion while the Land Bank of the Philippines would put in some P5 billion for credit

The government is also projecting economic growth at 9 percent in 2003, she added.

The sale of government shares in the Malampaya oil fields would help offset the budget deficit, Boncodin said.

BINAN, Laguna -- President Gloria Macapagal-Arroyo today led government officials and Honda Motor Company executives in ground-breaking rites for the P1-billion state-of-the-art transmission plant of the Japanese firm which is expected to begin operations in October 2003.

The President, assisted by Trade and Industry Secretary Manuel Roxas II and Honda Senior Managing Director Katsuro Suzuki and other local officials of Laguna, first lowered the time capsule and officially led the ground breaking to start off the construction of Honda’s new transmission plant in ceremonies held this morning at the Laguna Technopark here.

The plant is a fulfillment of Honda’s commitment to expand its operations in the Philippines which was committed by the company to President Macapagal-Arroyo during her visit to Japan in May this year.

Suzuki, who welcomed the President upon her arrival at the company transmission site, said today’s ground-breaking ceremony marks the second phase of the project which is to supply transmissions to Honda’s global network.

He said transmission units from the Laguna factory will be exported to Honda factories in North America, Europe and Asia.

"Honda is initially investing 2 billion Japanese Yen to produce some 140,000 transmission units a year, and generate over 200 new employment opportunities," Suzuki said.

When fully operational, Suzuki stressed that the transmission plant will generate US$65-million exports annually and additional jobs for highly skilled Filipino technicians.

The transmission project in Laguna, according to Suzuki, represents Honda’s commitment to "the long-term development of Philippine automotive industry."

He pointed out that the Philippines under the stewardship of President Macapagal-Arroyo is an important part of his company’s "Made by Global Honda" Program "to optimize our global procurement and product supply by efficiently utilizing our factories around the world."

Before the ground-breaking ceremony, the President was briefed by Honda Cars (Phil.) president Kenji Otaka on Honda Motors’ investments in the Philippines.

A large group of Ilocanos based in the different cities in the United States has expressed its support to the efforts of President Gloria Macapagal-Arroyo to rid the country of graft and corruption, fight criminality and alleviate poverty.

This information was relayed by Rep. Roque Ablan, Jr. (First Dist.- Ilocos Norte) who just returned this week from a successful meeting with the leaders of the Ilocano National Association (INA) in the United States, which covers cities like Honolulu, Los Angeles, Las Vegas, San Francisco, San Diego, Washington, D.C., and New York.

According to Ablan, the INA, through its overall chairman Dr. Carlos Manlapaz, believes that Filipinos should unite to support the program of the President as stated in her second State of the Nation Address (SONA) last July 22.

"We now have a sincere leader to pursue solutions to our country’s reputation," Manlapaz was quoted as saying.

The INA executive also expressed the association members’ appreciation to the inspiring SONA of the President, saying that the country might have had good presidents in the past "but she has excelled because of her political will which is the one that really counts."

"Let’s not judge her now, judge her later and give her a chance to prove that she is right," Manlapaz said.

In a statement, Ablan cited President Macapagal-Arroyo for being the first President among many nations in the world to exert efforts to fight crime and terrorism in the aftermath of the Sept. 11 terrorist attacks in the United States.

President Gloria Macapagal-Arroyo today announced "a major breakthrough in our campaign against graft and corruption."

The President made the announcement at the National Bureau of Investigation.

She added that the BIR, working closely with the Land Bank of the Philippines (LBP), had just uncovered a massive tax diversion scam reaching P205 million under which payments to the Bureau of Internal Revenue (BIR) were diverted to private accounts.

This was uncovered in the course of the BIR’s investigation of corporations that seemed to have stopped filing taxes and LBP’s ongoing review of large deposits and withdrawals in compliance with Republic Act No. 9160, otherwise known as the Anti-Money Laundering Act of 2001.

The corporations that the BIR investigated issued checks for payments to the bureau. As proof of tax payment, they presented receipts issued to them by the LBP. However, upon scrutiny by the BIR, the receipts were found to be falsified.

"I have directed Justice Secretary Hernando Perez to conduct a full-blown investigation of this scam, towards the early arrest of the suspects and the filing of plunder charges in court," the President said.

She added that hold-departure orders shall be issued against the suspects as they are identified.

"The Republic will seek the maximum penalty against these economic saboteurs," the President stressed, adding that "We will leave no stone unturned in this investigation."

The President said LBP officials who did not report the huge transactions related to the scam will be investigated for violations of the Anti-Money Laundering Law.

She said that she had given instructions to LBP president Margarito Teves to undertake a thorough assessment to preclude a repetition of the scam and similar anomalies

The NBI reported that from January 2001 to June this year, about P205 million in check payments to the BIR were fraudulently diverted to four accounts held by fictitious persons at the LBP Binangonan Branch.

The President said that on her instructions, the NBI this morning filed charges for violations of the Anti-Money Laundering Law against Artemio San Juan, LBP branch manager in Binangonan.

"Mr. San Juan failed to disclose a report to top management and subsequently to the Anti-Money Laundering Council deposit transactions of these accounts whose amount exceeded P4 million per transaction or a series of transactions exceeding P4 million," the President said.

She pointed out that under the Anti-Money Laundering Law, P4-million transactions have to be reported to the Anti-Money Laundering Council.

But in 17 instances, more than P4 million were deposited and San Juan did not report any of these, she said.

Last night, the NBI invited San Juan for questioning. And after investigation and gathering of evidence against him, he was placed under arrest.

The NBI today filed before the Chief State Prosecutors Office a 17-count violation of the Anti-Money Laundering Law against San Juan.

President Macapagal-Arroyo said San Juan will be held accountable for failure to report these big transactions, which is a violation of the Anti-Money Laundering Law as well as other unlawful acts that may be uncovered in the course of the investigation which is taking place.

The President said that further investigations will be conducted on the possibility of the existence of plunder or other violations by San Juan and other unknown personalities.

The President said that hold-departure orders will be issued against the suspects once they are identified.

At this juncture, the President introduced San Juan to the media.

"We will follow the paper trail from the BIR and the LBP to the last account in the hands of private individuals. No one will get away with stealing the money of the people. They will all face the harshest punishment under the law," the President vowed.

"As I said in my State of the Nation Address (SONA), tax-evasion is a white-collar crime and the response is a white-collar response—systems improvement, audit, prosecution. But the punishment is blue collar, kalaboso (imprisonment)," the President reiterated.

The President stressed that "this will be an unrelenting effort of our strong Philippine Republic."

She added that the tax collection system will be cleaned up as a primary institution of good governance.

"We will stamp out corruption and fraud in the bureaucracy. And we will call upon the business sector and the general public to support us in this campaign," she said.

The President revealed that she would go to the BIR tomorrow because of another set of scam the bureau has also uncovered and that "we will be running after. And this is with respect to an under declaration of the Value-Added Tax (VAT) by at least 300 firms accounting for as much as P4 billion."

"So you can see what we are doing. The tip of the iceberg is Mr. San Juan and the message we want to send is, we mean business," the President said.

Upon arrival at the NBI the President was welcomed by Justice Secretary Perez, NBI Director Reynaldo Wycoco, and Land Bank president Teves.

Thereafter, they proceeded to Director Wycoco’s office, where they briefed the President .

President Gloria Macapagal-Arroyo today presented to the media a suspected Nigerian drug pusher who was arrested for the illegal importation of less than 700 grams of high-grade cocaine with a street value of about P7 million.

In a statement read at the National Bureau of Investigation (NBI) headquarters in Manila, the President identified the suspect as Goswill Emenike, a.k.a."Willy," single, 29 years old and a resident of No. 16-A Queens Road, Project 8, Quezon City. The suspect is said to be a physical therapy graduate from St. Jude College in Manila.

The President said the arrest of the Nigerian national and the confiscation of cocaine is the first case that will be tried under the Comprehensive Dangerous Drugs Act of 2002 or Republic Act 9165 which was passed under her administration.

"This is the first successful drug controlled delivery operation done in the Philippines and the first of its kind to be tried under the new drug law," the President said.

The operation was a combined effort of the NBI, the Bureau of Customs under Commissioner Antonio Bernardo and the National Drug Law Enforcement and Prevention Coordinating Center (NDEPCC).

Last July 19, a United Parcel Service express parcel (overnight bag) bound for the Philippines was seized by the United States Customs at the Miami (Florida) International Airport.

It was revealed that the cocaine was packed in a brown plastic packet concealed inside the false bottom and cover of an overnight kit and was transported thru the UPS. The said package originated from Cochabamba, Bolivia.

On July 27, 2002, the US Drug Enforcement Administration requested the NBI, the BOC, and the NDEPCC to conduct a drug controlled delivery operation on the seized package to determine who were involved in the cocaine importation.

Later, the US Customs sent the cocaine package to the Ninoy Aquino International Airport (NAIA) via Continental Air Micronesia and the package was received by the BOC which turned it over to US-DEA representative in Manila and to the NBI for a joint drug controlled delivery operation.

On July 29, 2002, the combined authorities, including two NBI men who posed as driver and delivery man of the UPS, went to the said address of the suspect and delivered the package consigned to a certain "Jorge Nmadu" and care of a person by the name of "Willy."

It was revealed that suspect Emenike personally received the package by presenting to the undercover agents his identification card.

The suspect was then placed under arrest and seized from him the overnight bag which contained the cocaine.

President Gloria Macapagal-Arroyo has reorganized the Bureau of Internal Revenue (BIR) to make it a taxpayer-focused organization so that it can meet its targets in revenue collection urgently needed to finance and sustain the government’s vital economic programs.

In a luncheon meeting with members of the Malacaņang Press Corps today, the President said she has signed a still unnumbered Executive Order to reinforce the BIR’s tax administration and collection capabilities.

"There is going to be large taxpayers unit, a small taxpayers unit, tax-exempt taxpayers unit and another unit for government corporations," the President said.

The President, who will be attending the BIR foundation anniversary tomorrow, said that the reorganization of the revenue collection agency starts tomorrow, August 1.

A special feature of the EO is the creation of an operations group which is composed of the following services, each of which will be headed by an Assistant Commissioner:

1. The Large Taxpayers Service, which is composed of two divisions, namely: Banks, Insurance and Service Sectors Division, and Manufacturing, Industry and Agricultutral Sectors Division;
2. The Excise Taxpayers Service, which will be composed of five divisions, namely: Alcohol, Wine and Liquor Sector Division; Tobacco, Cigar and Cigarette Sector Division; Petroleum, Mineral and Miscellaneous Sector Division; Data Reconciliation and Analysis Division, and Field Operations Division;
3. The Non-Large Taxpayers Service which shall be composed of three divisions; Banks, Insurance and Service Division; Manufacturing, Industry and Agricultural Sectors Division and Emerging Industries/Business Sector Division;
4. The Individual Taxpayers Service which is composed of three divisions – Compensation Earners Division, Mixed Income Earners Division, and Professionals, Self-Employed, Estates and Thrusts Division;
5. The Government and Tax-Exempt Entities Service will be composed of three divisions – Government Agencies Division, Tax-Exempt Entities Division, and Special Taxpayers Division.
6. The National Investigation Service;
7. The Regional Offices, which shall be directly under the supervision of the Deputy Commissioner for Operations but shall executive and implement the policies and programs formulated and prescribed by the Non-Large Taxpayers Service, Individual Taxpayers Service and the Government and Tax-Exempt Entities Service for the enforcement of the Internal Revenue Laws of the Philippines.

President Gloria Macapagal-Arroyo today ordered Justice Secretary Hernando Perez to help the Bureau of Internal Revenue (BIR) speed up the filing of cases against some 300 companies that underdeclared their value added taxes (VAT) that robbed the government of some P5 billion.

The President also asked Perez to complement the number of lawyers to attend on the cases so that their prosecution could proceed in haste.

"I asked Nani (Perez) to give (BIR chief Rene Baņez) 12 (lawyers). The 12 already went today and they have started working, and tomorrow (Thursday), I want to see the results of their work," she said during the regular luncheon meeting with the Malacaņang Press Corps at the State Dining Room.

She said she would attend the Ateneo Law School homecoming to seek help and "get volunteers for the 300 cases."

"I’ll also get some of the lawyers who volunteered when I was Vice President, those who were helping to handle the cases against child abuse and exploitation of women. I’ll ask them to help … to volunteer for this one," she added.

The President said a branch manager could already be charged with VAT underdeclaration, adding that she had told the BIR to file the charges "right away."

"We’ll see who is involved. We have to have (a group) like the Sycip, Gorres and Velayo (SGV) financial forensic to do the paper trail," she said.

"I don’t want to pass judgment. But what I did say was that the bureaucracy does not run like a corporation. We have to strengthen the institution and bring in that ethic of effective implementation," she added.

"I want fast action," she stressed, adding that making the BIR as a showcase of good governance "is a continuing effort."

She had asked (Press Secretary Ignacio) Toting (Bunye) to keep bringing out the reports about fighting corruption. Marami (There are plenty)," she said.

Malacaņang today reiterated its earlier stand that fugitive Pentagon kidnap gang leader Faisal Marohombsar should not set demands for his surrender to the authorities.

"The stand of the President has always been clear that Marohombsar cannot make these demands. So, if he wants to surrender to General Braganza, that’s up to him," Press Secretary and Acting Presidential Spokesman Ignacio Bunye said today in his regular press briefing.

Bunye also said that henceforth, it would be Maj. Gen. Alberto Braganza, commander of the Army’s 7^th Infantry Division, who will announce developments in the surrender feelers of Marohombsar.

Braganza, former senior military aide of President Gloria Macapagal-Arroyo, has said that he was able to talk to Marohombsar by telephone Monday.

According to Braganza, Marohombsar has expressed his willingness to surrender, adding that he was giving the fugitive bandit leader to give himself up either today or tomorrow.

In debunking reports of a news blackout on Marohombsar, Bunye said that it was General Braganza himself who requested that any announcement about the fugitive’s surrender should come from him so as not to derail the operations.

A three-man panel composed of Justice Secretary Hernando Perez, Foreign Affairs Secretary Blas Ople and Defense Secretary Angelo Reyes will present separate briefings to the members of the Senate and the House of Representatives as soon as they finished the final draft of the Mutual Logistics Support Agreement (MLSA).

In a press briefing in Malacaņang, Press Secretary Ignacio Bunye said the MLSA draft has not been finalized yet.

"The reason why they are not releasing the draft yet, to tell you the truth, the draft has not yet been finalized," Bunye told reporters.

Under the updated draft dated last July 26, the Press Secretary said several provisions have been revised drastically to incorporate the suggestions made by Vice President and former Foreign Affairs Secretary Teofisto Guingona.

Bunye said the latest draft was also discussed in a meeting yesterday at the Palace attended by Ople, Perez, Reyes and other Cabinet officials.

In that meeting, he said even Education Secretary Raul Roco had some fine points to add to make the MLSA more acceptable.

Bunye expressed the hope that the final draft will be acceptable to the initial critics of the MLSA.

According to Bunye, there are several key provisions which, if incorporated, will address the objections raised by even the harshest critics of the MLSA.

He said under the agreement, there is a provision that will address the basing rights, prohibiting the construction and establishment of US military base facility or permanent structure.

Another provision, he said, is that storage units and ports shall at all times remain under the control and supervision of the host country.

Bunye stressed that under the draft agreement, the MLSA will be only for the period of five years and can be terminated upon six months notice by either party.

As proposed, the agreement will be signed by Armed Forces of the Philippines (AFP) Chief of Staff Roy Cimatu and the Commander in Chief of the US Pacific Forces (CINCPAC), Admiral Thomas Fargo.

The MLSA, Bunye said, is not peculiar to the Philippines since it is also being used in 51 other countries, including big powers such as Canada, Britain and Germany.

"It’s not something extraordinary as far as MLSA agreements are concerned," he pointed out.

As soon as the final draft is completed, Bunye said a copy will be immediately sent to the counterpart panel in the United States.

He further explained that the MLSA, being an executive agreement, can be signed by other officials of the government.

President Gloria Macapagal-Arroyo today said she will meet again with the mayors of Metro Manila to discuss proposals on returning to them the administrative control over members of the Philippine National Police (PNP).

"If the Executive Order is not yet there, then we will sit down and draw it up together," the President said during her regular luncheon meeting with members of the Malacanang Press Corps.

The President said she wanted to give the Metro Manila Mayors, who are deputies of the National Police Commission, the power to hire, fire and discipline the police, subject to appeal.

"Because right now, their only power is to recommend the hiring, firing or disciplining," the President said. But under the Executive Order that is being drafted, the mayors can "do this but subject to appeal."

The President announced her approval of the proposal during the joint meeting of the Regional Development Council and the Regional Peace and Order Council of Metro Manila at the Manila Hotel on July 16.