From the News! – Your Daily News

Ted P. Torres
Philippine Star

The World Bank is urging the Philippine government to fully implement tax administration reforms to cope with the global financial crisis.

In its recently released quarterly report, the World Bank said there are indications the tax effort might fall again in the absence of tax policy and administration reforms.

“Even maintaining the tax effort in the first half of 2008, wherein tax effort improved to 14.6 percent of GDP, is going to be a challenge,” it said. “Tax revenues need to grow while reducing fiscal risks and maintaining fiscal stability.”

Likewise, the tax revenue loss for 2009 is likely to be even bigger given the scheduled reduction in the corporate income tax rate from 35 percent to 30 percent on Jan. 1, 2009 and the implementation of the PERA Law on top of Republic Act (RA) 9504. The estimated tax revenue loss for 2009 from the three tax measures is estimated at between 0.5 percent to 0.7 percent of GDP.

The World Bank said that to prevent further erosion in the gains attained so far in fiscal consolidation, new tax policies and more systematic and sustainable tax administration are urgently needed.

“Increasing the excise tax rates of tobacco products and rationalizing fiscal incentives are foremost recommended since both have very strong economic and social cases on top of their revenue impact,” the report added.

The World Bank said there is a great scope in improving the design and yield of tobacco excises.

Philippine tobacco excise tax rates and excise burden are among the lowest in the world and the structure of excises is complex. Consequently, tobacco excise tax revenues are both low and have been declining as a percentage of GDP over the past 10 years, the World Bank noted.

“If properly taxed, tobacco products can be a large source of revenues. Aside from the revenue benefits, health and social benefits from lower tobacco consumption are expected to be significant,” the report said.

The World Bank said the Philippines has two options in improving excise taxes on the so-called sin taxes.

A first option would involve shifting to a uniform and higher specific excise tax rate that is automatically linked to inflation thereafter. This option would guarantee that both excise incidence and burden will not fall over time. The government can expect to generate up to 1.3 percent of GDP in revenues under the best scenario or 10 percent of tax collection.

A second option, if automatic indexation is not supported or rates cannot be agreed ahead of time, is to exclude specific rates from the law, and refer these to a schedule of rates, which is to become part of the annual budget submission to Congress. Rates can then be increased over time without changing the law.

The scope for rationalizing fiscal incentives is equally large. Tax incentives substantially reduce effective tax rates on corporate income.

Phasing out tax holidays and instead offering a reduced corporate income tax rate or a five-percent tax on gross receipts—would broadly retain the current effective tax rates while enabling the government to tap into tax redundancies estimated at about one percent of GDP.

Finally, the World Bank said that there is an urgent need to improve taxpayer compliance.

“Two reform areas appear promising given their track record of success if properly implemented and their potential to increase collection in the short- term,” the global financial institution said.

Iris C. Gonzales
Philippine Star

Dividends remitted by state-run firms to the National Government (NG) declined to P5.41 billion from January to October this year, a P3.46 billion decline from the P8.87 billion recorded in the same period last year, latest data from the Department of Finance (DOF) showed.

Finance Undersecretary Jeremias Paul Jr., however, stressed that last year’s figures were larger than expected because the government accelerated its collections.

“We will try to increase it. Some corporations have indicated that they would be able to provide more than 50 percent of dividends,” he said as he noted that the government wants to boost dividends collected from state companies.

President Arroyo has instructed government agencies to boost public spending as a means to cushion the country from the negative impact of the global economic slowdown.

Under Republic Act 7656 or the Dividends Law of 1994, government owned and controlled corporations (GOCCs) and government financial institutions (GFIs) are required to remit half or 50 percent of the income they earned in each fiscal year to the National Government. The remittance should be in the form of cash or in real estate properties with clean titles.

Paul said the major contributors of dividends to state coffers during the period include the Philippine Ports Authorities with P1.1 billion; the Development Bank of the Philippines, P1 billion; the Philippine National Oil Co. (PNOC), P790 million; the Manila International Airport Authority, P680 million; and the Land Bank of the Philippines, P440 million.

Despite the decline in dividends, the latest figure is already above the programmed dividends for the full year of P4 billion.

In 2006, dividends from GOCCs and GFIs reached a total P16.25 billion or almost three times the P5.66 billion recorded in 2005.

Dividends form part of the National Government’s total revenues. From January to September, total revenues of the National Government reached P879.920 billion, of which non-tax revenues amounted to P90.411 billion and tax revenues, P789.403 billion.

The government has programmed to raise a total of P1.250 trillion in revenues this year.

It has programmed to keep the budget deficit at P75 billion by yearend.

Roy Pelovello
Manila Standard

A Cabinet plan to rationalize the fiscal incentives system gains support in the House of Representatives, with Rep. Exequiel Javier filing a bill to set curbs on the tax deductible expenses of professionals and self-employed.

Javier’s proposal is embodied under House Bill 5257 or the Simplified Net Income Taxation.

Javier said his proposal would require professionals and self-employed to use an optional standard deduction of 40 percent of their gross income for purposes of determining their liability.

According to Javier, his proposal will save the government about P11 billion in revenues forgone each year with the tax deduction scheme.

“This bill seeks to redress the imbalance of taxation between the wage earners on the one hand, and the professionals and self-employed on the other hand,” Javier said.

Javier noted that under the National Internal Revenue Code, professionals and self-employed individuals are taxed at the same rate as wage earners.

But he said that while salaried workers are allowed only personal and additional exemptions, professionals and self-employed are entitled to “a full array of itemized deductions” from gross income allowed also to corporations.

He noted that 80 percent of tax revenue from individuals is collected from wage earners and only 20 percent comes from professionals and self-employed individuals.

Likewise, Javier pointed out that in terms of tax paid on gross income, the effective tax rate for wage earners is 15.25 percent while it is a measly 1.14 percent for self-employed and professionals.

Based on this system, Javier said a wage earner receiving a gross income of P200,000 a year pays a tax of P30,500 while an accountant or doctor earning the same pays a tax of only P2,280.

Pia Lee-Brago
Philippine Star

The European Union (EU) has adopted a new regulation on its Generalized System of Preferences (GSP) scheme that will allow 176 developing countries, including the Philippines, to continue enjoying preferential access to the EU market.

With the new GSP scheme that covers the period from 2009 to 2011, Ambassador Alistair MacDonald, head of the European Commission (EC) Delegation in Manila, said “the Philippines will continue to benefit from either reduced-duty or duty-free entry for many products, and no sector will be graduated from GSP for the Philippines from 2009-2011.”

EU Trade Commissioner Peter Mandelson said “the continuation of GSP will ensure stability and predictability for beneficiaries and traders in the EU and developing countries. GSP is a vital tool of our pro-development EU trade policy.”

In response to requests by users of GSP to ensure continued stability, predictability and transparency, the scheme remains broadly unchanged.

The Philippines is among the top 20 users of the EU GSP scheme, from which it benefits under the general arrangements. Philippine GSP exports stood at 862 million euros in 2007, up by nine percent from the previous year, the highest recorded since 1998.

The average utilization rate has also improved to 56 percent in 2007 from 44 percent in 1998, and is now above the global average.

Of the 5.6 billion euros total Philippine exports to the EU in 2007, about 16 percent benefited from GSP.

Based on recent GSP export performance, preferences for specific product groups will be restored (degraduation) for six beneficiary countries of GSP – Algeria (mineral products), India (jewelry, pearls, precious metals and stones), Indonesia (wood and articles of wood), Russia (chemicals and base metals), South Africa (transport equipment) and Thailand (transport equipment).

On the other hand, preferences for specific product groups will be suspended (graduation) for Vietnam, for footwear, headgear, umbrellas, sun umbrellas, artificial flowers and some other products.

Aurea Calica
Philippine Star

There is no relief yet for ordinary workers despite the law exempting minimum wage earners from income taxes.

Senators Manuel Roxas II and Francis Escudero lamented that the law was not being enforced because the Bureau of Internal Revenue (BIR) and the Department of Finance (DOF) have not issued the implementing rules and regulations.

Escudero said the BIR wanted to implement the exemption in 2009 but he threatened to sue the agency if it would do so, saying the law should have taken effect last January.

Roxas called on Malacañang to stop delaying the full implementation of the law, which also raised personal exemptions for other workers.

“The Palace just keeps on making promises to the people. We have long passed the tax exemption but we only hear excuses from the Palace,” said Roxas, principal author of Republic Act 9504, enacted last June 17, that exempted minimum wage earners from income tax.

“Why do we need to make it difficult for the people to enjoy the tax exemption?” he asked.

Roxas opposed a plan of the DOF to require companies to submit a list of their employees earning minimum wage.

The DOF plan, he said, would only be an unnecessary layer of bureaucracy that would make it harder for employees to avail of their income tax exemption.

“We are needlessly enlarging the bureaucracy by creating these new requirements that will only serve to lengthen the process in order to avail of the exemption,” he said.

“It seems the DOF is intent on collections according to the old law for as long as possible, since it’s easier. Instead of working to make the BIR more efficient under the new law, our people continue to be burdened by high taxes on top of high prices,” Roxas said.

He said the call for full and immediate implementation of RA 9504 has been echoed by, among other groups, the Tax Management Association of the Philippines, Business Processing Association of the Philippines, Employers Confederation of the Philippines, Management Association of the Philippines, Makati Business Club and the Philippine Chamber of Commerce and Industry.

Escudero said the BIR must follow a Supreme Court decision stating that a law on tax exemptions must be implemented at the start of a taxable year.

The senator said the BIR would just have to make the necessary adjustments on its projected revenues.

Revenue loss from the tax relief for minimum wage earners, pegged at P3.16 billion, and the loss due to the increase in exemption estimated at P11.09 billion, can be offset by the revenues to be generated from the new law that hopefully will promote tax collection efficiency expected to generate an estimated P15.03 billion.

Under the new law, the tax exemptions will provide additional take-home pay of P34 a day or P750 a month for minimum wage earners.

All holiday, night differential, hazard and overtime pay will also be tax exempt for minimum wage earners both from the private and government sectors.

Under the law, married couples can enjoy P100,000 in combined income tax deductions (P50,000 each if both are working) plus an additional P25,000 deduction per dependent up to a maximum of four children, or total deductions of up to P200,000 for each family.

An official of the Catholic Bishops’ Conference of the Philippines (CBCP), meanwhile, supported the proposal to raise the minimum age requirement to 30 years for overseas Filipino workers (OFWs) applying as household service workers (HSW).

Fr. Edwin Corros, CBCP-Episcopal Commission on the Pastoral Care of Migrants and Itinerant People (ECMI), said that he supports the proposal of the Department of Foreign Affairs (DFA) to increase the minimum age requirement of Filipino domestic helpers sent abroad from 23 to 30 years old.

“We support the higher age because a woman or person of that age would be emotionally mature. However, we still have yet to find supporting documents or an empirical study that would prove that older persons are more capable of protecting themselves from abuses such as rape,” Fr. Corros added.

He added that this is already the practice in Sri Lanka, where only women aged 30 or 35 are allowed to work abroad.

He admitted that the younger generation of OFWs, or those below 30 years old, who are aspiring to work as HSW abroad would be adversely affected by this change in the age requirement since they would not qualify for overseas employment.

Labor Undersecretary Rosalinda Baldoz had reported that the increase in suicides and runaways among Filipino maids prompted the DFA to request for the increase in the minimum age requirement.

–With Evelyn Macairan

Dan Mariano
Manila Times

When President Gloria Arroyo signed Republic Act 9504 into law less than three months ago, the government announced that it was giving immediate financial relief to low-income workers. However, the agencies—led by the Bureau of Internal Revenue (BIR)—that drafted the law’s implementing rules and regulations (IRR) seem determined to torpedo this widely applauded piece of social legislation.

The proposed IRR not only sets the effectivity of RA 9504 to July next year—thus contradicting the law’s avowed aim of providing “immediate” financial relief. It also provides an entire maze of bureaucratic procedures that would tend to discourage companies and their employees from complying with RA 9504.

So distressing is the proposed IRR that some of country’s biggest business groups were reported to have joined the Tax Management Association of the Philippines Inc. (TMAP) in asking the government to revise the draft implementing provisions of the tax-relief package law.

According to the TMAP, the proposed IRR could “negate the law’s original purpose to grant timely relief to workers and could hurt productivity and needlessly burden employers.”

Enacted on June 17 amid calls to protect workers from the inflationary effects of rising food and fuel prices, RA 9504 exempts an estimated 500,000 minimum-wage earners (MWEs) from income-tax payments.

RA 950 also increases the level of personal exemptions and deductions of individual taxpayers. The personal exemption of single taxpayers was raised from P20,000 to P50,000; heads of families from P25,000 to P50,000; and married employees from P32,000 to P50,000.

According to a report published in the BusinessMirror Wednesday, TMAP president Laura Yuson-Layug branded parts of RA 9504 as “contrary to law and jurisprudence.” She said as much in a letter to Finance Secretary Margaito Teves.

Similar objections were aired in a joint position paper by the TMAP, the Action for Economic Reforms, American Chamber of Commerce in the Philippines, Business Processing Association of the Philippines, Employers Confederation of the Philippines, Financial Executives Institutes of the Philippines, Management Association of the Philippines, Makati Business Club, Philippine Chamber of Commerce and Industry, Philippine Institute of Certified Public Accountants, Philippine Inter-Island Shipping Association, Philippine Liner Shipping Association, People Management Association of the Philippines and Public Services Labor Independent Confederation.

One of the IRR provisions declares that income-tax exemptions for MWEs and increases in personal and additional exemptions would take effect on July 1, next year.

The TMAP pointed out that RA 9504 is a social legislation passed by Congress to grant “immediate relief” to the economic plight of people during times of high fuel costs driving up inflationary pressures. It said the benefits of the law should be made available in full for the year 2008.

“To make the income tax exemption and increase in personal and additional exemptions available only from July 1, 2008 [violates] the forgoing intent,” said the TMAP, which groups tax lawyers and accountants of the country’s largest companies.

In addition, the proposed IRR limits the coverage of the law by adding the condition that an employee receiving additional income—like commissions, fringe benefits in excess of the statutory tax-exempt amount of P30,000—shall not be considered an MWE and shall be taxed for his entire income.

“By imposing limitations that effectively deprive MWEs of the tax exemption accorded by law, the BIR oversteps the bounds of law which it seeks to implement,” the TMAP said in its letter to Teves. “It is a settled rule that administrative agencies such as the BIR may not, by rules and regulations, amend, alter, modify, supplant, enlarge or limit the terms of the statute they are tasked to implement.” TMAP cited the case of Commissioner of Internal Revenue v. Court of Appeals, 240 SCRA 368 (1995).

The TMAP said the additional requirement that taxes the entire income versus simply taxing the amount in excess of P30,000 discourages worker productivity.

RA 9504 also requires employers to submit to the Department of Labor and Employment (DOLE) offices quarterly alphalists of their MWEs and their MWEs with hazard pay. The DOLE will in turn submit the lists to the BIR.

Moreover, employers that used to submit consolidated alpha lists will now have to submit the same on a regional basis, while all employees are required to file registration update forms along with supporting documents. Failure to file these forms will result in zero exemption, according to the draft IRR, the subject of recent meetings between the Department of Finance (DOF) and the BIR and the private firms.

“The administrative requirements imposed by the draft revenue regulations are an administrative nightmare,” said the TMAP, calling them “unnecessary, and contrary to the characteristics of a sound tax system.”

TMAP officials are scheduled to meet with DOF representatives Friday in order to clarify issues on RA 9505’s implementation. Hopefully, their discussions would lead to corrections in the IRR’s defects.

dansoy26@yahoo.com

Paolo Romero
Philippine Star

Malacañang gave assurances yesterday that no new taxes would be imposed despite fears of reduced government revenues brought about by the global economic slowdown.

President Arroyo’s economic managers in a press conference at the Palace said the Executive branch would instead push for the immediate passage of the rationalization of fiscal incentives and “sin taxes” bills pending in Congress.

“Our team captain, President Arroyo, has said categorically that there are no new taxes until the end of her term,” Press Secretary Jesus Dureza said in the briefing.

Socioeconomic Planning Secretary Ralph Recto, however, said nothing would prevent lawmakers from approving new taxes if they want to following calls for new revenue measures from some lawmakers, including a tax on text messaging.

Finance Secretary Margarito Teves said the two measures are urgent as they would help soften the impact of the looming recession in the United States. He said the two bills are not new taxes but “revenue enhancement measures” that are expected to generate about P35 billion in new income for the government.

“We need more revenues to handle difficult times and, therefore, we like to pursue as a team two important measures, rationalization of fiscal incentives and rationalization of sin taxes,” Teves said.

He said while the latest reduction in world oil prices was most welcome, it would also mean lesser value-added tax (VAT) revenues. The government had expected VAT revenues from oil to reach a little more than P18 billion this year had the price of crude per barrel in the world market stayed at an average of $115. Teves said the average price is now around $102 per barrel.

He said the rationalization of the existing taxes on liquor and cigarettes, depending on the final version that would be approved, could generate anywhere between P12 billion to P25 billion annually and the rationalization of fiscal incentives could raise P10 billion a year.

Teves said the economic team has made its pitch with members of the House of Representatives on the two measures and the response “is generally positive we hope the same response would be elicited from the Senate.”

Recto said the rationalization of fiscal incentives is also to give justice to ordinary taxpayers who see their paychecks already reduced by automatically deducted income taxes.

“Because there are industries that are making money but are not paying income taxes and that’s unfair,” he said. “This is an equity issue. You pay taxes but they don’t.”

Recto also said he personally favors “earmarking” of VAT proceeds to particular expenditures so that it would be clear to the people where the taxes go.

Teves said there also other efforts to raise revenues without having to impose new taxes, including privatization of assets, improving collection efforts, and attracting more business.

In the case of collections of the Bureaus of Internal Revenue and Customs, he said the government is updating the taxpayer database and implementing “fuel markings” to increase collections, he said.

He said the sale of government shares in Petron and Philippine National Oil Co.-Exploration Corp. (PNOC-EC) could generate an additional P40 billion.

The auction of Petron shares is scheduled next months and the government can get the proceeds by December, Teves said.

The sale of PNOC-EC shares could take place next year, he said, adding that depending on market conditions, the government could revive efforts to sell the Food Terminal Inc. and other real estate “but we will rely more on tax revenues.”

Teves also said the authority to borrow $500 million to $700 million remains despite the favorable news from the US but the government is still adopting a wait-and-see attitude.

Ma. Elisa P. Osorio
Philippine Star

Local and foreign businessmen are asking President Arroyo and the Department of Finance to change the planned implementation of the “Tax Relief Package” because the current strategy is expected to delay and even minimize benefits of the tax exemption for minimum wage earners (MWEs).

“We collectively appeal to the government, particularly the DOF and the Office of the President for the immediate revision of the draft implementing regulations,” the businessmen said in a statement.

According to them, over two months has passed since Mrs. Arroyo signed the bill into law last June but the people have not yet felt the benefits because the DOF is yet to complete the implementing rules and regulations (IRR).

Worse, they said the regulations proposed are not pro minimum wage earners.

“The current draft of the regulations seeks to implement RA 9504 (otherwise known as the Tax Relief Package Law) in a manner that would effectively defer and even curtail the full enjoyment of the benefits accorded under the law,” the joint statement of the Makati Business Club (MBC), the Financial Executives Institutes of the Philippines (FINEX), American Chamber of Commerce of the Philippines (AmCham) and Management Association of the Philippines (MAP) stated.

Other signatories were the Philippine Chamber of Commerce and Industry (PCCI), Tax Management Association of the Philippines (TMAP), Action for Economic Reforms (AER), Business Processing Association of the Philippines (BPAP) Employers Confederation of the Philippines (ECOP), Philippine Institute of Certified Public Accountants (PICPA), Philippine Inter-island Shipping Association (PISA), Philippine Liner Shipping Association (PLSA) People Management Association of the Philippines (PMAP)and Public Services Labor Independent Confederation (PSLINK).

“We strongly believe that the proposed implementing regulations negate the tax relief granted under RA 9504,” the statement said.

Businessmen urged the government to hold consultations with affected parties before finally signing an IRR.

This is because under the proposed IRR, MWEs that have additional compensation in excess of the tax exempt amount of P30,000 will lose their tax exemption privilege.

The additional compensation includes performance incentives and other similar bonuses.

The group said that this particular provision discourages productivity because workers will have to pay taxes if they receive bonuses that will push their income beyond P30,000.

Likewise, the businessmen said that the IRR imposes additional regulations and administrative procedures like the submission of quarterly alphalist of MWEs that is certified by the National Wages and Productivity Commission (NWPC) prior to BIR submission.

They said this is an administrative nightmare for both employers and employees. “It is unnecessary, unreasonable and contrary to the characteristics of a sound tax system.”

As such, they are asking the government not to change the definition of the MWE “in a manner that is contrary to law and counter-productive.”

Likewise they are appealing that the tax exemption of MWEs and the increase in personal and additional exemptions be made available in full for the year in order to provide immediate relief to all workers.

RA 9504 was signed into law on June 17. This exempts minimum wage earners from income tax and increases the tax exemptions allowable to individuals.

The social legislation was said to be the immediate response of the government to workers’ call for an increase in wages in the midst of rising food and fuel costs coupled with the double-digit inflation.

Margaux Ortiz
Philippine Daily Inquirer

MANILA, Philippines—The Trade Union Congress of the Philippines on Tuesday called on the Department of Finance to exercise transparency and hold consultations with workers’ groups in the realization of the implementing rules and regulation of the tax relief law passed in June.

Alex Aguilar, TUCP spokesperson, said that the DOF should already implement the law especially at this time when workers and their families are reeling from high inflation.

from The Manila Times

The Times editors asked some adepts in the civil service issue “What kind of civil service do you wish to see in our country?”

Civil Service Commissioner MARY ANN Z. FERNANDEZ-MENDOZA

I desire a future where there is a high level of trust in the civil service and where it is a major pillar and institution of our democratic system. In that future, I would like to see civil servants enjoying high morale, motivation, and a sense of empowerment that they can contribute and make the civil service a living and learning institution. They have pride in their work and the nation recognizes their worth and value.

I wish to see a civil service attracting the best and the brightest. It should be a civil service where there is continuous learning and improvement, where the civil service takes the lead in innovation toward systems improvement, raising the level of excellence in various concerns, such as education, public health, and agriculture, among others.

Civil Service Commissioner CESAR D. BUENAFLOR

It is my vision that the civil service will truly be a portrait of a bloc of civil servants exemplifying merit and fitness, and imbibed with the values of public accountability; that it would be a civil service that embodies and promotes morale, efficiency, integrity, responsiveness, progressiveness, and courtesy.

Dean Antonio La Viña of the Ateneo School of Government, Ateneo de Manila University

My hope is that we can build and support a civil service that is constituted by effective and ethical leaders who share a common vision of building prosperous and just communities in the Philippines.

By “effective” I mean a civil service composed of persons of practical excellence, what the Jesuit historian Horacio de la Costa described in a 1953 speech, as “persons of judgment.” Practical excellence means that civil servants have a set of competencies to deliver services better and more effectively. It means a truly professional and competent civil service where appointments and career advancement do not depend on political patronage but on qualifications and merits.

We see this already happening today. In the future this will become more obvious: as societies become more technology-based, making sure that civil service appointments go to the most qualified people—whether these be scientific, engineering, policy or legal positions—becomes a matter of life and death. It will spell the difference between success and failure in the delivery of critical services needed for public health, environmental protection, disaster response and risk reduction, economic development, infrastructure planning and expansion, etc.

By “ethical” I mean a civil service composed of women and men who are guided by a robust and practical code of ethics. I do not just mean that civil servants must be persons who obey the law, such as the code of conduct for public servants, but I mean persons who know how to think ethically. Ethical civil servants know their values and principles, and stick to them but do so in a practical way. Ethical civil servants always “do the right thing the right way.”

It is not enough to choose the morally correct option. It is equally important to do so in such a way that the choice can be defended legally and politically. Ethical civil servants stand up to corrupt and abusive superiors and politicians but so do effectively by being smart and strategic. They know their law and they build alliances among likeminded colleagues to ensure a civil service that is characterized by independence and integrity.

My vision of the civil service is that it will be composed of persons-for-others. In the context of the Philippines, to be a public servant should be to be a servant-leader of our people, and especially for the poorest in our society. This is the civil service we need now and in the future.

Development Academy of the Philippines President Antonio D. Kalaw

The civil service plays a key role in shaping policies to promote our country’s productivity, competitiveness, and sustainable human development and in ensuring its just and fair execution, with public services delivered effectively and efficiently. Administrations come and go, but the government bureaucracy remains. In this sense, it is the biggest stabilizing factor in statehood. In a democracy, the civil service is a critical institution that ensures stability of the government and the nation.

Public demands are continually increasing and becoming more complex. People transacting with the government expect an efficient civil service. With a sizeable poor population, people see government as the only provider of basic services. Inevitably, civil servants are the only people they look up to. Even the political landscape where the civil service operates is fast changing due to globalization, the emergence of non-traditional threats to national security and well-being, and the shifting preferences of citizens on the role of government.

These call for a new governance paradigm, which demands a more responsive and dynamic civil service of the future, no longer reactive but proactive to the needs of the public as they undertake measures to address those demands within the means of government. As the government’s arm in the delivery of critical services, civil servants have to be customer-oriented. Through a professional and efficient civil service, people would now see it as a rewarding experience for them to access government services. Through competent and caring civil service, citizens would feel the government’s compassion and concern for the welfare especially of the poor thus making them want to pay taxes because they see civil servants working well for the peoples’ welfare.

We see the civil service of the future, being the embodiment of government, as the epitome of meritocracy, integrity and genuine public service. Through just and honest public service, the good face of government would give Filipinos trust and pride in the bureaucracy. Through meritocracy, the civil service can ensure the stability of the Philippine bureaucracy.

The Development Academy of the Philippines is committed—as a think-tank and capacity builder of the government—to help mold civil servants who are unquestionably qualified, highly competent and well-trained; responsive in delivering customer-oriented public service; dynamic and productive as they proactively seek continuous improvement and innovation; professionally committed and dedicated to the Philippine Republic and the Filipino people they serve with utmost loyalty; genuine role models of good governance, honesty, transparency and accountability imbued with a high level of integrity; and, justly compensated and well taken care of even beyond retirement as they live a decent life with dignity.

This is our vision of the civil service of the future—a civil service that earns the trust of the Filipinos and acknowledged throughout the world for its honesty and fairness.

SENATOR PANFILO LACSON, acting chairman of the Senate Committee on Civil Service

Civil servants are this nation’s unsung heroes and we may not always get tangible rewards doing so but our satisfaction comes from enriching the lives of Filipinos everywhere. An honest and clean civil service is the foundation of effective governance. Indeed, an impartial and corruption-free civil service will always be a factor in the progress of a nation. Public servants ensure that we receive the best in both.

I have introduced and pushed for the realization of the Anti-Red Tape Act of 2007 not only to profes-sionalize our Civil Service but to eliminate our perennial problem on graft and corruption. If we want an honest system, we have to commit to a higher ethical standard ourselves.

My hope is that the purpose and idea of public service will become one of our most powerful motivators. After all, it is the opportunity to serve the public, doing it honestly and with pride that sustains us even when our jobs become, most often, underappreciated.

Prof. Alex Brillantes, Jr., Dean of the National College of Public Administration and Governance,University of the Philippines

Continuity in the face of change. This is what the civil service has represented over time. Presidents have been elected, defeated and even overthrown. But the civil service remains. It represents continuity and the source of stability amidst transformation and turbulence.

Of course this has not shielded the civil service from being severely attacked as an institution. The bureaucracy is often derided as being mediocre, inept, and corrupt. But despite this, the bureaucracy has its own generous treasury of gems and jewels, unheralded and unsung heroes, and good and best practices.

The civil service of the future should build upon the fundamental principles of good governance—transparency, accountability, participation, predictability, and rule of law. It is imperative that we build upon the hard-earned gains of those who earlier served at the helm of the Civil Service Commission. Those gains demonstrate that we are not wanting in a collective vision of a desired and responsive civil service. One still finds some validation of Max Weber’s ideal bureaucracy, which is based on rules, continuous operations, spheres of competence, specialization, clear hierarchy of authority, impersonalism, and professionalism.

Our desired civil service is one where there continues to be transparency and accountability among our public officials, where the citizens are actively engaged as partners in the process, and where the rule of law is upheld and partisan politics rejected. It is imperative that the current leadership of the Civil Service Commission provides continuity for worthwhile activities and programs, and where need be, adapt them and introduce innovations.

Chairman Ricardo Saludo’s MERCI as a battlecry is an initial step in the right direction. MERCI stands for morale, efficiency, responsiveness, courtesy and integrity. To a certain extent, these appropriately build upon the gains of previous CSC administrations, address the imperatives as incorporated in the proposed Civil Service Code, and also recognize the values of good governance. But perhaps MERCI may be pushed still further and expanded to MERCI-PIPP, where PIPP stands for “Partnerships and Insulation from Political Partisanship.”

Partnerships at the local level can be enhanced by working with the Association of Schools of Public Administration of the Philippines strategically located around the country. There are many good programs. There can still be more innovations. But these have to be localized, disseminated and sustained. Working with local schools and local governments may provide the avenue for such.

Finally, insulation from partisan politics is a must. These range from excessive political appointees especially at the top levels of the civil service, to the foregoing of eligibility requirements, something that causes considerable demoralization and, more significantly, massive de-professiona-lization. MERCI-PIPP can provide a solid basis for continuity and stability. It will strengthen not only citizen engagement with the civil service but also build much-needed confidence and trust in this institution.

This is the desired future of the civil service—that it be a bedrock for continuity and stability amidst dynamism and change, in times of peace and in times of turbulence.