Subic Bay Metropolitan Authority (SBMA) administrator Armand Arreza said he is ready to face any inquiry by the Senate or the House of Representatives to present proof that he did not receive a P26.9-million salary in 2009.

Arreza, who has refuted recent news reports that placed him as the highest-paid government official in the country, stated that SBMA’s operational expenses should not have been incorporated with his personal income.

He added that should the Senate or the House push through with its probe on excessive and unwarranted salaries and other perks received by top government officials, he will give his full cooperation to the authorities.

Arreza added that he expects the CoA itself to clarify the misleading information about his salary.

“I have already talked with CoA officials, and they promised to issue a clarification on the subject,” Arreza said on Thursday.

“In our initial talks, the CoA officials agreed that I was right all along — that the funds in question were not some allowance for personal benefits, but were actually operating expenses for the agency.”

Arreza said he is taking advantage of this “unwarranted publicity” to shed light on the issue. He said that since Monday, he has already appeared on various media programs and conferences to clarify that his monthly take-home pay is only P95,449 from his gross income of P130,888.77 per month.

“Maganda rin namang mapag-usapan ito, dahil kailangang maging transparent talaga kung magkano ang sweldo ng mga empleyado ng pamahalaan, said Arreza. “Palagay ko naman ay karamihan sa amin ay nais ring kumita ng marangal ,” he added.

According to Arreza, the CoA mistakenly included SBMA operational funds for extraordinary, miscellaneous and intelligence purposes with his personal income, resulting to a bloated salary of P26.9-million.

He identified these operational funds as the P15-million intelligence fund, which he said was actually determined by the Office of the President, and some P18-P19 million in SBMA’s extraordinary and miscellaneous expenses last year.

“Anybody who has run a corporation or a company would tell you that you really cannot plan for all exigencies — that’s why there is such a thing as discretionary or extraordinary or miscellaneous funds,” he added.

Arreza explained further that he cannot use these funds for personal benefit, since the CoA undertakes pre-auditing of the funds prior to disbursement.

Arreza also said that his name, as well as those of others in CoA’s list of highest-paid public officials, should be cleared once proven that their inclusion resulted from some mistake.

“Just like what happened to (Clark Development Corp. president) Benny Ricafort, my wife, too, has become suspicious when this report came out. Of course, it took a lot of explaining to convince her that I have not actually stashed any part of my supposed multi-million income,” Arreza joked. Hernan Habacon

Subic Bay Metropolitan Authority (SBMA) administrator Armand Arreza shows his pay-check voucher to media in a press conference indicating his take-home pay of P95,449.35 and not P26 million annually as reported by CoA.

SUBIC BAY FREEPORT – Subic Bay Metropolitan Authority (SBMA) administrator Armand Arreza yesterday refuted the inaccuracy on the report made by the Commission on Audit (CoA) making him the highest earning government official with P26.865 million annual salary.

Arreza who showed his pay check voucher to media in a press conference here said, “my monthly gross salary is actually P 131,880.77 which leaves me a take-home pay of P95,449.35.”

“It was the same salary enjoyed by my predecessors that was set in 2000 and not P26 million as reported by CoA,” he explained.

Arreza added that his compensation has remained the same since he was appointed in September 2005.

Arreza further explained that CoA mistakenly included the P15 million intelligence fund wherein P10 million of it went to Task Force Subic for its anti-smuggling drive inside the Freeport , while the remaining P5 million went to the SBMA’s Law Enforcement Department and the Intelligence and Investigation Division.

“The intelligence fund [was] approved by the President for anti-smuggling campaign, and in 2009, Arroyo gave that to the SBMA,” Arreza said. “This year, we have no intelligence funds because [Arroyo] did not approve any. The same goes with President Aquino.”

Arreza also said that the rest of the amount cited by COA went to other expenses made by the SBMA, which was approved by the SBMA board and was later dispensed through his office.

According to him, special events which were part of the promotions and marketing programs of SBMA such as the Philippine Advertising Congress, the Sangguniang Kabataan congress, along with other tourism events took much of the expenses for sponsorship.

The SBMA also has hosted delegations of agencies from other countries, or extend financial assistance to indigenous communities and non-government organizations.

“All of this is under my office, but it doesn’t go to me but definitely not as my salary,” he said

The SBMA board gave credence to the importance of such promotional projects but ensured that this would not go beyond one percent of the SBMA’s total annual budget of some P2 billion earned by the SBMA in administering the country’s premier Freeport zone.

Meanwhile, in a press statement, SBMA Chairman Feliciano Salonga clarified that the SBMA’s Board of Directors has no plan of challenging President Aquino’s Executive Order No. 2 which terminated all of the “midnight appointees” of his predecessor.

Salonga issued the statement to clarify media reports that the SBMA board will contest the constitutionality of EO 2 before the Supreme Court.

The claim, attributed to SBMA board member Eddie Tamondong, said that the SBMA board plans to challenge Pres. Aquino’s decision, as the order affected more than half of the number of members comprising the board.

However, Salonga said that only a few members of the SBMA board may be planning to contest EO 2.

“This move is not being initiated by the SBMA Board as a whole, but only by some members who are affected by the EO,” Salonga said. “The Board has not passed any resolution to that effect”, he added.

According to the report, the SBMA directors affected by EO 2 included Tamondong, Mario Garcia, Stefani Saño, Jesus Vicente Magsaysay III, Marivic Pineda, Angelita Cruz and Ricardo Coscolluela.

However, Coscolluela has denied that he was among those seeking to challenge the executive order.

Aquino signed EO 2 on August 4, revoking all appointments made by former President Gloria Macapagal-Arroyo on or after March 11.

The EO left only three out of fifteen members to the SBMA Board forcing the SBMA to suspend all board meetings until the issue has been finally resolved. Those who were not affected by the said EO are Salonga, Arreza and director Ted Del Rosario.

In the same press conference, Arreza said that the last board meeting was held on July 30.

Subic Freeport is currently operating without an SBMA Board which approves all projects proposals of investors, which in the long run, may adversely affect the daily businesses inside the Freeport .

Arreza said that the entry of new investors and proposal for expansion projects of existing investors, that requires board approval, would be temporarily be put on halt until the issue of the validity and legality of the appointments of the board members have been resolved. Rey Garcia

WELD YOUR DREAMS. SBMA Administrator Armand Arreza (standing 2nd from right) and Olongapo City Vice-Mayor Rolen Paulino (3rd from right) observe a Korean instructor of Hanjin Heavy Industries and Construction Company (HHIC) while demonstrating the use of a high-tech welding machine, commonly found in shipyards worldwide.

Subic Freeport authorities reiterated yesterday its warning on possible malaria outbreak with the onset of rainy season urging thousands of workers of Hanjin shipyard at the Redondo Peninsula and residents in nearby communities to take preventive measures against the mosquito-borne infectious disease which is endemic in that particular area.

The Subic Bay Metropolitan Authority (SBMA) issued its warning and cited that, “it is very necessary” for residents and workers staying at sitio Agusuhin, barangay Cawag near the shipbuilding facility of Hanjin Heavy Industries and Construction Corp.-Philippines (HHIC-Phil) to avoid malaria infection.

In a press statement, SBMA administrator Armand Arreza said the SBMA is maintaining in the area a Malaria Task Force (MTF) office, which is under the direct supervision of Dr. Solomon Jacalne, head of the SBMA Public Health and Safety Department.

The office was established to ensure that all necessary assistance with regards to the prevention of the spread of malaria is immediately put in place, especially during the rainy season when the nesting places of malaria-carrying mosquitoes are disturbed by rainfall, the statement said.

“This unit has implemented the anti-malaria program since Hanjin started constructing its shipyard in the area in 2006,” Arreza explained. “So we’re calling on residents and workers to please cooperate with the task force so that we can prevent infections.”

Sitio Agusuhin, which is the site of the Hanijn shipyard, is geographically within the Subic Bay Freeport Zone. However, it is under the political jurisdiction of the municipality of Subic, Zambales.

Arreza said that because of this, Subic town undertakes the delivery of basic services to Agusuhin while the SBMA coordinates with the local government unit on its programs and activities in the area, including the operation of the Anti-Malaria Task Force.

The SBMA official also said that on the recommendation of Jacalne, the SBMA Board passed in October 2008 a resolution requiring new job applicants and on-board workers in the area to undergo mandatory malaria screening before being issued their ID passes.

Newly-hired workers of HHIC-Phil, or those working for sub-contractors of the Korean shipbuilder within the vicinity of Agusuhin, were also required to renew their ID passes every six months, while regular personnel were made to renew passes every year.

“Considering the endemic nature of malaria in the Redondo area, the mandatory screening of all officers and employees of locators located in the Redondo Peninsula and other hotspots will prevent the spread of the infection,” Jacalne said.

Evelyn Crisini, supervisor of the SBMA Pass Processing Office which also conducts malaria monitoring just outside the Hanjin main gate in Agusuhin, said that in the month of July alone, 1,815 workers have undergone malaria screening, with all tests resulting in negative findings.

“In case a worker is found to be positive of malaria, he or she is immediately referred to the Department of Health for proper disposition,” Crisini said.

Meanwhile, Jacalne advised stay-in workers and residents in Agusuhin to maintain clean, comfortable and safe sleeping quarters by fitting windows with fine-meshed screens, using mosquito nets, regularly spraying sleeping quarters with anti-mosquito agents, and clearing the environs of stagnant ponds and pools of water.

“Malaria can now be easily prevented just by knowing what to do to eradicate the mosquito vectors (malaria carrier) and how to prevent the spread of the disease,” Jacalne added.

SUBIC Bay Freeport, one of the top income earning economic and Freeport zones in the country, collected P3.5 billion revenues derived from various government taxes in the first six months of the year.

Subic Bay Metropolitan Authority said that the combined collection of the Bureau of Customs (BoC) and the Bureau of Internal Revenue (BIR) reached P3.478 billion during the first half.

“The first half collection is actually 62 percent of the entire 2009 figure. So at this rate, we could be looking at a P6-billion plus total at the end of the year,” SBMA administrator Armand Arreza said.

Figures submitted by the BoC and the BIR showed that in June alone, the two government collection agencies posted a total of P826.52 million, the highest monthly cash collection in the six-month period, as the two collecting agencies came up with P473.93 million and P352.59 million, respectively.

For the whole six-month period, the BoC recorded cash collections totaling P2.508 billion. This exceeded last year’s total of P2.206 billion by P301.6 million or 13.67 percent.

In addition, BoC also processed government-to-government transactions amounting to P2.818 billion, thereby increasing its total cash and non-cash collections to P5.326 billion.

Duties and taxes collected by the BoC were derived from domestic and foreign ship calls, transshipment operations, and the taxes and duties paid for by the Freeport investors, including importation of oil, importation of motor vehicles, and other general merchandise.

For the same period, the BoC also exceeded its target of P2.054 billion by almost half a billion or 22.12 percent.

Meanwhile, the BIR posted a total of P970 million in cash collections derived from income taxes, value-added taxes, percentage taxes and other taxes paid for by the more than 1,000 Freeport business locators and their employees, as well as an increasing number of port users.

BIR’s cash collection in January-June 2010 topped last year’s P706.38 million, surpassing it by P263.86 million or 37.35 percent.

Arreza noted that part of the taxes collected by the BIR is the corporate tax, which comprises five percent of the gross income of locators here, and which the law imposes on business enterprises operating within the zone in lieu of national and local taxes.

He said that part of the corporate tax paid by Subic enterprises is allotted to local government units (LGUs) affected by or contiguous to the Subic Bay Freeport Zone.

Arreza added that starting in the second quarter of this year, the SBMA implemented a new scheme in collecting the two percent share of the LGUs.

Instead of going entirely to the BIR, the corporate taxes are split into 60 percent, which remains with the BIR, and 40 percent with the SBMA Treasury Department for direct remittance to the LGUs.

The LGU shares are intended to fund LGU development projects and provide for basic support services in health, education, and peace and order.

The SBMA revenue was issued to media amid reports that the national budget deficit ballooned to P196.7 billion in the first half, adding to the pressure on the government to keep the country’s finances under control.

According to media reports, the government tagged the failure to privatize state assets and a final spending flurry by the previous administration, but said they remained confident that this year’s expanded P325-billion deficit target would still be met.

The June shortfall alone was P34.6 billion as the government spent P126.7 billion while collecting only P92.1 billion.

Expenditures for the six-month period hit P788.8 billion, higher than the programmed P761.1 billion, versus revenues of P592.1 billion that were below a P615.9-billion target.

The January to June deficit also exceeded a P178.5-billion estimate offered by the previous government when it blew past its P145.2-billion first half goal in May. The five-month shortfall was P162.1 billion, which officials blamed on the failure to complete planned asset sales.

This explanation was reiterated on Wednesday by National Treasurer Roberto B. Tan in a statement issued to media, who said: “Privatization proceeds worth P30 billion programmed for the first half did not happen.”

The assets lined up for sale were a stake in the Malampaya natural gas project, a portion of the Food Terminal Inc. complex, and the lease of property owned in Japan .

The Aquino administration has lowered its 2010 privatization target to just P2 billion — which does not include the three assets — and officials have said it could resort to borrowings to narrow the deficit.

The country’s two main revenue agencies, the BIR and the BoC, both topped their first half targets: the former netted P403.5 billion, exceeding its P390.3-billion goal, while the latter netted P130.7 billion, also higher than its P124.1-billion mark.

But the Bureau of the Treasury was short of its P28.3 billion target, collecting only P24.9 billion, while income from other offices hit P33 billion, also short of the P73.3-billion goal.

Mr. Tan said the government was still keeping its 2010 deficit target of P325 billion — raised earlier this month from P300 billion.

“The increase in the collection target of the BIR for the whole year would cover the non-realization of privatization for the year,” he claimed.
The BIR’s 2010 collection goal has been hiked to P860.4 billion from P830.4 billion, and the BoC’s to P280.7 billion from P275.7 billion, on expectations of higher economic growth.

The Aquino government has said it would increase revenues by weeding out corruption in collection agencies and through better enforcement of existing laws before looking at tax increases.

Last year’s budget shortfall hit a record P298.5 billion, well in excess of the P250-billion target. Rey Garcia

The positive revenue collection performances of the Bureau of Customs here was lauded by Subic Bay Metropolitan Authority (SBMA) Administrator Armand C. Arreza, saying that it would contribute to the socio-economic funds of the government.

Arreza disclosed that based on the revenue collection reports of the BoC, the total cash collections derived from payment of Customs duties and taxes significantly went up by 21.84 percent higher compared to last year’s P1.8 billion.

Arreza said that the revenue collection from January to June this year increased by over P395 million.

“The cash revenues have consistently been increasing every year and this positive economic indicator clearly shows steady growth and uptrend business activities inside the Freeport zone,” Arreza said.

Port of Subic District Collector lawyer Marietta Zamoranos reported that its January to June revenue performance also exceeded the BoC’s collection target of P2.13 billion by 3.5 percent.

Zamoranos also cited that the Port of Subic hit an “all-time high” in terms of quarterly collection with outstanding P1 billion for the first three months and P1.16 billion revenues from April to June this year.

The BoC likewise reported an increase of 4.2 percent on non-cash collection valued at P2.3 billion compared to last year’s P2.2 billion. Non-cash collections are those “government-to-government” transactions including importation construction materials and heavy equipment for government funded projects. Also, non-cash transactions include the importation of agricultural products such as rice, corn and grains.

The SBMA also credited the strong performance of the Port of Subic through the efforts of BoC Deputy Collector for operations Errol Albano who instituted reforms to ensure fast movement of imported goods and cargoes coming in and out of the Freeport zone.

Meanwhile, the reported feud between Zamoranos and Albano over the authority to issue gate pass for imported goods exiting the Freeport zone has been “internally resolved” as the two BoC officials agreed to observe “status quo” pending the final decision of BoC Commissioner Napoleon Morales.