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May 14

The Long View: Department of Finance debunks Rizal

The Long View
Department of Finance debunks Rizal

By Manuel L. Quezon III
Philippine Daily Inquirer
First Posted 01:04:00 05/14/2009

The “Great Filipino novel” – What is it? Does it exist? Can it be written? – is a question that often absorbs literary circles. But all of us, at one point or another, have had a tangible experience that proves the power of the novel: because we are, by law, required to read two novels, Rizal’s “Noli Me Tangere” and “El Filibusterismo.”

That law was due to Jose P. Laurel and Claro M. Recto who battled against those who warned that the proposed law was divisive and an unfair imposition on Catholics (the hierarchy of the Catholic Church had issued pastoral letters denouncing the proposed law). The public debate became so ferocious that at one point Francisco “Soc” Rodrigo proposed holding Senate debates on the issue behind closed doors.

The thing is, RA 1425 or the Rizal Law enshrined a policy statement now being contradicted by the Department of Finance (DoF).

Our republic, until recently adopted the policy put forward by the Florence Agreement of allowing the duty-free importation of all books. Makati Rep. Teodoro L. Locsin Jr., in a letter to the President, asking her to rescind book duties, summarized the agreement’s objectives as follows: “The treaty’s goal is not merely to promote the charitable distribution of books or to simply allow individuals who had purchased books abroad to be able to bring them home duty-free… Rather, the purpose of the Florence Agreement is to spread knowledge and ideas across national boundaries through books to as many people as possible, which is to say principally by trade and commerce in line with the market philosophy of the Free World since ; World War II.”

But last April, the DoF, in league with the Bureau of Customs, decided it could stand an international covenant on its head for the dubious fiscal satisfaction of taxing books.

This was an exercise in being penny wise and pound foolish. Consider that even as the DoF tied up bureaucrats in re-imagining the Florence Agreement, it somehow overlooked the official figures on the infinitely-larger tax collections on imported oil. From 1997 to 2008, official records show, the daily demand for oil dropped 12.8 percent; and yet the economy was reported as growing 4.4 percent a year and vehicle registrations 5.5 percent. The result? It’s not that oil consumption fell, it’s that more oil was smuggled in, resulting in government losses to the tune of P93.3 billion. In comparison, the country imports about 80,000 books a year.

You see, books are an easier target, and book lovers are apparently politically inconsequential. Which helps explain why, according to Locsin, the DoF can adopt an extremely dangerous attitude towards the rule of law.

“The DoF,” he explained, “[in adopting] the position that imported books which were to be sold and traded were not entitled to the duty-free privileges granted by the Florence Agreement and the Nairobi Protocol… said that half a century of policy and practice must yield to the eureka moment of its legal department when, in a flash of inspiration – really, imagination bordering on delusion – it devised a scheme in which all books imported for sale should be taxed. Neither estoppel nor prescription, said the DoF, can run against the state, citing no authority on the matter because, in law, both can run against the state. What the DoF really meant to invoke is the outdated, not to say obnoxious, principle that the state, like the king, can do no wrong.”

Furthermore, the DoF “has arrogated unto itself the nonexistent, that is, unconstitutional, power to regulate if not censor books by theme and content – a power that exists nowhere in the structure of our government.”

And this is why I have to wonder if the Rizal Law is now liable to legal challenge. If the Florence Agreement has been in place, for us, since 1952, and it can be modified at a whim, then who is to say that the state policy since 1957, that Rizal’s novels are a “constant and inspiring source of patriotism with which the minds of the youth, especially during their formative and decisive years in school, should be suffused,” can’t be overturned? International treaties have the force of law. If the DoF can reinterpret treaties, then its interpretations can overturn existing legislation.

Finance Undersecretary Estela V. Sales has been quoted as saying that novels are “not educational,” hence permanently disqualified from minimal customs duties. At best, Customs Deputy Commissioner Alexander Arevalo suggested, readers can throw themselves into the bureaucratic wringer by petitioning the Department of Education and the Commission on Higher Education to declare, on a per-title basis, individual titles as “educational, technical, scientific, historical or cultural” books.

Consider the ungenerous mentality at work here: Sales” views contradict the Rizal Law’s statement that the hero’s novels are educational, because now, the Penguin edition of “Noli Me Tangere,” is, by definition, a non-educational material because it is an imported novel – unless a specific exemption is obtained. But who, I wonder, dares to defend Rizal?

It would seem logical that the Knights of Rizal and the UNESCO Philippine Commission are parties-in-interest to this issue. That the head of the Knights of Rizal is our ambassador to the United Nations makes a statement even more appropriate; that the issue involves the Florence Agreement makes a UNESCO Philippines statement particularly relevant for, as Locsin told the President, the new policy “will expose our government to criticism and outright ridicule, not to mention sparking formal protests from the civilized members of the international community who are all signatories to the Florence Agreement.”

That these officials all owe their appointments to the President doesn’t mean their speaking up would be tantamount to ingratitude or insubordination. But even if it does, so what?

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  1. sjsanjuan

    I can’t really comprehend why, of all things taxable, these people from Customs are targeting books and literature. They should target leakages in our oil imports!

    This kind of policy is a reason why Filipinos remain stupid. They are denied books and reading materials.

  2. Lester G Cavestany

    As Gat Jose Rizal once said, “we can only serve our country by telling the naked truth, however bitter it may be.” – Thanks for explaining this issue so well. The Explainer ka talaga. God bless and more power!

  3. mlq3

    Lester! thanks!!

  4. d0d0ng

    I am not favoring the DOF but in the issue of conflicting laws or memorandum, the court is the proper venue. Court decision will inhibit DOF from implementing its own wrongful rules.

    I still believe the Florence Agreement which is a world treaty and is superior to any selective interpretation by the DOF.

  5. aayu

    There is a lot of ruckus over the taxation of imported books in the blogs, there is even one facebook cause site dedicated to this. I wonder what else can be done that would lead to more tangible outcomes, beyond the letters written to pertinent people to explain their action or to influence action. IS collective action via a class action lawsuit feasible?

  6. ramrod

    The DOF is just responding to pressures from certain sectors one of them is PULPAPEL, the association of local paper mills (roughly 35 or so members, most prominent are Tipco, Bataan, Noah, etc). Local paper production is getting to be very expensive, waste paper is hard to come by (Chinese buyers are offering more for our local source), cost of power is up, chemicals, and our mills haven’t upgraded their machines so efficiency is a problem. If we don’t tax imported books/paper it will mean the end for this local industry. On the one hand, there is a need for good books, material, that importation can provide, but on the other is a struggling industry trying to protect itself.

  7. ramrod

    The local paper producers have a very long history with prominent publishers and printers deeply entrenched in government (DepEd, COA, etc.), it almost behaves like an institution. Going up against this is like hitting a brick wall with your heads.

  8. mlq3

    it’s interesting that opinions expressed immediately seem to conclude litigation is the best way forward, rather than pickets, or civil disobedience, or demonstrations or some other civic action.

  9. ramrod

    I believe we need to push for reasonable discussions with parties concerned first, clarify the issues, and what can be done about them. If we go on the offensive at the onset, the other side will have no reacourse but to defend themselves and close avenues of rational exchange…worst if its pickets, civil disobedience, or demonstrations. This is a business, and a “win-win” situation must be the result, no need to kill anyone’s business immediately but to seek better alternatives.

  10. Jhay

    Litigation is the best way forward at this stage because those concerned belong to the middle and upper classes. They do not want to rock the boat immediately hence they first resort to band-aid measures.

    I believe though, that if this issue would drag on, we would certainly get to that point where bookworms and others concerned would be raising torches and pitchforks at the greedy geniuses at the BOC and DOF.

  11. Madonna

    Ah this is quite illuminating: ramrod has given quite a “bottomline” perspective on the issue, if it is correct that the paper industry and local publishing groups are the primary forces behind the taxation on imported books.

    An all-out pressure on the government, coming from local and international parties to enforce/reiterate a clear policy on taxation of imported books is indeed the best step. Again, this admin’s true colors will show (or it is in fact already showing) if it throw its lot with a particular business sector/industry. Who are the people behind this sector/industry anyway and what are their ties to GMA’s administration?

    This is a political issue or a matter of policy, and not litigation. The DOF and BOC are not the agencies to be targeted but rather Malacanang or the President herself.

    “Finance Undersecretary Estela V. Sales has been quoted as saying that novels are “not educational,”.

    Maybe the Usec was misquoted or taken out of context? She sounds just way too preposterous here.

  12. mlq3

    Not exactly, Madonna, for example, National Bookstore would have an interest in eliminating the book tax, even if its allied domestic publishing arm, Anvil, is also into publishing books, and while they will have a close relationship with printers such as Cacho Hermanos, it wouldn’t have the same interest as say, the owners of PrintTown which have allied interests with Tipco, a domestic paper manufacturer. Put another way, raising foreign book prices won’t necessarily redound to the benefit of domestic publishers. And the big money in publishing is in textbooks. It’s with regards to the large volume of print runs and paper requirements that industry pressure would be applied to keep out cheap foreign paper or foreign presses.

  13. Madonna

    Ay Manolo, I meant the local paper industry really, not the publishing houses per se. Still, prices of books, that is those between locally published and imported ones affect book demand and ultimately sales, and local publishers selling comparatively lesser priced books, even if they are made of poorer paper quality or are actually costlier in terms of production are on an advantage over foreign publishers whose books are actually cheaper production-wise yet heavily taxed.

    I think a big player such as the National Bookstore owners have long figured out how to balance its interests, whether as a seller of imported books or as a local publisher.

    “It’s with regards to the large volume of print runs and paper requirements that industry pressure would be applied to keep out cheap foreign paper or foreign presses.”

    If so then perhaps books are a casualty of a larger economic and political issue being played out and not simply the “greediness” or unbelievable display of obtuseness by DoF or BoC officials.

  14. ramrod

    Madonna,
    If you take a closer look at our textbooks, they are printed mostly on locally manufactured “mechanical bond” or copy paper with a distinct “see-through” quality, if not, on newsprint. These could be good as bond paper or photocopy paper (using powder) but for books?
    Even the locally printed coloring books made using these material has a noticeable resistance to crayon adherence, I mean the child has to rub the crayon harder and much more.
    By protecting these businesses, we are making do with expensive, low grade material, suitable only for copy paper to be used as textbooks, etc. when we can save a lot of money importing the appropriate material. For UWF (uncoated woodfree) paper alone the local price is around 958Usd/mt compared to the imported 750Usd/mt and this is made from virgin pulp not recycled like the local.
    Does this issue warrant senate inquiry in aide of legislation?

  15. Madonna

    ramrod,

    Importation of cheaper raw materials and trade liberalization have been of course favored by businessmen, and yet there is also a view that should also be looked into why local industries have stagnated.

    Going deeper and on the other end, why has local paper production been hobbled with poorer quality and yet more expensive as raw materials and when the finished products are churned out?

    At the risk of sounding inconsistent, I meant to say for the purpose of discussion that liberal importation and protection of local industries should be weighed in at a balance to protect long-term national interest — that is, I neither espouse a strictly liberal nor protectionist bent when it comes trade policy.

  16. GabbyD

    hi! what about an update on what people’s complaints have done to have this policy changed? wala pa?

  17. mlq3

    Gabby, government policy remains the same.

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