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Tele-sabong, A Techno-Revolt in Cavite Previously published by BIZ NEWS (Makati), May, 2004
A Cavite techno-revolt
As is obvious to anyone, the life of the poor in the Philippines has not improved much since they were farming under the thumbs of inquilinos during the Spanish occupation. One only has to go to the remote barrios in any barangay to see a poor farmer plowing his field behind his carabao and living in the same nipa-styled hut on the edge of rice paddies. According to a study done by Celia M. Reyes of the MIMAP-Philippines (presented at the Sept. 2000 Fourth Meeting of the MMAP Research Network) , although the incidence of poverty declined in the Philippines during the past 10 years, the Asian economic crisis in 1997 reversed the trend and El Nino wiped out any of the gains made. As a result, poverty incidence grew by 8.2% in 1988 to 40.6%, with disastrous results for the poor, weakening even further their tenuous access to proper nutrition, affordable health care, dignified employment, quality education, and other basic facilities. Dr. Reyes's research shows that the life of the poor in the Philippines has shown a marked deterioration after 1998. The Philippine government, with its fiscal deficit of P200 billion is not in a position to alleviate this situation. What can be done? How can the government raise money to provide for the needs of the poor? Electronic sabong The Inter-Petal Recreational Corporation (IPRC), formed by a group of Cavitenos, thinks that it has uncovered a treasure buried in Cavite's culture, the practice of sports betting in cockfighting, that will generate the funds for LGUs. Led by Atty. Fernando C. Campos of Dasmarinas, Cavite, and in the company of Atty. Manuel Lazaro of Bacoor and Mr. Vicente Costa of Indang, this group of concerned Cavitenos conducted studies in the early 1990s about how to plug the multi-million peso hole in the collection of taxes from cockfighting. Justice Cesar Peralejo of Manila and Mr. Rodolfo Barron of Cavite City later joined forces with the original trio as they designed the experiment in Calabarzon. IPRC saw the potential benefits of cockfighting in Cavite, specially after the dissolution of the Philippine Gamefowl Commission, and when Sec.5, Article X of the 1987 Constitution authorized local governents to raise new sources of revenues. With the legislative power delegated by Congress to LGUs, local government could now franchise on-line cockfighting within its boundaries.
From its 1990 study, IPRC estimated a tax collection that would earn a municipality a minimum of P2 million pesos per month from cockfighting alone. It will involve adapting the well-established popular native game, sabong, into the electronic age and transform it into "Tele-Sabong". Like Lotto, it will allow on-line betting and will also be capable of accepting off-line bets in a lottery type game. The province can enact a uniform Municipal Tax Ordinance for a franchise tax of 5% of total bets that participating LGUs will be allowed to collect. Another 10% from the 20% withholding tax on winnings as advanced IRA can be added as more revenue for the LGU. In this scheme, the municipality can easily net a minimum of P1 million per month. A cockpit usually declares dividends of at least P25,000 per day. The local or franchise tax of 5% collected from the 20% deducted before the declaration of dividends can yield P100,000 per week per cockpit. Added to this will be the BIR withholdings on dividend winnings as advanced IRA. It has been established that at least P500,000 is wagered everyday in a cockpit; 80% of this or P400 ,000 is declared dividends to the winning bettors. If the Municipal Tax Ordinance authorizes the LGU to collect 10% of the 20% collectible by the BIR as withholding tax, the LGU could take in approximately P160,000 per week per cockpit.
Assuming the established monthly earning per cockpit of P400,000 per month and even if only 1000 cockpits from all over the country take part, the LGU can earn P4,800,000,000 (billion) in one year. The 10% final withholding tax due the BIR is estimated to be P640,000 per cockpit per month. For 12 months, 1000 cockpits can pour P7.6 billion into the BIR till. If the betting is off-pit (in the lottery system), 1000 cockpits can make P55 million from the 10% tax due the BIR per week, and an additional P22, 500,000 from the local franchise tax per week .The sale of off-pit tickets can generate P2.6 billion from the BIR share and P1,012 billion from the 5% local franchise tax. All told, the total tax collection from 1000 cockpits can amount to P16 billion per year. Income from multi-modal gaming
The IPRC solution which is to devolve the right to grant franchises only to the LGU is the most practical one because only this body can specify the location of the on-line gaming facilitilies in the local municipality and stipulate how often to operate. Thus the LGU can provide to the public the twin function of fund-raising and entertainment at the same time that it exercises its responsibility as the guardian of public well-being and safety. In addition to this social purpose, the right to grant franchises also enables the LGU to claim a share of the 20% of gross income. Through devolved franchising, IPRC estimates that each LGU could easily earn P10,000,000 per month. This amount is calculated from both local and BIR taxes totaling P2 million per game per month, and 20% from the gross incomes per month of each municipality. All the 5 on-line games would yield P60 million in taxes and another P60 milllion per LGU from the revenues, totaling P120 per year. If Professional supervision of these electronic multi-mode betting terminals will effectively frustrate much of the tendency towards corruption. Furthermore, IPRC suggests the exclusive use of chips instead of cash to purchase tickets.
Professor Emmanuel Q. Yap, a co-founder of the People's Patriotic Movement (PPM), has likewise expressed his support for Tele-Sabong. He trusts that with its ability to mobilize local development funds, it has the potential to feed, educate and protect the neediest citizens. The PPM is an organization that is committed to the task of building a strong nation, as befits its status as one of the forgers of Edsa II. Its Maniifesto proclaims its desire to "muster the national will to reconstruct the Filipino nation into a strong nation-state whih can adequately feed, educate and protect its own people by the sweat of its brow and not from mendicancy and subservience to other nations, and ultimately assure a better future to all our children."
The IPRC proposal is the perfect response to Secretary Jose Isidro N. Camacho's call for policy changes and structural reforms to sustain the country's fiscal health. In an article written for the Philippine Daily Inquirer ("A government roadmap to fiscal deliverance, June 21, 2003), Secretary Camacho urged the government to "push for more substantial devolution of national government functions. LGUs should be encouraged to exercise fiscal discipline and generate their own financial resources aside from the IRAs." This is exactly what the IPRC is offering as its contribution to the national effort. With elections around the corner, what candidate can pass up the opportunity to broadcast to constituents a way of bringing in millions of pesos for their municipalities - legally? It is imperative |
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© 2005-2006 Violeta P. Hughes-Davis |
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Tales of heroic patriotism and raw courage punctuate the history of the province of Cavite when the Philippines was fighting for independence from the Spanish regime. As early as 1872, the Caviteno priests Fathers Gomez, Burgos and Zamora, had already shed their blood for the revolution. The Spanish government accused the three priests of taking part in the mutiny of La Madrid in Fort San Felipe and garroted them. According to historian Renato Constantino, this event marked a watershed in a series of intensifying uprisings against the hated Spanish friars and the abusive Guardia Civil. By1896, the towns of Kawit and Noveleta had taken up arms and by September of that year, which saw the execution of the Trece Martires, the whole province of Cavite had taken part in the revolt. General Emilio Aguinaldo himself had routed Spanish forces in Imus and emerged as Capitan Miong, Cavite's hero. Cavitenos, seeing the Katipunan as the vehicle for mutual aid and defense of the poor and the oppressed, joined the organization in increasing numbers. The numerous instances of resistance against the Spaniards galvanized the Cavitenos against the colonizers and transformed the province into the center of the revolutionary struggle against foreign injustice and oppression.
Today, there is another revolution brewing in Cavite. Led by a band of concerned Cavitenos who remember the central role their province played in the Revolution against Spain, the radical movement is aimed at reversing hopelessness and discontent wrought not by friars but by poverty. It is a fight meant to cast off the yoke not of foreign domination, but of the frustration over government bungling and its failure to generate employment for the able and talented citizens of the historic province.The aim of this revolution is to assert the local autonomy granted to the Local Government Units (LGUs) to raise taxes and revenues meant to improve the standard of living of the rapidly expanding mix of old residents, squatters and new subdivision owners who have chosen to settle in the province due to its proximity to Manila. The ultimate objective is to assure these families a life with dignity and security consistent with the dreams of the forebears when they revolted against Spain.
Cavite is known as the site of the country's first sabong, where the game was introduced by a Mexican cockfighting aficionado who came to the Philippines during the days of the galleon trade. It is therefore an ideal site to launch this revolutionary tax-collection concept. Using sabong, the IPRC has designed an innovative way of funneling much-needed pesos into the municipal treasury. At present, the govern- ment's collection basket from sports betting leaks taxes like an old termite-infested bayong. At present, its only share in cockfighting is a minimal amount eked out from the enter- tainment tax and entrance dues.
In addition, in the lottery-type of betting, operators can sell tickets costing P10 apiece. IPRC estimates that ticket sales can reach up to P1 million per week, specially if telesabong preempts jueteng's drawing power. Based on this figure, 55% of the total sales goes to prizes with the taxes already paid, and 45% to operating costs. In this scenario, the BIR earns P55,000 per draw per town, equivalent to 10% of the total prize of P550,000. The LGU still has 5% or P22,500, equivalent to the local franchise tax on the operating cost coming to it.
On-line gaming does not have to be limited to cockfighting alone, however. Four other games (lotto, jai-alai, bingo and horse-racing) can be incorporated into on-line sports betting so that they can also be harnessed to generate funds for the local community. Although lotto and horse-racing are now on-line, the community does not derive the full benefit from them that it should. The present system is not tightly monitored and therefore leaves the door open for instances of corruption. Unscrupulous officials indiscriminately grant national franchises to TVs and radio bandwidths; frequencies are wantonly exploited resulting in a loss of revenue to the government. Again, the poor lose out because they are subjected to indirect taxation.
1000 municipalities and cities participate, the LGUs can raise at least P120 billion per year for the national government. (see pie charts).
The concept of Tele-Sabong has passed scrutiny from the appropriate government agencies, since the Philippine Gamefowl Commission approved of the experiement on Sept 2, 1992. It was favorably endorsed by the Games and Amusement Board (Dec 8, 1994) and the Department of Justice (Opinion No. 7, January 16, 1995). On June 11, 1998, it was granted a municipal permit and a provincial permit was given to it on June 19, 1998. It has merited a favorable oinion from the BIR on July 20, 1999 as well as the approval of then Secretary Edgardo Espiritu of the Department of Finance on January 2000. On May 5, 1999, the Senate Tax Research Office gave it a favorable review. On February 2000, Congressman Erico Aumentado filed House Bill No. 8760 to grant IPRC the franchise to establish Tele-Sabong. The latest government official to approve of it is the current secretary of the Department of Finance, Secretary Isidro Camacho who said that the "Department of Finance. . . has supported the proposal from the point of view of foreseen improvements in tax administration and compliance. Through the use of computers, the amount of winnings can be effectively determined". (Aug. 31, 2001 letter to Hon. Gabriel S. Claudio, Malacanang ).
With the projected billions of pesos to be earned from Tele-Sabong, the LGUs can finally provide the development fund for livelihood projects. Funds can be used in community mortgage programs to give squatters a choice in their housing arrangements. Financial help can also be extended to farmers so they can have access to updated agricultural techniques and food production, and in the processing and marketing of their produce. Social programs that could not be carried out because of paucity of funds can now be implemented. For these reasons, Cavite Governor Ayong Maliksi, Mayors Ruben Madlansacay (Silang), Walter D. Echevarria, Jr. (Gen Mariano Alvarez), Raymundo del Rosario (Tanza), and Melencio L. de Sagun, Jr. (Trece Martires) have all written letters of support for Tele-Sabong.
Contrary to the reservations against on-line gamings expressed by some Church leaders, it should be pointed out that Tele-sabong is not a new form of gambling. As explained by Atty. Manuel Lazaro, Tele-sabong will only make sure that the appropriate taxes are collected from cockfighting and funnelled to the participating LGUs. As mentioned earlier, cockfighting has been in existence in the country since the late 1800s; it has survived through all these years and probably will not go away very soon. Considering the number of people who consider cockfighting their hobby and because of their social standing and influence in Philippine society, it is unlikely that they will just stand by and let sabong disappear. On the contrary, they will welcome the additional electronic dimension of this type of recreation. Furthermore, research shows that on-line games are patronized by the A-B crowd, not the poor, who contribute only one-fourth of the bets. The A-B crowd contributes three-fourths of the bets, thus they will, in effect, be giving to the poor through the municipal development fund.
that Congress pass House Bill No. 8760 to establish the National Gaming Commission so that it can confer to LGUs the exclusive franchise to administer, manage and operate all on- and off-line gamings in the Philippines, and produce the much-needed economic windfall for the empty coffers of the municipalities. The poor people of the Philippines cannot wait any longer to enjoy a life with pride and dignity.