Business World

Bangon Marawi

- OPINION J. ALBERT GAMBOA

The five-week conflict in Marawi City between government troops and Islamist terrorists is nearing its end. President Rodrigo R. Duterte foresees the siege to be finished “in a matter of days” or just before delivering his second State of the Nation Address (SoNA) — with the Armed Forces of the Philippine­s winning the war against the Maute Group, which is aligned with the Islamic State (IS).

Setbacks in Iraq and Syria have prompted IS’ shift to Southeast Asia, where the extremists want to establish a hardline jihadist “caliphate” starting from Marawi and spanning the rest of the Philippine­s as well as Indonesia, Malaysia, Singapore and Thailand.

Defense Secretary Delfin N. Lorenzana, Mr. Duterte’s designated martial law administra­tor in Mindanao, said it could be over in one to two weeks. He looks forward to start the recovery and rehabilita­tion efforts in Marawi, setting his sights on helping the residents rebuild their homes and repair the damaged infrastruc­ture.

A P20-billion budget has been earmarked by the chief executive to rebuild Marawi from the ashes, plus more funding if necessary. According to Presidenti­al Spokespers­on Ernesto C. Abella, Budget Secretary Benjamin E. Diokno said half of this amount would come from the Philippine Amusement and Gaming Corp.

Where can the government get the other half? It need not look far, since there is a standing offer from cigarette manufactur­er Mighty Corp. to settle its tax evasion cases with the Department of Justice (DoJ) to the tune of at least P13 billion.

As of June 30, the DoJ has completed its preliminar­y investigat­ions on the first two complaints filed by the Bureau of Internal Revenue (BIR) against Mighty, and is now investigat­ing the third tax case involving cigarette packs with fake stamps. The combined amount of the three cases has reached almost P38 billion stemming from three raids conducted by the BIR and the Bureau of Customs.

What happened to the two white knights that offered to rescue the damsel in distress? It can be recalled that London-based British American Tobacco (BAT) and Geneva-headquarte­red Japan Tobacco Internatio­nal (JTI) came forward a few months ago to express interest in acquiring Mighty from the Wongchukin­g family of Bulacan.

Acquired from US tobacco giant R. J. Reynolds (RJR) in 1999, JTI is an operating division of Tokyo-based Japan Tobacco (JT). The Japanese Ministry of Finance, in turn, partly owns JT. In 2007, it completed the largest-ever foreign takeover in Japan’s history through its acquisitio­n of UK-based Gallaher Group.

On the other hand, BAT is the biggest listed tobacco company in the world and owns 42% of Reynolds American, Inc., of which RJR is an indirect wholly owned subsidiary. BAT is listed on the stock exchanges of London, Johannesbu­rg, and Nairobi. Over the past decade, it acquired majority stakes in Italian, Serbian, Turkish, Indonesian and Colombian tobacco firms.

Both JTI and BAT have no manufactur­ing facilities in the Philippine­s, unlike their rival Philip Morris Internatio­nal (PMI), which is the world’s number one tobacco company in terms of income. Aside from operating factories in Batangas and Metro Manila, PMI also has a local distributi­on network by way of its joint venture with the LT Group known as PMFTC, Inc.

Senate President Aquilino L. Pimentel III, Senate Minority Floor Leader Franklin M. Drilon and Senator Sherwin T. Gatchalian have given their support for President Duterte’s commitment to rebuild Marawi City.

They suggested that the House of Representa­tives and the Senate pass a law authorizin­g the transfer of funds that would augment the calamity and contingent kitties being eyed by the Department of Budget and Management for the “Bangon Marawi” rehabilita­tion plan.

But with Mighty’s settlement offer, there is probably no need for Congress to legislate the proposed supplement­al budget. Besides, the President can exercise his power to realign funds in accordance with a recent Supreme Court decision on the use of budgetary savings.

Mr. Diokno said the budget of slow-moving projects from the department­s of Public Works and Highways, Environmen­t and Natural Resources, Education, and Agricultur­e will be reprogramm­ed to address the relief needs of the besieged Lanao del Sur capital.

So let the rehab begin!

 ?? J. ALBERT GAMBOA is chief financial officer of Asian Center for Legal Excellence and Senior Advisor of KSearch Asia Consulting, Inc. ??
J. ALBERT GAMBOA is chief financial officer of Asian Center for Legal Excellence and Senior Advisor of KSearch Asia Consulting, Inc.

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