Philippine government shows how not to manage relief efforts

By Siesta-friendly

When it rains, it pours. No, this is not about the 2 typhoons that really overstayed their welcome these past 2 weeks. It’s about the never-ending incompetence of our government officials. While typhoons Ondoy and Pepeng flooded our streets (and homes) with rain, the government has flooded us with ineptitude.

There’s enough incriminating evidence out there on government corruption that allowed the setting up of residential areas where there shouldn’t be thus making residences and human lives very vulnerable to floods. And there’s more material on the government’s lack of rescue efforts (boats, manpower, intention).

But now the government has gone on messing relief work as well. So there’s been no relief from government ineptitude as well.

Prohibiting importation of used clothing for typhoon victims

ABS-CBNNEWS online reported this week that donations to typhoon victims of used clothing set to leave Saipan were disallowed by a Philippine Consul General citing Republic Act No. 4653 (An Act To Safeguard The Health Of The People And Maintain The Dignity Of The Nation By Declaring It A National Policy To Prohibit The Commercial Importation Of Textile Articles Commonly Known As Used Clothing And Rags).

True, said RA 4653 prohibits the importation of used clothing BUT the law has exceptions and it specifically cites one exception as Subsection "v" of Section 105 of Republic Act 1937 (Tariff and Customs Code of the Philippines) which reads:

“v. Food, clothing, house-building and sanitary-construction materials, and medical, surgical and other supplies for use in emergency relief work, when imported by or directly for the account of any victim, sufferer, refugee, survivor or any other person affected thereby, or by or for the account of any relief organization, not operated for profit, for distribution among the distressed individuals, whenever the President shall, by proclamation, declare an emergency to exist by reason of a state of war, pestilence, cholera, plague, famine, drought, typhoon, earthquake, fire, flood and similar conditions: Provided, That the importation free of duty of articles described in this herein subsection shall continue only during the existence of such emergency, or within such limits and subject to such conditions as the President may, by his proclamation, deem necessary to meet the emergency. [emphasis supplied]

There’s more.

Coursing all donations to the DSWD

In her Presidential Directive dated September 29, 2009, Gloria Arroyo stated that foreign donations coursed through the DSWD will not be taxed nor confiscated by the Bureau of Customs. Meaning foreign donations that go straight to the beneficiaries or relief organizations will be taxed or confiscated.

This new directive is contrary to Subsection “u” of the same Section 105 of RA 1937, which states:

“Section 105. Conditionally Free Importations. The following articles shall be exempt from the payment of import duties upon compliance with the formalities prescribed in, or with the regulations which shall be promulgated by the Commissioner of Customs with the approval of the department head:

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u. Articles donated to public or private institutions established solely for educational, scientific, cultural, charitable, health, relief, philanthropic or religious purposes, for free distribution among, or exclusive use of, the needy.” [emphasis supplied]

There are just too many ugly possibilities with this scenario: 1) the Arroyo Government’s possible exploitation of the chance to make it appear the donations come from the government (or worse, any one of the Arroyos’ foundations); 2) the government’s control in determining the beneficiaries (contrary to the donors’ intentions); 3) the possibility of taxing or confiscating relief goods contrary to law; and 4) the delay, if not the holding back, of donations by donors already wary of government corruption.

Given these developments, the best alternative would be is to donate in cash. Foreign donors could also choose to just pay the tax to have control over their goods.

Foreign donors may also send donations directly by balikbayan box c/o OFWs to relatives or friends in the Philippines then have the latter deliver the goods to relief organizations or relief centers themselves. But the boxes could take about 2 months to arrive and would only be on a piece-meal basis at a time when volumes of relief goods are needed.

There’s a lot more to complain about the acts of government authorities nowadays (we’re still waiting for heads to roll for their contributory fault and negligence to 2 recent acts of God), let’s give them as less control of our acts as much as possible in helping one another.

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GIFTS-IN-LAW (Donations and Gifts)

By Obiter07

Having just come out of the Christmas Season (with we hope at least a few pesos left), we will briefly tackle how gifts within a marriage are treated under the law.

ARTICLE 87. Every donation or grant of gratuitous advantage, direct or indirect, between the spouses during the marriage shall be void, except moderate gifts which the spouses may give each other on the occasion of any family rejoicing. The prohibition shall also apply to persons living together as husband and wife without a valid marriage. (133a)

And there is a limit on the gifts that you can give, depending on the property regime which governs the marriage. More on this in a future article. Essentially, the property regime determines who owns what in the marriage.

Under the Family Code, the default or automatic regime in the absence of any contrary agreement is the system of absolute community[1] where the couple pools everything into the marriage. [2] In this instance, there is a limit on what you can give materially to each other, whatever they may say about giving your marriage your all -

ARTICLE 84. If the future spouses agree upon a regime other than the absolute community of property, they cannot donate to each other in their marriage settlements more than one-fifth of their present property. Any excess shall be considered void. Donations of future property shall be governed by the provisions on testamentary succession and the formalities of wills. (130a)

And you can’t just give things away to a third party except again “moderate” gifts -

ARTICLE 125. Neither spouse may donate any conjugal partnership property without the consent of the other. However, either spouse may, without the consent of the other, make moderate donations from the conjugal partnership property for charity or on occasions of family rejoicing or family distress. (174a)

Can you get the gifts back? Yes you can, if you obtain a decree of legal separation -

ARTICLE 64. After the finality of the decree of legal separation, the innocent spouse may revoke the donations made by him or by her in favor of the offending spouse, as well as the designation of the latter as beneficiary in any insurance policy, even if such designation be stipulated as irrevocable. The revocation of the donations shall be recorded in the registries of property in the places where the properties are located. Alienations, liens and encumbrances registered in good faith before the recording of the complaint for revocation in the registries of property shall be respected. The revocation of or change in the designation of the insurance beneficiary shall take effect upon written notification thereof to the insured.

The action to revoke the donation under this Article must be brought within five years from the time the decree of legal separation become final. (107a)

What about gifts given to you and your spouse by your third parties (especially doting parents) in consideration of the marriage?[3] Well, if you acted in bad faith, then you have to give them back -

ARTICLE 43. The termination of the subsequent marriage referred to in the preceding Article shall produce the following effects:

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(3) Donations by reason of marriage shall remain valid, except that if the donee contracted the marriage in bad faith, such donations made to said donee are revoked by operation of law;

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ARTICLE 44. If both spouses of the subsequent marriage acted in bad faith, said marriage shall be void ab initio and all donations by reason of marriage and testamentary dispositions made by one in favor of the other are revoked by operation of law. (n)

Or the donors themselves can ask for the gifts back -

ARTICLE 86. A donation by reason of marriage may be revoked by the donor in the following cases:

(1) If the marriage is not celebrated or judicially declared void ab initio except donations made in the marriage settlements, which shall be governed by Article 81;

(2) When the marriage takes place without the consent of the parents or guardian, as required by law;

(3) When the marriage is annulled, and the donee acted in bad faith;

(4) Upon legal separation, the donee being the guilty spouse;

(5) If it is with a resolutory condition and the condition is complied with;

6) When the donee has committed an act of ingratitude as specified by the provisions of the Civil Code on donations in general. (132a)

On another note, apart from making into Santa’s list giving has advantages as tax deductions under Section 38 of the National Internal Revenue Code subject to certain limits. But, you can’t just give everything away -

“CHAPTER VII — ALLOWABLE DEDUCTIONS
SECTION 34. Deductions from Gross Income. — Except for taxpayers earning compensation income arising from personal services rendered under an employer-employee relationship where no deductions shall be allowed under this Section other than under Subsection (M) hereof, in computing taxable income subject to income tax under Sections 24(A); 25(A); 26; 27(A), (B) and (C); and 28(A)(1), there shall be allowed the following deductions from gross income:

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H (Charitable and Other Contributions –
(1) In General. — Contributions or gifts actually paid or made within the taxable year to, or for the use of the Government of the Philippines or any of its agencies or any political subdivision thereof exclusively for public purposes, or to accredited domestic corporations or associations organized and operated exclusively for religious, charitable, scientific, youth and sports development, cultural or educational purposes or for the rehabilitation of veterans, or to social welfare institutions, or to non-government organizations, in accordance with rules and regulations promulgated by the Secretary of Finance, upon recommendation of the Commissioner, no part of the net income of which inures to the benefit of any private stockholder or individual in an amount not in excess of ten percent (10%) in the case of an individual, and five percent (5%) in the case of a corporation, of the taxpayer’s taxable income derived from trade, business or profession as computed without the benefit of this and the following subparagraphs.

And if you are about to be married, you can ask for gifts not to exceed P10,000 as these are exempt from donor’s tax. If you have enough guests and sponsors this could be quite a hefty sum. The same rule applies for gifts to the to the government or education and charitable institutions -

“SECTION 101. Exemption of Certain Gifts. —The following gifts or donations shall be exempt from the tax provided for in this Chapter:
(A) In the Case of Gifts Made by a Resident. —
(1) Dowries or gifts made on account of marriage and before its celebration or within one year thereafter by parents to each of their legitimate, recognized natural, or adopted children to the extent of the first Ten thousand pesos (P10,000);

(2) Gifts made to or for the use of the National Government or any entity created by any of its agencies which is not conducted for profit, or to any political subdivision of the said Government; and

(3) Gifts in favor of an educational and/or charitable, religious, cultural or social welfare corporation, institution, accredited nongovernment organization, trust or philanthropic organization or research institution or organization: Provided, however, That not more than thirty percent (30%) of said gifts shall be used by such donee for administration purposes. For the purpose of this exemption, a ‘non-profit educational and/or charitable corporation, institution, accredited nongovernment organization, trust or philanthropic organization and/or research institution or organization’ is a school, college or university and/or charitable corporation, accredited nongovernment organization, trust or philanthropic organization and/or research institution or organization, incorporated as a nonstock entity, paying no dividends, governed by trustees who receive no compensation, and devoting all its income, whether students’ fees or gifts, donations, subsidies or other forms of philanthropy, to the accomplishment and promotion of the purposes enumerated in its Articles of Incorporation.

And it pays to know that one can give away at least P100,000 a year without having to pay donor’s taxes. This is even a form of estate planning for some.

Who knew gift-giving could have strict rules? Don’t you just miss Santa’s rule? It was just a matter of being naughty or nice.

[1] Article 75, Family Code.

[2] What Constitutes Community Property
ARTICLE 91. Unless otherwise provided in this Chapter or in the marriage settlements, the community property shall consist of all the property owned by the spouses at the time of the celebration of the marriage or acquired thereafter. (197a)

[3] ARTICLE 82. Donations by reason of marriage are those which are made before its celebration, in consideration of the same, and in favor of one or both of the future spouses. (126)

ARTICLE 83. These donations are governed by the rules on ordinary donations established in Title III of Book III of the Civil Code, insofar as they are not modified by the following articles.

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