Crossroads (Towards Philippine economic and social progress)
Philippine Star, 14 December 2011

 

Cesar Virata’s name occupies an important niche in the country’s development. His contributions were made mainly during the presidency and martial law years of Ferdinand Marcos. Since 1986 – about 25 years ago – his name has receded from the national news.

Today, Cesar Virata’s expertise and judgment are still valued in private corporate matters and on public questions. He contributes to these endeavors in relative obscurity that is in keeping with his low key style of work. He has retired from the active management of institutions, but he continues to be influential by providing advice and setting of policy as corporate board member. Few know of his role in encouraging historical investigations, especially local history, in particular that of his home province, Cavite.

Healthy and counting more years. This week, Virata celebrated his 81st birthday without fanfare. Through the years, he has regularly hosted lunch with a group of friends and former colleagues with whom he worked in the government. The other day, he held one such lunch at the new Romulo Café in Makati that appeared like any other lunch in the past. It was as if there was no milestone to remember. Instead, it was the usual exchange of pleasantries and news about happenings in the lives of those gathered.

He now uses a walking cane for help and steadiness. But he is still essentially healthy for his age. He can manage a fun game of doubles-tennis. He relegates to his more agile partner the task of running and retrieving for the ball. But if he had the ball goes within his range, his backhand or forehand stroke would surely know how to direct it away from the opponents to win the point. This is fun because he plays with three tennis trainers who are quite good at their game. This display of relative health is far beyond what other men, even one generation younger, can do.

Secretary/minister of Finance for the longest time. As secretary/minister of Finance for the longest period in the country’s history, Cesar Virata has contributed much to the nation’s economic development.

No single person has contributed more to the shaping of the Philippine modern tax and revenue system than he. Longevity in office has of course given him the ability to think through changes and improvements of the country’s tax system. He was an untiring worker who was also an avid learner. He studied his job well, and as far as tax systems go, he developed an uncanny ability to understand its various ramifications.

The Philippine tax system as it is today is for the main part due to his efforts to build the framework from the pieces that he inherited in 1970 from previous administrations. He built each component and strengthened it so that it covered a wide network of taxable income flows to benefit the needs of the government.

The country’s taxes are collected by the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC). He instituted major reforms in both agencies that continue to work today. Some of the changes he introduced were in the nature of administrative reforms. Most of all, he made changes in the design and improvement of the tax provisions of income, sales, business, and local government taxes. Many of these are incorporated in the Tax Code and in the Tariff Code.

Taxation deals with a wide network of income and resource flows. The tax system evolves with the growth and complexity of the economy. An effective system of taxation should be able to cover the sales of goods and services and all the flows of incomes among productive resources that are subject to tax.

Taxation is a complex topic. Even among the simplest tax systems, there are complications in the details of transaction and in their administration. They involve sales tax, income tax, taxes on resource flows and on wealth transfers.

To appreciate fully Cesar Virata’s contributions to the nation’s tax and revenue system, I recently wrote a paper that I have made available widely through the discussion paper series of the UP School of Economics. This paper is entitled: “Cesar Virata at Finance: Tax Collector and Reformer, 1970 to 1986.” Students and experts of taxation in developing countries would find his experience on the Philippine tax system illuminating. Among tax historians and fiscal experts in the Philippines, the paper also provides an appropriate framework for study of current as well as future tax reform issues.

Those who are familiar with the website of the UP School of Economics will be able to navigate it toward the discussion paper series. The following is however a direct address leading to the article itself in .pdf file: http://www.econ.upd.edu.ph

A much bigger contribution to nation-building. Cesar Virata’s contribution to our nation’s development is much broader than his work on the tax system. As finance minister, he was able to enlarge the resource base on which many programs of government could be financed. His contributions in other fields of the economy have been important too. He contributed to the shaping of broader economic and social goals.

From 1981 to 1986, Cesar Virata was Prime Minister of the land. It is often forgotten that in 1981, the martial law government was ended with the adoption of the revised Constitution of 1973. The national parliament was duly created and the Batasang Pambansa functioned to pass the laws of the land and passed the budget. Thus, the legislative function was restored through the creation of a parliament – the Batasang Pambansa or the national assembly.

Under that new political structure, Cesar Virata assumed higher public office. Although in that structure, the president remained strong in the running of the government, Virata led and orchestrated the national government through the cabinet.

It was under this institutional framework that it became possible for Cory Aquino to challenge Marcos in the national election of 1986. The election results of that year were never officially resolved because the EDSA revolution catapulted Mrs. Aquinto to the helm of the government.

A biography of Virata is in the offing. Since 2002, I have been at work on the biography of Cesar Virata. I was almost finished with eighty percent of the work when personal events required me to slow down on the project.

I had the final draft by last year, but I have withheld for further work. By the middle of next year that project will be realized in print. By then, we can have a much better appreciation of his many contributions to the nation in these interesting times that we are living.