VAT revenue to be used for light-rail loop - Arroyo
08/27/2008 | 12:37 AM
MANILA, Philippines - The government will use proceeds from the value-added tax (VAT) to complete a railway linking the Light Rail Transit-1’s (LRT) Monumento station and the Metro Rail Transit’s (MRT) North Avenue terminus.
The government, President Gloria Macapagal-Arroyo told reporters on Monday, has enough funds to complete the P6.3-billion project, thus there was no need to borrow money from creditors.
"We will use the VAT proceeds to close the LRT-MRT loop. Seeking foreign loans may take too much time and anyway we have the money to spend," she said.
Mrs. Arroyo said the completion of the MRT3-LRT Line 1 extension would be hampered if the government awaited creditor approval of a loan package.
Light Rail Transit Authority (LRTA) Administrator Melquiades Robles confirmed the use of the VAT funds in a phone interview Tuesday, adding that the project embodied the advantages of having the VAT system in place.
"The President decided to use the VAT funds because when we borrow money, we would have to pay interest. Through this project, we can see the advantages of the VAT. This project will be locally-funded and is indeed a fruit of VAT," he said.
The sales tax has been criticized lately by cause-oriented groups and some legislators, particularly the inclusion of the energy sector in its coverage, in the wake of rising fuel prices.
Mr. Robles said the loop, being a multi-year project, would be funded by VAT collections from 2008 to 2010.
The Department of Finance has said it expects VAT collections to hit P119.59 billion this year due to an increase in world oil prices. Part of the proceeds are already being used for subsidies and other social programs for the poor under the Katas ng VAT (literally, fruit of the VAT) program.
The 5.4-kilometer link will complete the EDSA Loop and involves three new stations, one beside the MRT-3 North Avenue end and the other two at Balintawak and Muñoz market in Quezon City.
It is one of the projects aimed at decongesting traffic in Metro Manila.
The MRT-LRT Loop has three components: package A, which is divided in two phases and involves the construction of a viaduct and pedestrian overpass; package B, which covers the train stations; and package C, which involves electromechanical works.
A DMCI-First Balfour consortium has been awarded the A1, A2, and B packages of the project. Package C had been declared a failed bid after DMCI-First Balfour, the only party qualified to join the auction, did not submit the required documents.
Construction of the project is expected to start next month and Mr. Robles expressed confidence that the loop would be fully operational by May 2010.
"The President has ordered us to work on the project. Through this project we will be serving more passengers," he said. — Alexis Douglas B. Romero, BusinessWorld
The government, President Gloria Macapagal-Arroyo told reporters on Monday, has enough funds to complete the P6.3-billion project, thus there was no need to borrow money from creditors.
"We will use the VAT proceeds to close the LRT-MRT loop. Seeking foreign loans may take too much time and anyway we have the money to spend," she said.
Mrs. Arroyo said the completion of the MRT3-LRT Line 1 extension would be hampered if the government awaited creditor approval of a loan package.
Light Rail Transit Authority (LRTA) Administrator Melquiades Robles confirmed the use of the VAT funds in a phone interview Tuesday, adding that the project embodied the advantages of having the VAT system in place.
"The President decided to use the VAT funds because when we borrow money, we would have to pay interest. Through this project, we can see the advantages of the VAT. This project will be locally-funded and is indeed a fruit of VAT," he said.
The sales tax has been criticized lately by cause-oriented groups and some legislators, particularly the inclusion of the energy sector in its coverage, in the wake of rising fuel prices.
Mr. Robles said the loop, being a multi-year project, would be funded by VAT collections from 2008 to 2010.
The Department of Finance has said it expects VAT collections to hit P119.59 billion this year due to an increase in world oil prices. Part of the proceeds are already being used for subsidies and other social programs for the poor under the Katas ng VAT (literally, fruit of the VAT) program.
The 5.4-kilometer link will complete the EDSA Loop and involves three new stations, one beside the MRT-3 North Avenue end and the other two at Balintawak and Muñoz market in Quezon City.
It is one of the projects aimed at decongesting traffic in Metro Manila.
The MRT-LRT Loop has three components: package A, which is divided in two phases and involves the construction of a viaduct and pedestrian overpass; package B, which covers the train stations; and package C, which involves electromechanical works.
A DMCI-First Balfour consortium has been awarded the A1, A2, and B packages of the project. Package C had been declared a failed bid after DMCI-First Balfour, the only party qualified to join the auction, did not submit the required documents.
Construction of the project is expected to start next month and Mr. Robles expressed confidence that the loop would be fully operational by May 2010.
"The President has ordered us to work on the project. Through this project we will be serving more passengers," he said. — Alexis Douglas B. Romero, BusinessWorld
