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Gov’t, MILF sign wealth-sharing annex for Bangsamoro

Written By David D'Angelo on Tuesday, July 16, 2013 | 7/16/2013

Kuala Lumpur – And succeed they did.

Wealth-sharing annex signed. GPH peace panel chair Miriam Coronel-Ferrer, Malaysian facilitator Tengku Dato Ab Ghafar Tengku Mohamed and MILF peace panel chair Mohagher Iqbal sign the wealth-sharing annex and joint statement.

Just when everyone thought that the peace negotiations were going nowhere, the Government of the Philippines (GPH) and the Moro Islamic Liberation Front (MILF) surprised the whole nation with yet another breakthrough. They signed the Annex on Revenue Generation and Wealth Sharing. 

After six days of painstaking discussions, the contentious Annex was completed at 10:30 p.m. on July 13 and signed before midnight. It was the toughest of all the rounds of talks after the Framework Agreement on the Bangsamoro (FAB) was signed in October last year. 

“It was a close call. But both parties' persistence and goodwill bore fruit,” GPH peace panel chair Miriam Coronel-Ferrer said shortly after the signing. “We have a good package, one that we believe would make fiscal autonomy in the Bangsamoro a reality,” she added.

The Annex on Revenue Generation and Wealth Sharing is one of the four annexes that, together with the FAB, will complete the comprehensive agreement. The other annexes are on power-sharing and normalization, and are still under discussion.   The Annex on Transitional Arrangements and Modalities was signed in February.

"This Annex on Revenue Generation and Wealth Sharing seeks to fulfill the aspirations for meaningful autonomy for Muslim Mindanao that was envisioned in the Constitution," said Coronel-Ferrer. "It will correct the flaws in the current fiscal system in the ARMM."

“With the insights provided by the technical experts, Cabinet secretaries and several legislators consulted by the government panel and the intense discussions we've had with our counterparts, we are confident that the Annex will withstand scrutiny and the tests of implementation,” Coronel-Ferrer said.

The originally scheduled four-day talks was extended for another two days. “The panels exerted their best effort to resolve the language issues. We succeeded because we exercised flexibility and worked hard to find the appropriate solutions," Coronel-Ferrer said.

"For the benefit of the Bangsamoro and the whole country, Government and the MILF once more demonstrated that they are invested in the process and will persevere in order to forge lasting peace in Mindanao," she added.

In a joint statement, the Parties said "the (Revenue Generation and Wealth Sharing) Annex, which forms part of the FAB, will provide sufficient guidance for the crafting of the Bangsamoro Basic Law's provisions on wealth-sharing and revenue generation for the Bangsamoro as envisioned by the FAB.”

The signed annex stated that "wealth creation (or revenue creation and sourcing) is important for the operation of the Bangsamoro, considering that the Bangsamoro territory is among the most underdeveloped in the Philippines due to the decades-old conflict. Moreover, the existing tax base therein is very limited.”

Arrangements

The eight-page wealth-sharing annex has sections on taxation, other sources of revenue, fees and charges, grants and donations, fund transfers from Central Government, contracting of loans and overseas development assistance, natural resources, and additional fiscal powers, among others.  

One of the highlights is the agreed sharing formula on taxing powers. The panels agreed that 25 percent of the “Central Government taxes, fees and charges collected in the Bangsamoro, other than tariff and custom duties” will go to the Central Government, while 75 percent of it, including the shares of the local government units, will go to the Bangsamoro Government.

With regard to other sources of revenue, “government income derived from the operations of Bangsamoro government-owned and -controlled corporations, financial institutions, economic zones, and freeports operating therein, shall go to the Bangsamoro Government.”

"The Bangsamoro shall have authority and control over existing government-owned and -controlled corporations and financial institutions operating exclusively in the Bangsamoro territory, after determination by the intergovernmental fiscal policy board of its feasibility.

On fund transfers from Central Government, a Special Development Fund will be provided by the former to the Bangsamoro “for rehabilitation and development purposes upon the ratification of the Bangsamoro Basic Law.”

When it comes to natural resources, 75 percent of income derived from exploration, development and utilization of metallic minerals within the region will go to the Bangsamoro Government. With respect to non-metallic minerals (sand, gravel, and quarry resources), such revenues will go to the Bangsamoro government and its local government units.

On the other hand, income derived from fossil fuels (petroleum, natural gas, and coal) and uranium will be shared equally between the Central and Bangsamoro Governments.

Other achievements

During this round of negotiations, the Third Party Monitoring Team (TPMT) “which will be responsible for monitoring the implementation of the agreements held its first organizational meeting, led by its Chair Mr. Alistair MacDonald.”

Further, “progress was also made by the Technical Working Group on Normalization and the special team on power-sharing,” according to the panels’ joint statement. #

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