The proposal of Senate President Drilon is well taken.

Today, I am issuing an Executive Order exempting taxpayers who will pay 25 percent above their current income tax payments from official audits and investigations, even as we shall continue to fully and uncompromisingly sanctions tax evaders.

This voluntary program shall be effective for five years.

It is designated to reduce corruption and administrative costs while enhancing voluntary compliance which lies at the foundation of any sound revenue program.

There are safeguards in the executive order that will prevent abuse or opportunism, and ensure consistency with industry benchmarks.

I have directed the Secretary of Finance to submit soonest the implementing guidelines of my order.

We are upgrading revenue administration side by side with new tax measures.

The President extends her deepest sympathy to the family of the victims of this very unfortunate and shocking incident.

It may take some time for us to win the crusade against corruption in the government, but we are steadily gaining ground in concert with allies in the media, the business sector, the academe, the church and civil society.

President Gloria Macapagal-Arroyo issued today Executive Order 399 requiring the Bureau of Internal Revenue to establish a program to promote optimum tax compliance.

The EO exempts taxpayers who will pay 25 percent above their current income tax payments from official audits and investigations.

The program, to be known as the No Audit Program (NAP), shall be effective for five years.

"It is designed to reduce corruption and administrative costs while enhancing voluntary compliance which lies at the foundation of any sound revenue program," the President said in a statement.

She assured the public that there are safeguards in the EO that will prevent abuse or opportunism, and ensure consistency with industry benchmarks.

"I have directed the Secretary of Finance to submit soonest the implementing guidelines of my order," the President said. "We are upgrading administration side by side with new tax measures."

She said that Malacanang’s partnership with Congress on this score is unrelenting and that the government will continue to explore all means to grow the economy to create jobs and support the full-blown implementation of its pro-poor agenda.

Under the NAP, the BIR Commissioner shall provide for the conditions under which taxpayers liable for business income shall be exempted from audit and investigation, the threshold required shall not be lower than the ff:

• growth rate of income tax payment for the current tax year compared with the previous tax year must be at least 20 percent;

• growth rate of income tax payment for the last quarter of the current tax year compared with the last quarter of the previous tax year must be at least 25 percent;

• growth rate of income tax payment for the first quarter of the succeeding tax year compared with the first quarter of the current tax year must be at least 25 percent;

• ratio of income tax payment to gross sales/receipts for the current taxable year must be at least equal to that of the previous taxable year;

President Gloria Macapagal-Arroyo today attributed the recovery of the peso to the reform measures being undertaken by the government to improve the economy.

In a radio interview this morning, the President said investors are beginning to appreciate government efforts to turn the economy around beginning with the new tax measures being pushed in Congress by the administration.

"Masyadong matagal na, ilang dekada nang utang ang pinanggagalingan ng ating kaunlaran (For so long a time, for so many decades, our external debt has been the source of our progress)," she noted.

"Hindi naman puwedeng utang nang utang na lang ang pinanggagalingan ng ating kaunlaran dahil ang ating budget ay sa interes lang mapupunta (We can’t forever rely on loans for our progress because we’d only be using our budget for interest payments)," the President added.

What the country needs, according to the Chief Executive, is for the present generation to pay for the price of progress.

"Mas mabuti na tayo ang nagbabayad ng ating utang imbes na iyong ating mga anak at apo (It’s better that we are paying for our debts instead of our children and grandchildren)," she said.

After languishing in the P56 to the dollar level, the peso finally crossed the P55 benchmark last week and continued to gain strength.

Today, the peso opened firmer at P55.600, moved up to a high of P55.460 in early trade, before closing at P55.550.

Bangko Sentral ng Pilipinas Director Ma. Ramona Santiago attributed the peso’s strength to the movement of regional currencies particularly the Japanese yen against the US dollar.

Volume of transactions remained heavy today, amounting to $215 million.

President Gloria Macapagal-Arroyo today hailed the members of the National Anti-Kidnapping Task Force (NAKTAF) and the Presidential Anti-Crime Emergency Response (PACER) for their safe and successful rescue of a German woman and her Filipino boyfriend at the hands of kidnappers in Las Pinas yesterday.

The President said in a radio interview this morning that the successful operation that led to the arrest of the suspects only goes to show that the government will leave no stone unturned in stamping out kidnapping "and that our law enforcers remain vigilant."

"Hindi tayo titigil sa ating pagkamulat laban sa krimen. Kasunod nito ang pag-aresto sa mga wanted na kriminal at terorista (We will continue our vigilance against kidnapping. Next in line are the criminals and terrorists)," the President warned.

Interior and Local Government Secretary Angelo Reyes announced the successful recovery of the two kidnapped victims in a press briefing in Malacaņang this afternoon.

Reyes, who has retained the Cabinet oversight chairmanship of anti-kidnapping operations, said that 20-year-old Katrina Schoof and his boyfriend, Jeffrey Cruz were recovered without ransom being paid. The kidnappers have demanded earlier P30 million for the release of the hostages.

"It was a very, very successful operation in the sense that the kidnapped victims were recovered, no ransom paid and the kidnappers captured," he emphasized." We should be proud of our anti-kidnapping people, they work very hard and are very dedicated," Reyes added.

According to Reyes, the Filipino-Chinese community has acknowledged the accomplishment of the government in this anti-kidnapping campaign.

External factors, not the increase in the value-added tax (VAT) rate now being debated in Congress, would pave the way for the increase in prices of basic commodities.

President Gloria Macapagal-Arroyo stressed this today in a radio interview as she allayed fears that prices of basic commodities would go up once the VAT bill now being taken up in Congress is approved.

"Hindi dapat mangamba ang mga mamamayan sapagkat karamihan ng ating mga basic necessities ay sakop ng tinatawag na VAT exemptions (The public shouldn’t be alarmed as most of the basic necessities are already covered by the VAT exemptions), " she said.

External factors, such as the armed conflicts that cause the oil prices to shoot up, are the ones that will make the prices of commodities go up, the President explained.

VAT will not charge farmers and fishermen who are responsible for our produce, according to the Chief Executive.

Revenues to be generated should the new VAT bill become a law, would go back to the taxpayers in the form of jobs, education, water and health projects.

"Doon natin ilalagay ang buwis na makukubra natin (That's where we will put the taxes that we will generate)," she said. "Earmarked ang ating buwis para sa mga bagay na iyon" (Our taxes are earmarked for this purpose).

No less than the culture of corruption is what President Gloria Macapagal-Arroyo wants to eradicate under her term as she reiterated the enforcement, prevention and limitation aspects of her program to stamp out the scourge that has kept the country from progressing.

In a radio interview this morning, the President said one of the priorities of her administration is to solve the problem of corruption, including smuggling which has deprived the government of badly needed revenues.

"Ito ang dahilan kung bakit ilang dekada na utang ang ginagamit natin para pondohan ang kaunlaran dahil hindi tayo makakubra ng tamang buwis at ang pinanggagalingan nito ay ang kultura ng korapsiyon (This is the reason why we are deep in debt because we are using our loans to finance our progress. And corruption is the root cause of this)," she said.

The President cited the Philippine Anti-Graft Commission and the Anti-Smuggling Task Force which she created to show government determination to wipe out the culture of corruption and smuggling in the country.

"We are trying to transform the PAGC into something like the Independent Commission Against Corruption (ICAC) of Hong Kong," she said.

The President said she had asked the services of former ICAC Deputy Commissioner Tony Khok to be the consultant in this regard.

Three million jobs through micro-finance and another two million through agribusiness is how President Gloria Macapagal-Arroyo intends to create the badly needed opportunities in line with her 10-point legacy agenda of six million jobs within her term.

In a radio interview this morning, the President spelled out how she intends to pursue her job-creation program.

"Kung tatlong milyon yan, " she said, referring to the micro-finance opportunities, "at least mayroong trabaho sila. Sa dalawang milyong ektarya ng agri-business, kung one job per hectare, dalawang milyong trabaho din yon." (That would be three million jobs from microfinance. In two hectares of agribusiness, that would be another two million.)

The President noted that the country’s future lies in the growth sectors, among them the human resources, mining and tourism. She stressed, however, that infrastructure must be very good.

"That’s why we have to finance our infrastructure so that investors would come in," she said.

The President noted that in order for the country to catch up with China, we should treat it as a friend, partner, a marketplace and a source of investment.

"Gagawin natin silang palengke kaysa sa ating kompetitor (We will make them our marketplace, not as a competitor)," she said.

Our respectable fiscal performance and healthy growth in 2004 support stronger ratings.

We are confident that S & P will revisit our rating and consider reversing the downward action once they have a complete understanding of the government’s significant achievements to raise revenues and contain the future impact of NPC losses through successful privatization and rate increases.

We believe the stable outlook could well be revised to positive in the next six to 12 months.

We know that substantial progress, particularly on the fiscal front, must be made to regain confidence.

Proposed tax reform measures must be passed, Transco and other asset sales must be completed on a timely basis and revenue collection must be significantly improved.