Former Senator Juan Ponce Enrile, who was chairman of the Senate ways and means committee, was a tough cookie to crack.  He was known for his piercing questions and acerbic remarks.   Defending the Ramos Tax Reform Program before him was like facing a grand jury.  He peppered us with questions, analyzed our estimates using long division, and took pride in his post graduate degree on International Taxation from Harvard University.  I was certainly no match for him.  So when all the chips were down, we had to bring an ace.  Prof. Richard Bird was the most eminent tax economist in the world.  He was well familiar with the Philippines having spent months here to study Philippine Public Finance.  The book that he wrote on how to finance Philippine development, I consider a masterpiece.  And most of all, he was a Professor on Taxation from the esteemed university where the Senator was schooled.

Hoping against hope, I sent Prof. Bird an email asking if he could come to the Philippines and help us.  I signed my letter as “President, Richard Bird Fans Club of the Philippines.”  My heart almost stopped when he answered with an affirmative reply.  He lit our dimming hopes that the Tax Reform Program would pass the Senator’s scrutiny.

I had a crummy room in the old Department of Finance building.  We did not have a steady water supply and a rickety-rack air conditioning unit.  The best table we could assign Prof Bird had seen better days.  But he had no complaints.  He simply asked for all our studies and said, “My mind works like a vacuum.”  And so it did.  It only took him a day to absorb the products of our year-long analysis and recommendations.  He was ready to face our prosecutor.  We were no longer scared.  We had the best defense lawyer in the world.

We were in total disbelief when the Senator behaved like a school boy in front of a mentor.  He listened attentively.  His aggressive posture was gone.  I felt like I was in 7^th heaven listening to a beautiful discourse.  It was the best lecture in public finance that I had attended.

I would not say that the road to reform became rosy when Prof. Bird left.  But something unexplainable had changed.  The Senator had greater patience and kindness in listening to us.  He still demanded in-depth studies and hard data, but the atmosphere was not longer fierce but collegial.

Fast forward and I left government.  My world has changed from national finance to strengthening local finance.  We were starting Synergeia with a core of Mayors and Governors who wanted to make a difference.  Mayor Jesse Robredo was one of those.  We thought that they should be exposed to the best minds on how to finance development.  Heaven must be smiling on me as Prof. Richard Bird said yes for the second time.  He had another herd of school boys listening to him on how to raise local revenues from the real property tax, business tax, and user charges.  I remember Mayor Raul Banias and Mayor Jett Rojas from Iloilo, too scared and too timid, to ask him questions.

I had kept my friendship with Prof Bird through the years.  I introduced him to my students and required them to read his major studies.  They would gently ask me questions why my references were mostly about his work.  A vey playful student, Rior Santos even hinted that I have a great crush on him.

In many ways Rior was correct.  Prof. Bird had a great influence on my views on public finance.  And why not?  Prof. Bird advocates that taxation cannot help the poor and the best it can do is to exempt them.  The income tax has great limitations in developing countries because of our huge informal economies, weak tax culture, evasion and corruption.  Governments must rely on an efficient expenditure system to be able to help the poor.

Prof. Bird saw the real potential of user charges.  It is certainly easier to charge a price for goods and services that people see and enjoy such as toll roads and water charges.    He had a simple advice—if a good or a service resembles a private good—privatize its delivery.  For him, the single ingredient for tax administration is political will.  His advice is to balance the revenue goals of government with the economic costs of taxation.

The weaknesses that Prof. Bird saw in our fiscal system in 1975 remain—a very thin tax base, a whole slew of tax rates, inability to tax wealth, and very generous tax incentives.

I feel like the Tin Man in the Wizard of Oz, “Now I know I have a heart because my heart is breaking.”

Fortunately, he has left a legacy.  His studies on public finance are our precious treasure.

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