Bank of the Philippine Islands v. Commissioner of Internal Revenue

[C.T.A. CASE NO. 5719. June 16, 2000.] BANK OF THE PHILIPPINE ISLANDS , petitioner , vs . BANK OF THE PHILIPPINE ISLANDS , respondent . D E C I S I O N This is a petition seeking for the refund of the amount of P6,278,856.58 allegedly representing overpaid gross receipts tax for the fourth quarter of 1996. The antecedent facts follow. Petitioner is a domestic banking corporation duly organized and existing under Philippine laws. It is licensed by the Bangko Sentral ng Pilipinas (BSP) to engage in expanded commercial banking operations as defined under the rules and regulations of the BSP. For the four quarters of 1996, Petitioner filed its quarterly percentage tax returns showing its gross receipts for each particular quarter, and paid the corresponding gross receipts tax, detailed as follows: Exh. Period Covered Gross Receipts Gross Receipts Tax Paid Date of Payment O Apr-June 1996 2,412,460,302.86 113,438,799.75 July 22, 1996 P July-Sept 1996 2,534,935,228.91 117,242,547.35 Oct. 21, 1996 Q Oct-Dec 1996 3,365,047,326.47 158,224,837.02 Jan. 20, 1997 In determining the basis for the gross receipts tax paid for each quarter of 1996, Petitioner allegedly included therein all of its gross receipts, inclusive of the twenty percent (20%) final taxes already withheld and paid to Respondent by various clients of Petitioner on interest and other passive income received by the latter. Hence, on July 15, 1998, on the strength of this Court's decision in CTA Case No. 4720 entitled Asian Bank Corporation vs. Commissioner of Internal Revenue promulgated last January 30, 1996, where We held that the twenty percent (20%) final withholding tax on bank's passive income should not form part of the bank's taxable gross receipts for the purpose of computing gross receipts tax, Petitioner filed a letter claim for refund dated July 13, 1998 with the Bureau of Internal Revenue in the amount of P26,069,147.00, representing alleged overpaid gross receipts tax for the whole year of 1996. Respondent did not act on Petitioner's claim. And so, on January 19, 1999, the instant petition for review was filed, praying for the refund of P6,278,856.58, representing Petitioner's overpaid gross receipts tax only for the fourth quarter of 1996, as Petitioner's right to ask for a refund of its overpaid gross receipt tax for the first three quarters of 1996 has already been barred by prescription. In his Answer, Respondent raised the following Special and Affirmative Defenses: "4. Petitioner's claim for refund if at all is still under verification/investigation by respondent Commissioner of Internal Revenue; 5. In an action for tax refund, petitioner must show that taxes were paid erroneously or collected illegally. Failure to sustain this burden is fatal to the action for refund; 6. Claims for refund are construed strictly against the claimants since they are in the nature of exemptions from taxation. ( Manila Electric Co . vs . Commissioner of Internal Revenue , 67 SCRA 351); 7. Taxes are presumed to have been paid and collected in accordance with law." The issues We are tasked to resolve are: 1. Whether or not the 20% final withholding tax derived from passive investments form part of gross receipts subject to the gross receipts tax; and 2. Whether or not Petitioner is entitled to the amount of P6,278,856.58 representing alleged overpaid gross receipts tax paid for the fourth quarter of 1996 on the basis of the evidence presented. As regards the first issue, this Court has already ruled in a number of cases involving claims for refund of overpaid gross receipts tax that the 20% final withholding tax on interest income should not form part of taxable gross receipts. As aptly cited by Petitioner, in the case of Asian Bank Corporation vs. Commissioner of Internal Revenue, (CTA Case No. 4720) this Court ruled: "We agree with the petitioner that the 20% final withholding tax on its interest income should not form part of its taxable gross receipts. xxx xxx xxx This conclusion is in accord with the interpretation of the Supreme Court in the case entitled Collector of Internal Revenue vs. Manila Jockey Club, 108 Phil. 821, as quoted by this Court in disposing of a similar issue in the case entitled Compaia Maritima vs. Acting Commissioner of Internal Revenue, CTA Case No. 1426 dated November 14, 1996, thus: In the second place, the highest tribunal of the land interpreted the term: "gross receipts" to mean all receipts of a taxpayer excluding those which have been especially earmarked by law or regulation for the government or some person other than the taxpayer. Thus, it was held: ". . . . The Government could not have meant to tax as gross receipt of the Manila Jockey Club the % which it directs same Club to turn over to the Board of Races. The latter being a Government institution, there would be double taxation, which should be avoided unless the statute admits of no other interpretation. In the same manner, the Government could not have intended to consider as gross receipt the portion of the funds which it directed the Club to give, or know the Club would give, to winning horses and Jockeys admitted 5%. It is true that the law says that out of the total wager funds 12% shall be set aside as the 'commission' of the track owners but the law itself takes official notice, and virtually approves or directs payment of the portion that goes to owners of horses as prized and bonuses of jockeys, which portion is admittedly 5% out of the 12% commission. As it did not at that time contemplate the application of 'gross receipts' revenue principle, the law in making a distribution of the total wager funds, took no trouble of separating one item from the other; and for convenience, grouped three items under one common denomination. "Needless to say, gross receipts of the proprietor of the amusement place should not include any money which although delivered to the amusement place has been especially earmarked by law or regulation for some person other than the proprietor." (The Commissioner of Internal Revenue vs. Manila Jockey Club, Inc. G.R. Nos. L-13890 and L-13887, June 30, 1960) It is to be noted that, under Section 260 of the Tax Code, a race-track is subject to an amusement tax of 20% of its gross receipts and the term 'gross receipts' embraces all the receipts of the proprietor, lessee, or operator of the amusement place." Notwithstanding the broad and all-embracing definition of the term "gross receipts" found in our amusement tax law, our Supreme Court did not adopt a literal interpretation of the said term in the case of the Manila Jockey Club, Inc., supra." In fact this aforequoted ruling was affirmed by the Court of Appeals in the case entitled Commissioner of Internal Revenue vs. Citytrust Investment Philippines, Inc., CA G.R. SP No. 52707, dated August 17, 1999 when it ruled, thus: "Accordingly, the 20% final tax withheld against the Respondent's passive income was already remitted to the Bureau of Internal Revenue for the corresponding year that the same was actually withheld and considered final withholding taxes under Section 50 of the same code. Indubitably, to include the same to the Respondent's gross receipts for the year 1994 would be to tax twice the passive income derived by the Respondent for the said year, which would constitute double taxation anathema to our taxation laws." With reference to the second issue, Petitioner presented the following: Exhibits Description A, A-1 to A-3 Certification of BSP dated April 13, 1999 showing the purchase of Petitioner of treasury bills A-4, A-6 Monthly remittance returns of income taxes withheld A-5, A-7 Credit advice to the Bureau of Treasury supporting Exhs. A-4 and A-6 B-1 to B-333 Purchase order slips covering the fourth quarter of 1996 C-1 to C-59 Monthly statements of Petitioner with the BSP for the periods Oct., Nov. & Dec. 1996 D-1 to D-58 Managers' Checks issued in favor of Petitioner for the fourth quarter of 1996 E-1 to E-140 Journal reports of Petitioner for the fourth quarter of 1996 F-1 to F-19 Reconciliation reports G-1 to G-2441 General ledger interface reports covering the fourth quarter of 1996 H-1 to H-67 Inventory reports I-1 to I-355 Sales Order slips documents J-1 to J-453 Daily trial balances for the three months of the last quarter of 1996 K-1 to K-56 Summary of tax-paid income L, L-1 to L-9 Transactions' Flow and Accounting M-1 to M-95 Bank statements of Petitioner S, S-1, S-1-a & S-2 Report submitted by the Joaquin Cunanan & Co. N, O, P, Q Quarterly percentage tax returns R, R-1 to R-22 Corporation Annual Income Tax Return with accompanying financial statements for the year 1996 T, T-1 & T-2 Written claim for refund of Petitioner dated 7/13/98 addressed to Respondent Counsel for the Respondent, on the other hand, submitted this case for decision without presenting any evidence (p. 106, CTA Records). After examining the evidence adduced by Petitioner this Court finds a refund to be in order but in a reduced amount. According to Joaquin Cunanan & Co., the independent auditing firm engaged by Petitioner and commissioned by the Court to conduct an examination relative to the instant claim for refund, Petitioner's claim for refund on excess payment of GRT for the fourth quarter of 1996 is correct except for the total amount of only P657,421.46 which was not supported by documents and other related accounting records (Exh. S), to state: Date Investment Income Excess GRT Payment Oct. and Nov. P192,812.50 P1,156.88 Oct., Nov. and Dec. 6,820,211.85 37,951.11 Oct. 23 and 25 12,812,335.81 128,123.36 Oct, Nov. and Dec. 49,671,071.01 490,190.11 P69,496,431.17 P657,421.46 ============ =========== However, a review of Petitioner's supporting documents revealed that out of the P5,621,435.12 overpaid gross receipts tax allegedly verified by Joaquin Cunanan & Co., only the amount of P692,172.78 was duly substantiated. In order to be entitled to a refund of overpaid gross receipts tax based on the Asian Bank decision, Petitioner must sufficiently prove: a.) that the 20% final tax on its passive income was actually withheld; b.) that the 20% final withholding tax formed part of its gross receipts tax base on passive income; and c.) that it actually paid the gross receipts tax due on gross receipts from passive income inclusive of the 20% final withholding tax. For purposes of clarity, We shall tackle the foregoing requirements separately. First, Petitioner must prove that the 20% final tax on its passive income was actually withheld. In its 1996 4th quarter Summary of Tax-Paid Income (Exhs. K-1 to K-56, inclusive), Petitioner indicated that it derived gross receipts from passive income consisting of: 1) Interest Income from Interbank Loans, Floating Rate Treasury Notes (FRTN) short, medium & long term, Treasury Bills, Trading Account Securities (TAS) Private Securities short & long term; and 2) Trading Gain from Government Securities on which the alleged 20% final tax withheld therefrom was allegedly further subjected to 5% GRT as follows: 4th quarter 1996 Income Gross Amount 20% Final Tax 5% GRT Paid Interest Income on: Interbank Loans-Tax Paid P166,149,532.99 P33,229,906.60 P1,661,495.33 Invest.- FRTN-Tax Paid-ST 108,214,693.25 21,642,938.65 1,082,146.93 Invest.- FRTN-Tax Paid-MT 1,004,431.87 200,886.37 10,044.32 Invest.- FRTN-Tax Paid-LT 12,476,315.97 2,495,263.19 124,763.16 Invest.-T-Bills-Tax Paid 283,811,510.91 56,762,302.18 2,838,115.11 TAS-Priv. Sec.-Tax Paid-ST 5,122,198.90 1,024,439.78 51,221.99 TAS-Priv. Sec.-Tax Paid-LT 739,395.37 147,879.07 7,393.95 Trading Gain-GS Tax Paid 11,394,678.13 2,278,935.63 113,946.78 Total P588,912,757.39 P117,782,551.48 P5,889,127.57 ============ ============ ========== Based on the evidence on record, Petitioner failed to prove the actual withholding of the 20% final tax on its Interest Income from Interbank Loans, Floating Rate Treasury Notes (FRTN) short, medium & long term and Trading Account Securities (TAS)-Private Securities short & long term. The amounts of 20% final withholding taxes indicated in the purchase order slips submitted by Petitioner related to its purchases of floating rate treasury notes and private securities for the last quarter of 1996 (Exhs. B-5, B-10, B-26, B-40 to B-42, B-47 to B-51, B-53 to B-56, B-61, B-68 to B-74, B-76 to B-78, B-82 to B-88, B-104, B-105, B-109 to B-117, B-119, B-124 to B-133, B-135, B-139, B-140, B-146, B-147, B-151, B-152, B-154 to B-157, B-158, B-164, B-174, B-199, B-202, B-217, B-226, B-241, B-250 to B-254, B-256 to B-264, B-270 to B-273, B-285 to B-286, inclusive) should have been corroborated by certificates of final taxes withheld from the issuers of the said investment securities. With respect to its Interest Income from Interbank Loans, Petitioner likewise failed to present certificates of final taxes withheld from the borrowing banks showing the amount of income payment and the corresponding 20% final withholding tax. On its direct purchases of T-bills from Bangko Sentral ng Pilipinas, Petitioner presented the following to prove the withholding of the 90% final tax: Exhibits 1.) BSP Certification of Final Taxes A to A -3 Withheld on petitioner's T-bills Purchases for the year 1996 2.) Purchase order slips B-14, B-31, B-33, B-34, B-64, B-95 to B-97, B- 183, B-188, B-198, B-223, B-242, B-246, B-282, B- 288, B-327, B-328, B-329 3.) Monthly Bank Statements from BSP- October, November & Dec., 1996 C-1 to C-59 4.) Testimony of Mrs. Jeanette Siguenza, Bank Officer III, BSP Treas. Dept. (TSN, May 26, 1999, pp. 11 - 21) However, while the net purchase prices (inclusive of the 20% final tax) indicated in the above enumerated purchase order slips pertaining to Petitioner's direct purchases of T-bills from BSP for the last quarter of 1996 tallied with the amounts charged against Petitioner's demand deposit account with BSP (Exhs. C-1 to C-59, inclusive) for the same period, we give more weight to the Certification issued by BSP to Petitioner (Exhs. A to A-3, inclusive) which reflected Petitioner's date of purchase of the T-bills, face amount (in millions), amount of interest (discount), 20% final tax withheld on the interest (discount) and date of remittance to the BIR of the 20% final withholding tax. The amounts of 20% final withholding taxes shown in the BSP Certification were even confirmed by Mrs. Jeanette Siguenza, Bank Officer of the BSP Treasury Department during the May 26, 1999 hearing of this case (TSN, May 26, 1999, pp 11-21). Unfortunately, though, only the amount of P 11,710,879.20 in final withholding taxes (Annex A) was verified to have been actually withheld on interest income (amortized discount) on T-bills of P58,554,396.00 where the corresponding purchases on the said interest income have the same date of purchase, par value and purchase price as shown in the Inventory Reports (Daily Accrual Reports) for October 20, November 20 & December 20, 1996 (Exhs. H-6, H-7, H-28 & H-48) and in the BSP Certification (Exhs. A to A-3, inclusive). The interest accrual (amortized discount) of P58,554,396.00 (inclusive of the 20% final tax) was also traced to Petitioner's 1996 4th quarter Summary Of Tax-Paid Income (Exhs. K-17, K-23 & K-32) and General Ledger Interface Reports (G-1 to G-2441, inclusive). As to the interest income on T-bills purchased from other banks, Petitioner presented the following to prove actual payment of the 20% final tax: Exhibits 1.) Purchase Order Slips B-1 to B-4, B-6 to B-9, B-11 to B-13, B-15 to B-25, B-27 to B-30, B-32, B- 35 to B-39, B-43 to B-46, B-52, B-57 to B-60, B-62, B-63,B-65, B-66, B-67, B-75, B-79 to B-81, B-89 to B-94, B- 98 to B-103, B-106 to B-108, B-118, B-121 to B-123, B-136 to B-138, B- 141 to B-145, B-148 to B-150, B-153, B-159 to B-163, B-165 to B-173, B- 175 to B-182, B-184 to B-187, B-189 to B-197, B-200, B-201, B-203 to B- 207, B-209 to B-216, B-218, B-219 to B-22, B-224, B-225, B-227 to B-240, B-243 to B-245, B-247 to B-249, B- 265 to B-269, B-275 to B-281, B-283, B-284, B-287, B-289 to B-297, B-299 to B-326, B-330 to B-333, inclusive 2.) Monthly bank statement of BPI Family Bank from petitioner -October, Nov. & Dec., 1996 M-1 to M-95, inclusive After examining the above documents, We find that Petitioner was able to prove that the 20% final taxes of P2,080,783.04 was actually withheld on interest income of P10,403,915.19 on T-bills purchased from BPI Family Bank (Annex B) traced to Petitioner's 1996 4th quarter Summary Of Tax-Paid Income (Exhs. K-20, K-21, K-27, K-28, K-35, K-36), General Ledger Interface Reports (Exhs. G-1 to G-2441, inclusive), purchase order slips (Exhs. B-1, B-3, B-4, B-11, B-16, B-22, B-24, B-35, B-37, B-46, B-75, B-102, B-122, B-169, B-170, B-182, B-275, B-287, B-290, B-330) and BPI Family Bank monthly bank statements with Petitioner (Exhs. M-12, M-17, M-18, M-33, M-36, M-37, M-43, M-66, M-72, M-78, M-81, M 85, M-87, M-92, M-93, M-94). Petitioner's 1996 4th quarter purchases of T-bills from BPI Family Bank were supported by monthly bank; statements issued to BPI Family Bank by Petitioner for October, November & December, 1996. The net purchase prices (inclusive of the 20% final tax) indicated in the purchase order slips regarding Petitioner's 1996 4th quarter T-bills purchases from BPI Family Bank were found to be in agreement with the amounts credited to the account of BPI Family Bank with Petitioner for the same period. And since the T-bills were purchased from a secondary or tertiary market, i.e. banks/financial institutions other than the Bureau of Treasury/Bangko Sentral ng Pilipinas, Petitioner's monthly bank statements to BPI Family Bank together with the purchase order slips can sufficient proofs of payment of the 20% final tax lieu of the certificates of final taxes withheld considering that it can be gathered from the said documents that there was actual withholding of the 20% final tax. It should be noted, however, that in T-bill purchases from the primary market, i.e. from the Bureau of Treasury/Bangko Sentral ng Pilipinas, certificates of final taxes withheld are necessary to prove actual withholding of the 20% final tax. As regards the purchases of T-bills from BPI Family Bank, the purchase order slips alone submitted by Petitioner cannot be considered as valid proofs of payment of the 20% final tax. Anent the last item, Trading Gain-Government Securities, only the amount of P51,793.38 was verified to have been actually withheld on gain of P258,966.92 arising from the purchase and sale of T-bills purchased from BPI Family Bank (Annex C). To sum, the total amount of final taxes verified to have been actually withheld amounted to P13,843,455.62 on Petitioner's total interest income and trading gain from T-bills of P69,217,278.11, detailed as follows: 20% Final Tax Gross Amount Withheld Interest Income on T-Bills Purchased from BSP (primary market) Annex A P58,554,396 00 P11,710,879.20 Purchased from BPI Family Bank Annex B1 10,403,915.19 2,080,783.04 Sub-total: P68,958,311.19 P13,791,662.24 Trading Gain T-bills Annex C 258,966.92 51,793.38 Total: P69,217,278.11 P13,843,455.62 ============ =========== Accordingly, Our next concern is whether the 20% final withholding taxes of P13,843,455.62 formed part of its gross receipts tax base on passive income for the fourth quarter of 1996. A review of the accounting entries relative to Petitioner's total interest income and trading gain of P69,217,278.11 disclosed that the same was recorded at gross (inclusive of the 20% final tax) and that the corresponding 20% final tax P13,843,455.62 was separately recorded as shown in the General Ledger Interface Reports for the last quarter of 1996 (Exhs. G-1 to G-2441, inclusive). As certified by Joaquin Cunanan & Co. (Exh. S), Petitioner's recorded gross interest income and trading gain from passive investments (inclusive of the 20% final tax of P13,842,455.62) for the last quarter of 1996 formed part of its gross receipts tax base on passive income for the same period. Finally, inasmuch as the final taxes of P13,843,455.62 formed part of Petitioner's gross receipts tax base on passive income, it follows that the corresponding 5% GRT of P692,172.78 represents Petitioner's valid claim for refund of excess GRT payment for the 4th quarter of 1996 broken down as follows: 20% Final Tax 5% Excess Gross Amount Withheld GRT Payment Interest Income on T-Bills Purchased from BSP Annex A P58,554,396 00 P11,710,879.20 P585,543.96 Purchased from BPI Family Bank Annex B1 10,403,915.19 2,080,783.04 104,039.15 Sub-total: P68,958,311.19 P13,791,662.24 P689,583.11 Trading Gain T-bills Annex C 258,966.92 51,793.38 2,589.67 Total: P69,217,278.11 P13,843,455.62 P692,172.78 ============= ============ =========== WHEREFORE, in view of the foregoing, judgment is hereby rendered ordering the Respondent to REFUND or ISSUE a Tax Credit Certificate in the reduced amount of P692,172.78 representing overpaid gross receipts tax for the fourth quarter of 1996. The remaining amount claimed is DENIED for insufficiency of evidence. SO ORDERED. (SGD.) ERNESTO D. ACOSTA Presiding Judge I CONCUR: (SGD.) RAMON DE VEYRA Associate Judge Separate Opinions The majority opinion partially granted the claim for refund in the amount of P692,172.78 and denied the rest of the claim due to insufficiency of evidence. In conclusion, the majority upheld the ruling that the final withholding tax on certain passive income of a bank should be excluded from its gross receipts for purposes of computing the gross receipts tax. I humbly disagree with the aforementioned ruling primarily because this is based on this Court's decision in the case of Asian Bank Corporation vs. Commissioner of Internal Revenue, CTA Case No. 4720 promulgated on January 30, 1996. The decision in the Asian Bank case which established a precedent for cases having a similar issue, has as its legal basis Section 4(e) of Revenue Regulations No. 12-80 dated November 7, 1980 which states, thus: "Section 4. . . . (e) Gross receipts tax on banks, non-bank financial intermediaries, financing companies, and other non-bank financial intermediaries not performing quasi-banking activities. The rates of taxes to be imposed on the gross receipts of such financial institutions shall be based on all items of income actually received. Mere accrual shall not be considered, but once payment is received on such accrual or in cases of overpayment then the amount actually received shall be included in the tax base of such financial institutions, as provided hereunder." (Emphasis supplied) Note that in the Asian Bank case, said bank was being assessed for deficiency gross receipts tax of 5% for taxable year 1986 which at that time the aforequoted Section 4(c) of Revenue Regulations No. 12-80 had already been amended, superseded and omitted in the amendatory Revenue Regulations No. 17-84 dated October 12, 1984. In other words, the citation of Section 4(e) of Revenue Regulations No. 12-80 by Petitioner's counsel was erroneous in the sense that it misled this Court to adopt Petitioner's legal basis. The legal basis that should have been cited is Section 8(c) of Revenue Regulations 12-80 which became Section 7(c) of Revenue Regulations No. 17-84 which provides, thus: "Section 8. . . . (c) If the recipient of the above-mentioned items of income are financial institutions, the same shall be included as part of the tax base upon which the gross receipts tax is imposed." Petitioner's counsel purposely did not cite said section because certainly it won't be able to get a refund or tax credit for the alleged overpaid gross receipts tax for obvious reasons Section 4(e) of Revenue Regulations No. 12-80, as worded, is not a computation which is determinative of the amount to be used as basis of the 5% gross receipts tax. Rather, said Section is reflective of the method of accounting being adopted by the taxpayer, such as the cash receipts and disbursement method or the accrual method of accounting. Said methods of accounting comprise a set of rules for determining when and how to report income and deduction (Consolidated Mines, Inc. vs. Court of Tax Appeals, L-18843, August 29, 1974). Thus, under the cash receipts and disbursements method, income earned by the taxpayer is not included in gross income until received and expenses are not deducted until paid within the taxable year. And in the case of the accrual method, income is included in gross income when earned, whether received or not, and expenses are allowed as deductions when incurred although not paid (BIR Ruling No. 35-98, April 13, 1998). The 5% gross receipts tax under Section 120 of the Tax Code is collectible from all finance companies doing business in the Philippines from interests, discounts and all other items treated as gross income under the Tax Code. Accordingly, its income derived from investing the excess funds in short-term market placements through commercial banks constitute income, hence, subject to the 5% gross receipts tax under said section. The fact that it has been subjected to the 20% final withholding tax under Section 50(a) is immaterial. Besides, the withholding tax is imposed under Title II of the Tax Code while the finance tax is provided under Title V thereof (BIR Ruling No. 223, November 2, 1989). The fact that the same income is subjected to two (2) different kinds of taxes would not make such payments a case of double taxation. By quoting a superseded revenue regulation, Petitioner in the Asian Bank case, led this Court to believe that indeed the basis of the gross receipts tax is total gross receipts exclusive of the 20% final withholding tax deducted and withheld under Section 50(a) of the Tax Code. Section 7(c) of Revenue Regulations No. 17-84 clearly and categorically provides that the basis of such tax is inclusive of the final withholding tax. Section 2.57 of Revenue Regulations No. 2-98 implementing Republic Act No. 8424 also provides that the bases of the 5% gross receipts tax includes the 20% final withholding income tax deducted at source, to wit: "(A) Final Withholding Tax Under the final withholding tax system the amount of income tax withheld by the withholding agent constituted as a full and final payment of the tax rests primarily on the payor as a withholding agent. Thus, in case of his failure to withhold the tax or in case of under withholding, the deficiency tax shall be collected from the payor/withholding agent. The payee is not required to file an income tax return for the particular income. The finality of the withholding tax is limited only to the payee's income tax liability on the particular income. It does not extend to the payee's other tax liability on said income, such as when the said income is further subject to a percentage tax. For example, if a bank receives income subject to final withholding tax, the same shall be subject to a percentage tax." The High Court's decision in the case of Commissioner of Internal Revenue vs. The Manila Jockey Club, Inc., 108 Phils. 821, June 30, 1960, which was reaffirmed by the said Court in the case of Visayan-Cebu Terminal Co., Inc. vs. Commissioner of Internal Revenue, 13 SCRA 357, February 27, 1965 cannot be considered as precedent cases, hence, inapplicable to the two cases decided by this Honorable Court in the cases of Compaia Maritima vs. Acting Commissioner of Internal Revenue, CTA Case No. 1426 dated November 14, 1966 and Asian Bank Corporation vs. Commissioner of Internal Revenue, CTA Case No. 4720 dated January 30, 1996, for the following reasons: In the Manila Jockey Club, Inc. case, the Club was authorized to operate horse races in which betting was made through the sale of tickets to the public. The total amount of bets called "wager fund" were distributed pursuant to Executive Order No. 320 and Republic Act No. 309, as follows: 87% as dividends to holders of winning tickets 12 as "commissions" of the Manila Jockey Club, of which % was assigned to the Board on Races and 5% was distributed as prizes for owners of winning horses and authorized bonus for jockeys. According to the above-mentioned distribution of the "wager fund'', the then Collector of Internal Revenue assessed the Club on the whole amount of its ' commission" of 12. But since the Club had already paid the amusement tax based on its 7% share of the "commission", the amount assessable pertains only to the 5% for the period from November 1946 to October 1950. On various instances, the Club protested the proposed assessments and was sustained by the opinions of the Secretary of Justice rendered on three different occasions (Opinion No. 345, series of 1941; Opinion No. 249, series of 1952 and Opinion No. 340, series of 1955). Notwithstanding the opinions of the Secretary of Justice to the effect that the amount corresponding to the 5% was held only by the Club in trust for the owners of winning horses and authorized bonuses of jockeys, the then Collector of Internal Revenue demanded payment of amusement taxes for the period November 1946 to October 1950. Said demand letter was timely appealed to the Court of Appeals wherein a unanimous judgment was obtained reversing the Collector's stand on the matter. In the High Court, the position of the Secretary of Justice was sustained thereby upholding the Court of Tax Appeals' decision. Accordingly, gross receipts of the proprietor of the amusement place should not include any money which, although delivered to the amusement place was " especially earmarked " by law or legal rule and regulations for some persons other than the proprietor. Undeniably. they are money received by the racing club but they are money earmarked by law or regulations for winning horse owners and jockeys and never for a minute become the property of the race track. The same is true in the case of the % which the law directs the club to deliver to the Board on Races. The High Court therefore agrees with the stand of the Court of Tax Appeals that such funds representing 5% of the 12% "commissions" of the race track do not form part of the gross receipts, hence not subject to the amusement tax of 20%. The above-mentioned decision of the High Court was also applied in the case of Visayan Cebu Terminal Co., Inc. vs. Commissioner of Internal Revenue, 13 SCRA 357, Nos. L-19530 and L-19444, February 27, 1965. The legal issue involved in this case is the interpretation of the management contract entered into by and between the Bureau of Customs and Visayan Cebu Terminal Co., Inc. whereby the latter as contractor was appointed the sole manager of the Arrastre Service at the Port of Cebu City. In the said Management Contract, it was further agreed and understood that in consideration of the rights and privileges granted the Contractor for the management of the Arrastre Service, the Bureau of Customs shall receive twenty eight (28%) percent of the total monthly gross income derived from whatever source in connection with the operations of the Arrastre Service, payable within ten (10) days of the succeeding month. The main legal issue involved in this case is whether or not the gross receipts corresponding to the 28% of the total gross income of the Service Contractor delivered to the Bureau of Customs within ten (10) days of the following month should form part of the gross receipts subject to 3% contractor's tax under Section 191 of the Tax Code. The Court of Tax Appeals ruled in favor of the petitioner, holding the view that the said 28% payment by the Arrastre Contractor based on its monthly gross income should not form part of the gross receipts subject to 3% contractors tax and that paragraph 23 of the said Management Contract can legally be construed as a " regulation ". As the learned trial court has aptly observed: ". . . the government could not have intended to consider as gross receipts the 28% that went to one of its institutions, the Bureau of Customs, and thereby collect percentage tax on it from petitioner. To hold petitioner liable for the payment of percentage tax is unquestionably unjust and not contemplated by Section 191 of the Tax Code." All the above-mentioned decisions of the High Court made specific reference to gross receipts which are especially " earmarked by law or legal rule or regulation " as not forming part of the taxable gross receipts for purposes of the gross receipts tax under the Tax Code. For this purpose, it is pertinent to define the word "earmark" as a mark put upon a thing to distinguish it from another. Originally and literally, a mark put upon the ear, a mode of marking sheep and other animals. Property is said to be earmarked when it can be identified or distinguished from other property of the same nature. To set apart from others (Black's Law Dictionary, 6th Edition, p. 508). In the case of the Manila Jockey Club, Inc. Executive Order No. 320 and Republic Act No. 309 made the specific "earmarking" for distribution of the total wager fund to different persons other than the proprietor. The same is true in the case of Visayan Cebu Terminal Co., Inc. where the specific earmarking of the 28% of the total monthly gross income to be delivered to the Bureau of Customs by the Contractor was provided in paragraph 23 of the Management Contract. Such specific earmarking of the twenty percent (20%) final income tax as not includible in the gross receipts for purposes of the gross receipts tax was not provided by any law or legal rule or regulation, hence the non-applicability of the above-cited High Court decisions to the Asian Bank Corporation case. This legal observation is also in point in the case of Compaia Maritima case where the non-inclusion of the 10% reserve from the total cash collection to avoid claim for refund on freight and passengers tickets not taken is not provided by any law or legal rule or regulation. In the Asian Bank Corporation case, petitioner bank alleges that subjecting the gross receipts to the 20% final withholding income tax and later to the 5% gross receipts tax is not only oppressive and obnoxious but even a confiscatory form of double taxation. Double taxation has been defined "as the taxing of the same item or piece of property twice to the same person, or taxing it as the property of one person and again as the property of another, but this does not include the imposition of different taxes concurrently on the same property or income (e.g. federal and state income taxes), nor the taxation of the same piece of property to different persons when they hold different interests in it or when it represents different values in their hands, as when both the mortgagor and mortgagee of property are taxed in respect to their interests in it, or when a tax is laid upon the profits of the corporation and also upon the dividends paid to its stockholders" (Black's Law Dictionary, 6th Edition, p. 491). This acceptable form of double taxation is reflected in BIR Ruling No. 223 dated November 2,1989, thus: "The 5% gross receipts tax under Section 120 of the Tax Code is collectible on all finance companies doing business in the Philippines from interests, discounts, and all other items treated as gross income under the Tax Code. Accordingly, your income derived from investing the excess funds in short-term market placements through commercial banks constitutes income hence, subject to the 5% gross receipts tax under said Section. The fact that it has been subjected to the 20% final withholding income tax under Section 50(a) is immaterial. Besides, the withholding tax is imposed under Title II of the Tax Code while the finance tax is provided under Title V thereof." (BIR Ruling No. 223, November 2, 1989) For as long as the basis for the claim for refund or tax credit certificate is based on the non-inclusion of the amount representing the final withholding income tax under Section 50(a) as part of the gross income to gross receipts tax, this dissenting opinion will stand. For purposes of the amusement tax under Section 260 of the Tax code, the term 'gross receipts' embraces 'all the receipts' of the proprietor, lessee, or operator of the amusement place. The words 'all the receipts refer to the total amount of cash received which becomes part of the funds of the taxpayer and does not include any money which has been specially earmarked by any law or legal rule or regulation for some other person other than the proprietor, lessee or operator of the amusement place. Receipts means actually received (Philippine Long Distance Telephone Co., vs. Collector of Internal Revenue, G.R. No. L-3222, January 21, 1952) for itself and not for others, for otherwise they would not be receipts (Manila Jockey Club, Inc. vs. Collector of Internal Revenue, CTA Case No. 205, April 15, 1958; Jai Alai Corporation of the Philippines vs. Araneta, CTA Case No. 108, July 31, 1956 [Annotated, NIRC by Commissioner Jose Araas, 1988 Edition, p. 687). WHEREFORE, in view of the foregoing, I hereby register my dissent to the majority opinion and vote for the denial of the claim for refund for lack of legal basis. (SGD.) AMANCIO Q. SAGA Associate Judge ANNEX A SCHEDULE OF ALLOWABLE REFUND OF OVERPAID GROSS RECEIPTS TAX FOR THE FOURTH QUARTER OF 1996 PER COURT'S FINDINGS 1.) Interest Income Accruals (Discount Amortization) on on Purchases-of T-Bills from BSP-GL Account Code 5400700 T-Bills Purchases from BSP Exhibits A, H-6, H-7, H-28, H-48 TX# 96AT67A0 96BC16A0 96BC59A0 96BM97A0 Set Date 3/13/96 4/23/96 4/24/96 5/29/96 Par Value P1,450,000,000.00 100,000,000.00 P100,000,000.00 350,000,000.00 Purchase Price 1,276,982,992.70 88,982,485.30 89,012,847.50 315,764,149.40 Discount 173,017,007.30 11,017,514.70 10,987,152.50 34,235,850.60 20% Final Withholding Tax 34,603,401.46 2,203,502.94 2,197,430.50 6,847,170.12 Net Purchase Price 1,311,586,394.16 91,185,988.24 91,210,278.00 322,611,319.42 Accrual Overpaid Exhibits Date Interest Accruals-T-Bills Purchases from BSP Total 20% Final Tax 5% GRT K-17,G-39 to G-41 01-Oct-96 P480,254.50 33,994.00 P33,994.00 117,453.00 P665,695.50 P133,139.10 P6,656.96 K-17, G-53, G-55, G-58 02-Oct-96 480,588.00 34,019.00 34,019.00 117,537.00 666,163.00 133,232.60 6,661.63 K-17, G-102, G-104, G-107 03-Oct-96 480,921.50 34,043.00 34,043.00 117,621.00 666,628.50 133,325.70 6,666.29 K-17, G-155, G-157, G-160 04-Oct-96 1,444,794.50 102,277.00 102,277.00 353,363.50 2,002,712.00 400,542.40 20,027.12 K-17, G-201, G-203, G-206 07-Oct-96 482,284.50 34,142.00 34,142.00 117,957.00 668,525.50 133,705.10 6,685.26 K-17, G-249, G-251, G-254 08-Oct-96 482,603.00 34,166.00 34,166.00 118,041.00 668,976.00 133,795.20 6,689.76 K-17 09-Oct-96 482,966.00 34,191.00 34,191.00 118,125.00 669,473.00 133,894.60 6,694.73 K-17, G-297, G-299, G-302 10-Oct-96 483,299.50 34,216.00 34,216.00 118,209.00 669,940.50 133,988.10 6,699.41 K-17, G-354, G-356, G-359 11-Oct-96 1,451,928.50 102,797.00 102,797.00 355,138.00 2,012,660.50 402,532.10 20,126.16 K-17, G-408, G-410, G-413 14-Oct-96 44,662.50 34,316.00 34,316.03 118,545.00 671,839.50 134,367.90 6,718 40 K-17, G-455, G-457, G-459 15-Oct-96 488,010.50 34,340.00 44,340.00 118,636.00 685,326.50 137,065.30 6,853.27 K-17, G-490, G-492, G-495 16-Oct-96 485,344.00 34,365.00 34,365.00 118,716.50 672,790.50 134,558.10 6,727.91 K-17, G-531, G-533, G-536 17-Oct-96 485,692.00 34,390.00 34,390.00 118,804.00 673,276.00 134,655.20 6,732.76 K-17, G-582, G-584,G-587 18 Oct 96 1,459,120.50 103,321 00 103,321.00 356,919.50 2,022,682.00 404,536.40 20,226.82 K-17, GK-628, G-630, G-633 21-Oct-96 487,069.50 34,490.00 34,490.00 119,143.50 675,193.00 135,038.60 6,751.93 K-17, G-668, G-670, G-673 22-Oct-96 487,403.00 34,515.00 34,515.00 119,227 50 675,660.50 135,132 10 6,755.61 K-17, G-740, G-714, G-716 24-Oct-96 463.389.00 34,585.00 34,565.00 119,402.50 676,641.50 135,328.30 6,766.42 K-17, G-740, G-742, G-743, G-745 26-Oct-96 489,476.50 34,667.00 34,667.00 119,742.00 678,552.50 135,710.50 6,785.53 K-17, G-782, G-784, G-785, G-787 29-Oct-96 489,839.00 34,691.00 34,691.00 119,833.00 675,054.00 135,810.80 6,790.54 K-17, G-829, G-831, G-832, G-834 30-Oct-95 490,172.50 34,718.00 34,718.00 119,917.00 6,9525.50 135,905.10 6,795.26 K-17, G-806, G-903, G-868, G-904, G-869 31-Oct-96 490,535.00 34,742.00 34,742.00 120,001.00 680.020.00 136,004.00 6,800.20 Sub-total P 926.985.00 936,955.00 P3,202,332.00 18,161.336.00 P18,161,336.00 P3,632,267.20 P181,613.35 K-23, G-915, G-917, G-918, G-920 04-N0v.-96 P1,965,591.00 139,224.00 P139,224.00 480,879.00 P2,724,918.00 P644,983.60 P27,249.18 K-23, G-954, G-956, G-957, G-595 05-Nov-96 492,275.00 34,869.00 34,869.00 120,435.00 682,448.00 136,489.60 8,824.48 K-23,G-996, G-998, G-999, G-1001 06-Nov-96 492,623.00 34,895.00 34,895.00 120,522.50 682,935.50 136,587.10 6,829.36 K-23, G-1036, G-1038, G-1039, G-1041 07-Nov-96 492,971.00 34,921.00 34,921.00 120,610.00 683,423 00 136,684.60 6,834.23 K-23, G-1064, G-1066, G-1067, G-1069 08-Nov-96 1,481,030.00 104,915.00 104,915.00 362,355.00 2,053,215.00 410,643.00 20,532.15 K-23, G-1098, G-1100, G-1101, G-1103 11-Nov-96 494,377.50 35,023.00 35,023.00 120,956 50 685,380.00 137,076.00 6,853.80 K-23, G-1132, G-1134, G-1135, G-1137 12-Nov-96 494,725.50 35,049.00 35,049.00 121,047.50 685,871.00 137,174.20 6,858.71 K-23, G-1170, G-1172, G-1173, G-1175 13-Nov-96 495,088.00 35,075.00 35,075.00 121,135.00 686,373.00 137,274.60 6,863.73 K-23, G-1225, G-1223, G-1222, G-1220 14-Nov-96 495,436.00 35,100.00 35,100.00 121,219.00 686,855.00 137,371.00 6,868.55 K-23, G-1239, G-1241, G-1242, G-1244 15-Nov-96 1,488,439.50 105,455.00 105,455.00 364,192.50 2,063,542 00 412,708.40 20,635.42 K-23, G-1322, G-1324, G-1325, G-1327 18-Nov-96 496,857.00 35,203.00 35,203.00 121,572.50 688,835.50 137,757.10 6,888.36 K-23, G-1367, G-1352, G-1368 19-Nov-96 497,205.00 35,230.00 35,230.00 121,563.50 689,228.50 137,845.70 6,892.29 K-23, G-1389, G-1391, G-1392, G-1394 20-Nov-96 497,567.00 35,255.00 35,255.00 121,747.50 689,824.50 137,964.90 6,898.25 K-23, G-1433, G-1435, G-1436, G-1438 21-Nov-96 497,915.50 35,281.00 35,281.00 121,838.50 690,316.00 138,063.20 6,903.16 K-23, G-1470, G-1472, G-1473, G-1475 22-Nov-96 498,278.00 35,307.00 35,307.00 121,926.00 690,818.00 138,163.60 6,908.18 K-23, G-1507, G-1509, G-1510, G-1512 25-Nov-96 499,713.50 35,411.00 35,411.00 122,283.00 692,818.50 138,563.70 6,928.19 K-23, G-1579, G-1581, G-1582, G-1584 27-Nov-96 500,061.50 35,437.00 35,437.00 122,367.00 693,302.50 138,660.50 6,933.03 K-23, G-1616, G-1618, G-1619, G-1621 28-Nov-96 500,424.00 35,464.00 35,464.00 122,461.50 693,813.50 138,762.70 6,938.14 K-23, G-1672, G-1670, G-1669,G-1667 29-Nov-96 1,001,921.00 71,005.00 71,005.00 245,182.00 1,389,113.00 277,822.60 13,891.13 Sub-total P13,382,499.00 948,119.00 P948,119 00 3,274,293.50 P18,553,030.50 P3,710.606.10 P185,530.31 K-32, G-1687, G-1689, G-1690, G-1692 02-Dec-96 P1,003,356.50 71,111.00 P71,111.00 245,542.50 P1,391,121.00 P278,224.20 P13,911.21 K-32, G-1728, G-1730, G-1731, G-1733 03-Dec-96 502,222.00 35,594.00 35,594.00 122,906.00 696,316.00 139,263.20 6,963.16 K-32, G-1772, G-1774, G-1775, G-1777 04-Dec-96 502,584.50 35,621.00 35,621.03 122,993.50 696,820.00 139,364.00 6,968.20 K-32, G-1813, G-1815, G-1816, G-1818 05-Dec-95 502,947.00 35,647.00 35,647.00 123,084.50 697,325.50 139,465.10 6,973.26 K-32, G-1840, G-1842, G-1843, G-1845 06-Dec-96 1,560,987.00 107,100.00 107,100.00 369,792.50 2,144,979.50 428,995.90 21,449.80 K-32, G-1876, G-1878, G-1879, G-1881 09-Dec-96 504,397.00 35,753.00 35,753.00 123,445.00 699,348.00 139,869.50 6,993.48 K-32, G-1922, G-1924, G-1926 10-Dec-96 504,759.50 35,780.00 35,780.00 123,536.00 699,855.50 139,971.10 6,993.56 K-32, G-1962, G-1964, G-1965, G-1967 11-Dec-96 505,107.50 35,806.00 35,806.00 123,623.50 700,343.00 140,068.50 7,003.43 K-32, G-1995, G-1997, G-1958, G-2000 12-Dec-96 505,484.50 35,832.00 35,832.00 123,714.50 700,863.00 140,172.50 7,008.63 K-32 13-Dec-96 505,484.50 35,832.00 35,832.00 123,714.50 700,863.00 140,172.60 7,008.63 K-32, G-2038, G-2040, G-2041, G-2043 16-Dec-96 1,519,760.50 107,737.00 107,737.00 371.959.00 2,107,193.50 421,438.70 21,071.94 K-32, G-2082,G-2084,G-2085,G-2087 17-Dec-96 507,311.50 35,966.00 35,966.00 124,169.50 703,413.00 140,632.63 7,034.13 K-32, G-2107, G-109, G-1110, G-1112 18-Dec-96 507,674.00 35,992.00 35,992.00 124,257.00 703,915.00 140,783.00 7,039.15 K-32, G-2150, G-2152, G-2153, G-2155 19-Dec-96 508,036.50 36,019.00 36,019.00 124,351.50 704,426.00 140,885.20 7,044.26 K-32,G-2206,G-2204,G-2203,G-2201 20-Dec-96 1,526,328.00 108,218.00 108,216.00 373,59700 2,116,361.00 423,272.20 21,163.61 K-32, G-2271, G-2273, G-2274, G-2276 23-Dec-96 509,515.50 36,127.00 36,127.00 124,715.50 706,485.00 141,297.00 7,064.85 K-32, G-2312, G-2314, G-2315, G-2317 24-Dec-96 1,020,133.00 72,333.00 72,333.00 249,707.50 1,414,506.50 282,901.30 14,145.07 K-32, G-2356, G-2358, G-2359, G-2361 26-Dec-96 510,617.50 36,207.00 36,207.00 124,992.00 708,023.50 141,604.70 7,080.24 K-32, G-2400, G-2402, G-2403, G-2405 27-Dec-96 2,558,655.50 181,442.00 181,442.00 626,332.00 3,547,871.50 709,574.30 35,478.72 Sub-total P15,765,362.00 1,114,117.00 P1,114,117.00 3,846,433.50 P21,840,029.50 P4,368,005.90 P218,400.30 Total P30,074,846.00 2,999,201.00 P5,264,568.00 25,282,063.00 P58,554,396.00 P11,710,879.20 P585,543.96 =============================================================================================== ANNEX B 2.) Interest Income Accruals (Discount Amortization) Purchases of T-Bills from BPI Family Bank - GL Account Code 5400700 T-Bills Purchases from BPI Family Bank Exhibits B-330, M-37 B-330, M-37 B-290, M-43 B-287, M-36 B-275, M-37 TX # 96CP89 96CP90 96CR54 96CR89 96CS37 Set Date 10/1/96 10/1/96 10/04/96 10/08/96 10/09/96 Par Value P60,000,000.00 P145,000,000.00 P6,000,000.00 P20,000,000.00 P3,000,000.00 Purchase Price 57,747,834.46 139,228,773.95 5,819,592.63 19,462,983.84 2,920,527.18 Discount 2,252,165.54 5,771,226.05 180,407.37 537,016.16 79,472.82 20% Final Tax 450,433.11 1,154,245.21 36,081.47 107,403.23 15,894.56 Net Purchase Price 58,198,267.57 140,383,019.16 5,855,674.10 19,570,387.07 2,936,421.74 Accrual Overpaid Exhibits Date Interest Accruals-T-Bills Purchases from BPI Family Bank Total 20% Final Tax 5% GRT K-20, K-21, G-16 01-Oct-96 P18,069.12 P43,647.75 P P P P61,716.87 12,343.37 617.17 K-20, K-21, G-84 02-Oct-96 18,080.40 43,675.45 61,755.85 12,351.17 617.56 K-20, K-21, G-132 03-Oct-96 18,091.80 43,701.55 61,793.35 12,358.67 617.93 K-20, K-21, G-184, G-191 04-Oct-96 54,343.80 131,372.85 5,473.35 191,190.00 38,328.00 1,911.90 K-20, K-21, G-230, G-235 07-Oct-96 18,137.40 43,811.75 1,826.76 63,775.91 12,755.18 637.76 K-20, K-21, G-278, G-284, G-285 08-Oct-96 18,148.80 43,840.75 1,827.90 1,844.84 65,662.29 13,132.46 656.62 K-20, K-21 09-Oct-96 18,159.60 43,866.85 1,829.04 933.85 910.50 65,699.84 13,139.97 657.00 K-20, K-21, G-331, G-332 10-Oct-96 1,830.18 934.23 911.04 3,675.45 735.09 36.75 K-20, K-21, G-387 11-Oct-96 5,497.44 2,806.22 2,736.60 11,040.26 2,208.05 110.40 K-20, K-21, G-440 14-Oct-96 1,834.80 936.57 913.32 3,684.69 736.69 36.85 K-20, K-21 15-Oct-96 1,835.94 937.15 913.92 3,687.01 737.40 36.87 K-20, K-21, G-518 16-Oct-96 1,837.08 937.76 914.46 3,689.30 737.86 36.89 K-20, K-21, G-557, G-558 17-Oct-96 1,838.22 938.31 915.06 3,691.59 738.32 36.92 K-20, K-21, G-610, G-611, G-612 18-Oct-96 5,521.74 2,818.54 2,748.57 11,088.85 2,217.77 110.89 K-20, K-21, G-651, G-652 21-Oct-96 1,842.84 940.68 917.34 3,700.86 740.17 37.01 K-20, K-21, G-693, G-694 22-Oct-96 1,844.04 941.29 917.91 3,703.24 740.65 37.03 K-20 K-21 26-Oct-96 1,846.38 (941.85) (918.51) (13.98) (2.80) (0.14) Sub-Total 163,030.92 P393,916.95 P36,685.71 P14,027.59 P11,880.21 P619,541.38 P123,908.28 P6,195.41 T-Bills Purchases from BPI Family Bank Exhibits B-182,M-12 B-182, M-12 B-170, M-17 B-170, M-17 B-169, M-18 TX # 96CZ78 96CZ79 96DA45 96DA46 96DA66 Set Date 11/12/96 11/12/96 11/15/96 11/15/96 11/15/96 Par Value P848,090,000.00 P173,000,000.00 P323,350,000.00 P247,000,000.00 P14,000,000.00 Purchase Price 825,386,149.05 169,489,680.46 307,800,272.25 237,840,180.07 13,480,819.93 Discount 22,703,850.95 3,510,319.54 15,549,727.75 9,159,819.93 519,180.07 20% Final Withholding Tax 4,540,770.19 702,063.91 3,109,945.55 1,831,963.99 103,836.01 Net Purchase Price 829,926,919.24 170,191,744.37 310,910,217.80 239,672,144.06 13,584,655.94 Accrual Exhibits Date Interest Accrual - T-Bills Purchases from BPI Family Bank K-27, K-28, G-1161, G-1162 12-Nov-96 P260,039.66 P53,753.69 P P P K-27, K-28, G-1198 13-Nov-96 256,036.88 53,785.70 K-27, K-28, G-1204 14-Nov-96 148,687.98 (53,785.70) K-27, K-28, G-1267, G-1270, G-1312, G-1351 15-Nov-96 510,452.45 292,422.54 226,373.28 17,113.19 K-27, K-28, G-1349 18-Nov-96 170,368.54 97,596.73 75,552.36 4,285.12 K-27, K-28, G-1359 19-Nov-96 164,006.34 97,658.17 75,601.76 4,285.12 K-27, K-28, G-1418, G-141920 Nov-96 128,052.81 97,722.84 75,648.69 4,287.78 K-27, K-28, G-1459, G-146021 Nov-96 128,052.81 97,781.04 75,698.09 4,290.58 K-27, K-28, G-1496, G-149722 Nov-96 114,333.83 97,845.71 75,745.02 4,293.24 K-27, K-28, G-1634 28-Nov-96 K-27, K-28, G-1643 29-Nov-96 Sub-Total P1,880,114.29 P53,753.69 P781,027.03 P604,619.20 P38,555.03 Exhibits B-122, M-33 TX # 96DD62 Set Date 11/28/96 Par Value 197,000,000 00 Purchase Price 188,346,023.43 Discount 8,653,976.57 20% Final Withholding Tax 1,730,795.31 Net Purchase Price 190,076,818.74 Accrual Overpaid Exhibits Date Total 20% Final Tax 5% GRT K-27, K-28, G-1161, G-1162 12-Nov-96 P313,793.35 P62,758.67 P3,137.93 K-27, K-28, G-1198 13-Nov-96 309,822.58 61,964.52 3,098.23 K-27, K-28, G-1204 14-Nov-96 94,902.28 18,980.46 949.02 K-27, K-28, G-1267, G-1270, G-1312, G-1351 15-Nov-96 1,046,361.46 209,272.29 10,463.61 K-27, K-28, G-1349 18-Nov-96 347,802.75 69,560.55 3,478.03 K-27, K-28, G-1359 19-Nov-96 341,551.39 68,310.28 3,415.51 K-27, K-28, G-1418, G-1419 20-Nov-96 305,712.12 61,142.42 3,057.12 K-27, K-28, G-1459, G-1460 21-Nov-96 305,905.52 61,181.10 3,059.06 K-27, K-28, G-1496, G-1497 22-Nov-96 292,217.79 58,443.56 2,922.18 K-27, K-28, G-1634 28-Nov-96 58,542.26 58,542.26 11,708.45 585.42 K-27, K-28, G-1643 29-Nov-96 119,198.79 119,198.79 23,839.76 1,191.99 Sub-total 177,741.05 P3,535,810.29 P707,162.06 P35,358.10 T-Bills Purchases from BPI Family Bank Exhibits B-275, M-37 B-122, M-33 B-102, M-66 B-75, M-72 B-46,M-78 TX# 96CS37 96DD62 96DE19 96DF82 96DH58 Set Date 10/09/96 11/28/96 12/2/96 12/6/96 12/12/96 Par Value P3,000,000.00 P197,000,000.00 P348,540,000.00 P69,000,000.00 P32,000,000.00 Purchase Price 2,920,527.18 188,346,023.43 341,510,574.02 67,100,587.42 30,750,750.70 Discount 79,472.82 8,653,976.57 7,029,425.98 1,899,412.58 1,249,249.30 20% Final Withholding Tax 15,894.56 1,730,795.31 1,405,885.20 379,882.52 249,849.86 Net Purchase Price 2,936,421.74 190,076,818.74 342,916,459.22 67,480,469.94 31,000,600.56 Accrual Date I n t e r e s t A c c r u a I - T-Bills Purchases from BPI Family Bank K-35, K-36, G-1716 02-Dec-96 P 119,348.51 P105,995.89 P P K-35, K-36, G-1757, G-1761 03-Dec-96 56,599.87 106,064.21 56,635.33 106,126.94 K-35, K-36, G-1801, G-1804 04-Dec-96 56,635.33 106,126.94 K-35, K-36 05-Dec-96 2.69 K-35-, K-36 06-Dec-96 8.08 K-35, K-36, G-1914 09-Dec-96 (8.08) 83,120.09 K-35, K-36, G-1954 10-Dec-96 20,811.78 K-35, K-36, G-2030 12-Dec-96 9,606.69 K-36, K-36 13-Dec-96 9,606.69 K-35, K-36, G-2070 16-Dec-96 2,985.68 28,874.56 K-35, K-36, G-2100 17-Dec-96 9,636.80 K-35, K-36, G-2138, G-2141 18-Dec-96 9,642.88 K-35, K-36, G-2176, G-2177 19-Dec-96 9,648.96 K-35, K-36, G-2181, G-2179 20-Dec-96 28,983.36 K-35, K-36, G-2299, G-2302, G-2304, G-2305 23-Dec-96 9,673.28 K-35, K-36, G-2343, G-2346, G-2347, G-2348 24-Dec-96 19,364.48 K-35, K-36, G-2386, G-2388 to G-2390, G-2393 26-Dec-96 9,691.52 K-35, K-36, G-2431, G-2435 to G-2437, G-2440, G-2441 27-Dec-96 48,548.48 Sub-Total 2,985.68 P232,586.40 P318,187.04 P103,931.87 P193,277.70 T-B i l l s P u r c h a s e s f r o m B P I F a m i l.y B a n k Exhibits B-37, M-81 B-35, M-81 B-22, M-85 B-24, M-85 B-24, M-85 TX # 96DJ27 96DJ41 96DK26 96DK27 96DK28 Set Value 12/13/96 12/17/96 35,418.00 35,418.00 12/19/96 Par Value 8,000,000.00 P522,000,000.00 P78,000,000.00 P242,540,000.00 P150,000,000.00 Purchase Value 7,620,337.84 513,898,953.99 76,670,512.02 238,932,124.93 147,768,692.79 Discount 379,662.16 8,101,046.01 1,329,487.98 3,607,875.07 2,231,307.21 20% Final Withholding Tax 75,932.43 1,620,209.20 265,897.60 721,575.01 446,261.44 Net Purchase Price 7,696,270.27 515,519,163.19 76,936,409.62 239,653,699.94 148,214,954.23 Accrual Exhibits Date I n t e r e s t A c c r u a I - T-Bills Purchases from BPI Family Bank K-35, K-36, G-1716 02-Dec-96 P P P P K-35, K-36, G-1757, G-1761 03-Dec-96 K-35, K-36, G-1801, G-1804 04-Dec-96 K-35, K-36 05-Dec-96 K-35, K-36 06-Dec-96 K-35, K-36, G-1914 09-Dec-96 K-35, K-36, G-1954 10-Dec-96 K-35, K-36, G-2030 12-Dec-96 K-35, K-36 13-Dec-96 K-35, K-36, G-2070 16-Dec-96 9,528.89 K-35, K-36, G-2100 17-Dec-96 2,385.92 159,557.13 K-35, K-36, G-2138, G-2141 18-Dec-96 2,387.44 159,653.70 K-35, K-36, G-2176, G-2177 19-Dec-96 2,388.88 159,752.88 23,768.00 74,069.78 45,808.80 K-35, K-36, G-2181, G-2179 20-Dec-96 7,175.76 479,858.94 71,391.84 176,616.94 137,595.00 K-35, K-36, G-2299, G-2302, G-2304, G-2305 23-Dec-96 2,394.96 101,081.63 23,826.66 58,946.12 29,139.35 K-35, K-36, G-2343, G-2346, G-2347, G-2348 24-Dec-96 4,794.32 130,918.61 47,698.56 93,209.88 58,332.02 K-35, K-36, G-2386, G-2388 to G-2390, G-2393 26-Dec-96 2,399.44 56,299.72 23,871.12 46,649.04 29,193.61 K-35, K-36, G-2431, G-2435 to G-2437, G-2440, G-2441 27-Dec-96 12,019.68 266,624.84 119,579.46 233,678.68 146,239.31 Sub-total 45,475.29 P1,513,747.45 P310,135.64 P683,170.44 P446,308.09 T-B i l l s P u r c h a s e s f r o m B P I F a m i l y B a n k Exhibits B-16, M-87 B-11, M-92 B-4, M-93 B-3, M-94 B-3, M-94 TX # 96DK53 96DL46 96DL85 96DL87 96DL88 Set Date 12/29/96 12/26/99 12/27/96 12/27/96 12/27/96 Par Value 307,000,000.00 24,000,000.00 P48,000,000.00 P267,000,000.00 P261,000,000.00 Purchase Price 298,513,106.54 23,369,604.91 46,957,797.78 261,202,750.40 254,737,698.70 Discount 8,486,893.46 630,395.09 1,042,202.22 5,797,249.60 6,262,301.30 20% Final Withholding Tax 1,697,378.69 126,079.02 208,440.44 1,159,449.92 1,252,460.26 Net Purchase Price 300,210,485.23 23,495,683.93 47,166,238.22 262,362,200.32 255,990,158.96 Accrual Exhibits Date Interest Accrual . T-Bills Purchases from BPI Family Bank K-35, K-36, G-1716 02-Dec-96 P P P P K-35, K-36, G-1757, G-1761 03-Dec-96 K-35, K-36, G-1801, G-1804 04-Dec-96 K-35, K-36 05-Dec-96 K-35, K-36 06-Dec-96 K-35, K-36, G-1914 09-Dec-96 K-35, K-36, G-1954 10-Dec-96 K-35, K-36, G-2030 12-Dec-96 K-35, K-36 13-Dec-96 K-35, K-36, G-2070 16-Dec-96 K-35, K-36, G-2100 17-Dec-96 K-35, K-36, G-2138, G-2141 18-Dec-96 K-35, K-36, G-2176, G-2177 19-Dec-96 K-35, K-36, G-2181, G-2179 20-Dec-96 278,425.67 K-35, K-36, G-2299, G-2302, G-2304, G-2305 23-Dec-96 92,925.83 K-35, K-36, G-2343, G-2346, G-2347, G-2348 24-Dec-96 186,020.51 K-35, K-36, G-2386, G-2388 to G-2390, G-2393 26-Dec-96 84,367.18 7,398.05 K-35, K-36, G-2431, G-2435 to G-2437, G-2440, G-2441 27-Dec-96 422,626.03 35,392.37 75,088.61 417,680.38 408,123.87 Sub-total 1,064,365.22 P42,790.42 P75,088.61 P417,680.38 P408,123.87 Exhibits B-1, M-94 TX # 96DL89 Set Date 12/27/96 Par Value 253,000,000 00 Purchase Price 244,105,409.22 Discount 8,894,590.78 20% Final Withholding Tax 1,778,918.16 Net Purchase Price 245,884,327.38 Accrual 20% Overpaid Exhibits Date Total Final Tax 5% GRT K-35, K-36, G-1716 02-Dec-96 P225,344.40 P45,068.88 P2,253.44 K-35, K-36, G-1757, G-1761 03-Dec-96 162,664.08 32,532.82 1,626.64 K-35, K-36, G-1801, G-1804 04-Dec-96 162,762.7 32,552.45 1,627.62 K-35, K-36 05-Dec-96 2.69 0.54 0.03 K-35, K-36 06-Dec-96 8.08 1.62 0.08 K-35, K-36, G-1914 09-Dec-96 83,112.01 16,622.40 831.12 K-35, K-36, G-1954 10-Dec-96 20,811.78 4,162.36 208.12 K-35, K-36, G-2030 12-Dec-96 9,606.69 1,921.34 96.07 K-35, K-36 13-Dec-96 9,606.69 1,921.34 96.07 K-35, K-36, G-2070 16-Dec-96 41,389.13 8,277.83 413.89 K-35, K-36, G-2100 17-Dec-96 171,579.85 34,315.97 1,715.80 K-35, K-36, G-2138, G-2141 18-Dec-96 171,684.02 34,336.80 1,716.84 K-35, K-36, G-2176, G-2177 19-Dec-96 315,437.30 63,087.46 3,154.37 K-35, K-36, G-2181, G-2179 20-Dec-96 1,180,047.51 236,009.50 11,800.48 K-35, K-36, G-2299, G-2302, G-2304, G-2305 23-Dec-96 317,987.83 63,087.46 3,154.37 K-35, K-36, G-2343, G-2346, G-2347, G-2348 24-Dec-96 540,338.38 108,067.68 5,403.38 K-35, K-36, G-2386, G-2388 to G-2390, G-2393 26-Dec-96 259,869.68 51,973.94 2,598.70 K-35, K-36, G-2431, G-2435 to G-2437, G-2440, G-2441 27-Dec-96 390,709.42 2,576,311.13 515,262.23 25,763.11 Sub-total 390,709.42 P6,248,563.53 P1,249,712.70 P62,485.64 TOTAL P10,403,915.19 P2,080,783.04 P104,039.15 ============================================ ANNEX C 3.) Trading Gain on T-bills -GL Account Code 5700100 Trading Gain (Loss) 20% Exhibits Date 96CP89 96CP30 96CR54 96CR89 96CS37 Total Final Tax 5% GRT K-46 09-Oct-96 167.82 167.82 33.56 1.68 G-325, K-46 10-Oct-96 8,618.46 22,037.54 30,656.00 6,131.20 306.56 G-734 24-Oct-96 289.43 141.43 430.86 86.17 4.31 K-47 28-Oct-96 2,006.34 2,006.34 401.27 20.06 sub-total 8,618.46 22,037.54 2,006.34 457.25 141.43 33,261.02 6,652.20 332.61 96CZ78 96CZ79 96DA45 96DA66 Total 20% Final Tax 5% GRT K-51 04-Nov-96 (0.86) (0.86) (0.17) (0.01) G-1198, K-51 13-Nov-96 221.10 221.10 44.22 2.21 G-1204, K-51 14-Nov-96 0.10 0.10 0.02 0.00 G-1379, K-51 19-Nov-96 (0.02) (0.02) (0.00) (0.00) G-1418, K-51 20-Nov-96 (0.23) (0.23) (0.05) (0.00) K-51 22-Nov-96 0.09 0.09 0.02 0.00 G-1496, K-51 25-Nov-96 0.02 0.02 0.00 0.00 G-1565, G-1566, K-51, K-52 26-Nov-96 65,698.75 46,229.99 1,924.69 113,853.43 22,770.69 1,138.53 27-Nov-96 33,957.07 33,957.07 6,791.41 339.57 subtotal 65,919.79 (0.84) 80,187.06 1,924.69 148,030.70 29,606.14 1,480.31 96DD62 96DE19 96DE85 96DJ41 96DK27 96DK28 96DL46 96DK53 Total 20% Final Tax 5% GRT G-1757, K-53 03-Dec-96 7,057.42 7,057.42 1,411.48 70.57 G-1807, K-53 04-Dec-96 (3,112.52) (3,112.52) (622.50) (31.13) K-53 05-Dec-96 31,424.01 28,871.66 60,295.67 12,059.13 602.96 K-53 09-Dec-96 5.20 5.20 1.04 0.05 K-56 20-Dec-96 1,584.65 1,584.65 316.93 15.85 G-2303, G-2304, K-56 23-Dec-96 13,891.82 651.82 G-2346, G-2347, K-56 24-Dec-96 3,380.50 (0.12) 3,380.38 676.08 33.80 G-2389, K-56 26-Dec-96 2,497.74 (9,973.55) (7,475.81) (1,495.16) (74.76) 27-Dec-96 812.76 583.81 1,396.57 279.31 13.97 sub-total 38,486.63 28,871.66 (3,112.52) 20,582.82 1,584.53 651.82 583.81 (9,973.55) 77,675.20 15,535.04 776.75 Total 113,024.88 50,908.36 79,080.88 22,964.76 1,725.96 651.82 583.82 (9,973.55) 258,966.92 51,793.38 2,589.67 ============================================================================================================================