UNLIKE the security guards he is supposed to represent, Rep. Juan Miguel ‘Mikey’ Arroyo of Ang Galing Pinoy is one of the wealthiest members of the 15th Congress. His fortune flourished during the same years of his mother’s presidency – from P5.72 million in 2001 to P101.35 million in 2009.
Based on the data he enrolled in his sworn Statements of Assets, Liabilities, and Net Worth (SALN), what follow are the highlights of the financial history of Mikey and wife Ma. Angela Montenegro Arroyo. Last Thursday, Apr. 7, 2011, the Bureau of Internal Revenue filed a P73.85-million tax evasion complaint against the couple.
Mikey began his stint in public office as a legislative staff officer to his mother, then Senator Gloria Macapagal Arroyo. Entries in his 1992 SALN were filled with “N/A” or “not applicable.” Mikey, 23 at the time, had zero net worth.
Mikey declared a net worth of P50,000 – all cash on hand.
Earning P7,370 monthly, Mikey’s last recorded net worth as a Senate employee was at P320,000 in 1994. He resigned Dec. 16, 1995.
This is a significant year for the Arroyos – Mikey was elected vice-governor of Pampanga and his mother became President. From his last recorded SALN in 1994, his wealth grew by over 16 times this year at P5.72 million – all in personal assets. By this time, Mikey should be paying income tax for his salary as vice-governor. As well, he should also be paying income tax for the talent fees he earned in the three movies he reportedly made this year. One of the most prominent ones is the “Mahal kita… Kahit sino ka pa!” (I Love You… No MatterWho You Are!) where he starred opposite Judy Ann Santos.
Tax records from the BIR shows that Mikey originally registered on Apr. 18, 2001 as a One Time Transaction (ONETT) taxpayer with Revenue District No. 21 B, South Pampanga under Tax Identification Number 210-543-613-000.
This year is yet another momentous one for Mikey. He married Angela A. Montenegro and became father to Mikaela Gloria the same year. He also starred in at least one movie titled “Walang Iba Kundi Ikaw” (No One But You) with Geneva Cruz and Roi Vinzon.
His 2002 SALN in filed with the Office of the Ombudsman says that his net worth decreased by more than P700,000 this year. This entire amount was deducted from his cash on hand and in bank, which meant that he did not buy any new piece of watch or clothing and shares of stock as the acquisition costs of these items did not change from last year’s.
On Jun. 19, 2002, he would register again with Revenue District No. 39, South Quezon City under TIN 914-841-267-000. The TIN issued in Pampanga would only be cancelled later in Jul. 22, 2009.
Just the same, Mikey should be filing tax return and paying income tax for his salary as vice-governor and talent fee as actor.
Records from the Securities and Exchange Commission (SEC), meanwhile, reveal that ‘Juan Miguel M. Arroyo’ is listed as shareholder in Klub Don Juan de Manila Inc. and Franchino Farms Inc. as of 2002. These companies were not listed in Mikey’s Dec. 2002 SALN.
Speaking on behalf of Mikey, lawyer Ruy Rondain says Franchino Farms is listed in the 2002 supplement while Klub Don Juan need not be declared because it is a foundation.
The PCIJ found no record of Mikey’s 2003 SALN at the Office of the Ombudsman and the Pampanga Human Resources Management Office. A copy of this SALN, however, was provided by lawyer Rondain.
As well, Mikey should be filing an income tax return and paying tax for his salary as vice-governor and talent fee as actor.
Mikey’s fortune as an elected official recorded the steepest increase this year when he assumed the position of Pampanga Representative. In 2004, an election year, the neophyte congressman declared a net worth of P76.53 million, which is 15 times his P5-million net worth in 2002. Mikey and his lawyer explains that majority of the properties that were added to the lawmaker’s net worth was Angela’s, a heiress to an old-rich family.
The Arroyos made big acquisitions this year. They bought a P4-million house and lot in Lubao, Mikey’s hometown in Pampanga, and an P8-million house in posh La Vista Subdivision in Quezon City. These transactions would have led the couple to pay documentary stamp tax (P1 for every P200 of the value) and transfer fee (75 percent of the 1 percent of the property’s fair market value). If they bought the property from a buyer/seller, then it’s likely that the buyer/seller had them pay for the value-added tax (VAT) or sales tax. As well, the couple would have to pay real property tax (1.5 percent of the zonal value) for the house and lot annually.
His wife Angela is listed as director in five companies: Pacific Activated Carbon Co., International, Pacific Activated Carbon Inc., H.M. Montenegro Co., Inc., Titan Megabags Industrial Corp., and Titan Megatiles Industrial Corp.
In the case that Angela earn from dividends declared by these companies, a 10-percent final withholding tax will have to be paid. This tax, however, will not be filed in the stockholder’s ITR, but in the company’s tax return along with its audited financial statement.
The couple bought a P49.5-million house in the United States, which would mean that they should have paid for necessary taxes in the country. They also made improvement worth P15 million for the La Vista house. If they hired a contractor, then it’s likely that the contractor had them pay for the VAT. VAT would also have to be paid for the P5.8-million furniture that they bought this year.
In an interview, Rondain said that the couple made two sales in 2005 – the house in the U.S. and the P8.5 million worth of jewelry. If they made profit off these sales, then they should have paid the corresponding income tax. The Bureau of Internal Revenue (BIR), however, discovered that Mikey and Angela did not file ITR in 2005.
As well, Mikey acquired loans from certain relatives worth P27.5-million. Loans this big usually require an affidavit or promissory note, says a tax lawyer. These papers are subject to a documentary stamp tax of P1 for P200 of the value. In the case that the creditor earns from the loan interest, then he or she would have to declare this in his or her income tax return.
SEC records show that ‘Angela M. Arroyo’ is also listed as shareholder in Bethestda Computer Institute Corp. in 2005. This company is not declared in the 2005 joint SALN of the couple. Rondain has knowledge about the company.
Angela also gave birth to their second daughter Marie Angelique this year.
The couple listed a new house in the U.S., which he bought from the sale of the other house. Just the same, he would have to pay for the taxes applicable in the country.
Mikey’s cash on hand and in bank also increased by P15 million. If he earned from bank deposit interest then it will be subject to 20-percent final withholding tax by the bank.
This year, Mikey declared three businesses: Mikey’s Horseman Bar and Grill, Inc., Visualtoon Creations, Inc. and LPG Auto Gas.
In the case that Mikey earn from dividends declared by these companies, a 10-percent final withholding tax will have to be paid. This tax, however, will not be filed in the stockholder’s ITR, but in the company’s tax return along with its audited financial statement.
The couple no longer has the U.S. property in their SALN. Significant increases, however, are recorded in their cash in bank and on hand (P46.7 million) and investments worth P44.33 million and P14.74 million.
It should be noted that Mikey’s 2005 to 2007 SALNs bear the note “TENTATIVE (Not yet including the 2005   Financial Statement of Spouse).”
CSC’s Ariel Ronquillo says that the note would mean that the information included in the SALN would be that of the declarant’s only, and not including his spouse’s assets or finances.
Rondain, however, says that the couple might have marked it tentative because they are saving it for amendment later. “I think they might just been careful,” he says.
Mikey also listed two new companies in his name: Beach Way Park and Los Manos Verdes Inc.
The couple’s cash increased by P4.95 million, but their furniture decreased in cost by P1.3 million. Investments in various companies also increased to P15.24 million. Liabilities, meanwhile, decreased from P58.22 million to P56.87 million.
The BIR said there is no record of the couple’s ITR filing this year.
Mikey declared a new business entity, U18 Properties, Inc.
Total personal assets decreased as the total amount of liabilities also decreased, which results to Mikey and Angela’s net worth of P101.35 million.
The couple allegedly did not file their ITR this year, according to the BIR.
Mikey also listed three new companies in his name: La Vista Investments and Holdings, Inc., Lourdes T. De Arroyo, Inc., and Asia Pacific Islands, LLC. – PCIJ, April 2011