Page 1 IMPROVED ECONOMIC LANDSCAPE, INCLUSIVE DEVELOPMENT

No. 7 Series 2015

IMPROVED ECONOMIC LANDSCAPE, INCLUSIVE DEVELOPMENT

FRANKLIN M. DRILON Senate President, 16th Congress of the Senate of the MBC IMAGES/ R. DELROSARIO INDEED, MUCH HAS CHANGED IN THE PAST FIVE YEARS. The Philippines has become a rising star in Asia. It is now in the radar of the business and financial community because of its remarkable economic growth, investment grade ratings, strong macroeconomic indicators, political stabil- ity, and the earnest pursuit of good governance. The optimism and confidence of the internation- al community are reflected in the significant im- provements in our Global Competitiveness and Ease of Doing Business ratings. Your Congress has been an active partner in the pursuit of difficult but meaningful reforms for the past five years. For the past five years, the Senate has never wavered in its commitment to help lay the foundation of a healthy economy, and create an environment marked by political MBC IMAGES/ R. DEL ROSARIO stability and strong institutions, and equitable dis- tribution of social services. We have always underscored the importance of transparency and accountability, developing our human capital and building world-class infra- structure to attract much needed foreign invest- ments and generate jobs for our people. On 6 August 2015, Senate President Franklin M. Drilon was the INSTITUTIONALIZING GOOD GOVERNANCE guest speaker at the annual membership meeting organized by During the first SONA of the President in 2010, he the Business Club at The Peninsula , Makati City. cited the excesses of the GOCCs. In response, Published here are excerpts from the keynote speech . and on our own initiative, I wrote and worked

www.mbc.com.ph Page 2 IMPROVED ECONOMIC LANDSCAPE, INCLUSIVE DEVELOPMENT on the enactment of the GOCC More than 80,000 Filipino seafar- smoking in cigarette packs. Governance Act and made state- ers faced the threat of losing their The Responsible Parenthood and owned enterprises instruments of jobs in European Union-flagged Reproductive Health Law would national progress, instead of being vessels because of our failure to not have been passed if not for milking cows. In 2013, the GOCCs comply with the international con- the active intervention of President remitted a total of P28 billion in div- vention on seafarers. We in Con- Aquino. It was one of the most dif- idends to the national coffers, and gress took it upon ourselves to pass ficult reform measures enacted by last year in 2014, over P32 billion. the MARINA Law. this Congress. The law, as you are Cases in the Sandiganbayan Last year, the European Union aware, provides universal access take five to seven years to resolve. threatened to ban Philippine ma- for medically safe, effective, legal, To enable the speedy disposition rine and fisheries products. This affordable, and quality reproduc- of corruption cases, we amend- threatened the livelihood of our tive health services, information ed the Sandiganbayan Law, with poor fisherfolk. Congress respond- and education. much input from former Ombuds- ed by amending the Fisheries man Sonny Marcelo. Code to comply with internation- ENHANCING EDUCATION We amended the Anti-Money al standards and strengthen our The Enhanced Basic Education Laundering Act to expand the list of laws against illegal, unreported, Act is now the cornerstone of our entities required to report covered and unregulated fishing. This also learning system. The K to 12 pro- and suspicious transactions. We also redounded to the benefit of Filipi- gram— which covers kindergarten, authorized freeze orders and inquir- no traders who can now export to six years of primary education, four ies on bank deposits upon order of EU markets at zero tariff using the years of junior high school, and two the court based on ex parte petition Generalized System of Preferenc- years of senior high school—would by the AMLC. es Plus (GSP+) of more than 6,000 provide our students sufficient time products such as processed fruits, to master concepts and skills and STIMULATING THE ECONOMY textiles, chemicals, and coconut develop stronger fundamentals On the initiative of the Senate and and marine products. I am proud for college education. K to 12 also the House of Representatives, we to say that due to Congress’ swift aligns our basic education pro- passed the Philippine Competi- action in passing the law, the Phil- gram with those of other countries. tion Act. For more than 20 years ippines is the only ASEAN country We passed the Iskolar ng Bayan the bill was stuck in Congress. Fi- to be accepted in GSP+. Act, which accords the top 10 nally, we now have a competition public high school graduates with policy that outlaws and penaliz- IMPROVING HEALTHCARE scholarships to State Universities es anti-competitive agreements, For more than 10 years, our excise and Colleges of their choice. This abuse of dominant position, and taxes on tobacco and alcohol complements the Fast-Tracked anti-competitive mergers and ac- favored certain brands. We re- Science & Technology Scholarship quisitions. sponded with the passage of the Act which we passed in 2013. In 2013, the President asked Sin Tax Reform Law, which, by the This week we also passed the Uni- Congress to “amend the Cabo- way, I sponsored in the Senate fied Student Financial Assistance tage Law in order to foster greater and won by one vote, or a vote of System Act (UNIFAST). This will har- competition and to lower the cost 11 to 10. That one vote made the monize and expand all student of transportation for our agricul- difference in levelling the playing financial assistance programs for tural sector and other industries.” field and in generating an addi- tertiary education in both public We responded by amending the tional excise tax collection of over and private institutions, whether Cabotage Law to achieve these P50 billion last year. P37 billion of nationally or locally funded. goals. this incremental revenue was allo- We also passed the Ladderized On our own initiative, we allowed cated to enroll 15 million indigent Education Act, the Open Learning the Full Entry of Foreign Banks by families in PhilHealth and cover our and Distance Education Act, and authorizing them to acquire and senior citizens, which we required the Open High School System Act invest up to 100% of the voting under the Amendments to the Ex- to enable those who have less in stock of a domestic bank. My re- panded Senior Citizens Act. life to have more access to good cent conversation with Bangko The Graphic Health Warning Act education. Sentral Governor Tetangco indi- compelled cigarette companies I attribute this harvest of remark- cated that there are four foreign to graphically demonstrate in cig- able laws first, to the political will banks which indicated their in- arette packs the deadly effects of of President Aquino, and second, terest, and in fact, are putting up smoking. For years, this legislation, largely to the harmonious rela- branches here. We also enacted again, was stuck in the legislative tions, marked by mutual trust and a law that allowed foreign inves- mill. Finally, we are able to pass this respect, with our counterparts in tors to own up to 60% of the voting law which will require the graphic the House of Representatives. As stock in rural banks. illustration of the deadly effects of you are aware, the leaders of the Page 3 IMPROVED ECONOMIC LANDSCAPE, INCLUSIVE DEVELOPMENT Page 4 IMPROVED ECONOMIC LANDSCAPE, INCLUSIVE DEVELOPMENT Senate and the House have been this will redound to the benefit of ON THE 2016 GENERAL holding regular monthly meetings every Filipino. APPROPRIATIONS ACT to define and push forward our Since we are an archipelag- Next week we will start examining legislative agenda. ic country, we need to improve the 2016 National Budget. We will physical and digital connectivity pass this before December 31 as MOVING FORWARD to minimize transaction costs. The we have done in the past five years However, the time is not ripe to Senate passed on third reading so that the government will not congratulate ourselves and pat the law creating the Department operate on a reenacted budget. each other’s back. The road to our of Information and Communica- I wish to reiterate that pork bar- goal for inclusive development is tions Technology (DICT) to de- rel is a thing of the past. The 2016 long. We must sustain the momen- velop ICT systems and enhance National Budget will be a peo- tum, build on our gains and contin- communication services. ple-centered budget. We would ue the pursuit of reforms. The creation of the DICT will provide the social services sector Even if the economic fundamen- improve the government’s re- its highest budget allocation in the tals are now strong and the out- sponse to the challenges and is- history of our country: P1.1 trilllion, look is favorable, I assure you that sues posed by the rapid develop- or 36.8% of the proposed budget. the Senate remains relentless in ments in ICT, while harnessing the On social protection, we will al- passing reform measures that will sector’s potential to be one of locate P62.7 billion for the Condi- ensure a better business climate. the strongest drivers of economic tional Cash Transfer that will ben- In the last regular session of the growth in the Philippines. efit 4.6 million households. We will 16th Congress, we will pass the For efficiency and a smaller fund the supplementary feeding Customs and Tariff Modernization budget footprint, the DICT will be for 2.15 million daycare children Act that will introduce full auto- created by merging or abolish- and pension for 1.18 million senior mation of customs procedures, ing existing ICT-related agencies. citizens. and strengthen the Bureau of For instance, all units of the DOTC On basic education, we shall Customs’ risk management, reve- with functions dealing with com- provide for the construction of nue collection and enforcement munications will be transferred to more than 47,000 classrooms and systems. One of the sticky points the DICT. To avoid redundancy, workshops for senior high school of this law is the status of Customs other offices in the bureaucracy for K-12, and the purchase of over brokers. There’s a lot of discussion will be abolished and their func- 103 million new textbooks. To ad- in this area; we hope to find the tions, manpower and budget ab- dress the shortage of teachers, the language that will be acceptable sorbed by the DICT. budget shall fund close to 80,000 to all sectors. We are aware that the Execu- teaching and non-teaching posi- We will soon pass the Tax Incen- tive Department has some reser- tions. tives Monitoring and Transparen- vations on the creation of a DICT. On universal health care, the cy Act (TIMTA) to foster transpar- In the coming weeks, Speaker proposed budget will cover Phil- ency and accountability in the Belmonte and I will confer with Health premiums for approximate- grant of fiscal incentives to busi- the Executive Secretary to thresh ly 15.4 million indigent families and ness entities. The private sector out the concerns of the Execu- 2.8 million senior citizens. More has been pushing for transpar- tive Department and the Presi- than 11,000 rural health units, ba- ency and accountability in gov- dent on the creation of the DICT. rangay health stations and health- ernment. However, we also wish We are not adding any bureau- care facilities will be constructed. that the effort to be transparent cracy. What we will do is to con- The budget will also provide for the will extend to all phases of gov- solidate the functions of various hiring of more than 21,000 health ernance, including the private offices involved in the ICT. professionals, because in many sector. Quite surprisingly, we en- countered difficulty in passing bout he peaker TIMTA due to the reservations of A T S the business community in the FRANKLIN M. DRILON publication of tax incentives Senator Franklin Drilon is a veteran public servant, having served for granted to registered business many years holding numerous responsibilities in both the executive enterprises. and the legislative. Under President Cory Aquino, he was appointed To have an open and transpar- secretary of labor, thereafter became justice secretary, and subse- ent environment, we also need quently, served as Mrs. Aquino’s executive secretary. After another the cooperation of the private stint with the DOJ from 1992 to 1995, he joined the Senate and has sector. So I ask: Have an open since been a member of six Congresses. He was previously Senate mind. Be objective. Look at it President from April to November 2000 and also throughout the 12th beyond the bottom line of your and 13th Congress. financial statements. In the end, Page 5 IMPROVED ECONOMIC LANDSCAPE, INCLUSIVE DEVELOPMENT parts of this country, our people ural hazards, we will modernize do not even know how a doctor PAGASA. Yesterday, we passed looks like. the measure that will allocate P3 We will support infrastructure billion for the next three years to spending because public invest- be sourced from the share of the ment is a driver of the economy, national government of the PAG- with 20% of our GDP dependent COR funds so that we can equip on the expenditure program of our weather bureau with state-of- the government. Years ago, re- the-art facilities and technologies. nowned economist Jeffrey Sachs The proposed Rationalization of asserted that to accelerate the Fiscal Incentives has been mired growth of the country’s econo- due to disagreements between my, it has to focus on two impor- the Department of Finance and tant areas: one, the development the Department of Trade and In- of human capital and two, the dustry. The Makati Business Club invites guest improvement of our infrastruc- This cannot continue. I call on speakers to its General Membership ture—and these are the two areas Finance Secretary Cesar Purisima Meetings and MBC Briefings to discuss where the 2016 national budget and Trade Secretary Gregory Do- public issues and trends, whether local or global, that have an impact on Philippine will be focused on. mingo to reconcile their differenc- development. MBC Forum highlights the es in order to facilitate the passage speeches and discussions at these gather- ON THE REMAINING of this law, which the President cit- ings. The full text of speeches and other REFORM MEASURES ed in his last SONA. To recall, the presentations may also be found at the We will create a better policy envi- delay in the passage of TIMTA can MBC website, www.mbc.com.ph. ronment for Public-Private Partner- be attributed partly to the diver- ships. To remove the roadblocks gent views of DTI and DOF on how in the implementation of critical this law will be shaped. I am certain that this is what the infrastructure projects, we will ad- We shall continue in the last regu- Filipino people want. In five years, dress the gaps in our Build-Oper- lar session of this Congress, and even they have already seen the fruits ate-Transfer Law and the Law on beyond, the pursuit of good gov- of these reforms. Now, more than Acquisition of Right-of-Way. These ernance and the audacity to imple- ever, they want these reforms to bills will be sponsored in the Senate ment meaningful reforms, no matter continue so that their fruits will be probably next week, and we hope how unpopular they may be. enjoyed not only by this genera- to pass them in October. Our economic gains are a tes- tion, but also, the generations yet To promote lasting peace and tament of our collective efforts to unborn. sustainable development in Min- bring our beloved country to our Let me close from where I began. danao, we will enact a Bangsam- development goals on the wings My dear friends, we have gone oro Basic Law that is consistent of good governance. However, this far and achieved this much with our Constitution. The chair- prosperity should not be enjoyed because of the relentless pursuit of man of our Committee on Local by a few. Each and every Filipino good governance, which restored Governments, Senator Marcos, must be able to partake of the the trust and respect of our people has committed to file the -com fruits of development. That no for our government. We gained mittee report on August 10 and to Filipino man, woman or child will the confidence of the internation- sponsor it the following day. On a be left behind. Then, and only al community because of our res- daily basis, it will be the first item in then, can we say that the Philip- olute drive to institute transparen- our calendar. pines is truly a developed coun- cy and accountability. I support the enactment of an try and everyone did his share to As the President mentioned in his Anti-Political Dynasty Law. This make this possible. SONA, “simula pa lang ito”. This is measure is long overdue. It’s time However, the challenge that just the beginning. to end the long wait. I will encour- we must face head on is to pro- We are committed to follow the age my colleagues in Congress to tect our gains and ensure the course that we have charted. But give the bill a chance. Let us pro- continuity of reforms. Next year, even now, we can already see in vide an avenue that will allow for we shall be electing a new set the horizon, the dawn of a progres- a constructive debate on this very of leaders for our country. Our sive and prosperous Philippines. important issue that would bring mission now is to safeguard the positive changes to our political reforms that we have painstak- Excerpts edited by system. ingly put in place so that neither PATRICIA PAULA B. RUIVIVAR To ensure the protection and force nor certain personalities Special Projects Associate economic security of the people can reverse these even beyond and communities against nat- 2016. Page 6 IMPROVED ECONOMIC LANDSCAPE, INCLUSIVE DEVELOPMENT