REPUBLIC OF THE PHILIPPINES Senate Pasay City

Journa

SESSION NO. 45 Monday to Thursday November 27 to 30,2006

THIRTEENTH CONGRESS THIRD REGULAR SESSION SESSION NO. 45 Monday to Thursday November 27 to 30,2006

CALL TO ORDER and approval of the Journal of Session No. 44 (November 21, 22, 23, 24, and 27). At 3:19 p.m,, Monday, November 27, 2006, the Senate President, Hon. Manny Villar, called SUSPENSION OF SESSION the session to order. Upon motion of Senator Pangilinan, the session PRAYER was suspended.

The Body observed a minute of silent prayer. It was 3:24 p.m.

NATIONAL ANTHEM RESUMPTION OF SESSION

The Senate Choir led the singing of the national At 3:24 p.m., the session was resumed with anthem. Senate President Pro Tempore Flavier presiding.

ROLL CALL REFERENCE OF BUSINESS The Secretary of the Senate read the following Upon direction of the Chair, the Secretary of the matters and the Chair made the corresponding Senate, Oscar G. Yabes, called the roll, to which the referrals: following senators responded RESOLUTIONS Angara, E. J. Flavier, J. M. Arroyo, J. P. Lacson, P. M. Proposed Senate Resolution No. 595, entitled Defensor Santiago, M. Lim, A. S. Drilon, F. M. Madrigal, M. A. RESOLUTION EXPRESSING THE PRO- Ejercito Estrada, J. Pangilinan, F. N. FOUND SYMPATHY AND SINCERE! Ejercito Estrada, L. L. P. Revilla Jr., R. B CONDOLENCE OF THE SENATE Enrile, J. P. Villar, M. ON THE DEATH OF PHILIPPINE STAR PUBLISHER MAXIM0 “MAX” With 14 senators present, the Chair declared the V. SOLIVEN AND HONORING presence of a quorum. HIS CONTRIBUTION TO PRESS FREEDOM IN THE PHILIPPINES Senators Biazon, Cayetano, Gordon, Magsaysay, Osmefia, Pimentel, Recto and Roxas arrived after Introduced by Senator Ramon “Bong” the roll call. Revilla Jr.

Senator Lapid was on official mission abroad. To the Committee on Rules

DEFERMENT OF THE APPROVAL Proposed Senate Resolution No. 596, entitled OF THE JOURNAL RESOLUTION EXPRESSING THE PRO- Upon motion of Senator Pangilinan, there being FOUND SYMPATHIES AND CON- no objection, the Body deferred the consideration DOLENCES OF THE PHILIPPINE K P 830 MONDAY, NOVEMBER 21,2006

SENATE OVER THE DEATH OF crusader’s sword. It was incisive in uncovering MAXIMO “MAX” V. SOLIVEN, the meaning of stream of events. It was relentless PHILIPPINE STAR PUBLISHER, in search of the truth behind the statements and CHAIRMAN OF THE BOARD AND insinuations. It probed into motives and hidden COLUMNIST, AND ONE OF THE agendas. It wrote of past conflicts and distant places through the prism of fust-hand observa- MOST DECORATED FILIPINO tion to give them a texture of contemporaty rele- JOURNALISTS OF ALL TIME vance. His historical perspective was illuminat- ing. A man of real courage, Max was never Introduced by Senator Compafiera Pia S. intimidated by the arrogance of power. He would Cayetano much prefer the silence of imprisonment to the comfort of compromise. To the Committee on Rules In fact, he made that preference. He became COMMUNICATIONS a prisoner of conscience that established his moral kinship with Rizal, Ninoy Aquino, Letter from Director General Rodolfo V. Vicerra Mahatma Gandhi and Nelson Mandela. No other Filipino journalist of our generation had wielded of the Congressional Planning and Budget as much influence on molding public opinion as Department, House of Representatives, dated Max did. He wrote with authority, with candor 23 November 2006, providing the Senate with a and conviction. He wote from the heart. copy of the Analysis of the President’s Budget for Fiscal Year 2007. It was, therefore, a privilege to know Max and in the process got enriched by his thoughts, educated by his observations, and challenged To the Committee on Finance by his questions. Letter from Deputy Executive Secretary for Legal Time shared by Max was too precious. Affairs, Manuel B. Gaite of the Office of the We shall surely miss you, dear fellow! May God President of the Philippines, transmitting to the finally grant you the peace that we can never Senate two (2) original copies of Republic Act truly find on Earth. No. 9361, entitled Goodbye.

AN ACT AMENDING SECTION llO(B) PROPOSED SENATE RESOLUTION NO. 594 OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS Upon motion of Senator Pangilinan, there being AMENDED, AND FOR OTHER no objection, the Body considered Proposed Senate PURPOSES, Resolution No. 594, entitled

which was approved and signed into law by Her RESOLUTION EXPRESSING THE Excellency, President Gloria Macapagal Arroyo, PROFOUND SYMPATHY AND on 21 November 2006. SINCERE CONDOLENCE OF THE SENATE OF THE PHILIPPINES ON To the Archives THE DEATH OF PUBLISHER AND COLUMNIST MAXIMO V. SOLIVEN, PRIVILEGE SPEECH OF SENATOR VILLAR taking into consideration Proposed Senate Resolution Availing himself of the privilege hour, Senate Nos. 595 and 596. President Villar delivered the following speech

A guiding light in Philippine journalism has With the permission of the Body, only the title of passed away. As journalists would put it in their the resolution was read without prejudice to the own jargon, Max Soliven has just written 30. But insertion of its full text into the Record of the Senate. Max, to his many friends, readers and admirers, was too much of a presence simply to walk away. ADOPTION OF PROPOSED He was so full of life, wit, humor and knowledge, SENATE RESOLUTION NO. 594 that not having him around anymore is almost unthinkable. Without Max, the Philippine press Upon motion of Senator Pangilinan, there being will never be the same again. His pen was a no objection, Proposed Senate Resolution No. 594 6 MONDAY, NOVEMBER 27,2006 83 1 was adopted by the Body, taking into consideration MENT OF THE REPUBLIC OF THE Proposed Senate Resolution Nos. 595 and 596. PHILIPPINES FROM JANUARY ONE TO DECEMBER THIRTY-ONE, TWO MOTION TO CONVENE THE SENATE THOUSAND SEVEN, AND FOR INTO A COMMITTEE OF THE WHOLE OTHER PURPOSES.

Senator Defensor Santiago moved that the Senator Pangilinan stated that the Body would hearings on Proposed Senate Resolution No. 582 consider the budgets of the Commission on Human (inquiry into certain provisions of the Japan-Philippines Rights, Department of Foreign Affairs, Department Economic Partnership Agreement [JPEPA]), which of Justice, Department of Tourism, and Department was primarily referred to the Committee on Foreign of Transportation and Communications. Relations, be conducted by a Committee of the Whole, the creation of which is allowed under Thereupon, the Chair recognized Senator Drilon, Section 14, Rule X of the Rules of the Senate. In Sponsor of the measure, and Senator Enrile for his view of the many issues and concerns on the JPEPA interpellation. from various sectors, she stated that the Committee of the Whole could be an avenue to expedite inquiries DEPARTMENT OF FOREIGN AFFAIRS of vital issues, and address comprehensive and interlocking subjects. She recalled that when the Senator Drilon presented the proposed budget of GATT-WTO was discussed during the Ninth Congress, the Department of Foreign Affairs in the amount of the Senate constituted itself as a Committee of the P7,420,572,000, reflecting a P43.793 million increase Whole with the chair of the Committees on Foreign over the NEP’s proposal, which shall be utilized for Relations, and Trade and Commerce as co-chair. the following items under the GAB: She said that when the Senate convenes as a Committee of the Whole, all departments in the PS for the upgrading of salaries of Senate could be mobilized to render assistance. officers and staff by two grades; Capital outlay for the purchase of a Senator Pangilinan moved that Senator Defensor vehicle for the embassy in Thailand; Santiago’s motion be referred to the Committee on PS for the payment of P5 million Rules which shall come up with the recommendation for the salary of two contractual at the soonest possible time. employees; and Senator Defensor Santiago said that she would MOOE for training, travel, supplies have no objection as long as the public is made and materials of the UNESCO aware that the Committee on Foreign Relations has National Commission of the Philippines. acted within its resources upon receipt of the resolution. INTERPELLATION OF SENATOR ENRILE

There being no objection, the Chair referred Asked by Senator Enrile on the reason for the Senator Defensor Santiago’s motion to the Committee substantial increase of 53% or P116 million in the on Rules. allocation for salaries and wages of permanent personnel under Personal Services in the DFA’s COMMITTEE REPORT NO. 160 2007 budget, Senator Drilon stated that the additional ON HOUSE BILL NO. 5794 allocation shall cover basically the increases in the (Continuation) salaries and allowances of nonpermanent personnel, including the upgrading of positions and mandatory Upon motion of Senator Pangilinan, there being requirements for personnel abroad and in the Foreign no objection, the Body resumed consideration, on Service Institute. Second Reading, of House Bill No. 5794 (Committee Report No. 160), entitled Asked on the justification for the 345% increase in the DFA’s allocation for supplies and materials AN ACT APPROPRIATING FUNDS FOR and the 151% increase for training scholarships, THE OPERATION OF THE GOVERN- Senator Drilon said that the P1.5 billion is accounted# P 832 MONDAY, NOVEMBER 27,2006 principally by the supplies and materials needed as Senator Drilon stated that for the initial imple- partial requirement for the implementation of the mentation of the project, the lead time in the issuance Electronic Passport Project. He confirmed that the of a new passport is about two to three weeks but present booklet-type passport would be replaced with as soon as the project progresses, that time shall be a machine-readable E-passport. reduced to a week. He believed that the electronic chip feature would discourage the tampering of Asked how many Filipino passport holders there passports. are in the country and abroad, Senator Drilon replied that the estimate is ten million. Upon further query, Senator Drilon confirmed that there was an increase in the allocations for Asked if the new passport would mean a supplies and materials as well as for training and new expense for the passport holder and whether scholarships on such matters as WTO negotiations an applicant would have to submit the required and foreign languages. documents all over again, Senator Drilon replied that a new passport would only be issued when Senator Enrile asked which consulates would be the old passport is surrendered for renewal. He the recipients of the capital outlay of P121 million for said that the program would go on until 2010, the office equipment, furniture and fixtures that reflects deadline set by the International Civil Aviation a 1,223% increase over the current allocation. Senator Organization (ICAO) for all passports to be machine- Drilon explained that the bulk of the capital outlay readable. would go to the E-passport and the machines to read them, and the balance to furniture and fixtures and Regarding the E-passport, Senator Drilon book outlay for certain consular offices, the details of explained that it would have a machine-readable which shall be provided Senator Enrile. He explained zone that contains the personal information of the that the machines would be situated at the immigration applicant. He noted that the passports currently being desk, both at the point of departure and the point of issued, in fact, has a space for a machine-readable arrival, just as in other countries. He said that the zone and need not be replaced; it can be converted faster processing of passports would make traveling by implanting an electronic chip to store the facial easier and the country would gain greater international features of the passport holder. This would eliminate acceptance and credibility. tampering and conform to the emerging global trends in security for international travel and immigration, On another matter, Senator Drilon reported that he added. to date, 120 migrant workers had died abroad and their remains were brought home with the assistance Senator Enrile asked how much the implant of of the DFA. the chip would cost the passport applicant. Asked how the DFA assisted the bereaved SUSPENSION OF SESSION families of deceased migrant workers who did not earn their keep from their migrant work, Senator Upon motion of Senator Drilon, the session was Drilon replied that the assistance extended by the suspended. DFA was through the repatriation of the cadaver and personal belongings of the deceased, together It was 3:46 p,m. with the necessary documentation which are all free of charge. RESUMPTION OF SESSION Senator Enrile asked on the current developments At 3:47 p.m., the session was resumed, on key cases abroad involving Filipino migrant workers; the services or assistance provided by the Senator Drilon explained that once a passport embassies to ensure that the concerned Filipino expires, the replacement passport shall be an E- overseas workers would be given justice; and the passport that costs P1,lOO. He affirmed that there DFA's performance in terms of protecting and would be no need to obtain new clearances when promoting the welfare of the overseas filipino workers one is just renewing hisher passport since the data (OFWs), particularly those with consular or legal are stored in the chip. problems. Senator Drilon said that the DFA utilizes,+" MONDAY, NOVEMBER 21,2006 833

the Overseas Workers Welfare Fund and other E.O. No. 292, which amount shall be used to cover funds under the Migrant Workers Act to assist the gap in the foreign exchange rate, adjusted from abused OFWs and provide them counsels in their P41/US$l to P52/US$1. place of work; labor attach&, as part of the one- team concept of the embassies, are tapped to provide On the concern that if the indexing of salaries medical assistance in areas with a big concentration and allowances of foreign service personnel is pegged of Filipino workers; and the Philippine centers are to the dollar, this would put some Philippine embassies made available to serve as halfway houses for or missions to a disadvantage because of the runaway workers and those seeking jobs after leaving fluctuation of the peso, Senator Drilon conceded that their previous employers. there is a need to revise the compensation plan of foreign service personnel. He said that the corres- Noting that the proposed 40% budgetary ponding increases effected by Executive Order increase is the biggest insofar as the DFA is No. 461 on the basic annual rates of the overseas concerned, Senator Enrile inquired into the key allowances of the Chief of Missions, Career Minister, policy concerns and areas to be prioritized by the Foreign Service Officer and Foreign Service staff DFA, the specific programs and projects to be employees as provided in Executive Order No. 101, implemented, and the policies to be created in order and the revision of the overseas allowance indices in to address the growing concerns of terrorism conformity to the standards of the United Nations within and outside Philippine territories. Development Program (UNDP), are being funded from the savings of the DFA. He stated that the SUSPENSION OF SESSION P1.5 billion needed for the full implementation of the increases would be partly addressed by the proposed Upon motion of Senator Drilon, the session was additional budget of P592 million. suspended. Upon further queries, Senator Drilon said that It was 4:05 p.m. Philippine passports are valid for five years. He affirmed that with about one million OFWs in the RESUMPTION OF SESSION Middle East, consular and mission services would be rendered to about 200,000 OFWs annually. He said At 4:07 pm, the session was resumed. that on the average, the amount of US25 dollars is exacted as consular service fee. Senator Drilon stated that the proposed increase would he devoted to programs promoting the welfare Asked whether Philippine embassies or missions of some 8.5 million overseas Filipinos which is the charge uniform rates regardless of the exchange DFA’s primary concern, international trade to assist rate in the host country, Senator Drilon replied in the government’s economic programs, and that once the Revised Compensation Plan under international cooperation in the area of terrorism and Executive Order No. 461 is put in place in the transnational crimes. DFA budget, a uniform rate would be established to cover local currency fluctuations vis-&vis the INTERPELLATION OF SENATOR BIAZON US dollar.

In light of the peso’s movement in the currency At $50 as passport fee, Senator Biazon stated market, Senator Biazon asked whether the DFA has that the total service fee that the 200,000 Filipinos reassessed the indexing of allowances of its staff and would pay is $10 million or P500 million. He asked personnel overseas. Senator Drilon replied that the how such an amount is incorporated in the budget career diplomatic personnel of the DFA continue to for foreign missions and who determines its use. be compensated in terms of living quarters allowance Senator Drilon replied that the amount goes to (LQA) and other allowances based on an index of the general fund, and Congress appropriates it for P41 to US$l. However, he said that the Committee the DFA’s operational budget and capital outlay has made it clear in the special provision that the in the GAA. He said that the consular offices are P592,650,000 shall be charged against the consular authorized under the GAA to use the funds they income, subject to the submission of a special budget collect as advanced working funds, the disbursements pursuant to Section 35, Chapter 5, Book 6 of of which should be in accordance with the GAA. Bs 834 MONDAY. NOVEMBER 21.2006

Senator Biazon pointed out the need to clarify the SUSPENSION OF CONSIDERATION mechanism to ensure that there would be no OF HOUSE BILL NO. 5794 encroachment upon the congressional power of the purse. Senator Drilon reassured the Body that there Upon motion of Senator Pangilinan, there being are proper safeguards in the GAA. no objection, the Body suspended consideration of the bill. Asked whether the new site to which the Philippine mission in London was transferred afier STATEMENT OF losing preferential treatment from the lessor of the SENATOR DEFENSOR SANTIAGO property, for which the government paid about P1.2 million a year or $100,000 a month, had already been At this point, Senator Defensor Santiago delivered acquired by the Philippine government, Senator Drilon the following statement in relation to the GAB: replied that the government leased it under a 125- year lease, the consideration of which is equivalent TRIMMING THE BUDGET DEFICIT to a 15-year current lease. He clarified that the Senate-House Conflict Philippine mission was relocated because the old site The Senate and the House of Representatives is near the Israeli Embassy which is deemed to be a appear to be deadlocked on the meaning of terrorist target. the constitutional provision which states: “The Congress may NOT increase the appropriations Senator Biazon said that for the past five years, recommended by the President for the operation he has been advocating the acquisition of properties of the government as specified in the budget.” for the country’s foreign missions and the disposition (Constitution, Art. VI, Sec. 25, para. I). of the country’s nonperforming assets in Seattle, On the one hand, certain members of the Houston and New York, because he believed that House of Representatives have expressed the it was a better option than renting. Senator Drilon view that this constitutional provision may be clarified that the amount of P462 million is being circumvented by the expedient of inputting in appropriated for the acquisition of new sites of the budget process such extraneous factors as Philippine embassies. On the status of the disposition the automatic debt service appropriation, or the of the nonperforming assets, he said that the DFA currency exchange rate. would submit a written report on the disposition of On the other hand, certain members of the vacant lots in Seattle and Houston, the develop- Senate, including Senators Drilon, Arroyo and ment of the old chancery in Washington, D.C., and myself, take the lawyers’ view that in interpreting the disposition of the Fujimi and the Nampedai this provision, we should apply the rules of properties in Japan. As regards the Fifth Avenue statutory construction. The primary rule is that property in New York, he said that the premises are where the constitutional language is clear, there being used for the UN mission and the Philippine is no room for construction. consulate. Agreeing that there is a wasted space The test is that the language used in the in the chancery, he explained that it could not be Constitution must be understood in the sense sold or rented out because the Philippine government most obvious to the common understanding at supposedly owes the New York City government the time of its adoption. The rule is that words $18 million in property taxes, an issue that is still are presumed to be used according to their under dispute. ordinary plain, natural and usual meaning. Hence, when the Constitution provides that the SUSPENSION OF SESSION Congress may not increase appropriations, that is exactly what it means. Where the law does not distinguish, we should not distinguish. Ubi Upon motion of Senator Pangilinan, the session lex non distinguit, nec nos distinguere debemos. was suspended. Our budget deficits continue to be large and It was 4:30 p.m. persistent, mainly because certain House members continue to believe that they can ignore or RESUMPTION OF SESSION circumvent this constitutional provision. As a scholar of constitutional law, I humbly At 4:30 p.m., the session was resumed. submit that budget institutions and rules as hf MONDAY. NOVEMBER 27.2006 835

prescribed in the Constitution are sound and The House of Representatives, Department fiscally responsible. I denounce any attempt to of Health, and Ombudsman are the top three circumvent the rule against budgetary increases. agencies with quantum increases over the Pres- ident’s budget. As a lawyer, 1 have to reiterate Hence, in the spirit of obedience to that these increases are unconstitutional. constitutional rules and in observance of fiscal discipline, 1 humbly submit that the President Questionable Special Judiciay Fund should send a strong signal to the House of Representatives NOT to increase her request for This is an entirely new system. I would like new appropriations as stated in the Budget of to ask What is the legal basis for the creation Expenditures and Sources of Financing or BESF, of the Special Judiciary Fund, and what is the which I shall call the President’s budget. justification for the amount proposed? Would this not be tantamount to increasing the Fiscal discipline should start with the President’s budget as proposed7 President and her cabinet. I recommend that any cabinet member who actively lobbied for an Other questionable increases increase in the department budget over and above what the President requested in her Moreover, I humbly disagree with the SFC’s President’s budget should be reprimanded at the increases over the President’s budget appropria- very least. In extreme cases, I shall even go as tions for the following: far as to recommend that cabinet members Office of the Secretary of Education. The lobbying for increases in their agency budgets SFC raised the President’s budget by 2.9%, should be fired. for an appropriation of P126.249 billion. Further, I humbly recommend that as a Department of Energy. The SFC raised the matter of principle, the Senate should raise President’s budget by 2.7% for an appro- questions, when the budget level proposed by priation of P350.348 million. the House exceeds the President’s budget request UNESCO National Commission of the for each agency or fund. To carry out this Philippines. The House raised the President’s principle, I wish now to point out the egregious budget by49% to P15.213 million. entries in the statement of difference, in thousand pesos, among the President’s budget, Philippine Military Academy. The House the House version, and the Senate Finance raised the President’s budget by 2.8%, for an Committee Report (SFC). appropriation ofP183.855 million. Department of Public Works and Highways. Unconstitutional increases: top three The House raised the President’s budget by The first glaring example of fiscal irrespon- P8 billion for an appropriation of P66.381 sibility is the appropriation that the House of billion. This appropriation should be restored Representatives made for itself. For 2006, compared to the level of the President’s budget, which to the 2005 budget, the House gave itself an is only P65.3 billion. increase of 21.2%. But it appears to be insatiable. Department of Science and Technology. The For 2007, the House increased the President’s House raised the President’s budget by 21%, budget by 17.3%, thus appropriating for itself for an appropriation of P3.491 billion. This the sum of P3.4 billion. I submit that this appropriation should be restored to the level budgetary adjustment made by the House, of the President’s budget, which is P3.06 billion. in favor of the House, is unconstitutional and self-serving. Secretary of Transportation and Communica- tions. The House increased the President’s The second example of fiscal irresponsibility budget by P432 million, or an appropriation is the appropriation for the Department of of P16.224 billion. This should be restored Health. From the President’s budget, the Senate to the level of the President’s budget at further increased the budget as proposed by P16 billion. the House. Office of Transportation Security. Although The third example of fiscal irresponsibility the President’s budget provides for an is the appropriation for the Ombudsman, which appropriation of P10.451 million, still, this is the House increased by a whopping 58.7%, an increase of 945% over the 2005 level. for an appropriation of P1.175 billion. This is a I respectfully request our SFC to ask the far jump from the President’s budget of P936.394 Office of Transportation Secretary to explain million only. the quantum increase. 836 MONDAY, NOVEMBER 27,2006

NEDA Director-General. The House increased for an appropriation of P1.760 billion. the President’s budget by PI0 million. This I recommend that we should restore it should be restored to the level of the to the level of the President’s budget at President’s budget at P1.729 billion. P1.76 billion. Connnission on Higher Education. The House t Miscellaneous Personnel Benefits Fund. increased the President’s budget by 26.2%, The appropriation is P12.057 billion. I recom- for an appropriation of P509.847 million. This mend that it should be restored to the level is a quanhm jump of 78.8%. This should be of the President’s budget at Pll.8 billion. restored to the level of the President’s budget at P248.7 million. Supporting Senate Finance Committee (SFQ Film Development Council. The House raised the President’s budget by 89.5%, for an I agree with the SFC report and recommended appropriation of P8.467 million. This should appropriations for the following agencies: be restored to the level of the President’s + National Commission on Indigenous Peoples budgzt, which is P4.467 million. * Secretary of Agriculture Codof Appeals. The House increased the President’s budget by 18.2%, for an appro- * DENR, consisting of Office of the Secretary, priation of P656.056 million. This should be Environmental Management Bureau, and cut and we should adopt the level of the Mines and Geosciencies Bureau President’s budget, which is P602.8 million. Bureau of Internal Revenue Philippine Heart Center. The House raised Secreky of the Interior and Local Government the President’s budget 21.7%, for an appro- Bureau of Fire Protection priation of P235.500 million. We should restore this to the level of the President’s Philippine National Police budget at P170.5 million. Secretary of Justice People’s TV Network, Inc. It has an appro- Public Attorney’s Office priation of P50 million. I submit that this appropriation is unconstitutional and un- Institute for Labor Studies justified. This TV station should be privatized. + National Labor Relations Commission It does not deserve a chronic public subsidy. + Technical Education and Skills Development Cultural Center. The House raised the Authority President’s budget by P9.5 million, for an Department of Social Welfare and appropriation of PI70 million. I submit that + the appropriation should be restored to the Development 2005 level, and that Congress should review + Secretary of Trade and Industry the need for a continuing subsidy. + National Library Development Academy of the Philippines. It + National Museum has an appropriation of P70 million. I also recommend that the Congress should review + Office of Muslim Affairs the need for a continuing subsidy. + Philippine Drug Enforcement Agency National Housing Authority. It has an + Autonomous Regional Government appropriation of P1.356 billion. I recommend in Muslim Mindanao that we should restore the appropriation to the 2005 level of P1 billion. I also propose + Supreme Court and lower courts that Congress should review the need for a + Presidential Electoral Tribunal continuing subsidy. + National Electrification Administration *’ Zamboanga City Special Economic Zone The appropriation of P302.400 million Authority. It has an appropriation of P90 is suspicious and unconstitutional, million. What have been the major achieve- and I commend the SFC for its report ments of this Authority? Again, I propose + National Development Company that Congress should review the need for a continuing subsidy. + Home Guarantee Corporation * DepEd School Building Program. The House + National Meat Inspection Service raised the President’s budget by 56.8% Priority Development Assistance Fund p6 MONDAY, NOVEMBER 27.2006 227

CLARIFICATION OF SENATOR DRILON Philip Alston, in February 2007. He disclosed that the Working Group on Enforced or Involuntary Disappear- Senator Drilon informed the Body that while ances, consisting of five experts, has also requested Senator Defensor Santiago was correct in saying that to visit the country. He stressed that the Philippines, the budget of the DPWH was increased by P8 billion, being a member of the Human Rights Council, is the Committee reduced it to the NEP level. expected to cooperate with the special rapporteurs. He also informed the Body that the DFA has consulted REFERRAL OF SPEECH TO COMMITTEE various government agencies on the proposed visits.

Upon motion of Senator Pangilinan, there being Asked if the request visit of Special Rapporteur no objection, the Chair referred the privilege speech Jean Ziegler on the Right to Food in relation to of Senator Defensor Santiago to the Committee on the Rapu-Rapu Island problem has been acted upon, Finance. Senator Drilon replied that the DFA is presently consulting the Department of Agriculture, the COMMITTEE REPORT NO. 160 Department of Agrarian Reform, the National Food ON HOUSE BILL NO. 5794 Authority and the DENR on the matter. He assured (Continuation) Senator Madrigal that the Committee would continue to monitor the response of the DFA. Upon motion of Senator Pangilinan, there being no objection, the Body resumed consideration, on Senator Madrigal stated that during her visit to Second Reading, of House Bill No. 5794 (Committee England, she consulted University of Essex Professor Report No. 160), entitled Kevin Boyle, assistant to the former UN High Commissioner on Human Rights, Mary Robinson, AN ACT APPROPRIATING FUNDS FOR regarding the pending requests, and he was shocked THE OPERATION OF THE GOVERN- to learn that the requests have not been acted upon MENT OF THE REPUBLIC OF THE because such inaction reflects the state of human PHLIF'PINES FROM JANUARY ONE rights in the country. Senator Drilon agreed that the TO DECEMBER THIRTY-ONE, TWO requests should have been acted upon. THOUSAND SEVEN, AND FOR OTHER PURPOSES. As regards the JPEPA agreement, Senator Drilon stated that in terms of substantial contribution and DEPARTMENT OF FOREIGN AFFAIRS negotiation, the principal agency is the Department of (Continuation) Trade and Industry and it may have already consulted the Department of Labor and Employment on the Senator Pangilinan stated that the parliamentary admission of health workers; the Department of status was the continuation of consideration of the Health; and the DENR on toxic wastes. He added budget of the Department of Foreign Affairs. that there has been no substantial consultation between the DFA and the DTI with respect to the Thereupon, the Chair recognized Senator Drilon, JPEPA. Nonetheless, he opined that as part of Sponsor of the measure. procedure and because the DFA is in charge of foreign relations, an agreement of such nature should INTERPELLATION OF SENATOR MADRIGAL have the inputs of the DFA experts.

Asked by Senator Madrigal how many visit Senator Madrigal said that she looks forward to requests from the United Nations Special Rapporteurs the visit of the Special Rapporteur on Enforced and were pending, Senator Drilon replied that there were Involuntary Disappearances and hoped that his 12 requests from various UN rapporteurs. Philippine counterpart would not try to change his opinion on the country's situation. Asked what actions were taken on the requests, Senator Drilon stated that the DFA, National Security To the concern that the DFA has not been con- Council and the DLG were coordinating preparations sulted on some very important treaties, Senator Drilon for the proposed visit of the UN Special Rapporteur informed the Body that the Philippine government on Extrajudicial Summary and Arbitrary Execution, established, through a privately organized corporation, w 838 MONDAY, NOVEMBER 27,2006 the Manila Economic and Cultural Office in Taipei, he learned that, among other things, the low turnout Taiwan without consulting the DFA; the funds of the of overseas voters has to do with the “uncertainty” Office are disposed of at the pleasure of the board of the 2007 elections, the cynicism of Filipino expats of directors and are not subject to audit by the COA; that their votes would not be counted, and the burden and all its personnel are under the control of the of voting in far-off voting centers. He asked what Office of the President. He added that the Office the DFA could input from the personal observations operates like an independent republic whose funds of their foreign missions regarding the problems of are audited by a special auditor in Taipei. He posited overseas voters. that the DFA’s noninvolvement may have done it good since its reputation was not tarnished by the Senator Drilon reiterated that one major revision operation of MECO. would be voting by mail which is allowed under the law, upon concurrence of the Joint Congressional INTERPELLATION OF SENATOR PIMENTEL Oversight Committee and the Comelec. He said that presently, only voters in Japan, the United Kingdom At the outset, Senator Pimentel asked whether and Canada are allowed to vote by mail but the list the Department of Foreign Affairs has records on of countries could be expanded upon review, given the turnout of overseas voters, as he recalled that in the efficiency of the mail system in other developed the implementation of the Overseas Voting Act, the countries. On the information that Belgium, Italy government went to great lengths, at a huge and and Switzerland allow voting by mail, he disclosed undeserved expense, to accommodate an insignificant that postal voting is recommended to be adopted number of overseas voters in far-flung areas. He in all countries except the United Arab Emirates, expressed the view that the DFA might give Congress Saudi Arabia, Hong Kong, Greece and Saipan where specific recommendations on the matter.Senator personal voting would be required. He added that Drilon informed the Body that the total number internet voting may be allowed to 73,150 registered of registrants in 2003 was 364,197; as of November voters in Australia, the United States, the United 2006, the total number of registered overseas Kingdom, Italy, Canada and Singapore. voters was 507,252. He estimated that the number of absentee voters in 2007 would be 329,714, To the suggestion that the issues be raised assuming that the 65% of voters turnout in 2003 again when the Body tackles the Comelec budget, would be true in 2007. He disclosed that certain Senator Pimentel agreed. He cautioned the Body programs are being recommended to improve to go about automated elections slowly to avoid voters turnout in 2007, like voting by mail, so as the problems encountered by the U.S. in its recent not to open voting centers with an insignificant election. number of voters. He requested Senator Pimentel to clarify the issues in more detail when the budget On the issue of Myanmar, Senator Drilon stated of the Commission on Elections is presented. that the Body is awaiting the report of the special representative of the UN Secretary General who Senator Pimentel recalled that when he attended visited Myanmar even as he conceded the difficulty the Interparliamentary Union Conference in Geneva, of getting updated information on the situation because he took the opportunity to visit Rome and Brussels to of very strict regulations in that country. He gave find out from Philippine embassies the exact number assurance that Secretary Romulo would raise the of overseas voters for the 2007 elections. He lamented issue in the forthcoming Asean Ministers Conference that the data he gathered were so insignificant that in Cebu City. He promised that the deparment would he wondered whether it was worthwhile passing the seriously consider Senator Pimentel’s suggestion to Overseas Voting Act in the first place. He expressed downgrade the Philippines’ relationship with Myanmar the view that if the government could muster only in the event the latter’s military leaders would refuse half a million voters out of 10 million Filipinos abroad, to restore democracy. then some justification might be presented for Congress to amend the law and the country to adjust On the possibility of mitigating the problems of its expectations. foreign service personnel in various posts abroad considering that the fluctuations in the exchange Moreover, Senator Pimentel informed the Body rates have affected their living condition, Senator that from his consultations with embassy people, Drilon informed the Body that President Macapagal bg P MONDAY, NOVEMBER 21.2006 839

Arroyo issued Executive Order No. 461 in September Senator Lim stated that the leadership of 2004, adjusting the living allowances of DFA person- Secretary Romulo is worth emulating by other nel assigned abroad based on the UNDP prevailing departments, considering the high dissatisfaction indices. He expressed gratitude to the observation rating of the President partly as a result of the that failing to cope with living standards while on actions of other government officials. He expressed foreign assignment could cause embarrassment to hope that the budget of the DFA would be approved the Filipino people and their representatives. He said in toto. that the Committee has incorporated a special provision on the use of the consulate’s income in the ACKNOWLEDGMENT OF THE amount of P562,656,000 to cover the deficiency in PRESENCE OF GUESTS the foreign exchange rate in the allowances of foreign service personnel. Senator Angara, president of the Philippines- Spain Friendship Association, acknowledged the At this point, Senator Pimentel informed the presence of Senator Isidre Molas, Vice President of Body that he received a report that a country in the the Spanish Senate; Senator Jose Manuel Barquero, Middle East is being used as a staging ground for the President of the Spanish-Philippine Friendship illegal recruitment of Filipino women who wound up Association; Senator Jaime Blanco Garcia; Ms. Ana as prostitutes. To avoid embarrassing the country by Alvarez and Mr. Eduardo del Vas, staff of the identifying it, he said that he would personally relay Spanish Senate; Spanish Ambassador to the the information to Secretary Romulo. Senator Drilon Philippines Ignacio Sagas; and Philippine Ambassador welcomed the additional information on the matter, to Spain Joseph Delano Bernardo. He said that the adding that diplomatic moves were being taken to Spanish delegation was in the country on the occasion address the problem. of a two-day Tribuna Filipina-Espafia, an annual affair that alternates between Madrid and Manila, that REMARKS OF SENATOR LIM aims to foster closer ties between the two countries.

Senator Lim lauded the very quick response SUSPENSION OF CONSIDERATION of some public officials to problems brought to OF HOUSE BILL NO. 5794 their attention through radio and television programs and hoped that the other departments of govern- Upon motion of Senator Pangilinan, there being ment would act with such dispatch. In particular, no objection, the Body suspended consideration of he commended the country’s ambassadors for the bill. responding to his requests and addressing the concern of OFWs, to wit: Consul of the Philippine Embassy SUSPENSION OF SESSION in Saudi Arabia Mariano Dumia for personally seeing to it that a sexually-harassed domestic helper is Upon motion of Senator Pangilinan, the session released from her employer; Ambassador to Milan was suspended to allow the senators to greet the Pedro Chan for responding to the urgent needs of his guests. countrymen; and Ambassador to Canada Jose Brillantes for helping the Filipino girls who were hired It was 5t34 p.m. supposedly as waitresses in Dubai but ended up as prostitutes. He also lauded Chief Public Attorney RESUMPTION OF SESSION Persida Rueda-Acosta for responding to problems brought to her attention. At 5:40 p.m., the session was resumed.

Relative thereto, Senator Lim requested the COMMITTEE REPORT NO. 160 foreign affairs secretary to send someone from the ON HOUSE BILL NO. 5794 DFA to lecture the other departments as to the (Continuation) deportment of a public official and the true essence of public service, which is to respond to the concerns Upon motion of Senator Pangilinan, there being of the general public at all times. He said that people no objection, the Body resumed consideration, on go to the media out of frustration over the failure of Second Reading, of House Bill No. 5794 (Committee many government departments to respond. Report No.160), entitled &f 4” 840 MONDAY, NOVEMBER 27,2006

AN ACT APPROPRIATING FUNDS FOR able to bring out 230 of the 500 OFWs in that THE OPERATION OF THE GOVERN- country. He bared that because of the circuitous MENT OF THE REPUBLIC OF THE route by land and air, it took DFA personnel in PHILIPPINES FROM JANUARY ONE Islamabad days to reach Kazakhstan. Nonetheless, TO DECEMBER THIRTY-ONE, TWO he commended the DFA and OWWA for acting THOUSAND SEVEN, AND FOR immediately on the matter. Given the fact that the OTHER PURPOSES. OFWs were being humiliated, abused and intimidated by the Kazakhs, he asked whether the DFA should DEPARTMENT OF FOREIGN AFFAIRS have a post nearer that country. (Continuation) In reply, Senator Drilon stressed that because of Senator Pangilinan stated that the parliamentary budgetary constraints, it would be difficult for the status was still the consideration of the budget of the DFA to open an embassy in Kazakhstan. To ensure Department of Foreign Affairs. the well-being of OFWs, he proposed the following steps: 1) constant and regular visits to the area The Chair recognized Senator Drilon, Sponsor of by a Philippine representative of the nearest post; the measure, and Senator Gordon for his interpellation. 2) regular visits to the area by the OWWA attach6 in Jeddah; and 3) assigning an honorary consul to INTERPELLATION OF SENATOR GORDON Kazakhstan. For his part, Senator Gordon suggested that the government ask its allies in that region to Upon query of Senator Gordon, Senator Drilon make representation, on its behalf, with the affirmed that the budget for diplomatic and consular Kazakhstan government. He stated that in the next services increased by 51.53%, from P4.72 billion to budget delibations, he would check if the DFA has P6.1 billion. done any research on establishing an embassy in the Central Asian region. Senator Drilon stated that Asked on the basis for establishing diplomatic budget permitting, it would be possible for the DFA missions, Senator Drilon replied that three factors to do so. are taken into consideration: 1) assistance to the Philippine nationals in a given area; 2) potential for Citing the assassination of Lebanese minister trade relations, including tourism; and 3) the bilateral Pierre Gemayel in Beirut, Senator Gordon inquired if political considerations. the Philippine government has an allocation for intelligence to anticipate such an incident not only Senator Gordon pointed out that U.S. territories in Lebanon but elsewhere, given its impact on the like Saipan and Guam, which have large Filipino well-being of OFWs. Senator Drilon replied that population, were allocated P3.8 million and P36.5 the consulate in Lebanon has established “Team million, respectively, in the 2007 DFA budget in view Lebanon” that is tasked to make an on-the-ground of the country’s trade and political interest therein. assessment of the situation. He informed the Body that hundreds of thousands of OFWs had been On whether there are Philippine missions in repatriated from Lebanon but many have gone back. areas like Kazakhstan which has been recognized as a powerful country because of its strategic resources, Senator Gordon asked what kind of represent- specifically oil, Senator Drilon replied that Kazakhstan ation the DFA has made to address the situation of is covered by the Islamabad post. undocumented OFWs, especially women, whose pass- ports were confiscated by their employers, as he Senator Gordon recounted that while he was in lamented the fate of a missing undocumented female Geneva on October 22 for the Red Cross International OFW in Lebanon who was located with the help of Board Meeting, he was called by OFWs working the International Committee of the Red Cross, but for Bechtel in Kazakhstan that Turkish workers died later in hospital. He pointed out that many such had been massacred or beaten up by Kazakhs and undocumented female OFWs are treated as chattel the incident traumatized and instilled fear in them. by their employers in some Middle Eastern countries. He said that he called Secretary Romulo immediately, He recalled that in a conversation with Labor and working closely with Undersecretary Cornejos Secretary Brion during the height of the Israel- as well as Mr. Nitoy Roque of OWWA, they were Lebanon conflict, he asked the secretary why theN MONDAY, NOVEMBER 27,2006 84 1

Filipino maids in the Middle East were getting between in the GAB a special provision for another P200 US$lOO and US$200 in wage when it should be million to augment the DFA’s building fund of US$400. True to his promise, he said that the P262.452 million. He said that this may be insufficient Secretary Brion has been lobbying for a US$400 wage. but loans can be secured on the basis of the down payments to be made for the improvement of buildings Senator Gordon said that the DFA should provide and other facilities. He added that the DFA Secretary active representation in the different countries to has requested that the consular fees of 10% being ensure the welfare of the OFWs. collected abroad be raised to 25% to enable embassies to improve their representation and presentation. Senator Drilon stated that it is a very complex situation because with the present 11.5% unemploy- On another matter, Senator Gordon said that the ment rate in the country, a lot of people would resort OWWA, which has enough resources, should study to various ways to leave the country and seek the possibility of adopting an internet voting system employment abroad, resulting in many undocumented for Filipinos overseas. Senator Drilon informed the workers in various parts of the world. Nonetheless, Body that the Comelec has recommended the adoption he said that the DFA and DOLE officials have of an internet voting system for the US., Australia, given the assurance that additional measures would United Kingdom, Italy, Canada and Singapore. be undertaken to address the problem of the continuous migration of Filipino workers; and to SUBMISSION OF THE BUDGET OF THE hold the recruitment agencies in the host countries DEPARTMENT OF FOREIGN AFFAIRS primarily responsible for the welfare and safety of these workers. He said that the DOLE Secretary There being no other reservation for interpellation, has recently raised the minimum wage of domestic upon motion of Senator Drilon, there being no objec- helpers to US$400. tion, the budget of the Department of Foreign Affairs was deemed submitted for the Body’s consideration. On whether the DFA has created a location map of Filipinos in Lebanon, and come up with an exit SUSPENSION OF SESION plan in cases of emergency. Senator Drilon said there is a location map of OFWs in Lebanon and Upon motion of Senator Drilon, the session was these workers have been clustered in such a manner suspended. that each cluster has group leaders or contact persons. It was 6:15 p.m. Senator Gordon stated that he would like a formal letter from the DFA enumerating the strategies RESUMPTION OF SESSION that are being employed to ensure the adequate protection of Filipino workers. Senator Drilon said At 6:17 pm., the session was resumed. that he has requested the DFA Secretiuy to submit a written response to Senator Gordon’s queries, COMMISSION ON HUMAN RIGHTS including a detailed plan for the evacuation of Filipinos in Lebanon. Senator Drilon presented the proposed budget of the Commission on Human Rights in the amount of As regards the budget for Philippine embassies, P216,491,000, just like the NEP and the GAB. Senator Gordon observed that the increase in capital outlay covers only the official residences in Shanghai INTERPELLATION OF SENATOR MADRIGAL and Brussels, chanceries in Manama and Seoul, and the diplomatic enclave in Berlin. He said that the Senator Madrigal stated that she has a copy of government would need additional funding to maintain the concluding observations of the Human Rights embassies in other countries like India and France, Committee on the reports submitted by state-parties pointing out the importance of providing decent office under Article 40 of the International Covenant on building, transportation, and other facilities for embassy Civil and Political Rights, which says that as the officials and personnel as they are representatives of Committee welcomes the ratification of the Optional the country who should be treated with high respect. Protocol to the Covenant of 1989, it considers that the Senator Drilon stated that the Committee has included reform process should be accelerated and strengthened.Af P. 842 MONDAY. NOVEMBER 27.2006

Senator Madrigal asked on the CHR’s stand on As regards the CHR’s opinion on the possibility the passage of the anti-terrorism bill vis-a-vis the of limiting the effectivity of the Anti-Terrorism Law, observations of the Human Rights Committee that Senator Drilon said that the CHR favors a sunset the proposed terrorism legislation, as acknowl- provision in the law to address a change in circurn- edged by the delegation, includes a broad and vague stances in the future, and that a mechanism should definition of acts of terrorism which could have be in place so that extraordinary powers granted to a negative impact on the rights guaranteed by the authorities to address the terrorism problem could the government. Senator Drilon replied that the be withdrawn automatically if the situation no longer CHR believes that while the anti-terrorism bill is a warranted the exercise of such powers. necessary legislation, which must also safeguard accepted human rights principles and protection, the Asked on the number of extrajudicial killings and law against torture and involuntary disappearance disappearances in the country, Senator DriIon said must be enacted first. that based on the CHR’s documentation on reports from regional offices and the families of the victims, Asked on the CHR’s position on the number of there have been 249 political killings and counting, days an arrested person can be detained without with Regions III (Pampanga), VI11 and N registering charges under the anti-terrorism bill, Senator Drilon the highest number of cases. said that it prefers implementing the minimum 5-day period which is within the level of acceptance nnder Asked on the CHR’s view about having prosecu- international human rights standards. torial powers as proposed in the Paris Principles on National Human Rights Institutions, Senator Drilon Senator Madrigal echoed the concern of the said that while the CHR favors having such powers, International Commission of Jurists (ICJ) that the the DOJ is opposed to it. proposed 15-day detention of a suspected terrorist prior to his presentation before a judicial authority as INTERPELLATION OF SENATOR BIAZON stated in Section 19 of the anti-terrorism bill would violate Article IX, paragraph 3 of the Covenant, Asked by Senator Biazon whether there has since, under international law, the term “promptly” been an increase in human rights violation cases does not exceed 48 hours even if national security in the last five years, Senator Drilon replied in the concerns are involved. For his part, Senator Drilon affirmative. pointed out that under the anti-terrorism bill, the period of detention for very serious offenses is 72 On the reason behind the 2% reduction in the hours or three days; however, there are debates over proposed CIIR budget for operations from P158 million suggestions to change the detention period to five in 2006 to PI55 million in 2007, Senator Drilon days which is two days more than the period explained that the House of Representatives and the prescribed in the Revised Penal Code. He clarified Committee deleted the P52,143,000 MOOE for the that the period of detention varies, depending on the CHR under the President’s budget. gravity of the offense and is subject to review. Asked why the CHR’s proposed P225 million On the CHR’s view on the issue of having an budget for 2007 was reduced by the Office of Anti-Terrorism Council to be composed of the the President by P50 million if there has been an President, Vice President and a number of key increase in human rights violations in the last five ministries to be served by the National Intelligence years, Senator Drilon replied that he would forward Agency as its secretariat, Senator Drilon replied that the query to the DBM. the CHR has not reviewed the proposed council in great detail. However, he stated that he is preparing Senator Biazon said that at the proper time, he a number of amendments to ensure that the CHR would propose the restoration of the P50 million to would not exercise functions that do not pertain to the CHR budget to be taken from the P650 million a political body such as the Anti-Terrorism Council. intelligence fund of the President. He believed that being a political body, the Anti- Terrorism Council should have very limited powers On whether the CHR mandate includes the which should be subject to constant monitoring and monitoring of the judicial processes for the clearance review by the judicial system. or prosecution of soldiers, Senator Drilon replied # MONDAY, NOVEMBER 27,2006 841 that human rights, being a broad subject, could truthfulness of the report that a contingent headed by include all concerns. a Canadian human rights advocate was arbitrarily stopped and prevented from proceeding with its On another matter, Senator Biazon expressed investigation. Senator Drilon replied that the justice concern over the actuation of AFP Chief of Staff secretary did not have any knowledge of the incident General Esperon of overturning the recommendation and that he has not ordered the cessation of of the pre-trial investigating board to drop the case investigation by any party. against 18 of 30 officers and soldiers charged with rebellion. He then asked whether this matter was Senator Pimentel disclosed that said group was monitored by the CHR. Senator Drilon replied in the surprised by the turn of events because it was under negative. the impression that there was an open invitation from the President, herself, for the group to personally see Senator Biazon asserted that the commander what is happening in the country. He said that the may overturn the recommendations of his staff on group responded to the call but a military unit matters pertaining to operations on the ground but the supposedly blocked its ingress into some of the spots, determination of guilt or innocence of the accused, particularly in Central Luzon. He stressed that the he insisted, has to pass through judicial process. In countty’s human rights image should be maintained the case he cited, he said that the commander, a with some degree of acceptance and integrity among nonlawyer, overturned the findings of the board human rights groups or institutions. without justifying his action. He asked the Chair of the Commission on Human Rights to determine if INTERPELLATION OF SENATOR BIAZON there has been a violation of the rights of the accused, as well as to monitor the case. He believed Asked by Senator Biazon on the basic policy in that in any investigation, the statements of the accused the implementation of the Witness Protection and must be given weight. Senator Drilon agreed. Benefit Program, especially on the matter of qualifica- tion, Senator Drilon replied that the law sets the SUBMISSION OF THE BUDGET OF qualifications for a person who wants to enter into THE COMMISSION ON HUMAN RIGHTS the Program: 1) he must be the least guilty; and 2) his testimony must be essential to the conviction of Upon motion of Senator Drilon, there being no the accused. objection, the budget of the Commission on Human Rights was deemed submitted for the Body’s As to how long the benefit, particularly security, consideration. is extended, Senator Drilon replied that it would be extended for as long as in the judgment of the justice SUSPENSION OF SESSION secretary the witness needs to be protected, but certainly, at the minimum, it ends after the witness Upon motion of Senator Drilon, the session was has testified and the case had been terminated; and, suspended. certainly, the natural limitation is the budget. He observed that there were times when the witnesses It was 6:44 p.m. no longer wanted to be confined in the safe houses and voluntarily left the program. RESUMPTION OF SESSION On whether Ms. Rosebud Ong is still under the At 6:47 p.m., the session was resumed. Witness Protection Program, Senator Drilon replied in the negative, pointing out that she is under the care DEPARTMENT OF JUSTICE of the Intelligence Service of the Armed Forces of the Philippines (ISAFP). Senator Drilon presented the budget of the Department of Justice. As to the categories of witnesses who enter the program, Senator Drilon clarified that the person INTERPELLATION OF SENATOR PIMENTEL need not be a participant in the offense but if he/ she could provide vital evidence that would lead to On the matter of extrajudicial killings, Senator successful prosecution of the accused, he/she could Pimentel asked the justice secretary regarding the be admitted into the program. N F 844 MONDAY, NOVEMBER 27,2006

Asked whether the principal perpetrator could turn the Articles of War that are punishable by the death state witness against co-defendants, Senator Drilon penalty. He asked whether the Articles of War had replied in the negative, stating that hekhe would not been amended as a consequence of the abolition of meet the qualification of “not the most guilty.” the death penalty in the Constitution. Senator Drilon replied in the affirmative, as he agreed that the Asked what 2Lt. Lawrence San Juan was Articles of War cannot go against the Constitution. charged with, Senator Drilon replied that he was charged with participating in an alleged coup d’etat Asked if the Chief of Staffs excuse in over- or rebellion to topple the Arroyo administration. turning the findings of the Investigation Board needs He said that the officer’s discharge from the list of further examination, Senator Drilon replied in the accused persons so he could turn state witness is affirmative. governed by the Rules of Court and it is for the court to make a judgment as to whether or not he qualifies INTERPELLATION as a state witness. OF SENATOR EJERCITO ESTRADA (J)

Asked whether it is within the mandate of the At the outset, Senator Ejercito Estrada (J) DOJ to get involved in the judicial process as far as observed that for the DOJ, the President proposed the Articles of War is concerned, Senator Drilon P5.332 billion, the House of Representatives, P5.493 replied that it would depend on the elements of the billion, and the Senate, P5.32 billion. Senator Drilon crime. He explained that if the elements of the crime stated that the cut was made by the Committee in of coup d’etat were present in a case, the DOJ the DOJ’s Confidential and Intelligence Funds. would charge the persons before the civilian courts; however, the rules of conduct under the Articles of On the assumption that the Senate’s version War govern the conduct of uniformed personnel, would he adopted, Senator Ejercito Estrada (J) a matter that the military authorities could take up inquired how the DOJ would be affected by the through court martial proceedings. cut. Senator Drilon clarified that Committee cut the President’s proposal and the insertions of the Senator Biazon recalled that the AFP Chief of House of Representative. He stressed that only the Staff created a 3-man Investigation Board under the Confidential and Intelligence Funds were deleted on Judge Advocate General’s Office (JAGO) that recom- the principle that agencies that actually gather mended the dropping of some of the charges against information should use such funds, so in the case of some military officers involved in a plot against the the DOJ, its attached agencies - NBI and the Arroyo administration; however, the Chief of Staff Bureau of Immigration - are allowed to use the overturned it. He expressed concern that such an act confidential funds but not the DOJ Proper. might have violated the rights of the accused. Senator Drilon explained that if the matter was brought to the Should the House version or the President’s Secretary of Justice in a formal inquiry, the DOJ version prevail in the bicameral conference committee, would have declined from rendering an opinion since Senator Drilon stated that the P112 million increase it pertains exclusively to court martial proceedings. in capital outlay would go to the construction of the halls ofjustice in Region IV - Gumaca, Quezon and Asked if the Articles of War could supersede the Mamburao, Occidental Mindoro; Region V - Pili, Revised Penal Code in this situation, Senator Drilon Camarines Sur and Polangui, Albay; rehabilitation of replied that acts of uniformed personnel related to the hall of justice in Iloilo City; Region VU - Talisay military duties are governed by the Articles of War. City, Cebu and Kanlaon.

Asked if a person could go to the Supreme Court As regards the budget of the Public Attorney’s if his rights are being violated, Senator Drilon replied Office, Senator Drilon stated that it is P40,778,000. in the affirmative. He stated that due process is a constitutionally guaranteed right of the accused, Asked whether the labor problems of poor whether in a civilian court or a military court. workers are being addressed by the PAO, Senator Drilon replied in the affirmative. He said that there Senator Biazon stated that there are 13 offenses, are 1,048 lawyers but it cannot be determined how including treason and murder during wartime, under many are working exclusively on labor cases.@ P MONDAY. NOVEMBER 27. 2006 RA5

On the observation that PA0 lawyers often Bureau of Corrections, as a certain degree of lost labor cases, Senator Drilon stated that labor discretion must be exercised to avoid any untoward cases are decided on their merits and lawyers are incidents. He reiterated that due process must be presumed to be competent in handling them. observed in all instances, whether involving DOJ prosecutors, prison inmates or those charged with To complaints that PA0 lawyers ask indigent rebellion. He gave assurance that efforts are being clients for professional fees. Senator Drilon stressed undertaken to hasten the administrative proceedings that this should not be tolerated and should be and that the justice secretary would be submitting a reported. written report on these cases.

Asked if the PA0 Chief is aware that some On the case of Prosecutor Elmer Mitra of Pasay PA0 lawyers are receiving professional fees, Senator City, Senator Drilon informed the Body that the Drilon replied in the affirmative, adding that PA0 prosecutor had been promoted &om an acting capacity lawyers found guilty of accepting fees had been to a regular position as city prosecutor of Pasay. disciplined or dismissed. He said that he knows Prosecutor Mitra personally, having been with the Pasay City Prosecutor’s Office On the alleged statement of Secretary Gonzalez when he (Senator Drilon) was justice secretary. that he would “feed protesters to the shark” in He surmised that the appointment of Prosecutor relation to the forthcoming ASEAN summit, Senator Mitra to a permanent position at the time he filed a Drilon explained that the colorful statement attributed case against Senator Ejercito Estrada (J) was merely to the justice secretary is a mere figure of speech. a coincidence. But he conceded that the Cabinet official should be advised to exercise more prudence in making state- Asked whether a crime of destabilization exists ments that some in the civil rights movement may under the Revised Penal Code, Senator Drilon replied find offensive. in the negative, saying that the crime is inciting to sedition. On the Secretary’s statement that the Asked on the major outputs of the special University of the Philippines is a breeding ground for committee againstjueteng and other illegal gambling destabilizers, he explained that the DOJ filed charges activities chaired by Secretary Gonzalez, Senator of inciting to sedition against some personages of Up Drilon disclosed that the committee was transferred such as a student from the UP College of Law who to the jurisdiction of the Ombudsman as soon as was accused of running errands for Attorney Behnonte the names of some members of the First Family but the case is still for resolution by the courts. were mentioned in the investigation. He said that the presidential directive was prompted by the fact that Senator Ejercito Estrada (J) asked for an update the justice secretary is a political appointee, so his on the case of the “Erap 5” who were charged with investigation into the involvement of the First Family rebellion by the DOJ. He recalled that one of the might be compromised. On the other hand, he stated five accused was mauled by elements of the NBI that the Ombudsman, while also a political appointee, and the military. is a constitutional office independent from the Executive branch. SUSPENSION OF SESSION

On the promise to go after prosecutors who fail Upon motion of Senator Drilon, the session was to dispose of their cases speedily, Senator Drilon suspended. informed the Body of an ongoing performance audit of state prosecutors, including evidence in their It was 7:37 p.m. possession. He conceded that to date there were no figures available on the number of prosecutors RESUMPTION OF SESSION dismissed as due process must be followed but he disclosed that some erring prosecutors in Antique At 7:37 p.m., the session was resumed. and Bacolod had been relieved. Likewise, he said that the investigation on inmates running rackets Senator Drilon requested Senator Ejercito inside prison is still ongoing. He acknowledged that Estrada (.I)to allow the justice secretary to check the investigation is taking long, especially in the on the case and to submit a report shortly. He said 846 MONDAY, NOVEMBER 27,2006 that given the myriad of cases handled by the depart- increase by the House because the overall P8.2 ment, the secretary could not inmediately recall billion increase in the budget has already posed every case. Senator Ejercito Estrada (J) averred that some constitutional and fiscal problems. the charges against the five were dismissed for lack of evidence. INTERPELLATION OF SENATOR BIAZON

Senator Ejercito Estrada (J) asked what the DOJ Replying to Senator Biazon’s queries, Senator could do to totally dismiss the cases against people, Drilon confirmed that in the recent hosting of particularly those who have less in life, who were the World Pool Tournament in the Philippines, falsely accused of destabilization attempts against the the DOT spent P40 million, which included the government. Senator Drilon said that the complainant payment for television rights. He said that the money could be assisted by the Public Attorney’s Office so was sourced from Pagcor and not from the general that charges could be filed before the prosecutor’s fund for 2005. office. If evidence warrants, he said that appropriate charges could be filed in court, including the civil Since the country would be hosting the tourna- damages. ment again next year, Senator Biazon asked if the P40 million allocation has been included in the 2007 Regarding the more than five uniformed person- DOT budget. Senator Drilon replied in the negative. nel from the police and the military who were implicated in the “Erap 5” case, Senator Drilon said Senator Biazon suggested that the DOT ensure that charges against them had been filed with the the quality of Philippine tourism advertisements for Military Ombudsman. He said that he would verify the international market as he cited the tourism with the DOJ the status of the case and the identities advertisements of Taipei, Warsaw and Jakarta which of the accused. were quite effective. He noted that the Philippine advertisements, on the other hand, show abstract art SUBMISSION OF THE BUDGET that does not depict the country’s unique features. OF THE DEPARTMENT OF JUSTICE Senator Drilon gave assurance that the DOT would address this matter. Upon motion of Senator Drilon, there being no objection, the budget of the Department of Justice Upon further query, Senator Drilon said that the was deemed submitted for the Body’s consideration. country’s tourism attach& for Europe are deployed in Germany and London. SUSPENSION OF SESSION Senator Biazon recalled that he got a feedback Upon motion of Senator Drilon, the session was from the country’s tourism attach6 in Frankfurt that suspended. German tourists who visited Pagsanjan Falls, which is featured in Philippine advertisements, complained It was 7:44 p.m. of the foul odor at the boat terminal. Senator Drilon said that the LGU has jurisdiction over the tourist RESUMPTION OF SESSION spot and the DOT has threatened that unless it cleaned up the place, Pagsanjan Falls would not be At 7:55 p.m., the session was resumed. included in the Philippines’ tour package.

DEPARTMENT OF TOURISM On whether there is a multi-year program on the restoration of the rice terraces, Senator Drilon Senator Drilon presented the budget of the acknowledged that direct presidential intervention Department of Tourism. He stated that the Committee is needed to prevent the further deterioration of has recommended the President’s original submission the rice terraces. He posited that the DOT and the of P1,562,543,000 for the DOT, which includes DA should agree to allocate a portion of their P1,497,543,000 for the DOT proper and a P65 million budgets to improve the irrigation system and in the subsidy for the Philippine Convention and Visitors process, preserve the cultural heritage of this tourist Corporation (PCVC). He said that the Committee spot. Unfortunately, he said, no agreement has been could not agree with the proposed P49,521,000 reached so far. dd P MONDAY, NOVEMBER 27,2006 847

Senator Biazon suggested that the government subsidy. He said that he would appreciate a report on provide subsidy to the rice farmers in that area to this matter in the next budget hearing. Senator Drilon make rice farming financially viable. He recalled that thanked Senator Angara for his suggestions, saying during the tenure of Tourism Secretary Gemma Cruz,’ that the tourism secretary would give them appropriate it was also proposed that the farmers plant a rice attention. variety similar to Jasmine rice to be served in restaurants and hotels. In reply, Senator Drilon said On another matter, Senator Angara observed that he would urge the tourism secretary to bring the that a larger influx of tourists would require a larger matter to the President’s attention so that she could accommodation capacity, among others. In this regard, issue the proper directive to the agriculture secretary. he proposed that the tourism secretary consider the Furthermore, he said that he would propose that a conversion of public buildings or abandoned churches/ portion of the P7.5 billion to P8 billion allocation for convents such as that of Santa Barbara in Iloilo into irrigation be redirected to the irrigation of the rice paradores, similar to those of Spain. He noted that terraces. Bohol has one of the best but decrepit convents that could be restored into an enticing and attractive SUSPENSION OF SESSION paradov. He asked whether there is any problem about the State providing assistance to the Church, Upon motion of Senator Drilon, the session was as he believed that doing so would, in effect, develop suspended. local tourism and provide income to the communities. Senator Drilon stated that while convents remain in It was 8:11 p.m. the hands of the private sector, issues could be raised on the validity or legality of the general fund being RESUMPTION OF SESSION allocated for private purposes such as church At 8:14 p.m,, the session was resumed. renovation. He said that the government could only provide incentives to encouragejoint ventures between INTERPELLATION OF SENATOR ANGARA the private sector and the Church.

Relative to the issue of subsidizing farmers Senator Angara expressed hope that Congress cultivating the rice terraces, Senator Angara recalled could come up with a legal device to skirt the tech- that to preserve part of the Alps that yields US$2 billion nicality of public money going to the private sector in revenue from skiing during winter, the Bavarian because it would be a waste not to utilize idle assets government subsidized its farmers who grazed their for highly productive purposes. He said that an old cattle in the area and made it fit for the sport. The monastexy in Spain has become a powerful magnet government, he recounted, tried to apply the same for tourists. principle to the rice terraces by establishing the Rice Asked why the DOT has not come up with Terraces Authority under the Department of Agri- attractive advertising spots such as “Incredible India” culture which was tasked to provide income subsidy and “Malaysia, Truly Asia” despite the fact that the to the farmers. However, he bared that the main Philippines has relatively good beaches and cultural problem the soil erosion in the rice terraces of is sites, Senator Drilon said that this is due to budgetary Banaue, Ifugao and other parts of the Mt. Province constraints. He stated that instead of advertising in that are not bolstered by stone masonry. He explained CNN, the DOT has targeted potential tourists by that these rice terraces crumbled owing to certain placing advertisements in local television spots in factors that include the cutting of trees that were China, Japan and Korea. supposed to hold the rainwater and prevent the terraces from washing out; the terraces were not Senator Angara believed that on a cost-benefit properly maintained because instead of tending them, ratio, the PTA and Pagcor could yield, at least, the farmers opted to earn a living in the lowland. $2 million worth of publicity which shall translate He posited that to preserve the rice terraces, the into $10 million worth of benefits. government should provide farmers sufficient income to encourage them to till the land. He enjoined the INTERPELLATION OF SENATOR GORDON DA and the DOT to team up and create a program for the rice terraces because in terms of cost benefit, Senator Gordon commended the DOT for having the tourism income would outweigh the cost of increased tourism arrivals in 2005. He expressed 848 MONDAY. NOVEMBER 21.2006 hope that it could do more in view of the report such as, for instance, using the Philippines’ tropical prepared by the Pacific Asia Travel Association clime as a come-on to foreigners who would like to (PATA) which showed that the route from the experience warm and sunny weather during the Philippines to Macau has registered a +88.5% growth winter months. Senator Drilon said that the “Warm in passenger traffic from 2005 to 2006. Over Winter” concept is emphasized in the DOT’s localized and targeted campaigns in countries like Senator Drilon said that the tremendous increase Japan, China and Korea. Senator Gordon requested of Filipino tourists going to Macau could be due to the a copy of the DOT’s promotional CDs and DVDs. novelty of tourist attractions and facilities in Macau which is barely an hour-and-a-half away from the Further, Senator Gordon asked whether the DOT Philippines. is making any effort to strengthen historical ties with Koreans by emphasizing the fact that the Philippines Senator Gordon pointed out that it was the cheap helped Korea regain its freedom or by promoting airfare that attracted Filipino tourists to Macau, the tokens from Korea such as the statue of Lapu-Lapu economy of which has grown dramatically because in Cebu. Senator Drilon gave assurance that the of casino operations. He said that the DOT should DOT would exert effort toward this area. also consider putting up small gaming spots in Clark, Subic and Manila to attract tourists. Further, he Senator Gordon stressed the importance of having stated that the country is losing out moneyed European centerpiece attractions such as the Luneta Park, tourists who have two-week holidays in a year Boardwalk and regional shows in Intramuros to spur because the DOT has been precipitate in pursuing a domestic tourism. Relative thereto, he asked for an quantitative tourism concept rather than a qualitative update on the restoration of the walls of Intramuros, concept. He also acknowledged the fact that the noting that it has been three years since the govem- country has limited accommodation for tourists. ment received the US$5 million Japanese grant for the undertaking. Senator Drilon stated that the Senator Drilon stated that the proposed additional primary or archaeological phase is ongoing, after budget for the DOT would be used to penetrate which reconstruction of the walls would commence. developed markets such as Germany and Australia. Senator Gordon said that the DOT should also pene- Given Intramuros’ historical significance, Senator trate Shanghai, Beijing, United Kingdom and Japan. Gordon asked to be updated on the progress of its Senator Gordon pointed out that one of the restoration, even as he stressed the importance of DOT’s roles is to promote rural areas through focused having a restoration architect supervise the project. tourism. However, he lamented that the way the Further, he recalled that during the last budget hearing, Philippines is packaged or branded changes each the DOT promised the restoration of Intramuros, as time a new tourism secretary is appointed. He well as the construction of structures to display the wondered why the “WOW Philippines” slogan is no treasures in the vaults of Intramuros and to show- longer included in the DOT posters even though local case the Islamic cultural history of the Philippines. companies, such as the manufacturers of the WOW He said that both he and the Islamic Ambassador Microphone, have adopted this branding strategy have committed to provide funds for the project. to sell their products. Senator Drilon replied that With this in mind, he hoped that the PTA could the DOT posters are generic posters used for other undertake the restoration of important sites like the purposes although the primary campaign thrust of Post Office, Pasig River, Escolta, and Chinatown. the DOT’s tourism-related activities still carry the He asked how the funds of the Philippine Tourism “WOW Philippines” slogan. Authority (PTA) are being utilized in light of the fact that its budget is precisely allocated for building Senator Gordon explained that the objective of such infrastructure. slogans, such as the “I Love New York” or “Amazing Thailand,” is accomplished when the idea being Further, Senator Gordon noted that the DOT’s associated with a product has been hammered into proposed 2007 budget does not allocate any funds the minds of the target market. For instance, he for Intramuros despite the fact that its theater-in- pointed out that the 13.5% growth in India is partly the-round program called “A Walk Back In Time,” attributed to its “Incredible India” slogan. He suggested an effective tool for promoting domestic tourism, that the DOT be consistent in its promotional methods is still being held during the weekends. P MONDAY, NOVEMBER 27,2006 849

Senator Drilon agreed with Senator Gordon that the tourism industry would get somewhere. He asked the PSOO million allocation from Duty Free Philippines if there is any budget for advertising campaigns for to the DOT for tourism promotion abroad would be tourist sites like Intramuros, and beaches, among others. better used on the restoration of historical buildings and sites and improvement of hotels to attract more SUSPENSION OF SESSION tourists. Upon motion of Senator Drilon, the session was Senator Gordon asked on the status of medical suspended. tourism in the Philippines as he cited a Newsweek It was 9:15 p.m. article indicating that Thailand, Singapore and India are way ahead in this field while the Philippines was RESUMPTION OF SESSION not even mentioned. Senator Drilon shared the same observation, noting that small medical outfits like the At 9:16 p.m., the session was resumed. Vicky Belo Clinic and the American Eye Center are just starting. He informed the Body that recently, a Senator Drilon stated that there is a domestic medical tourism congress was held to entice the big tourism promotion fund for those concerns aired by players, including the Capitol Medical Center, into Senator Gordon. this kind of revenue-generating endeavor. Senator Gordon said that Asian Hospital, Makati Medical Senator Gordon requested the DOT to furnish Center and St Luke’s Hospital and other hospitals in the Body a monthly report on its expenditures as Angeles, Subic Bay, Cebu and Bacolod could also go he stressed the need to put value for money in the into this business. country’s tourist efforts because unless the Filipinos imbibed the culture of tourism, the Philippines would On another matter, Senator Gordon opined that never sell as a tourism attraction and it would never the spas in Los Bdos, Laguna could also be promoted, outstrip Thailand in tourism. Senator Drilon agreed. along with medical tourism, especially since they offer services like a good massage for the price. Regarding the overhauling of the DOT, Senator Drilon clarified that the tourism services sector has On the rice terraces especially in Banaue, remained intact and that planning and promotion had Senator Gordon opined that the main problem is been merged under Undersecretary Jarque. that too many vendors selling trinkets in makeshift stands are obstructing the view. He believed that Senator Gordon stated that according to reports, it would be easier to move these people to the other the Canada mission had been closed. Senator Drilon side of the road so that the PTA could beautify the said that the funds to operate the Paris and Canada site, make it more accessible to the public, and offices were used to open the tourism offices in Korea help its hotel earn more. Senator Drilon agreed, which has only a market representative at present. adding that the DOT has been requesting the local government to do so. Senator Gordon pointed out that during the difficult times, the DOT looked for quantitative tourists -- the Senator Gordon inquired on the possibility of nearer the better - and the Korean market went up. using the PTA funds to build stands across the street In the case of Canada, he said that it was developed and rent them out. In a similar vein, he asked if the because a lot of Filipino-Canadians wanted to go to tourism secretary could help remove the establish- a warm place during winter. ments at the Subic Bay waterfront which ruin the view of the bay. Apparently, he said, some people Asked why certain positions in overseas DOT are making a lot of money by renting out their offices were being abolished, Senator Drilon stated property at P2 or P1 per square meter and then that it was principally dictated by the rationalization subleasing it at $2 per square meter. being proposed by the DBM that wanted to lower the cost of the DOT’S international operations. Moreover, Senator Gordon observed that the excellent beaches in Iloilo are being occupied by Senator Gordon pointed out that with the closure illegal settlers. He believed that if tourism advocacy of the Canada office, the San Francisco staff would included the proper use of the environment, perhaps have less capability to move around the area. HeM 850 MONDAY, NOVEMBER 27,2006 asked if the DOT is able to track the activities of RESUMPTION OF SESSION the tourism attaches. At 9:37 p.m., the session was resumed. As regards the “On Grant Pinoy Launching: Free Air Raffle Tickets for 300 Phil-Am From the United DEPARTMENT OF TRANSPORTATION States Regular Balikbayans,” Senator Drilon stated AND COMMUNICATIONS that it is just a one-time program. Senator Drilon presented the budget of the Senator Gordon surmised that the completion of Department of Transportation and Communications. the program would cost the tourism staff their jobs. He stated that the Committee recommended a budget Senator Drilon said that the program has nothing to of P16,728,319,000 for the Office of the Secretary do with the jobs of the tourism staff in the U.S. and and its attached agencies; and a subsidy of P135 Canada. Senator Gordon countered that the matter is million for the Philippine National Railways, or a total a cause for concern for DOT employees who have of P16,863,319,000. He said that the amount represents worked and lived overseas for a long time. an increase of P196,600,000 in the NEP and a reduction of P234,200,000 in the GAB. As regards the IPU meeting for the World Tourism Organization (WTO), Senator Gordon INTERPELLATION OF SENATOR ARROYO expressed disappointment that the govermnent backed out on hosting the event because 2007 is an election At the outset, Senator Arroyo expressed baffle- year. He said that the government had an apparent ment why a private airport in a town that is just a dot change of mind but when Allan Canizal informed the in the island of Palawan would get P50 million while WTO that the government would like to host the other airports would be starved even as he noted that IPU, the WTO officials were confused and went to San Vicente airport is located in a town of 19,000 at Tanzania. Senator Drilon informed the Body that the the southern tip of Palawan. Senator Drilon expressed Philippines made representations in Algiers, and would openness to consider an amendment at the proper time. be hosting the IF’U in 2008. Senator Gordon stated that hosting the IPU would be a feather in the cap On the Laoag International Airport, Senator Arroyo for the Philippines. noted that over and above the P75 million allocation are the P15 million allocation for navigational equip- Asked if the tourism secretary was committed to ment and P49.5 million for a firefighting equipment. rebuild Intramuros, Senator Drilon replied in the He stressed that even the most sophisticated equip- affirmative. He said that the secretary would use ment would not cost that much. He pointed out that every ounce of his influence to have the PTA board the development program of the airport from 2006 to allocate funds for the rehabilitation. 2010 includes a runway overlay of existing pavement, completion of perimeter fencing and upgrading of In closing, Senator Gordon emphasized that firefighting capacity, yet the department would spend tourism is very important because it could push the P50 million in 2007 for a one-time procurement of a country forward. crash fire rescue vehicle. Senator Drilon expressed openness to an amendment at the proper time. SUBMISSION OF THE BUDGET OF THE DEPARTMENT OF TOURISM On the Dumaguete International Airport with a total construction cost of P289 million over a period Upon motion of Senator Drilon, there being no of five years, asked why P102 million or one-third of objection, the budget of the Department of Tourism the total cost would be spent for the first year for the was deemed submitted for the Body’s consideration. airfield lighting system, Senator Drilon explained that the lighting system needs rehabilitation and upgrading SUSPENSION OF SESSION to improve the visual guidance during landing and take-off. He informed the Body that the department Upon motion of Senator Drilon, the session was submitted a breakdown of the project expenses but suspended. the Committee would not be technically capable of analyzing the reasonableness of the pricing as the It was 9:31 p.m. budget is simply a spending authority. Ax; MONDAY &TUESDAY, NOVEMBER 27 & 28,2006 851

Senator Arroyo noted that a similar equipment In the morning: is installed at the Ninoy Aquino International Airport Department of Public Works and Highways that handles the most air traffic, yet it did not cost Office of the Press Secretary that much. On the statement that there is a terrible Department of Social Welfare and Development imbalance in the allocation because there is P215 In the afternoon: million for Region VII, PI02 million of which goes Office of the President with E-Government Fund to Dumayete and none for Cebu which is the hub Department of National Defense in the South. Senator Drilon clarified that Cebu has Department of Agriculture its own international airport with its own budget. But he confirmed that the earnings of both Manila and SUSPENSION OF SESSION Cebu international airports go to the National Treasury. He expressed willingness to accept amendments at Upon motion of Senator Drilon, there being no the proper time. objection, the Chair declared the session suspended until ten o’clock in the morning of the following day. On the Tacloban airport with an allocation of P75 million, Senator Drilon recalled that the previous It was 10.01 p.m. allocation for the airport was realigned to pay for the patrol boats of the Coast Guard, so the proposed RESUMPTION OF SESSION budget for 2007 is urgently needed for the airport’s development, in fairness to the people of Tacloban. At 10:30 am., Tuesday, November 28,2006, the session was resumed with Senate President Pro Senator Arroyo expressed concern at the Tempore Flavier presiding. imbalance in the allocation of various airports, citing Dumaguete Airport which has PI75 million; ACKNOWLEDGMENT OF Tagbilaran Airport, P24 million; Calbayog Airport, P5 THE PRESENCE OF GUESTS million; and Butuan Airport, another P102 million for airfield lighting system. He doubted whether the Senator Drilon acknowledged the presence of the system costs one-third of the P305 million total parliamentarians from the House of Representatives construction cost of the airport. He suggested that of the Republic of Indonesia who were in the country the Body take a second look at the allocations. to make a comparative study on Human Trafficking Law and Rehabilitation of the Philippine Government, Finally, Senator Arroyo expressed concern that namely: Hon. Latifah Iskandar, Hon. Sanvo Budi DOTC has so many retired generals under its offices Wiryanti, Hon. Ma’mur Noor, Hon. Eko Waluyo, even as he questioned whether an admiral knows Hon. Husairi Abdi, Hon. Faqih Chaeroni, Hon. Dayday ahout communications and franchises. Noting that Hudaya, Hon. Ishaq Saleh, Hon. AI Yusni, Hon. the DOTC has the biggest infrastructure projects, Syamsul Hilal, Hon. Nur Syamsi Nurian, and Hon. he complained that the department has been slow Azlaini Agus. in implementing them. Senator Drilon said that Senator Enrile had earlier SUBMISSION OF THE BUDGET OF THE briefed the delegation on the status of Philippine DEPARTMENT OF TRANSPORTATION legislation. AND COMMUNICATIONS DEPARTMENT OF PUBLIC WORKS Upon motion of Senator Drilon, there being no AND HIGHWAYS objection, the budget of the Department of Transportation and Communications was deemed Senator Drilon presented the budget of the submitted for the Body’s consideration. Department of Public Works and Highways. He stated that the Committee has recommended the NEXT DAY’S AGENDA President’s budget of P66,381,966,000, except that the P1,095,000,000 under the Tulay ng Pungulo Senator Drilon announced that the budgets of the program of the DAR was transferred to the DPWH following agencies would be taken up in the next where it should properly belong, without prejudice day’s session: to the DAR being the agency to designate the&’ 852 TUESDAY, NOVEMBER 28,2006 agrarian reform communities where this program SUSPENSION OF SESSION would be best suited. Upon motion of Senator Drilon, the session was MANIFESTATION OF SENATOR ENRILE suspended.

Expressing support for the DPWH budget, It was 10:40 a.m. Senator Enrile stated that the infrastructure program is very important to the country because it would enable RESUMPTION OF SESSION the construction of the necessary communication links between the populated areas. Nonetheless, At 10:46 a.m.. the session was resumed. he expressed the need for the DPWH to look into the impoverished condition of the Pacific side of the OFFICE OF THE PRESS SECRETARY country from the northeastern tip of Luzon to the AND ITS ATTACHED AGENCIES Sarangani Bay so that Congress could redistribute properly the future resources of the country. Senator Drilon presented the budget of the Office of the Press Secretary and its attached agencies. In view thereof, Senator Enrile moved that the He stated that the Committee has recommended DPWH budget be considered submitted for the the President’s budget of P845,966,000 which was Body’s consideration. adopted by the House. He said that there were no resewations for interpellation on this particular budget. MANIFESTATION OF SENATOR LIM MOTION OF SENATOR LIM Senator Lim manifested that during his incum- bency as Mayor of Manila with DPWH Secretary Senator Lim stated that the Office of the Hermogenes Ebdane as the Chief of Police, the President has the huge responsibility of disseminating people witnessed the restoration of law and order information with respect to the accomplishments of in the city. He strongly seconded Senator Enrile’s the administration. He moved that the budget of the motion. Office of the Press Secretary and its attached agencies be considered submitted for the Body’s consideration. REMARKS OF SENATOR DRILON REMARKS OF SENATOR DRILON Senator Drilon stated that Senator Defensor Santiago had earlier requested that she be given the Senator Drilon stated that he would only close opportunity to ask questions on the DPWH budget the period of interpellations on the budget of the but since she is unavailable this morning and it has Office of the Press Secretary and its attached been agreed in caucus that the present schedule of agencies so as not to prejudice the right of other interpellations on the 2007 GAB shall be maintained, Members to submit amendments. so as not to delay the approval of the budget, he would proceed to terminate the period of interpellations TERMINATION OF THE PERIOD on the DPWH. He said that he has already requested OF INTERPELLATIONS ON THE Undersecretary Manuel Bonoan and some members BUDGET OF THE OFFICE OF THE of his technical staff to make themselves available PRESS SECRETARY in the afternoon’s session should Senator Defensor Santiago wish to raise questions on the DPWH budget. Upon motion of Senator Lim, there being no objection, the Body closed the period of interpellations SUBMISSION OF THE BUDGET on the budget of the Office of the Press Secretary. OF THE DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS SUSPENSION OF SESSION

Upon motion of Senator Drilon, there being no Upon motion of Senator Drilon, the session was objection, the budget of the Department of Public suspended. Works and Highways was deemed submitted for the Body’s consideration. It was 10:50 a.m. ay P TUESDAY. NOVEMBER 28.2006 851

RESUMPTION OF SESSION year, since the line function of the DSWD - a devolved agency with no field personnel except those At 11:Ol p.m., the session was resumed. in the regional offices - is being performed by the local government units. Nonetheless, he said that DEPARTMENT OF SOCIAL WELFARE the Senate had already put across the DSWD AND DEVELOPMENT policy in the supplemental budget by allocating the amount P269.5 million for a milk-feeding program Senator Drilou presented the proposed budget of for pre-schoolers. the Department of Social Welfare and Development of P2,765,116,000. He said that the Committee cut INTERPELLATION P1,245,844,000 from the President’s budget of OF SENATOR LIM P4,010,960,000, principally P1.085 billion for the Food for School Program for pre-schoolers. He clarified Asked by Senator Lim if the Committee would that the Committee, in fact, supports the original be amenable to restoring the P1.085 billion after the design of a Supplemental Feeding Program for pre- elections to preclude the possibility that the allocation schoolers in day care centers to address the malnutri- would be used for political purposes, Senator Drilon tion needs of children before they reach Grade 11. replied that it could be done after the elections, not However, he disclosed that the administration used as a rice distribution scheme but as a supplemental this program under the 2005 budget to distribute feeding program for malnourished children, as long rice as a food supplement for political purposes. as the program is consistent with the original design He pointed out that this program was implemented of the DSWD. through the DepEd and P4 billion was used to purchase over 88,000 metric tons of rice that were Asked on the possibility of including a proviso or distributed to schoolchildren even during summer qualification to change the rice subsidy program into months when they were supposed to be on vacation. a milk-feeding program, Senator Drilon replied that He reported that during the committee hearings on he would endorse the proposal. He said that the the DSWD budget, the secretary candidly admitted DSWD staff has, infact, approved and endorsed that a rice distribution program was placed by the the milk and breastfeeding program as designated in Office of the President in the DSWD. He stated that the supplemental budget, and not as rice distribution the Committee concurred with the secretary’s program, precisely to preclude the use of the day suggestion that should the rice program be made a care centers as distribution points. regular program of her department, the rice be sourced from local farmers’ cooperatives. Senator Lim lauded the efforts of the DSWD officials and employees who are always in the front Moreover, Senator Drilon revealed that, a day line in responding to crisis or calamities and, thus, after the DSWD budget hearing, a person allegedly could not avoid associating themselves with the sad from the National Food Authority requested plight of the victims. He hoped that its charitable him to maintain the rice program in the DSWD functions or activities would not be clouded by budget. He concluded that these incidents indicated political motives. He recommended the approval of motives other than a supplemental feeding for the DSWD budget, on the condition that the feeding pre-schoolers. For these reasons, he said that the program would be restored after the May 2007 Committee deleted P1,085,000,000 for a rice elections. Senator Drilon stated that the Committee distribution program from the agency’s budget but would review the DSWD budget again and make the at the appropriate time, it would have no objection appropriate amendments at the proper time. to reinstating a supplemental feeding program for pre-schoolers in day care centers as originally SUBMISSION OF THE BUDGET designed by the DSWD where the supplement would OF THE DEPARTMENT OF SOCIAL be approved by the National Nutrition Council of WELFARE AND DEVELOPMENT the Philippines. Upon motion of Senator Drilon, there being no Senator Drilon admitted that it would be difficult objection, the budget of the Department of Social to imagine that the PI-billion rice distribution program Welfare and Development was deemed submitted would not be used for political purposes in an election for the Body’s consideration.H 854 TUESDAY, NOVEMBER 28,2006

SUSPENSION OF SESSION accounts payable? If so, why are they appropriated as new appropriations? Upon motion of Senator Drilon, the session was b. Who are the beneficiaries of these new suspended. appropriations? Specifically, who are the payees? [Request for the list of payees, It was 11:19 a.m the amount involved, and the dates of the claims]. RESUMPTION OF SESSION 5. Explain the nature of the request for new appropriations of P141,444,000 for “Value- At 11:32 a.m., the session was resumed. Added Tax” [pp.598 (lines 55-61) - 599 (lines 1- 41. Isn’t the payment of VAT the responsibility AFTERNOON AGENDA of the contractor? Senator Drilon announced that in the afternoon’s 6. The proposed new appropriations of session, the Body would take up the budgets of the P26.6 billion for foreign-assisted projects were Office of the President with the E-Government Fund, cut by P2 billion to partly finance the increase in Department of National Defense, and Department of new appropriations for locally funded projects. Agriculture. a. What is the implication of this cut on our commitment to foreign funding QUESTIONS TO DPWH agencies to speed up the implementation of foreign-funded projects? At this juncture, Senator Flavier read into the b. What is the economic cost of such move? record the questions of Senator Defensor Santiago in Won’t this increase the commitment fees the DPWH budget: to be paid by the government? 1. Who initiated the whopping increase in I. A special provision granting the DPWH the DPWH’s new appropriations for various Secretary the authority to realign funds has been locally funded projects? The Secretary of Public proposed. It reads: Works and Highways or the House Committee 15. Realignment of Funds. The on Appropriations? Secretary of Public Works and Highways 2. The House increased the various is authorized to realign funds released infrastructure including local projects by P8 from appropriations under B. 1.g from billion. Is this additional pork barrel allocation for one projectkcope of work to another: legislators? How will this be allocated? [The PROVIDED that (i) the realignment is increase in new appropriations over and above within the same DPWH Implementing the President’s budget is unconstitutional] Unit and the same project category as the original project; (ii) the allotment 3. As part of the various infrastructure released has not been obligated for the including local projects, the President requested original projectlscope of work; (iii) the a lump-sum amount of P 1.9 billion. The House request is with the concurrence of the increased this to P5.9 billion, for a whopping legislator concerned; and (iv) the amount increase of P4 billion. to be realigned is not more than Twenty a. Who will allocate this P5.9 billion lump- Million Pesos (P20,000,000). The Secre- sum fund? taty of Public Works and Highways shall inform the DBM, in writing, of b. How much of this fund will go to the every such realignment within (5) “pork” of “favored” senators? calendar days for its approval and shall c. How much of this fund will go to the post the realignment on the DPWH projects of governors, city mayors, muni- website. cipal mayors, and other local officials? a. Doesn’t this special provision violate 4. On page 598, lines 22-53, there is a Article VI, Section 25 (5)of the Consti- proposed new appropriations for “Contractual tution which states that: no law shall be Obligations” in the amount of P 1,243,434,000, passed authorizing any transfer of appropriation? The Secretary of Public a. Explain the nature of these contractual Works, not even the President, is obligations. Are these in the nature of authorized to fund projects that are not kv TUESDAY, NOVEMBER 28,2006 855

expressly provided for in the General RESUMPTION OF SESSION Appropriations Act, with funding coming from appropriations of projects approved At 2:30 p.m., the session was resumed with by Congress and the President. Implica- Senate President Pro Tempore Flavier presiding. tions: * The congressional power of the DEPARTMENT OF AGRICULTURE purse is diminished thereby chang- ing the balance of power as con- Senator Drilon presented the budget of the templated in the Constitution. The Department of Agriculture. He said that the Committee DPWH Secretary is given authority appropriated P20,817,850,000 for the Office of the to change specific projects approved Secretary, its attached agencies and corporations, by Congress and the President. and the Agriculture and Fisheries Modernization Worse, Congress - or at least the relevant Committees - is not even Fund, representing a net increase of approximately informed of such realignment. P1.3 billion. * The concurrence ofthe legislator - He stated that in view of the testimony during not Congress - gives an individual one of the hearings that at least 5% or P8 billion of legislator (congressman) veto power over the proposed alignment. grain produce and more than P8 billion of fishery This violates the separation of products were being lost due to lack of post- powers as envisioned in the Const- harvest and refrigeration facilities, the Committee itution. Why should legislators be appropriated P1,496,919,000 for post-harvest facili- directly involved in the execution ties. He explained that the Committee augmented of the budget? the DA budget as part of the solution to address * It would create an opportunity for the problem of poverty in the rural areas but, by and corruption. Projects that have been large, it supported the National Expenditure Program bidded out may not be awarded to submitted by the President to Congress. the winning bidder if the outcome of the competitive bidding process SUBMISSION OF THE BUDGET OF THE is not acceptable to DPWH officials DEPARTMENT AGRICULTURE or the sponsoring legislator. Since OF the released funds have not yet been obligated, the district engineer There being no reservation to interpellate, upon or legislator may request a change motion of Senator Drilon, there being no objection, in the projectiscope of work. The the budget of the Department of Agriculture was process will continue until the deemed submitted for the Body’s consideration. “favored” contractor is chosen. The frequent changes in the project and SUSPENSION OF SESSION scope of work would further com- plicate the problems in monitoring infrastructure projects. Upon motion of Senator Drilon, the session was suspended. Recommendation: Delete the proposed Special Provision. It was 2:35 p.m.

Senator Drilon stated that he would attempt to RESUMPTION OF SESSION answer these questions in consultation with the DPWH officials in the afternoon’s session. At 3:35 pm., the session was resumed. SUSPENSION OF SESSION SUSPENSION OF CONSIDERATION Upon motion of Senator Drilon, there being no OF HOUSE BILL NO. 5794 objection, the session was suspended until two o’clock in the afternoon. Upon motion of Senator Drilon, there being no objection, the Body suspended consideration of It was 11:41 a.m. the bill.# 856 TUESDAY. NOVEMBER 28.2006

SPECIAL ORDER economy has become increasingly dependent on the remittances of migrant Filipinos and our Upon motion of Senator Drilon, there being no overseas contract workers. objection, the Body approved the transfer of The Bangko Sentral ng Pilipinas (BSP) Committee Report No. 156 on Senate Bill No. 2501 reported that in 2005, remittances through formal from the Calendar for Ordinary Business to the channels reached up to US10.6 billion, while Calendar for Special Orders. those sent through informal channels amounted to US$1.6 billion. Indeed, the labor export industry COMMITTEE REPORT NO. 156 is one of the major dollar-earning industries in the country. ON SENATE BILL NO. 2501 Despite the significant and continuous contri- Upon motion of Senator Drilon, there being no bution of our OFWs to our economy, they have objection, the Body considered, on Second Reading, yet to get a fair share of protection they deserve from the government. These concerns should have Senate Bill No. (Committee Report No. 156), 2501 been addressed when Congress passed Republic entitled Act No. 8042, otherwise known as the “Migrant Workers and Overseas Filipino Act of 1995.” AN ACT STRENGTHENING THE While R.A. No. 8042 may have expedited the REGULATORY FUNCTIONS OF THE deployment of Filipinos abroad, it nonetheless PHILIPPINE OVERSEAS EMPLOY- spells uncertainty on the part of the worker MENT ADMINISTRATION (POEA), especially in the face of market forces and the FURTHER IMPROVING THE HGHER apparent abdication of responsibility of the STANDARD OF PROTECTION AND government. PROMOTION OF THE WELFARE Part of the said law provides that: OF MIGRANT WORKERS, THEIR FAMILIES AND OVERSEAS FILIPINO Sec. 29. Comprehensive Deregula- tion Plan on Recruitment. - Pursuant WORKERS IN DISTRESS, AMEND- to a Policy of Deregulation whereby the ING FOR THIS PURPOSE REPUBLIC migration of workers becomes strictly a ACT NO. 8042, OTHERWISE KNOWN matter between the worker and his AS THE “MIGRANT WORKERS AND foreign employer, the DOLE within one OVERSEAS FILIPINOS ACT OF 1995.” (1) year from the effectivity of this Act, is hereby mandated to formulate a five- Pursuant to Section 67, Rule XXIII of the Rules year comprehensive deregulation plan of the Senate, with the permission of the Body, upon on recruitment activities taking into motion of Senator Drilon, only the title of the bill was account labor market trends, economic read without prejudice to the insertion of its full text conditions of the country and emerging circumstances which may affect the into the Record of the Senate. welfare of migrant workers. The Chair recognized Senator Ejercito Estrada (J) Sec. 30. Gradual Phase-ant ofRegu- for the sponsorship. latory Functions. - Within a period of five (5) years from the effectivity of this Act, the DOLE shall phase out the SPONSORSHIP SPEECH regulatory functions of the POEA pur- OF SENATOR EJERCITO ESTRADA (J) suant to the objectives of deregulations. This Representation believes that the absence In sponsofig Senate Bill No. 2501, Senator Ejercito of regulation on the labor export industry is Estrada (J), delivered the following speech tantamount to the State abandonment of its responsibility to promote and protect the rights Committee Report No. 156 on Senate Bill and welfare of the Filipino migrant worker. No. 2501 is a consolidation of the various measures referred to the joint committees, namely, Senate Among the implications of the law is the Bill Nos. 158,636, 1105, 1184 and 1385, taking diminution of the benefits and protection of into consideration House Bill No. 5498. OFWs. Since deregulation is anchored on labor market trends, compensation is no longer accord- It is a known fact that when the labor export ing to the skills of worker, but the capacity of the industry came into being in 1974, the Philippine employer to pay. It also provides leeway for# B WESDAY, NOVEMBER 28,2006 857

foreign employers and recruiters to give less on a government-to-government arrangement than what is due to a worker, a condition that and the National Seamen Board (NSB) deploy- leads to abuse and exploitation of our workers. ment of seafarers on board ocean-going vessels, respectively. One concrete example and manifestation of the deregulation of the labor export industry is In 1987, Executive Order No. 797 was issued the unified contract scheme imposed in Saudi by then President Cory Aquino as a response Arabia without any resistance fiom the Philippine to the government’s call for a more efficient government. The scheme is considered a private delivery of public service. One of the most transaction between two recruitment agencies important provisions is the strengthening of the and does not bound the Philippines and Saudi worker’s protection and welfare and a tighter Arabian government. regulation of the private sector’s recruitment activities. The objective of deregulation is clearly to create a situation whereby the migration of Accordingly, the POEA has the principal workers becomes strictly a matter between the function of formulating and implementing a worker and his foreign employer. Significantly, systematic program for promoting and monitor- therefore, the parameters provided under ing the overseas employment of Filipino workers Section 29 may apply likewise to the concept of and for protecting their rights to fair and phase-out, as the policies on “deregulation” and equitable employment practices. “phase-out” are indubitably intertwined. In the case of Esalyn Chavez v. Bonto A loose interpretation of the provisions of Perez, Rayala, Et. AL, (G.R. 109808, March 01, R.A. No. 8042 may suggest that the regulatory 1995), the Supreme Court eloquently held that functions of POEA would have to be abrogated. “our overseas workers constitute an exploited However, such a construction will endanger the class. Most of them come fiom the poorest sector public interest as the vital role of POEA in regu- of our society. They are thoroughly disadvant- lating and monitoring the overseas employment aged. Their profile shows they live in suffocating vis-a-vis the protection of the welfare of OFWs, slums, trapped in an environment of crime, will thereby be obliterated and an abdication hardly literate and ill-health, their only hope lies of the constitutionally mandated principle of in jobs that they can hardly find in our country. parens patria. Their unfortunate circumstances make them easy prey to avaricious employers. They will The existence of the fundamental policy of climb mountains, cross the seas, endure slave the State to protect the rights of workers and in treatment in foreign lands just to survive. Out promoting their welfare is reflected in oui- of despondence, they will work in subhuman Constitution and the laws creating the POEA. conditions and accept salaries below the Needless to state, government’s regulation minimum. The least we can do is to protect of overseas employment was based primarily on them with our laws in our land. Regretfully, our fundamental law, the Constitution: respondent public officials who should sympathize with the working class appear to Section 18, Article I1 of the Philip- have a different orientation.” pine Constitution respectively provides that the “State affirms labor as a primary Laws were passed and agencies were reated social economic force. It shall protect precisely to give meaning to that aforesaid the rights of workers and promote their avowed policy of the state. welfare.” Overseas employment bas consistently Section 3, Article XI11 also reads: increased from 19 15 to the present as local employ- “The State shall afford full protection to ment opportunities continue to remain bleak. labor, local and overseas, organized and Rough estimate of overseas Filipinos worldwide unorganized, and promote full employ- reached 8,083,484 as of December 2004, and ment and equality of employment for the year 2005, there were 977,522 OFWs opportunities for all.” deployed, 72% of which were women. While there is now a growing demand for professional The tabor Code provided for a systematic women workers in the field of health care, regulation of private sector participation in majority of the women workers belong to the the overseas employment industry, through the vulnerable group, particularly the service workers Bureau of Employment Services. It created the consisting of domestic helpers and entertainers Overseas Employment Development Board or performing artists. The feminization of migra- (OEDE) for the deployment of land-based workem tion and upsurge of viable skills overseas require# 858 TUESDAY. NOVEMBER 28.2006

continued government intervention to promote COMMITTEE REPORT NO. 160 and protect their welfare. ON HOUSE BILL NO. 5794 On the other hand, statistics will show that (Continuation)) the incidence of recruitment violations by private placement agencies, welfare cases involving Upon motion of Senator Drilon, there being no OFWs, as well as illegal recruitment, has not objection, the Body resumed consideration, on Second been totally efadicated. On the contrary, there Reading, of House Bill No. 5794 (Committee Report are 9,120 reported cases of recruitment violations No. 160), entitled and illegal practices filed with the Adjudication Office of the Philippine Overseas Employment Administration from year 2001 to 2005. These AN ACT APPROPRIATING FUNDS FOR violations were committed by both licensed and THE OPERATION OF THE GOVERN- spurious agencies. Furthermore, there were 23,071 MENT OF THE REPUBLIC OF THE cases of labor violations committed against our PHILIPPINES FROM JANUARY ONE OFWs in this five-year period. These cases TO DECEMBER THIRTY-ONE TWO involve breach and/or substitution of contracts, THOUSAND SEVEN, AND FOR unpaid salaries, sub-human living conditions, OTHER PURPOSES. non-payment of benefits, employment problem, illegal termination and inferior, subhuman food Senator Drilon stated that the parliamentary status provision. was the period of interpellations. In conclusion, the protection and the general welfare of our migrant workers is of OFFICE OF THE PRESIDENT primordial interest in the extensive disquisition on the deregulation and phase-out issue. To Senator Drilon presented the budget of the Office settle all legal arguments, the legislature bas to of the President. He stated that the proposed budget post a baseline proposition that the statutoly provision to deregulate recruitment activities and of the Office of the President for 2007 in the NEP to phase out regulatory functions of POEA has is P3,799,099,000, the same level in the House and to be streamlined. The intention of R. A. No. 8042 Senate versions, and allocated to the following: on the progressive policy of deregulation Mindanao Economic Development Council, the Office whereby migration of workers becoming strictly of the North-Luzon Quadrangle Area, Office of the a matter between the worker and his foreign Presidential Adviser on the Peace Process, Office of employer is subsumed or in line with the State External Affairs, Presidential Anti-Graft Commission, policy that the existence of the overseas employ- Presidential Anti-Organized Crime Commission, ment program rests solely on the assurance that Presidential Visiting Forces Agreement, Commission the dignity and fundamental human rights and on Information and Communications Technology, freedom of our overseas Filipino workers (OFW) shall not, at anytime, be compromised or violated. EDSA People Power Commission, the Minerals While recognizing the significant contribution of Development Council and agencies like the Philippine Filipino migrant workers to the national economy Center on Transnational Crime, Office of the Special through their foreign exchange remittances, Envoy on Transnational Crime and National Anti- the State shall continue to promote, sustain and Environment Task Force. He said that the Committee protect our OFWs with our laws in our land. also proposes a P1 billion E-Government Fund. Hence, it is imperative to repeal Sections 29 and 30 of R. A. No. 8042 and the same is hereby INTERPELLATION urgently recommended. OF SENATOR ARROYO Considering therefore the foregoing, the immediate passage of this bill is earnestly Asked by Senator Arroyo on the difference requested. between the Philippine Center on Transnational Crimes headed by General Roland0 Garcia, who has SUSPENSION OF CONSIDERATION the rank of undersecretary, and the Office of the OF SENATE BILL NO. 2501 Special Envoy for Transnational Crimes headed by General Florencio Fianza, also with the mnk of under- Upon motion of Senator Pangilinan, there being secretary, Senator Drilon replied that the former is no objection, the Body suspended consideration of involved in the operational aspect of transnational the bill. crimes while the latter is the office of the ambassador .g TUESDAY, NOVEMBER 28,2006 859

who represents the Philippines in international on the E-Government Fund effectively delegates conferences on transnational crimes and who is Congress’ power over the purse to the CICT. involved in the coordination with foreign governments on transnational crimes that presumably the other Asked for the track record of the CICT consider- office is unable to handle. ing its hefty budget, Senator Drilon explained that the Telecommunications Office, which used to be To the observation that General Fianza’s position under the Department of Transportation and Com- as special envoy on transnational crime might conflict munications (DOTC), has already outlived its use- with his position as president of the Philippine Racing fulness and as such is considered a “halfway house” Commission (PRC), Senator Drilon said that the scheduled for reorganization. He said that a rational- same issue was raised during the committee hearings ization plan has been prepared to streamline the because General Fianza’s title as “ambassador” goes CICT and its component agencies, particularly against Section 16 of the Foreign Service Act which the Telecommunications Office (Tel-Of) and the provides that all ambassadorial appointments shall be National Computer Center. He explained that the to particular posts, the clear intent of which is to stop Tel-Of would be assimilated within the structure the practice of appointing ambassadors-at-large. of the CICT and some of its services would be However, he said that the matter has been reviewed discontinued. He said that 1,655 of the 4,642 Tel-Of and that, in fact, an executive order would be issued workers have already signified their intention to to resolve the issue. retire under Executive Order No. 366, while 432 others would be transferred to DOTC-attached On whether a special envoy is appointed to a agencies such as the LTO, Marina, LTFRB and the particular post rather than to an ambiguous term such Philippine Coast Guard, and the others would be as “transnational crime,” Senator Drilon explained fielded to offices such as the TESDA. that a special envoy is appointed to the post for a specific mission and period. Relative thereto, be said Senator Drilon affirmed that if Congress approved that General Fianza has agreed to relinquish his post the proposal to create a Department of Communica- as PRC president. tions, it would cause a division in the DOTC but nobody in either Houses of Congress has pushed for it. Senator Arroyo asked why expenses of agencies under the Commission on Information and Com- Senator Arroyo stated that as a matter of tradition, munications Technology (CICT) are charged to the budget of the Office of the President is normally the Office of the President rather than to them. not being questioned. He placed on record that Senator Drilon said that pending the creation of the he did not ask for a reduction in the said budget. Department of Communications that would absorb Senator Drilon assured the Body that the P1 billion the Telecommunications Office and the National E-Government Fund would be retained for the same Computer Center, their P1 billion plus budgets would purpose but the Committee would ensure that the still fall under the Office of the President. funding shall be given to the agency which needs to upgrade its information and communications Upon further query, Senator Drilon clarified that, technology capability. in effect, the CICT total appropriation is P2 billion - P1 billion to cover the budgets of the Office of SUBMISSION OF THE BUDGET the Chairman, Telecommunications Office and the OF THE OFFICE OF THE PRESIDENT NCC, and another P1 billion for the E-Government Fund, which is a one-line lumpsum item to address Upon motion of Senator Drilon, there being no the needs of the bureaucracy for information and objection, the budget of the Office of the President communication technology (ICT). He said that was deemed submitted for the Body’s consideration. government agencies, such as the BE,would have to submit their ICT project proposals to the CICT for SUSPENSION OF SESSION approval and funding. Upon motion of Senator Drilon, the session was On the argument that expenses for such under- suspended. taking should be shouldered by the agency concerned, Senator Drilon agreed, pointing out that the proposal It was 4:22 p.m. $ P 860 TUESDAY, NOVEMBER 28,2006

RESUMPTION OF SESSION Answer : The P4 billion increase is part of the P8 billion additional allocation for legislators. We At 4:36 p.m., the session was resumed. still have to get the details from the House on how the additional allocation will be utilized. SUSPENSION OF SESSION Question : On page 598, lines 22 and 23, there is a proposed new appropriation for contractual Upon motion of Senator Pangilinan, the session obligation in the amount of P1,234,434,000. was suspended. Explain the nature of the contractual obliga- tions. Are these in the nature of accounts pay- It was 4:36 p.m. able or are they new appropriations? Who will be the beneficiaries of these new appropriations RESUMPTION OF SESSION specifically, who are the payees? Answer : These are consolidated contractual At 4:38 pm., the session was resumed obligations, mostly claims from various projects that are multi-year in nature. The nature of these RESPONSE OF THE DEPARTMENT contractual obligations are final billings; price OF PUBLIC WORKS AND HIGHWAYS escalations; price adjustments; four completed TO THE QUESTIONS OF projects, including earthquake-related projects, SENATOR DEFENSOR SANTIAGO and Mt. Pinatubo-related projects. We will have a list of claimants and payees At this juncture, Senator Drilon read into the which we will provide to the honorable senator. record the answers of the DPWH to the written questions of Senator Defensor Santiago on its budget, Question : Explain the nature of the request for to wit: new appropriations of P141,444,000 for value- added tax. Is not the payment of VAT the responsibility of the contractor? Question : Who initiated the whopping increase in the DPWH budget's new appropriation for Answer : These are VAT claims mainly of various locally-funded projects, the Secretary of Japanese contractors and consultants in relation Public Works and Highways or the House to the JVEC-funded projects. The Japanese Committee on Appropriations? contractorslconsultants are exempted from the VAT payment for JVEC-assisted projects in Answer : The House of Representatives, accordance with the exchange of notes between Question : The House increased the various the government of the Philippines and the infrastructure including local projects by P8 billion. government of Japan. Is this additional pork barrel allocation for Question : The proposed new appropriations of legislators? P26.6 billion for foreign-assisted projects were Answer : Yes, this is additional allocation for cut by P2 billion to partly finance the increase of legislators. the new appropriations for locally funded projects. What is the implication of this cut on our Question : How will this be allocated? commitment to foreign funding agencies to speed Answer : The projects will be identified by the up implementation of foreign-funded projects? respective legislators during the budget year. What is the economic cost of such move? Would this not increase the commitment fees to Question : As part of the various infrastructure, be paid by the government? including local projects, the President requested Answer : The P2 billion cut was taken from the a lump-sum of P1.9 billion. proposed or new foreign-assisted projects or Answer : The House increased this to P5.9 billion FAPs, whose loans are not yet approved but for a whooping increase of P4 billion. anticipated to be effective in CY 2007. They were placed under the Unprogrammed Fund but will Question : Who will allocate the P5.9 billion be released for the said FAPs once the loan lump-sum fund? How much of this fund will go agreements for the same are approved. There is to pork barrel-favored senators? How much of no implication to further funding agencies this fund will go to the projects of governors, because there is no loan agreement yet and no city,mayors, municipal mayors and other officials? commitment fees will be paid yet. .P P' TUESDAY, NOVEMBER 28,2006 861

Question : A special provision granting DPWH tasks, among them the implementation of the budget Secretary the authority to realign funds has been that he crafted. proposed, particularly BIB1 G various infrastruc- ture, including local projects. INTERPELLATION OF SENATOR BIAZON Answer : There is a realignment provision in the previous GAA hut this proposed special Senator Biazon expressed regret that Secretary provision under the proposed CY 2007 DPWH’s Cruz resigned from the Cabinet, saying that he and budget will allow for expediency. The Secretary the Secretary shared the same sentiments on reforming of Public Works and Highways is to realign the DND and the Armed Forces of the Philippines. locally-funded projects funded under BIBlG, various infrastructure including local projects. As regards the acquisition of helicopters from We recognize the participation of legislators the United States and Singapore, Senator Drilon within their legislative jurisdiction since the stated that it is possible the helicopters would be projects are locally funded. delivered in 2007. He said that of the total number To address the corruption concerns, perhaps, of helicopters to be acquired, 20 from the United it can also he specified that realignment of States are in grants, while six are to be paid for; and specific projects can be done only once in a all 27 helicopters from Singapore, are to be paid for. budget year and the project can no longer be realigned once the bidding process has begun. On the observation that the 2007 DND budget Submitted by Manuel M. Bonoan, Under- does not provide for the maintenance and operational secretary, DPWH. requirements of the aircraft, Senator Drilon stated that 15% of the Integrated Logistics Support (ILS) DEPARTMENT OF NATIONAL DEFENSE is allocated for the maintenance of the helicopters. He assured the Body that the details would be Senator Drilon presented the budget of the provided by the secretruy. Department of National Defense. He stated that the President submitted a budget of P49,326,721,000; the On the planned acquisition of patrol boats for the GAB increased this to P49,341,721,000; the Committee Philippine Navy, the date of deliveries, and the main- accepted the additional PI5 million proposed by the tenance and operating costs, Senator Drilon stated that GAB: P10 million for the National Defense College at the rate the budget allocation is made, the deliveries of the Philippines; and P5 million the Philippine would be in the third year of the modernization Military Academy. program, so that there would no deliveries in 2007.

INTERPELLATION Senator Biazon stated that the DND has to OF SENATOR ARROYO anticipate the date of deliveries so that the allocations could be provided in budget. Senator Drilon maintained On the proposed P15 billion increase in the DND that the appropriation for patrol boats should be budget, Senator Arroyo asked if the P15 million was included either in the 2008 or 2009 budget. a giveaway. Senator Drilon replied that it was not a giveaway, saying that it was indorsed by Secretary Replying to further queries, Senator Drilon Cruz and he was confident that the budget would go affirmed that between 3,000 to 5,000 officers and into good hands. men retire annually from the Armed Forces of the Philippines. He explained that the Personal Services Senator Arroyo noted that Secretary Cmz was portion of the AFP budget includes the payment of defending a budget that he would not implement. salaries for filled positions, thus, the budget provides Senator Drilon stated that the secretruy was defending for the replacement of retirees. He said that the the budget that he crafted. relirement benefits are paid out of the retirement and pension fund. Asked if Secretary Cruz was leaving the Cabinet happy, Senator Drilon replied that the secretary has On another matter, Senator Drilon affirmed mixed feelings about the matter. He said that that the intelligence fund of DND, including the AFP, Secretary Cruz would be going back to private is PI33 million, of which P24 million goes to the practice but would be leaving behind some unfinished Philippine Navy and P33 million to the Philippine Army.)+f 862 TUESDAY, NOVEMBER 28.2006

He agreed that the AFP should have the highest the adjustment of the pensions of military retirees priority in the allocation of available intelligence fund. according to the increase in the pay of the men in active service. Senator Drilon pointed out that the 2007 Asked why the Office of the President has P650 budget provides for P3.770 billion for the 20% imple- million in intelligence funds while the AFP has P133 mentation of Republic Act No. 9166 (Base Pay Law). million and the PNP, P270 million, Senator Drilon recalled that when Congress decided in 1999 that SGS Senator Biazon recalled that per arrangement was not entitled to any payment from the government, with former DBM Secretary Boncodin, the second the legislature realigned the SGS allocation from tranche of 30% of the arrears would be funded in the BOC budget to the Office of the President as 2007. Senator Drilon maintained that this is not be confidential and intelligence fund. He admitted that possible because the programmed deficit is P63 billion. since then Congress, out interdepartmental courtesy, has not removed the P650 million intelligence fund Asked if the DND and AFP budgets submitted from the Office of the President. While he expressed to the President included allocation for the payment of openness to an amendment to cut the intelligence arrears and adjustment of pay and pensions of soldiers fund of the Office of the President, he admitted that and retirees, Senator Drilon replied in the affirmative. the Senate panel would have to fight for it in the Bicameral Conference. To implement the second tranche for retirees, Senator Biazon proposed two options: 1) realign- On the P10-million allocation for the National ment of P636 million for the arrears in pension, or Defense College and P5 million for the Philippine 2) submission of a supplemental budget. In reply, Military Academy, Senator Drilon believed that the Senator Drilon stated that while the Committee amounts were insignificant considering that the total recognizes the validity of the claims, prioritization of proposed budget of AFP is P49.3 billion. He clarified expenses must be painfdly made. On the other that the P15 million was realigned outside of the option, he said that a supplemental budget must AFP budget. comply with the provision of the Constitution that funds are actually available for the purpose. Replying to a query, Senator Drilon affirmed that the House of Representatives reduced the pension On the possibility of coming up with the funds fund for government employees from P65 billion to as a result of the reduction in interest payments on P57 billion. But he clarified that the P8.2 billion debt servicing, Senator Drilon believed that the excess in the programmed appropriation is the net Executive department might consider the options in change in the budget. He explained that the cut in the the 2008 budget; but it would be extremely difficult pension fund pertained to the budget for rational- to look at the debt service portion of the budget at ization which remains nebulous as there is still no this late stage because the fiscal program has already enabling statute. He gave assurance that the cut did been set and tinkering around with the assumptions not affect the retirement and pension benefits of as the House did is risky and, in the words of the AFP retirees and veterans which has a budget of DBCC, “fiscally unsound.” P31,885,927,000. But he disclosed that as of June 30, 2006, the government has pension arrears of P11.693 Senator Biazon explained that he raised this con- billion to AFP retirees and P26.63 billion to veterans, cern because a number of retirees and veterans died or a total of P37.756 billion, of which P1.764 billion without receiving their benefits and that Mr. Terry is provided for in the 2007 budget. He affirmed Adevoso, presidential adviser on veterans’ affairs, that the pension of 3,698 personnel who retired has been blaming Congress for not providing funds in 2004 amounting to P307 million is provided for in for payment of pension arrears. the 2007 budget. ANNOUNCEMENT OF SENATOR DRILON On a related matter, Senator Biazon noted that the government owes retirees under Republic Act Senator Drilon said that Senator Madrigal, No. 9166 a total of P9.172 billion. who earlier manifested her desire to interpellate on the DND budget, would no longer ask questions, as Unlike the retirement scheme for civilian employ- she was satisfied with the answers during previous ees, Senator Biazon stated that PD 1638 mandates interpellations. & P TUESDAY, NOVEMBER 28,2006 863

He likewise announced that the Body is awaiting RESOLUTION the arrival of Senator Gordon who has indicated his desire to interpellate also. Proposed Senate Resolution No. 597, entitled

SUSPENSION OF CONSIDERATION RESOLUTION IN COMMEMORATION OF HOUSE BILL NO. 5794 OF THE DEMISE OF A DAUNTLESS STALWART OF PRESS FREEDOM Upon motion of Senator Drilon, there being no AND DEMOCRACY, MAXIM0 V. objection, the Body suspended consideration of SOLIVEN the bill. Introduced by Senator Lim ADDITIONAL REFERENCE OF BUSINESS

The Executive Director for Legislation read the To the Archives following matters and the Chair made the corresponding referrals: SECOND ADDITIONAL REFERENCE OF BUSINESS BILLS ON FIRST READING BILL ON FIRST READING Senate Bill No. 2542, entitled Senate Bill No. 2544, entitled AN ACT AMENDING SECTION ONE OF REPUBLIC ACT NUMBERED AN ACT INSTITUTING CHILDREN’S NINE THOUSAND TWO HUNDRED WELFARE FUND FOR THE AND FIFTY-FIVE, OTHERWISE PROTECTION AND REHABILITA- KNOWN AS AN ACT ALLOWING TION OF ABANDONED, ABUSED ILLEGITIMATE CHILDREN TO USE AND SEXUALLY EXPLOITED THE SURNAME OF THEIR FATHER, CHILDREN AMENDING FOR AMENDING FOR THE PURPOSE THIS PURPOSE REPUBLIC ACT ARTICLE 176 OF THE FAMILY NUMBERED 76 10, OTHERWISE CODE OF THE PHILIPPINES KNOWN AS THE SPECIAL PROTEC- Introduced by Senator Ramon “Bong” TION OF CHILDREN AGAINST Revilla Jr. CHILD ABUSE, EXPLOITATION AND DISCRIMINATION ACT To the Committees on Youth, Women and Family Relations; and Constitutional Amend- Introduced by Senator Ramon “Bong” ments, Revision of Codes and Laws Revilla Jr.

Senate Bill No. 2543, entitled To the Committees on Youth, Women and Family Relations; and Finance AN ACT PROVIDING FOR AN INCREASE IN THE SALARY OF GOVERNMENT DOCTORS AND SUSPENSION OF SESSION FOR EDUCATIONAL BENEFITS FOR THEIR CHILDREN, APPROPRIAT- Upon motion of Senator Drilon, the session was ING FUNDS THEREFOR suspended.

Introduced by Senator Ramon “Bong” It was 5:35 pm. Revilla Jr.

To the Committees on Health and RESUMPTION OF SESSION Demography; Civil Service and Government Reorganization; and Finance At 5:39 p.m., the session was resumed. 864 TUESDAY, NOVEMBER 28.2006

COMMITTEE REPORT NO. 160 Senator Drilon replied that these alternatives are ON HOUSE BILL NO. 5794 being examined by both panels. (Continuation) On whether the DND secretary could provide a Upon motion of Senator Drilon, there being no timetable for the negotiations, Senator Drilon that this objection, the Body resumed consideration, on Second matter shall be part of the briefing to be made by Reading, of House Bill No. 5794 (Committee Report Secretary Afable. No. 160), entitled Asked if the presence of the U.S. military in the AN ACT APPROPRIATING FUNDS FOR pacification campaign in Sulu and Basilan is helping THE OPERATION OF THE GOVERN- the peace process, Senator Drilon replied in the MENT OF THE REPUBLIC OF THE affirmative. PHILIPPINES FROM JANUARY ONE TO DECEMBER THlRTY-ONE TWO On whether the DFA is trying to get the support THOUSAND SEVEN, AND FOR of the ambassadors of Middle Eastern countries OTHER PURPOSES in convincing the MILF to accept a compromise agreement, Senator Drilon replied in the affirmative, INTERPELLATION OF SENATOR ANGARA adding that the DFA is also asking help from members of the Organization of Islamic Conference Senator Angara expressed the view that a (OK), namely, Indonesia, Malaysia, Saudi Arabia, peace treaty between the government and the Mor0 and Libya. Islamic Liberation Front (MILF) would trigger the unconditional release of US$0.5 billion to the Asked which among these countries has the Philippines from pledges of the U.S., Japan, and greatest moral ascendancy, Senator Drilon said that World Bank, which shall, in effect, relieve the it is Malaysia. budgetary strain by 70% to 80% since there would be no need for a standing army in Mindanao. Senator Angara expressed concern that there Senator Drilon agreed, adding that the only major might be some self-interest on the part of Malaysia roadblock is the matter on the number of barangays which he would rather not divulge. Senator Drilon to be included in the territory of the Autonomous said that while the government negotiators are fully Region in Muslim Mindanao (ARMM). aware of the danger, they have taken certain factors into account in the formulation of the government’s On whether the DND and the AFP are free to position in the negotiation. discuss the issue openly without jeopardizing the flow of peace negotiation, Senator Drilon said that he Asked whether the ASEAN, as an organiz- would be requesting Undersecretary Afable to brief ation, is involved in the resolution of this conflict, Senator Angara on the issue so as not to jeopardize Senator Drilon replied in the negative, saying that the government’s position on the matter. this is a judgment call on the part of the govem- ment’s negotiators. He suggested that Senator Asked on the number of barangays to be affected Angara raise the issue with Secretary Afable during by the negotiation, and whether these are contiguous the briefing. to the existing boundaries of the ARMM, Senator Drilon replied that more than 500 barangays are Asked on the status of the peace pact between being disputed by the government and MILF the government and RPA-ABB, Senator Drilon replied negotiators. While the disputed barangays are that it was holding. substantially contiguous, he said that the government is undertaking a survey to validate the claim of the SUBMISSION OF THE BUDGET OF THE MILF that majority of the residents of said barangays DEPARTMENT OF NATIONAL DEFENSE are Muslims. Upon motion of Senator Drilon, there being no Asked if an educational or health program would objection, the budget of the Department of National be a feasible trade-off for some of the disputed Defense was deemed submitted for the Body’s barangays that may be too distant to govern, consideration. d yb TUESDAY & WEDNESDAY, NOVEMBER 28 & 29,2006 865

SUSPENSION OF CONSIDERATION INTERPELLATION OF SENATOR LIM OF HOUSE BILL NO. 5794 Preliminarily, Senator Lim recognized the vital Upon motion of Senator Drilon, there being no role of the AMLC in the prevention of graft and objection, the Body suspended consideration of corrnption as well as the transfer to the country of the bill. illicit funds of terrorists. He asked whether the Council could be given a budgetary increase. Senator NEXT DAY’S AGENDA Drilon agreed that the Council has a critical role in providing information to help curb graft and cornption, Senator Drilon stated that the budgets of the terrorism and criminality. He said that during the following agencies would be taken up in the next hearings, the Committee was surprised at the level of day’s session: the AMLC budget but, apparently at this point, the Council draws principal support from the Bangko In the morning: Sentval ng Pilipinas which has sufficient funding. Agencies under other executive offices Department of Trade and Industry Senator Lim noted that the Council also plays a vital role in ferreting out tax evaders. He believed In the afternoon: Autonomous Region in Muslim Mindanao that government would not incur deficit if only the Department of Energy businessmen and citizens paid their taxes properly. Congress of the Philippines Senator Drilon stated that the Council is also Commission on Elections instrnmental in tracing the deposits of those who Office of the Ombudsman have squandered the investments of ordinary investors Department of Finance through pyramiding scams. National Economic and Development Authority SUBMISSION OF THE BUDGET OF THE Department of Budget and Management ANTI-MONEY LAUNDERING COUNCIL Allocations to Local Government Units Special Funds Executive Offices Upon motion of Senator Drilon, there being no - Cagayan Economic Zone Authority objection, the budget of the Anti-Money Laundering - Zamboanga City Special Economic Council was deemed submitted for the Body’s con- Zone Authority sideration.

SUSPENSION OF SESSION COMMISSION ON FILIPINOS OVERSEAS

Upon motion of Senator Drilon, there being Senator Drilon presented the budget of the no objection, the Chair declared the session Commission on Filipino Overseas. He stated that the suspended until ten o’clock in the morning of Committee has recommended the approval of the the following day. P40,005,000.00 appropriation as proposed in the NEP and the GAB. It was 5:56p.m. INTERPELLATION OF SENATOR LIM RESUMPTION OF SESSION Senator Lim believed that the DFA has gone At 10:32 a.m., Wednesday, November 29,2006, beyond its responsibility in attending to the OFWs the session was resumed with Senate President Pro who were affected by the recent crisis in Lebanon. Tempore Flavier presiding. He asked whether the Commission on Filipinos Overseas could also assist the OFWs as he lamented ANTI-MONEY LAUNDERING COUNCIL the fact that some agencies did not perform to the satisfaction of most of the OFWs. Senator Drilon presented the budget of the Anti- Money Laundering Council (AMLC). He said that Senator Drilon replied that the evacuation of the the Committee has recommended the P10 million OFWs in Lebanon is part of the mandate of the DFA budget as proposed by the President. and the OWWA, not of the Commission on Filipinos 866 WEDNESDAY, NOVEMBER 29,2006

Overseas. He explained that part of the mandate of DANGEROUS DRUGS BOARD the Commission is to attend to Filipinos who are permanent residents of foreign countries and inculcate Senator Drilon presented the budget of the in them the Filipino heritage. Dangerous Drugs Board (DDB). He stated that the budget proposed by the Committee is P45,430,000 SUBMISSION OF THE BUDGET OF THE which is lower than the proposal in the NEP and the COMMISSION ON FILIPINO OVERSEAS P46,563,000 in the GAB. He said that the Committee restored the maintenance and operating expense Upon motion of Senator Drilon, there being no to the 2005 level. He disclosed that apart from objection, the budget of the Commission on Filipinos the P45.4 million budget, under the law, the DDB Overseas was considered submitted for the Body’s also has a P77 million average supplement from consideration. Pagcor.

COMMISSION ON INTERPELLATION OF SENATOR LIM THE FILIPINO LANGUAGE Asked by Senator Lim if the DDB is authorized Senator Drilon presented the budget of the to issue licenses and permits to laboratories which Commission on the Filipino Language amounting conduct drug tests, Senator Drilon replied that the to P26.046 million as recommended in the NEP DDB is only a policy and research unit. and GAEL Senator Lim recalled that during the time of INTERPELLATION OF SENATOR LIM then Justice Secretary Drilon, the DDB applied for a permit to do drug testing but was denied for Asked by Senator Lim why the use of the one reason or another. He stated that his office has Filipino language as the medium of instruction is been receiving complaints ahout the proliferation being blamed for the deterioration of English of fly-by-night drug testing centers that charge proficiency among Filipinos, Senator Drilon believed excessive fees. that the problem does not lie in the Commission but in the DepEd‘s budget which is not sufficient to fund SUBMISSION OF THE BUDGET the salaries of teachers and educational materials OF THE DANGEROUS DRUGS BOARD and facilities. Upon motion of Senator Drilon, there being no Asked if the DepEd budget could be increased objection, the budget of the Dangerous Drugs Board to provide for the hiring of competent teachers and was deemed submitted for the Body’s consideration. the promotion of the national language, Senator Drilon explained that the DepEd budget was increased FILM DEVELOPMENT COUNCIL by P730 million for the hiring of 6,000 plus teachers OF THE PHILIPPINES who are proficient in the national language and other fields. Senator Drilon presented the budget of the Film Development Council of the Philippines. He stated that Asked whether students are taught about the the President recommended a budget of P4,467,000 heroism of their forebears so that they would that was increased by P4,000,000 in the GAB and imbibe Filipino values, Senator Drilon replied in the the Committee adopted it. affirmative. SUBMISSION OF THE BUDGET SUBMISSION OF THE BUDGET OF THE OF THE FILM DEVELOPMENT COMMISSION ON THE ~~JNOLANGUAGE COUNCIL OF THE PHILIPPINES

Upon motion of Senator Drilon, there being no Upon motion of Senator Drilon, there being no objection, the budget of the Commission on the objection, the budget of the Film Development Council Filipino Language was deemed submitted for the of the Philimines__ was deemed’ submitted for the Body’s consideration, Body’s consideration, N P WEDNESDAY, NOVEMBER29,2006 867

GAMES AND AMUSEMENTS BOARD On the observation that setting policies on housing is the role of the legislature, Senator Drilon stated Senator Drilon presented the budget of the Games that HUDCC policies are within the parameters set and Amusements Board. He stated that the Committee by Congress. has adopted the proposed budget of P43,728,000 in the NEP and GAB. As to the relation of the HUDCC with the Pag- BIG Fund, Senator Drilon stated that HUDCC has SUBMISSION OF THE BUDGET OF no actual control over the Pag-BIG Fund although THE GAMES AND AMUSEMENTS BOARD the HUDCC chair sits as the Pag-BIG Fund chair. He affirmed that HLURB, HUDCC and Pag-BIG Upon motion of Senator Drilon, there being no are chaired by Vice President Noli de Castro. objection, the budget of the Games and Amusements Board was deemed submitted for the Body's Senator Angara expressed strong belief in the consideration. housing sector as a multiplier in the economy but he lamented that no one is in charge of this vital social HOUSING AND LAND USE sector. He stressed that there must be a clear-cut REGULATORY BOARD definition of the roles and responsibilities of the housing agencies. Senator Drilon presented the budget of the Housing and Land Use Regulatory Board. He stated Senator Drilon recalled that a bill was filed in the that the Committee has adopted the proposed budget last Congress creating a Department of Housing of P163,083,000 in the NEP and GAB. under which the various housing agencies could be consolidated but the creation was hindered by INTERPELLATION questions on the coverage of the Salary Standardiz- OF SENATOR ANGARA ation Law. Further, he noted that the Arroyo adminis- tration is not pushing hard for the passage of the bill Asked by Senator Angara on the difference which is not even discussed in the LEDAC as one of between the Housing and Land Use Regulatory the priorty legislative measures. Board and the Housing and Urban Development Coordinating Council, Senator Drilon clarified that Replying to a query, Senator Drilon enumerated the HLURB is a regulatory agency, while the HUDCC the following agencies under the housing sector: is a policy-making and coordinating council. Housing and Land Use Regulatory Board (HLURB), Housing and Urban Development Coordinating Asked what the HLURB regulates, Senator Drilon Council (HUDCC), National Home Mortgage Finance replied that the agency ensures compliance with Corporation ("MFC), National Housing Authority subdivision plans and the protection of buyers of ("A),Home Guarantee Corporation (HGC), Home subdivision lots, and adjudicates disputes within Development Mutual Fund (HDMF), popularly known homeowners associations, among others. as Pag-BIG Fund, and the Socialized Housing Finance Corporation which handles the Community As regards the policies that are promulgated Mortgage Program. In this regard, he reiterated the by the HUDCC, Senator Drilon stated that these need to create a Department of Housing. include the national objective for housing and urban development; broad strategies for the accomplish- Senator Angara requested the agencies to submit ment of its objective; and implementing mechanism a report on how their functions are related and for the development or disposal of acquired or existing coordinated, their personnel, and plans to rationalize assets of key housing agencies. The Council, he said, their operations. Senator Drilon gave assurance that also coordinates the activities of key government a consolidated report would be submitted which housing agencies in the national housing program; would include the assets and resources under the monitors, reviews and evaluates the effective exercise control of the agencies. by these agencies of their assigned functions; and assists and develops the maximum participation of Upon further query, Senator Drilon affirmed that the private sector in all aspects of housing and urban the HUDCC formulates basic policies, guidelines and development. implementing mechanisms for the disposal of acquired 4 868 WEDNESDAY, NOVEMBER 29,2006 and existing assets of the key housing agencies censorship in this case, it is not amenable to adopting which could run to billions worth of nonperforming the stance of the House. He stated that a message assets. He recalled that the Special Purpose Asset should be delivered to the agency to exercise its Vehicle law was passed precisely to facilitate the functions in a more prudent manner, conscious of the disposal of these assets. constitutionally guaranteed press freedom and civil and individual rights, but it should be allowed to INTERPELLATION OF SENATOR LIM continue existing as it also performs its other mandates.

Replying to Senator Lim’s query, Senator Drilon REMARKS OF SENATOR ANGARA affirmed that one of the pressing problems of the country is the acute housing shortage. As to the status Senator Angara shared the position of the of a big condominium occupying a prime location along Committee in retaining the President’s budget for the the coastal road which has remained unoccupied to agency amounting to P31.973 million. He stated that date, he informed the Body that the project is under the MTRCB should be careful in censorship, but it the Public Estates Authority presently headed by former would be improper and almost inhuman to punish the Senator Ramon Revilla Sr. He said that unverified entire agency for the acts of its board. reports indicate that a substantial number of the units have been sold to the private sector. He stated that REMARKS OF SENATOR LIM he would request PEA to submit a report on the situation, including the reason why it is unoccupied. Senator Lim recommended the approval of the budget of the MTRCB, as he hoped that Senator Lim informed the Body that Vice the President would reconsider her position and President de Castro in a speech that morning reported convince the members of the board to allow the a decrease in the interest rates of housing loans from showing of the documentary. He said that the very 9% to 6% for loans less than P300,OOO and from purpose for which it was banned has aroused the 10% to 7% for loans P500,OOO or less, which should curiosity of many which is the reason why copies of be a welcome news to all. He commended Under- the documentary were selling like hotcakes. secretary Bagatsing for his response to complaints brought to his attention. SUBMISSION OF THE BUDGET OF THE MOVIE AND TELEVISION SUBMISSION OF THE BUDGETS REVIEW AND CLASSIFICATION BOARD OF THE HOUSING AGENCIES Upon motion of Senator Drilon, there being no Upon motion of Senator Drilon, there being no objection, the budget of the Movie and Television objection, the budgets of the Housing and Land Use Review and Classification Board was deemed Regulatory Board, Housing and Urban Development submitted for the Body’s consideration. Coordinating Council, National Home Mortgage Finance Corporation, and National Housing Authority were NATIONAL ANTI-POVERTY COMMISSION deemed submitted for the Body’s consideration. Senator Drilon presented the budget of the MOVIE AND TELEVISION REVIEW AND National Anti-Poverty Commission. CLASSIFICATION BOARD INTERPELLATION OF SENATOR ANGARA Senator Drilon presented the budget of the Movie and Television Review and Classification Board In reply to the queries of Senator Angara, Senator (MTRCB). He stated that the Committee had Drilon said that the Committee has recommended the sustained the President’s budget of P31.973 million approval of the President’s budget for the NAPC - which the House of Representatives earlier reduced now headed by Secretary Doming0 Panganiban - to P1.00 due to certain policy disagreements, parti- of P54.108 million. He said that by virtue of Republic cularly over the banning of the documentary film on Act No. 8425, the agency coordinates the anti- former President Estrada. He said that while the poverty programs of 23 government agencies, one of Committee believes that the MTRCB committed which is Kapit-Bisig Laban sa Kahirapan (XALH). an error and violated press freedom by exercising a pilot poverty-reduction program. & WEDNESDAY, NOVEMBER 29,2006 869

Senator Angara requested a report on the flagship On whether it is possible to realign P0.5 billion of program, the budget devoted to it by the 23 agencies, the P2 billion to cultural institutions, Senator Drilon and the areas being targeted or addressed. He also replied that the P1 billion one-line item for the asked data on the poverty trend over the past three E-Government Fund could be realigned to other years and NAPC’s poverty projection in the next agencies for specific projects and the Committee has three years. Senator Drilon said that he would provide asked them to submit an itemization thereof. He Senator Angara the information. noted that the National Commission for Culture and the Arts, aside from its general appropriation, has a SUBMISSION OF THE BUDGET OF THE National Endowment Fund for Culture and Arts NATIONAL ANTI-POVERTY COMMISSION (NEFCA) of P3,330,913,022, of which P1.615 billion has been disbursed, leaving a balance of PI .7 billion. Upon motion of Senator Drilon, there being no Senator Angara expressed confidence that the objection, the budget of the National Anti-Poverty Fund is being well spent to promote the country’s Commission was deemed submitted for the Body’s artistic and cultural heritage. However, he pointed consideration. out that the National Museum needed additional funding for the acquisition of many priceless literary NATIONAL COMMISSION works, paintings, and historical artifacts from private ON CULTURE AND THE ARTS AND owners who would rather sell them abroad; and the ITS ATTACHED AGENCIES preservation of historical and cultural monuments and priceless documents that would boost Philippine Senator Drilon presented the budget of the National tourism. He bared that the Spanish government Commission on Culture and the Arts and its attached was willing to send over experts on the preservation agencies: National Commission for Culture and the of priceless documents but the undertaking needed Arts - Proper, P13.440 million; National Historical local counterpart funding. Senator Drilon stated that Institute, P106.512 million; National Library, P61.902 the National Museum has an allocation of P115.402 million; National Museum, P115.402 million; and the million which the Committee would review before Record Management and Archives Office, P70.039 the final approval of the GAB. million. SUBMISSION OF THE BUDGET INTERPELLATION OF SENATOR ANGARA OF THE NATIONAL COMMISSION ON CULTURE AND THE ARTS In reply to the queries of Senator Angara, AND ITS ATTACHED AGENCIES Senator Drilon said that the total budget for the culture and the arts agencies is P367.295 million Upon motion of Senator Drilon, there being no consisting of the following: personal services, P157.4 objection, the budget of the National Commission on million; MOOE, P145.8 million; and capital outlay, Culture and the Arts and its attached agencies was P64 million. deemed submitted for the Body’s consideration.

To the observation that the P367 million budget PRESIDENTIAL COMMISSION for the promotion, cultivation and preservation of the ON GOOD GOVERNMENT country’s cultural and literary heritage is a miniscule Senator Drilon presented the budget of the investment, Senator Drilon agreed, adding that apart Presidential Commission on Good Government. He from the inadequacy in the spending authority, there stated that it is P79.190 million, P5 million less than is also failure in the enactment of laws to preserve the proposal in the NEP and the GAB. He explained the country’s heritage. that the Committee deleted the P5-million confidential and intelligence funds because of the position of the Senator Angara said that this was the reason PCGG chairman that only COA can look into the why he has urged the Body to pass the National disbursement of the funds. Heritage Act. He asked why the P1 million allocation for the E-Government Fund and the P1 billion for the INTERPELLATION OF SENATOR ENRILE Telecommunications Office should be lei? untouched when the country’s cultural institutions are under- Senator Enrile inquired on the difference between funded. a confidential fund and an intelligence fund.d 870 WEDNESDAY. NOVEMBER 29.2006

Senator Drilon replied that the funds are under one SUSPENSION OF SESSION classification and their basic feature is that these funds are accounted for using the “close envelope Upon motion of Senator Enrile, the session was system” wherein the accounting is simply placed suspended. in an envelope and submitted to the COA chairman. It was 12:lO p.m. Senator Enrile recalled that during his time at the Department of National Defense, the intelligence RESUMPTION OF SESSION funds and confidential funds were distinct funds although liquidated by the same method. He observed At 12:11 p.m., the session was resumed. that the agency has an appropriation of P86.672 million in the GAB, of which P84.190 million is in Asked if the reason for the increase of its new appropriation; and it is higher by 28.25% than full-time employees was the transfer of functions of the 2006 budget of P67.580 million; on the other the Committee to the PCGG, Senator Drilon replied hand, the Committee has reduced this amount by in the affirmative. He clarified that the Committee P5,000,000 to P79,190,500. He said that the PCGG used to be an inter-agency group composed of the has asked for an increase of P19.092 million, DOJ, COA, BIR, DBP and the BSP within the PCGG. PI0 million of which is for MOOE to implement E.O. No. 432. On whether the Committee had its own budget, Senator Drilon stated that the personnel assigned to Senator Drilon explained that the executive order, it drew their salaries from their respective agencies dated May 26,2005, transferred the defunct powers, but it was appropriated P10 million from the budget functions and duties of the AdHoc Committee on of the Office of the President for MOOE. Behest Loans to the PCGG, including the investigation, filing and prosecution of cases for the recovery of Asked if the records of the Committee were also claims arising out of behest and nonbehest loans that transferred to the PCGG, Senator Drilon replied that had been defaulted. He stated that the PCGG created some records were transferred to the Commission, the behest legal team whose operating budget is but some were still in the possession of the Landbank P10 million. and DBP.

As regards the allocation for other benefits under As to the total number of cases handled by the personal services, Senator Enrile inquired if the Committee, Senator Drilon replied that there were increase of P1.682 million in 2006 to P3.353 million 119 cases pending in the Committee, which includes in 2007 includes the additional P1,OOO compensation 5 1 cases from the Office of the Ombudsman, 20 from for PCGG employees. Senator Drilon replied in the the Supreme Court, and 8 from the Sandiganbayan, affirmative. and 40 cases for refilling. He said that these cases were merely transferred to the Commission. As to the 21% increase of the PS item on salaries and wages from P17.041 million in 2006 to Asked whether these cases include those against P20.67 million in 2007, Senator Drilon said that it is Mr. Eduardo Cojuangco, Senator Drilon replied in the for the increase in salaries of permanent positions negative, saying that these are behest loans cases and the filling up of vacant positions which was not during the time of President Marcos, amounting to done in 2005. P105.5 billion: P53.9 billion, DBP; P42 billion, PNB; P5.2 billion, PhilGuarantee; and P3.9 billion, NDC. Asked why there would be a filling-up of positions when the work of the PCGG has decreased, Senator In reply to further query, Senator Drilon said that Drilon said that the PCGG took on new functions for neither Senator Enrile nor any of the companies which purpose, a behest legal team was created. identified with him is included in the list of behest loans recipients. Upon further query, Senator Drilon said that full- time office-based PCGG personnel increased from Asked why the PCGG had requested only P10 41 in 2005 to 58 in 2006, while its full-time lawyers million for 2006 when the amount of behest increased from 36 in 2005 to 43 in 2006. loans to be recovered is more than PlOO billion, da/ u6 WEDNESDAY, NOVEMBER 29,2006 871

Senator Drilon replied that while much of the Senator Drilon revealed that the records sub- work had already been done by the Committee, mitted to the Committee show that from 1987 to the PI 0 million would cover only litigation expenses. date, a total of US$20,046,751.49 was spent for He added that the original P10 billion budget for the the services of foreign lawyers apart from 743,000 Committee is now being sourced from the General Swiss francs. Fund and is part of the PCGG budget. Asked to name all lawyers hired at various Asked if PI0 million would be sufficient to time by the PCGG, Senator Drilon cited them as unravel the behest loans during the term of President follows: Macapagal Arroyo and the commissioners, Senator Drilon believed that the behest loans might be UNITED STATES OF AMERICA recovered if a different agency is involved and not East Coast the PCGG. Caplin & Drysdale Center for Constitutional Rights As regards the breakdown of the increase in the Franklin Siege1 allocation for professional services, Senator Drilon Peter Hoets enumerated the following: security services - P3.2 Roberts & Hollarned million; janitorial services -P3.1 million; legal services Sills Beck Cummis - P11.6 million; consultancy services - P890,OOO; general services, P5 10,000; and other professional West Coast Area services, P3.421 million. Abram Chayes Benjamin G. Williams With respect to the item on legal services, Senator Jose Lauchengco Jr. Drilon said that this would cover the professional Mark D. Bernstein Munger, Tolles & Olson services of private lawyers, excluding foreign lawyers. Paul Chamberlain Int’l. Senator Enrile directed the PCGG to submit a record Shartsis, Friese and Ginsburg of all the local and foreign lawyers it has hired and Ted Laguatan & Assosciates the corresponding payment for the professional fee Heller Ehan White & McAuliffe of each lawyer since the PCGG’s creation. Senator Drilon disclosed that as of October 31, 2006, the Texas PCGG has paid a total of P12,538,897.25 for the Mallet, Trichter & Brann services of foreign lawyers. Maloney & Smith Swif & Associates Senator Drilon said that American law firm Winstead, SEchrest and Minick Heller, Ehrman, White and McAuliffe was paid Herren and Esquivel Vinson & Elkins Law Office on time-charge basis for services in human-rights litigations and in the Merill Lynch vs. Arelma case. SWITZERLAND As regards the services of the firm of Swiss Fontanet, Salvioni and Leunberger lawyer Sergio Salvioni, he clarified that it was paid Franz Reichenbach US$6,797,405.54, approximately P300 million, Claude Aberle and Georges Zecchin representing 1% of the recovered Marcos deposits in Walder Wyss & Partners Switzerland. He revealed that Mr. Salvioni identified Badertscher Dong & Poledna the Marcos Swiss deposits and was hired during the Frick and Partner time of PCGG Chairman Jovito Salonga. ELIROPE But Senator Enrile bared that the deposits had Baudel, Sales, Vincent & George already been identified in documents recovered from Coudert Freres the house of a Dr. Reyes in 1986, and this happened Studio Legale Guerreri in the presence of PCGG Chairman Salonga, PCGG Friedrich W. Mosing Commissioners Pedro Yap, Raul Daza and Raul Diaz; Chief of Staff Fidel Ramos and himself. He AUSTRACIA recalled that the documents, along with the Marcos Richard J. Burbridge jewelry, were deposited in the Central Bank. Robertson Cox dd 872 WEDNESDAY, NOVEMBER 29,2006

JAPAN Asked how much the chairman drew from the Control Risks, Ltd. PCGG for the New York travel, Senator Enrile stated that the chairman did not have the information HONG KONG on hand. Management Answer Co. Romulo Phil Attorneys at Law At this point, Senator Enrile manifested that Wilkinson and Grist he would suspend his interpellations on the PCGG budget until it shall have furnished the answers to PANAMA his queries. James Nelson Joseph Soos SUSPENSION OF THE PERIOD Morgan & Morgan OF INTERPELLATIONS ON THE BUDGET OF THE PRESIDENTIAL Senator Drilon stated that Chairman Camilo Sabio COMMISSION ON GOOD GOVERNMENT wanted to apprise the Body that during his watch, the PCGG hired only the services of Harry Alias Upon motion of Senator Drilon, there being no Partnership, a Singaporean firm, to recover the $27 objection, the Body suspended the period of inter- million held in a Singapore bank, which is part of the pellations on the PCGG budget. Marcos Swiss account. He added that the case is still pending but the motion to intervene has been granted. OTHER EXECUTIVE OFFICES

Senator Enrile observed that under the MOOE, Senator Drilon presented the budgets of the the travel expenses have the highest increase of other executive offices: 130%. asked to he clarified where the PCGG He Securities and Exchange Commission officials intend to travel in 2007 and the purpose * - P212,474,000 thereof, asserting that these could not be in connection with the Marcos wealth that has already been 4 Presidential Management Staff identified. Senator Drilon replied that the budget of - P187,320,000 P2.3 million covers local and foreign travels. * Presidential Legislative Liaison Office On foreign travels, Senator Enrile noted that - P19,958,000 there is only one representation in the PCGG records * National Commission on the Role which showed that Chairman Sabio spent PI 16,068.85 of Filipino Women - P29,411,000 representing daily subsistence, accommodation and meal allowance during his “official” trip from March 4 National Water Resources Board 21 to April 4, 2006 to New York and Los Angeles - P32,419,000 to attend, in his capacity as chairman of the CIIF Oil Mills Group and the CIIF Management Company, * National Youth Commission Incorporated, the annual convention of the National - P53,010,000 Institute of Oils Seed Products and the IOP, and 4 Office of Muslim Affairs to confer with the officials of Granex USA and - 245,541,000 Mr. Arde Francisco Arnold of Connecticut, who has been referred to the PCGG by the Philippine Mission * Optical Media Board - 25,791,000 to the United Nations. He asked whether it was * Philippine Drug Enforcement Agency proper for the chairman to charge the PCGG for his - 604,583,000 travel expenses on this occasion. He added that he has information that Chairman Sabio also charged * Philippine Council for Sustainable some of his expenses to a company in New York Development - 8 1,486,000 owned and operated by the United Coconut Planters * Philippine Racing Commission Bank and the CIIF Oil Mills Group. Senator Drilon - P80,821,000 confirmed the observation, conceding that it was an improper act on the part of the chairman to charge * Philippine Commission for the Urban the PCGG for his travel expenses. Poor - P48,425,000 p WEDNESDAY, NOVEMBER 29,2006

+ National Intelligence Coordinating SUSPENSION OF SESSION Agency - P260,435,000 Upon motion of Senator Drilon, there being no + National Security Council (Secretariat) objection, the session was suspended until three - P54,088,000 o’clock in the afternoon. + Professional Regulation Commission - P349,030,000 It was 12:59 p.m.

+ Cultural Center of the Philippines RESUMPTION OF SESSION - P170,000,000 At 3:17 p.m., the session was resumed with Senator Drilon stated that while the Committee Senate President Pro Tempore Flavier presiding. retained most of the appropriations of the other executive offices as proposed in the NEP and the SPECIAL ORDER GAB, it made some cuts including the PI million intelligence fund of the National Security Council Upon motion of Senator Cayetano, there being Secretariat. no objection, the Body approved the transfer of Committee Report No. 177 on Senate Bill No. 2522 SUBMISSION OF THE BUDGETS from Calendar for Ordinary Business to the Calendar OF OTHER EXECUTIVE OFFICES for Special Orders.

There being no interpellation, upon motion COMMITTEE REPORT NO. 177 of Senator Drilon, there being no objection, the ON SENATE BILL NO. 2522 budgets of the aforementioned other executive offices were deemed submitted for the Body’s Upon motion of Senator Cayetano, there being consideration. no objection, the Body considered, on Second Reading, Senate Bill No. 2522 (Committee Report No. 177), MANIFESTATION entitled OF SENATOR DRILON AN ACT DEFINING HANDLINE FISHING, PROVIDING EFFECTIVE Senator Drilon informed the Body that there REGULATIONS THEREFOR AND were still reservations for interpellation on the FOR OTHER PURPOSES. budgets of the Philippine Sports Commission and the Presidential Commission on Good Government. Pursuant to Section 67, Rule XXlII of the Rules of the Senate, with the permission of the Body, upon SUSPENSION OF CONSIDERATION motion of Senator Cayetano, only the title of the bill OF HOUSE BILL NO. 5794 was read without prejudice to the insertion of its full text into the Record of the Senate, Upon motion of Senator Drilon, there being no objection, the Body suspended consideration of The Chair recognized Senator Magsaysay for the bill. the sponsorship.

AFTERNOON AGENDA SPONSORHIP SPEECH OF SENATOR MAGSAYSAY Senator Drilon informed the Body that the sponsorship speech of Senator Magsaysay on In sponsoring Senate Bill No. 2522, Senator Senate Bill No. 2522 (defining handline fishing Magsaysay delivered the following speech and providing effective regulations) as well as the possible approval of bicameral conference committee AN IMPORTANT STEP TOWARDS reports on the Biofuels Act and the Automated PROMOTJNG COMPE”BS, Election System bill would be on the agenda when SUSTAINABILITY AND DEVELOPMENT the session resumes at three o’clock in the afternoon, OF THE TUNA FISHING INDUSTRY while floor debates on House Bill No. 5794 would On behalf of the tuna handline fisherfolk resume at five o’clock. of SOCSKSARGEN (South Cotabato, Sultan # 874 WEDNESDAY, NOVEMBER 29,2006

Kudarat, Sarangani province, General Sautos fishing included. Under the Fisheries Code of City) and Mindanao, I rise today to sponsor 1998, all handline fishing vessels are classified as Senate Bill No, 2522, which underlines the need small commercial fishing vessels (Section 2, 10.1). to regulate the country’s tuna handline fishing However, the rules and regulations prescribed industry. by the Maritime Industy Authority (Marina) do not cover simple vessels, such as the pumpboats, Handline fishing is a traditional method that which is the current practice in the handline makes use of a single hook and line - a passive fishing sector; hence, these simple handline boats fishing gear to catch fish. Under the Fisheries - could not be registered, and it is like they are in Code of the Philippines of 1998, commercial limbo. In addition, the handline fishing gear and fishing is the taking of fishery species by fishing vessels operating on a commercial scale passive or active gear for trade, business or could not be issued a license by the Bureau of profit beyond subsistence or sports fishing. Fisheries and Aquatic Resources (BFAR). Handline fishing is considered both environmentally safe and practical in terms of The newly-formed Western and Central fish resource management. In handline fishing, Pacific Fisheries Commission, of which the only large mature tunas are caught, resulting in Philippines is a member, began enforcing its smaller catches but a much higher unit value. regulations in 2004. The Convention text requires That means the smaller tunas of less than 20 that all vessels that fish in international waters kilos are pretty safe. Now, may I also mention within the commission area must be duly licensed here about the local tuna industry briefly. by the commission. This has made it possible for traditional fishing crafts, such as handline fishing Local tuna industy vessels, to be exempted from the stringent regula- tions that apply to sophisticated fishing boats. Handline fishing for large tunas is an However, under Marina regulations, no handline important component of the Mindanao economy, fishing vessel would qualify for registration to particularly for General Santos City and fish in international waters. Philippine handline Sarangani province. Their tuna handline fleet fishing vessels that fish in international waters consists of over 2,500 large bancas or outriggers without proper documentation could jeopardize - they are sometimes called “pumpboats” - the access of the entire country’s tuna fleet to employing over 130,000 fishermen who yield the Pacific fishing grounds. over 30,000 metric tons of high-value tunas each year. The direct revenue of the fishermen Objectives exceeds P4.5 billion per year, and the frozen sashimi, which all of us here are very fond of, Senate Bill No. 2522 is a special legislation. processing sector exports over P4.5 billion in Over the years, the Fisheries Code of 1998 has finished steaks and sashimi blocks annually. not provided a category for commercial handline Commercialization of the handline method fishing where it can be registered and provided began in the 1980s when the demand for large, the required license. high-quality sashimi tuna spread globally. As The measure aims to set the appropriate the Mindanao pumpboat fleet expanded to meet rules and regulations in order to strengthen the the demand, the size of the boats became bigger existing ones governing handline fishing. We, in so they could fish beyond Philippine waters. the Committee on Agriculture and Food, jointly Most of the handline vessels are now within the with the Committee on Environment and Natural 10 to 20 gross tons (gt) classification. Resources, strongly believe that this proposal These vessels are of traditional design with could make a marked difference in the pace of outriggers on either side of the central hull, development of the handline fishing industry. giving it the advantage of simplicity, low cost This will address the requirements of the and stability. However, handline fishermen are Philippine regulations with the Western and gradually trying out modern boats without Central Pacific Fisheries Commission that the outriggers. Most of the crewmembers employed country ensure the registration and licensing of are ex-rebels or potential rebels, and their handline vessels that would further establish employment has somehow promoted peace and the country’s credibility as a producer of world- order in southern Mindanao. class, high-grade tuna.

Roadblocks to indushy growth Salient points It is the policy of the State to support the This measure proposes that the registration,

development of the fishing industry - handline inspection, manning and documentation of ~ WEDNESDAY, NOVEMBER 29,2006 875

handline fishing boats as flag boats shall be with APPROVAL OF SENATE BILL NO. 2522 the Marina, while the licensing and related ON SECOND READING documentation of said boats as fishing boats shall be with the BFAR. Submitted to a vote, there being no objection, By giving weight to traditional fishing Senate Bill No. 2522 was approved on Second Reading. practices and small fishermen by defining handline commercial fishing and handline SUSPENSION OF CONSIDERATION commercial vessel, this piece of legislation could OF SENATE BILL NO. 2522 contribute significantly to making our handline fishing and its allied industry highly competitive Upon motion of Senator Cayetano, there being no in the global market. objection, the Body suspended consideration of the bill. May I, therefore, appeal to this Body for its support and the immediate passage of this bill. SUSPENSION OF SESSION

INTERPELLATION OF SENATOR CAWTAN0 Upon motion of Senator Cayetano, the session was suspended. Senator Cayetano noted that handline fishing is an environmental-friendlymode of fishing that avoids It was 3:34 p.m catching the smaller fish; and prevents the use of nets that indiscriminately catch other kinds of marine species RESUMPTION OF SESSION and resources that are not meant to be caught, like dolphins and corals. She said that she has always At 3:42, p.m., the session was resumed been supportive of measures to promote livelihood for farmers and fisherfolk and, at the same time, MOTION OF SENATOR LIM ensure the safety of the environment. Upon motion of Senator Lim, there being no Regarding the licensing and other related docu- objection, Proposed Senate Resolution No. 597, expressing the heartfelt sympathy and condolence mentation of small fishing boats, Senator Cayetano of the Senate over the demise of publisher and columnist informed the Body that in light of the recent oil spill in Guimaras, government is currently conducting a Maximo Soliven, was made part of Senate Resolution review on the functions and powers of the different No. 113, as adopted. agencies like Marina and the Philippine Coast Guard, which are involved in the registration process and in SUSPENSION OF SESSION safeguarding the waters, respectively. Upon motion of Senator Cayetano, the session was suspended. Senator Magsaysay said that at the proper time, he would be willing to consider amendments to It was 3:51 p.m. improve the bill and protect the open ocean waters. RESUMPTION OF SESSION TERMINATION OF THE PERIOD OF INTERPELLATIONS At 355 p.m., the session was resumed.

There being no other reservation for interpellation, Senator Cayetano informed the Body that the upon motion of Senator Cayetano, there being no session would be suspended until five o’clock in the objection, the Body closed the period of interpellations. afternoon, at which time, the budget deliberations would resume. TERMINATION OF THE PERIOD OF AMENDMENTS SUSPENSION OF SESSION

There being no committee or individual Upon motion of Senator Cayetano, the session amendment, upon motion of Senator Cayetano, there was suspended. being no objection, the Body closed the period of amendments. It was 3:56 p.m.P 876 WEDNESDAY, NOVEMBER 29,2006

RESUMPTION OF SESSION Industry and its attached agencies was deemed submitted for the Body’s consideration. At 5:20 p.m., the session was resumed with Senate President Pro Tempore Flavier presiding. SUSPENSION OF SESSION

COMMITTEE REPORT NO. 160 Upon motion of Senator Drilon, the session was ON HOUSE BILL NO. 5794 suspended. (Continuation) It was 5:26 p.m. Upon motion of Senator Drilon, there being no objection, the Body resumed consideration, on Second RESUMPTION OF SESSION Reading, of House Bill No. 5794 (Committee Report No. 160), entitled At 5:30 p.m., the session was resumed. AN ACT APPROPRIATING FUNDS FOR THE OPERATION OF THE GOVERN- PHILIPPINE SPORTS COMMISSION MENT OF THE REPUBLIC OF THE PHILIPPINES FROM JANUARY ONE Senator Drilon presented the budget of the Philip- TO DECEMBER THIRTY-ONE, TWO pine Sports Commission. He informed the Body that THOUSAND SEVEN, AND FOR under the National Expenditure Progam, the President OTHER PURPOSES. proposed P108,984,000 for the Commission which the House increased to Pi 15,484,000; the Committee, Senator Drilon stated that the parliamentary status however, maintained the President’s budget of was still the period of interpellations. P108,984,000.

Thereupon, the Chair recognized Senator Drilon, SUSPENSION OF SESSION Sponsor of the measure. Upon motion of Senator Drilon, the session was DEPARTMENT OF TRADE AND INDUSTRY suspended. Senator Drilon stated that the President recom- It was 5:32 p.m. mended a budget of P2,076,115,000 for the Department of Trade and Industry and its attached agencies plus RESUMPTION OF SESSION a subsidy of P515,500,000 for the National Develop- ment Company (NDC). He informed the Body that the At 5:32 p.m., the session was resumed. House of Representatives increased the President’s proposal by P373,350,000 but the Committee restored INTERPELLATION the President’s budget. OF SENATOR EJERCITO ESTRADA (J) Senator Drilon explained that the P515.5 million subsidy is for servicing the interests on maturing bonds Replying to Senator (J) Ejercito Estrada’s queries, which the NDC issued with government guarantees Senator Drilon stated that the PSC is represented by to fund the centennial celebration, including the Commissioner Ambrosio de Luna as the chairman is centennial projects in Clark Development Corporation in Doha, Qatar for the Asian Games. that have become white elephants. He stated that the House did not find the expense valid and reduced the As regards the preparations made for the Doha subsidy by P250 million to P265.5 million; the Asian Games, Senator Drilon stated that the PSC has conducted a continuing program for the training Committee, on the other hand, further reduced it to zero. of athletes for local and international competitions SUBMISSION OF THE BUDGET OF THE since the Southeast Asian Games. He revealed that DEPARTMENT OF TRADE AND INDUSTRY the PSC spent P30 million for the training and AND ITS ATTACHED AGENCIES participation of Filipino athletes in the Asian Games.

Upon motion of Senator Drilon, there being no Senator Ejercito Estrada (.I)requested a break- objection, the budget of the Department of Trade and down of the expenses. $r‘ WEDNESDAY, NOVEMBER 29,2006 877

SUSPENSION OF SESSION Senator Ejercito Estrada (J) warned that he would even recommend a zero budget for the PSC should Upon motion of Senator Drilon, the session was it fail to produce the data the next day. suspended. INTERPELLATION OF SENATOR PJMENTEL It was 5:35 p.m In reply to a query of Senator Pimentel, Senator Drilon clarified that it is the Philippine RESUMPTION OF SESSION Olympics Committee (POC) and the NSAs that are involved in matters pertaining to the Basketball At 5:37 p.m., the session was resumed. Association of the Philippines (BAP).

Senator Drilon expressed regret that he could At this point, Senator Ejercito Estrada (J) stressed not defend the budget of the PSC since no single that it is but proper for the PSC to provide assist- official or staff knowledgeable on the budget was ance to the BAP, an NSA and a former POC present in the hall nor were records available. member. He said that it was unfortunate that POC He left it to the discretion of the Body to decide on Chair Cojuangco expelled the BAP for reasons only the PSC budget. known to him. He revealed that Chairman Ramirez has yet to fulfill his promise to open the office Senator Ejercito Estrada (J) moved to defer the of the BAP once he (Senator Estrada) was elected submission of the PSC budget for the Body’s president. consideration. Senator Drilon reminded that the Body was scheduled to approve the budget on December Asked by Senator Ejercito Strada (J) whether 4. He expressed doubt that the PSC officials, including Chairman Ramirez has consulted Commissioner De the accountant, who were all in Doha, could make it Luna on the BAP problem, Senator Drilon replied in time to assist in the defense of their budget. in the affirmative. However, he pointed out that because of the expulsion of the BAP from the Senator Ejercito Estrada (J) requested a report POC, the PSC has decided not to extend financial on the expenses of the PSC with regard to the assistance to it. training and participation of athletes from all National Sports Associations (NSAs) in the Asian Games Replying to Senator Pimentel’s queries, Senator in Doha. Senator Drilon said that Commissioner Drilon explained that the POC handles the participation De Luna might be able to submit the data, as he of athletes in the Olympics and all other athletic requested the commissioner to likewise submit a competitions like the Asian Games, while the PSC report on the PSC officials who went to Doha and only provides assistance to NSAs. their specific roles; and the amount paid for their trips as he noted that even the accountant has gone Senator Pimentel asked what the PSC officials there purportedly to “disburse funds.” Additionally, were doing in Doha, pointing out that the common Senator Ejercito Estrada (J) requested a report on complaint among athletes who compete abroad is the allowances of athletes and officials who their very low stipend and the fact that more officials participated in the Asian Games. than athletes are sent to such events.

Asked on the veracity of the report accusing Senator Drilon said that Commissioner De Chairman Ramirez of failure to remit P10 million Luna has informed him that the PSC officials are in in advance rental payment of Brent International Doha to ensure that funds are “properly disbursed.” School to the PSC, Senator Drilon stated that Senator Pimentel, however, pointed out that disburse- Commissioner De Luna is totally ignorant of the ment is the function of the auditor. He believed that transaction. Senator Ejercito Estrada (J) requested since the officials outnumbered the athletes, the the PSC to submit the details on the transaction. officials consume more of the funds than the athletes. He asked how the legislature could stop the practice. Senator Drilon cautioned that the Committee Senator Drilon said that the Committee would study was prepared to recommend a P1.00 budget for the how it could implement such policy through the PSC with the kind of cooperation it has shown. special provisions. w 878 WEDNESDAY. NOVEMBER 29.2006

SUSPENSION OF THE PERIOD teachers, who are being hired in the region, are not OF INTERPELLATIONS ON really qualified. He cautioned that government should THE BUDGET OF THE PHILIPPINE not allow a situation where politicians disregard SPORTS COMMISSION qualifications and just hire teachers because they happen to be relatives or neighbors. He asked whether Upon motion of Senator Drilon, there being no the practice is still going on, as he emphasized that objection, the Body suspended the period of inter- the ARMM youth should receive quality education at pellations on the budget of the Philippine Sports par with the rest of the country. Senator Drilon Commission. admitted that this practice did exist in the past when the ARMM officials could not take firm action SUSPENSION OF SESSION because of the volatile situation in some of the areas in the ARMM. However, he said that the present Upon motion of Senator Drilon, the session was ARMM administration has tried to remedy the problem suspended. by, among others, training teachers who are already in the payroll. Senator Pimentel suggested that positive It was 5:53 p.m. steps be taken to ensure that the Muslim youth would have quality education. RESUMPTION OF SESSION Senator Drilon stated that the present ARMM At 5:55 p.m., the session was resumed. administration and the ARMM DepEd are implement- ing a policy that only those who passed the licensure AUTONOMOUS REGIONAL GOVERNMENT examination or those who have secured a special IN MUSLIM MINDANAO teaching permit from the Professional Regulation Commission shall be hired. Senator Pimentel lauded the Senator Drilon presented the budget of the move; nonetheless, he said that there should be a Autonomous Regional Government in Muslim definite deadline for unlicensed teaches to pass their Mindanao. He stated that the Committee has recom- licensure examination, otherwise, they would have to mended an P8,549,657,000 budget, exactly the same be let go. Senator Drilon that the CSC has given the as in the NEP but P344.628 million lower than the teachers a year to pass the licensure examination or GAB, adding that the Committee had no choice but get a special teaching permit, otherwise, they would to remove the House insertions. However, he said that be terminated in consonance with CSC rules. the Committee has realigned the P250 million premium in arrears due to the GSIS to the lump-sum appro- However, Senator Pimentel argued that one year priation for Miscellaneous Personnel Benefits Fund. is not realistic as it does not give teachers sufficient time to prepare. He appealed to the CSC to extend Senator Drilon revealed that the P250 million the deadline by another year, saying that if need be, was the GSIS insurance premiums paid by teachers he would make the necessary representation with which were not remitted to the GSIS by the previous the CSC. Senator Drilon said that upon recommend- administration. He said that an investigation is being ation of the ARMM officials, the deadline could be done as to who malversed the amount, but in the extended for another year. meantime, Congress has to respond to the needs of the teachers in the ARMM by authorizing the At this point, Senator Pimentel asked the ARMM expenditure of P250 million to pay for the premiums. education secretary to submit a quarterly report on the status of the licensure program. INTERPELLATION OF SENATOR PJMENTEL On whether the ARMM has institutionalized the Senator Pimentel expressed support for the commemoration of the heroic deeds of the Muslims Committee proposal for the ARMM budget and at the battle of Bud Dajo, Senator Drilon replied that Senator Drilon’s position that Congress should look the ARMM governor has declared March 5 as Bud into the disbursements of funds that are not in Dajo Day, a holiday. accordance with the requirements of the law. He pointed out that one of the complaints that he On the proposal to put up as shrine at Bud Dajo, received from the ARMM is that a number of Senator Drilon said that a portion of the allocations WEDNESDAY, NOVEMBER29,2006 819

for unspecified activities could be allocated to the INTERPELLATION OF SENATOR PIMENTEL Office of the Governor for this purpose. Senator Pimentel suggested that the Department of Tourism Considering that the DOE is tasked with the also help out in this endeavor. implementation of the Biofuels Act, Senator Pimentel asked if it would be possible to realign a certain amount SUBMISSION OF THE BUDGET to the agency for this purpose. Senator Drilon stated OF THE AUTONOMOUS REGION that in the course of the hearings, the proper authorities IN MUSLIM MINDANAO in charge of the road users’ tax agreed to tap the P8 billion annual tax collection for the requirements of Upon motion of Senator Drilon, there being no the Biofuels Act. Nonetheless, he said that he would objection, the budget of the Autonomous Region in be open to amendments as long as these shall not Muslim Mindanao was deemed submitted for the prejudice the other services of the Department. Body’s consideration. On the suggestion that a P500 million budget for SUSPENSION OF SESSION the initial implementation of the Biofuels Act be provided for, Senator Drilon said that the Committee Upon motion of Senator Drilon, the session was would be willing to review the entire budget in suspended. consultation with Secretary Lotilla.

It was 6:09 p.m. SUBMISSION OF THE BUDGET OF THE DEPARTMENT OF ENERGY RESUMPTION OF SESSION AND ITS ATTACHED CORPORATIONS AND SUBSIDIARIES At 6:19 pm., the session was resumed. Upon motion of Senator Drilon, there being no DEPARTMENT OF ENERGY objection, the budget of the Department of Energy and its attached corporations and subsidiaries was Senator Drilon presented the budget of the deemed submitted for the Body’s consideration. Department of Energy and other executive offices and the budgetary support to government corporations SUSPENSION OF SESSION in the energy sector. Upon motion of Senator Drilon, the session was He stated that the Committee has adopted the suspended. budget of P350,348,000 for the DOE as proposed in It was 629 p.m the NEP and the GAB. RESUMPTION OF SESSION With respect the Energy Regulatory Commission (ERC), headed by Chairman Rodolfo Albano, Senator At 632 pm., the session was resumed. Drilon stated the Committee has recommended the approval of its P172,718,000 budget without any SUSPENSION OF CONSIDERATION reduction. OF HOUSE BILL NO. 5794

On the budget of the National Electrification Upon motion of Senator Drilon, there being no Administration (NEA), Senator Drilon said that the objection, the Body suspended consideration of the bill. Committee has recommended the President’s budget of P302,400,000.00, which was increased by P800 CONFERENCE COMMITTEE REPORT million in the GAB. ON SENATE BILL NO. 2226 AND HOUSE BILL NO. 4629 With respect to the energy corporations, Senator Drilon stated that the Committee has also recom- Upon motion of Senator Drilon, there being no mended the approval of the budgets of the National Objection, the Body considered the Conference Power Corporation and the Philippine National Oil Committee Report on the disagreeing provisions of Company without any cut. Senate Bill No. 2226, entitled d 880 WEDNESDAY. NOVEMBER 29. 2006

AN ACT TO DIRECT THE USE OF 1. The conferees agreed to reconcile both BIOFUELS ESTABLISHING FOR the Senate and House versions; THIS PURPOSE THE BIOFUEL 2. As reference for this report, the conferees PROGRAM, APPROPRIATING FUNDS agreed to use the Senate version as the working THEREFOR, AND FOR OTHER draft but may refer to the House version fbm PURPOSES time to time;

and House Bill No. 4629, entitled 3. The conferees agreed to adopt Sections 1 and 2 of the Senate version; AN ACT MANDATING THE USE OF 4. On the Definition of Terms, the conferees BIOETHANOL OR ETHn ALCO€IOL, agreed to adopt the following: AS TRANSPORT FUEL AND On the definition of “AFTA,” the Senate SUPPORTING THE DEVELOPMENT a. version was adopted with a few niodifications, AND USE OF OTHER BIOFUELS, adding the phrase “initiated by the ESTPLBLISHING FOR THE PURPOSE Association of South East Asian Nations”; THE NATIONAL BIOFUELS PROGRAM, APPROPRIATING b. The conferees agreed to adopt the Senate FUNDS THEREFOR, AND FOR definition of “Alternative Fuel Vehicle” and to add slash (/) and the word “engine” after OTHER PURPOSES. the word “vehicle”; The Chair recognized Senator Pimentel to sponsor c. Having no counterpart term of the word the report. “biodiesel,” the conferees agreed to adopt the Senate version; SUSPENSION OF SESSION d. On the defmition of “Bioethanol Fuel,” the Senate version was adopted with a few Upon motion of Senator Pimentel, the session modifications by adding the phrase was suspended. “feedstocks, and other”;

It was 633 p.m. e. The conferees agreed to adopt the Senate definition of “Biofuel”; WSUMPTION OF SESSION E The conferees agreed to adopt the Senate’s definition of “Biomass” with a modification At 6:42 p.m., the session was resumed. by deleting the word “municipal” after the word “of’ and before the word “solid”; SPONSORSHIP REMARKS OF SENATOR PIMENTEL g. The conferees agreed to adopt the Senate definition of the following offices: Department Preliminarily, Senator Pimentel lauded the members of Agriculture, Department of Energy, Depart- ment of Labor and Employment, Department the panel, namely, Senators Cayetano, of Senate of Finance, Department of Science and Recto, Roxas, Gordon, Angara and Osmcfia who Technology, Department of Transportation made it possible to produce a version of the bill that and Communications, Department of Trade was acceptable to the House panel. and Industry, and the Department of Environment and Natural Resources; In sponsoring the report, Senator Pimentel read the following Joint Explanatory Statement of the h. The conferees also agreed to adopt the Senate’s definition of the word “diesel”; Conference Committee: i The conferees agreed to adopt the Senate’s The Conference Committee of the Senate deffition of “feedstocks” with a few modifica- and the House of Representatives on the tions by adding the words “coconut,” disagreeing provisions of Senate Bill No. 2226 ‘Tathropa,” “sweet sorghum” which were and House Bill No. 4629, submits the following taken from the House version; joint statement to both Houses in explanation oE the amendments and recommendations agreed j. Since there is no counterpart provision in the upon by the conferees in the accompanying Senate version, the conferees agreed to adopt Conference Committee Report: the House defmition of “GasohoRN WEDNESDAY, NOVEMBER29,2006 881

k The conferees agreed to adopt the definition phrase “and Original Equipment Manufacturers of the Senate version of the words “Gasoline” (OEM) standards set by engine and prime and the phrase “Motor Fuel”; movers, manufacturers, vis-8-vis, the required L The conferees agreed that the phrases “Oil quality of the fuel to be used” found in letter “C” Company” and ‘GMethylTertiary Butyl Ether after the letters “PNS”, (MIBE) should be included in the definition; 9. The conferees decided to adopt the m The definition of the “PBB” or the Philippine Senate version on the “Creation of the Philippine Biofuel Board, the conferees agreed to adopt Biofuel Board” but with a little modification the Senate version with a modification, as the conferees agreed to change the word changing the word “Philippine” to the word “Philippine” to “National.” The conferees agreed “National”, also to include as members of the Boards and the Administrators of the Philippine Coconut n. The conferees agreed to adopt the definition Authority and the Sugar Regulatory Authority, of the Senate version on the phrases respectively; “Philippine National Standard,” “Renewal Energy Sources,” and the words “WTO 10. On the Powers and Functions of the National Biofitel Board the conferees agreed to 0. Having no counterpart word and definition in the Senate version, the conferees agreed adopt in its entirety the Senate version; to adopt the House version of the word 11. The conferees agreed to add another “Oxygenate”; section which will read “SEC. 10 SECURITY OF P. The conferees agreed to delete the phrase DOMESTIC SUGAR SUPPLY - Any provision of “Transport Sector” from the definition of this Act to the contray notwithstanding, the terms. SRA, pursuant to its mandate shall, at all times, ensure that the supply of sugar is sufficient to 5. Having no counterpart provision in the meet the domestic demand and that the price of Senate version, the conferees agreed to adopt sugar is stable. To this end, the SRA shall the House version on “Phasing Out of the Use recommend and the proper agencies shall of NdlGasoline Additives andor Oxygenate” undertake the importation of sugar whenever and renumbering of the sections thereafter; necessary and shall make appropriate adjust- 6. Section 4 of the Senate version on the ments to the minimum access volume parameters “Mandatory Use of Biofuels” would become for sugar in the Tariff and Customs Code; Section 5 due to the renumbering that was 12. Sec. 11 as renumbered on the “Role of adopted with some modifications that include a Government Agencies,” the conferees agreed to clarification as to how the biodiesel blend may adopt the Senate version in its entirety; be increased. The conferees agreed to change the word “total” after the letter “a” and before 13. The conferees agreed to adopt the re- the word “of” to the word “minimum.” The numbered Sec. 12 on “Prohibited Acts,” Sec. 13 conferees further agreed to delete the numbers on “Penal Provision, Sec. 14 on the “Appro- starting from 4.3 to 4.5 of the Senate version. priations, Sec. 15 on the “Implementing Rules and Regulations” of the Senate version; I. The Senate version on “Incentives Scheme” was adopted with a little modification. 14. Since there is no counterpart provision The conferees agreed to add another letter, to in the Senate version, the conferees agreed to read as follows: adopt the House version on the creation of Congressional Oversight Committee with some “b) Value Added Tax - The sale of modification on the membership that shall raw material used in the production of now be composed of fourteen members coming biofuels such as, but not limited to, from both Houses, with the Chairmen of the coconut, jathropa, sugarcane, cassava, Committee on Energy and the Chairmen of the corn, and sweet sorghum shall be Committees on Agriculture, Trade and Commerce exempt from the value added tax.” as members thereof; The conferees further agreed to adopt the 15. Having no counterpart provision in the last portion of the House version on “Financial House version on the “Non-Diminution of Assistance”; Benefits for Sugar Workers,” the conferees 8. On the “Powers and Functions of DOE,” agreed to adopt the Senate’s version with a the Senate version was adopted but with a little modification. The title was changed to “Benefits modification. The conferees agreed to delete the of Biofuel Workers”; R 882 WEDNESDAY, NOVEMBER 29,2006

16. And finally, the conferees agreed to use SUSPENSION OF SESSION the title of the Senate version. The title shall read as follows: Upon motion of Senator Drilon, the session was suspended. AN ACT TO DIRECT THE USE OF BIOFUELS, ESTABLISHING FOR THIS PURPOSE THE BIOFUEL, It was 6:56 p.m. PROGRAM, APPROPRIATING FUNDS THEREFOR, AND FOR RESUMPTION OF SESSION OTHER PURPOSES. At 7:08 p.m., the session was resumed. In case of a conflict between the statements/ amendments stated in this Joint Explanation and COMMISSION ON ELECTIONS that of the provisions of the consolidated bill in the accompanying Conference Committee Report, the provisions of the latter shall prevail, Senator Drilon presented the budget of the subject to the explanations of the DOE as Commission on Elections (Comelec). previously enunciated. Senator Drilon informed the Body that the As regards the membership of the oversight Committee has recommended that the proposed committee, Senator Pimentel explained that seven Comelec budget of 9,717,962,000 under the GAB members shall come from the House and seven from be reduced by P750 million. He explained that the the Senate and each panel shall have at least one budget cut was prompted by the Committee’s member from the Opposition. comparison of expenses incurred by the poll body in the 2002 and 2004 elections and the proposed Senator Pientel clarified that with respect to the appropriation for 2007 which showed that its budget powers and functions of the DOE, it shall formulate for barangay elections in 2007 is P1 billion more than the schedule of fines and penalties against persons or that in 2002; likewise, its allocation for the 2007 entities found to have committed any of the prohibited national elections is P750 million more than that acts under Section 12 (b) to (e) of the Act. in 2004. Further, he said that even if doubts are resolved in favor of granting the Comelec a bigger APPROVAL OF THE CONFERENCE allocation, it is the view of the Committee that the COMMITTEE REPORT amount could still be reduced by P750 million. However, he expressed willingness to review the matter in Submitted to a vote, there being no objection, the view of the request of Comelec Chairman Abalos Conference Committee Report on the disagreeing that the budget be reduced by only P550 million. provisions of Senate Bill No. 2226 and House Bill No. 4629 was approved by the Body. INTERPELLATION OF SENATOR EJERCITO ESTRADA (J) COMMITTEE REPORT NO. 160 ON HOUSE BILL NO. 5794 Asked by Senator Ejercito Estrada (.I)whether (Continuation) the 2007 national elections would push through, Senator Drilon replied in the affrmative. He said Upon motion of Senator Drilon, there being no that while the proposed budget is not tailor-made for objection, the Body resumed consideration, on Second any particular form of government, it could accom- Reading, of House Bill No. 5794 (Committee Report modate both the national elections for senatorial and No. 160), entitled congressional posts as well as local elections for local government posts. AN ACT APPROPRIATING FUNDS FOR THE OPERATION OF THE GOVERN- Moreover, Senator Drilon stated that the Comelec MENT OF THE REPUBLIC OF THE budget would be more than sufficient for the holding PHILIPPINES FROM JANUARY ONE of local elections in a presidential or parliamentary TO DECEMBER THIRTY-ONE, TWO system of government. However, he clarified that THOUSAND SEVEN, AND FOR the proposal makes no provisions for the holding of OTHER PURPOSES. a plebiscite.# WEDNESDAY, NOVEMBER 29,2006 883

SUBMISSION OF THE BUDGET INTERPELLATION OF THE COMMISSION ON ELECTIONS OF SENATOR EJERCITO ESTRADA (J)

Upon motion of Senator Drilon, there being no Senator Ejercito Estrada (J) noted that the objection, the budget of the Commission on Elections President’s budget of P936.394 million for the Office was considered submitted for the Body’s consider- of the Ombudsman was increased by the House ation. of Representatives by P550 million.

SUSPENSION OF SESSION Asked on the purpose of the increase, Senator Drilon explained that of the P550 million increase, the Upon motion of Senator Drilon, the session was Committee allocated P242 in capital outlay for land suspended. and building but could not figure out the use of the balance of P311 million, so upon consultation with It was 7:14 pm the Office of the Ombudsman, the increase was maintained at P242 million. Nevertheless, he said, all RESUMPTION OF SESSION other requirements including the hiring of personnel, are already covered in the regular appropriation. He At 7:19 p.m., the session was resumed. added that he has conferred with the Ombudsman on the matter of hiring because the authority for that OFFICE OF THE OMBUDSMAN purpose in the supplemental and 2006 budgets had not been fully used. He disclosed that the Office Senator Drilon presented the budget of the Office takes two years to process an application and this of the Ombudsman. He said that the Committee has period was reduced to two months so that vacancies proposed a P239 million increase over the President’s could be filled up immediately. He expressed hope budget of P936,394,000. that the Office would be able to use the allocation in personal services at a better rate. Senator Drilon informed the Body that the Office Asked on the quality of the applicants, Senator, of the Ombudsman has requested permission to Drilon replied that many lawyers who come from temporarily rent a space for the special prosecutors very good schools have applied. to be hired. He suggested that in the next year’s budget deliberations, the Committee should consider On the observation that Congress cannot increase a budget for a permanent building for the Office of the budget submitted by the President, Senator Drilon the Special Prosecutor. In any case, he said, the clarified that the prohibition is against increasing the Committee has allocated P242 million as capital total new appropriations but department-wise, it could outlay and it is up to the Ombudsman to prioritize be increased. which building to construct first given the many requirements. He stated that the Committee has Asked on the legality of the increase in the constantly supported the budgetary requirements of Office’s budget by P550 million, Senator Drilon the Office and there is enough in personal services expressed the view that if the appropriation remains in the previous and supplemental budgets to hire all within the total appropriations submitted by the the personnel necessary to enable it to discharge its President, it could pass the constitutional test. He functions effectively. In spite of that, he noted that said that the problem is that the House increased the hiring process of the Office is a little bit slow. the budgets of departments, sourced the finds from Apart from the GAA appropriation, he bared that the other appropriations within the executive department Office would also be getting $6.75 million from the to such an extent that the GAB exceeded the $20.1 million Millennium Challenge Fund. President’s budget by P8.2 billion. He affirmed that the House made insertions in the budgets of many MANIFESTATION OF THE CHAIR agencies, such as those of the National Electrification Administration, P800 million, and the Department of At this juncture, the Chair manifested that Public Works and Highways, PS billion. Senator Defensor Santiago has requested that the written questions she submitted be read into the Senator Ejercito Estrada (J) recalled that Ombudsman Record of the Senate. Merceditas Gutierrez promised during a Committee 884 WEDNESDAY, NOVEMBER 29,2006 hearing to keep the Senate updated on several cases the Office of the Ombudsman. He said that the pending before the Ombudsman. He asked on the Ombudsman has given the assurance that the case status of the cases filed against Gov. Chavit Singson. would be resolved before Christmas. He stated that this involves the $2 million extortion case filed by SUSPENSION OF SESSION former Congressman Mark Jimenez against former Secretary Perez, and this is the only case in the Upon motion of Senator Drilon, the session was files of the Office of the Ombudsman involving the suspended. former secretary.

It was 7:34 p.m Asked if a case had been filed against DA Undersecretary Bolante, Senator Drilon replied in the RESUMPTION OF SESSION affmtive, saying that the Committee on Agriculture had referred to the Ombudsman all the evidence At 7:35 p.m., the session was resumed. gathered during the hearings, including the committee report approved by the Body. Senator Drilon stated that Governor Singson had been given immunity from prosecution with respect As regards the status of the case, Senator Drilon to the plunder case filed against former President stated that it is still on a fact-finding level. He said Joseph Estrada, but he has two or three other cases that while the issue involves all the regional offices of that have to do with accounting of public funds. the department, the fact-finding could be completed on a per region basis so that this could be reviewed Senator Ejercito Estrada (J) disclosed that there independently and prosecuted separately, to resolve are pending cases against the governor in the some of the cases at the shortest possible time. Ombudsman and the records are being kept in the Office of the Special Prosecutor. He said that the Senator Ejercito Estrada (J) expressed hope that cases, which are supposed to be under preliminary the Office of the Ombudsman would release its investigation, have not been filed with the decision on the Perez case next month, and on the Sandiganbayan. Bolante case early next year.

Senator Drilon stated that preliminary investigation Senator Drilon said that the Ombudsman would had been conducted on these cases but when these be seriously considering the suggestion that the fertilizer reached the Office of the Ombudsman, former scam fact-finding investigation be done on a per Ombudsman Simeon Marcel0 inhibited himself region basis. He said that on the basis of evidence because Governor Singson was a witness in the plunder presented, it should merit a preliminary investigation case which he was prosecuting. He said that the to allow the respondent to answer the charges. Special Prosecutor has committed himself to submit a written report on the status of these cases before QUESTIONS OF noontime the following day, which shall be transmitted SENATOR DEFENSOR SANTIAGO to Senator Ejercito Estrada (J) immediately. With the permission of the Body, the Chair read Senator Ejercito Estrada (J) wondered why the into the Record of the Senate the following questions Ombudsman and the DOJ were very slow in invest- of Senator Defensor Santiago on the budget of the igating cases that involve allies of the administration, Office of the Ombudsman, to wit: and very fast in prosecuting those that involve the administration’s critics. Senator Drilon stated that in Background: The President proposed to law, there is the principle of res ipsa loquitur which increase the budget for the Office of the allows the situation to speak for itself. Ombudsman by P288,855,000 or 44% from P647,539,000 to P936,394,000. The House further increased the President’s proposed new Asked on the status of the case filed against appropriations to P1,486,394,000 or by 58%. By former Secretary Hernando Perez, Senator Drilon the way, at this level, the proposed budget stated that the Preliminary Investigation Administrative for the Office of the Ombudsman is now higher Adjudication and Monitoring Office (PAMO) has than the proposed budget of the Philippine already submitted the result of its investigation to Senate which is P1,377,000,000.J P WEDNESDAY, NOVEMBER 29,2006 885

The Senate Finance Committee proposed Senator Drilon said that the Senate Electoral to reduce the proposed total new appropriations Tribnnal requested an increase of P28,056,000 basically for the Ombudsman as proposed by the House to address the inequity in the budgets of the Senate to P1,175,394,000 or by 20.9%. But the Senate- Electoral Tribunal and its House counterpart. He proposed level is still much higher than what the explained that this amount was previously approved President proposed in the BESF (P936,394,000). by the Body in its version of the 2006 budget but was 1. What has the Ombudsman done in recent not approved in the Bicameral Conference, so the years to deserve such a quantum jump in its Committee simply adopted the same amount for the budget? 2007 budget. He stressed that no other changes were 2. What does it intend to do to the higher made in the budget of the Congress of the Philippines. budget? What can we expect kom the ombudsman in terms of verifiable performance indicator of QUESTIONS OF outputs and outcomes? (Note: Inputs like the SENATOR DEFENSOR SANTIAGO number of prosecutors, computers, vehicles, nice offices are less important performance indicators. With the permission of the Body, the Chair read In output-based budgeting, outputs and incomes into the Record of the Senate the following questions are more important.) of Senator Defensor Santiago which Senator Drilon The Philippines’ rating on governance and subsequently answered corruption has progressively deteriorated in 1. Explain the increase in the Senate Electoral recent years. Will this be reversed as a result Tribunal’s proposed new appropriations. of higher budget for the Ombudsman? Put Proposed amendment: restore it to the level differently, can we expect improvement in proposed in the present budget, that is, outcome as a result of higher inputs? P56,643,000. 3. In terms of value for the citizens money, are we willing to accept that the Ombudsman Senator Drilon reiterated that the increase was is a more worthy institution than the Senate made to put the budget of the Senate Electoral Tribunal since the House proposed budget for the at par with its House counterpart. He said that the Ombudsman, P1.48 billion, is much higher than increase was approved by the Body in the 2006 budget the Senate’s own budget for 2007 which is but was not approved in the Bicameral Conference. P1.38 billion? 2. The President proposed a total new appro- priations of P2,928,052,000 for the House Senator Drilon requested that a copy of the of Representatives. The House proposed questions be given to the Ombudsman as he asked P3,185,586,000, however. In the General leave for the Ombudsman to respond in writing Appropriations Bill approved by the House, before noontime the next day so that it could be the total new appropriations proposed is presented in the same manner as the status report P3,433,230,000much higher than their original on certain cases that Senator Ejercito Estrada (J) proposal. The Senate Finance Committee had requested. concurred with the higher appropriation. Why are we allowing this unconstitutional SUBMISSION OF THE BUDGET fiscal irresponsibility and self-serving act? OF THE OFFICE OF THE OMBUSMAN Proposed amendment: restore to the level proposed in the President’s budget, that is, P2,928,053,000. Note: Article VI, Section 35, Upon motion of Senator Drilon, there being Paragraph 3 of the 1987 Constitution no objection, the budget of the Office of the provides: “The procedure in approving Ombudsman was deemed submitted for the Body’s appropriations for Congress shall strictly consideration. follow the procedure for approving appro- priations for the department and agencies. CONGRESS OF THE PHILIPPINES Senator Drilon explained that following tradition Senator Drilon presented the budget of the and courtesy to a coequal branch, the Senate does not Congress of the Philippines. He stated that the touch the proposal of the House of Representatives. President proposed a budget of P4,666,095,000, He gave assurance that he would act accordingly on which the House of Representatives increased to Senator Defensor Santiago’s proposed amendments P5,I 71,272,000. at the proper time. 886 WEDNESDAY & THURSDAY, NOVEMBER 29 & 30,2006

SUBMISSION OF THE BUDGET TO DECEMBER THIRTY-ONE, TWO OF THE CONGRESS OF THE PHILIPPINES THOUSAND SEVEN, AND FOR OTHER PURPOSES. Upon motion of Senator Drilon, there being no objection, the budget of the Congress of the Philippines Senator Drilon stated that the parliamentary status was deemed submitted for the Body’s consideration. was the period of interpellations on the budget of the Presidential Commission on Good Government. SUSPENSION OF CONSIDERATION OF HOUSE BILL NO. 5794 Thereupon, the Chair recognized Senator Enrile for the continuation of his interpellation on the Upon motion of Senator Drilon, there being no PCGG budget. objection, the Body suspended consideration of the bill. INTERPELLATION OF SENATOR ENRKE REMARKS OF SENATOR DRILON (Continuation)

Senator Drilon stated that the Body had completed Asked by Senator Enrile whether the PCGG was its agenda for the day. He said that the Body would ready to provide information on how much Chairman tackle the budgets of the following agencies Sabio and other commissioners had drawn for their the following day: Presidential Commission on Good travels abroad, Senator Drilon replied in the negative, Government, Department of Finance, National hoping that the chairman would make good his Economic and Development Authority, Department commitment to submit the information to the Senate of Budget and Management, Local Government Units, in time for the approval of the GAB on Second and Special Purpose Funds, and Other Executive Offices, Third Readings on Monday, December 4, 2006. principally Cagayan Economic Zone Authority, Zamboanga City Special Economic Zone Authority, Senator Enrile signified that he would continue and Philippine Sports Commission. his interpellation on the condition that the document would be submitted in due time. SUSPENSION OF SESSION Senator Enrile stated that during the budget Upon motion of Senator Drilon, there being no hearings, he had requested the PCGG to submit a list objection, the Chair declared the session suspended until ten o’clock in the morning of the following day. of all companies that it had sequestered in 1986, a report on the condition of each company at the time It was 8:07 p.m. of sequestration and at present, as well as the bonuses, per diems and other benefits received by RESUMPTION OF SESSION PCGG officials and representatives assigned to these companies. For instance, he recalled that prior to its At 10:26 a.m, Thursday, November 30,2006, the sequestration, the United Coconut Planters Bank session was resumed with Senate President Pro (UCPB) that he chaired once, was so profitable that Tempore Flavier presiding. it became one of the leading banks in the country. However, he disclosed that following the looting done COMMITTEE REPORT NO. 160 by certain bank officials during the term of former ON HOUSE BILL NO. 5794 President Ramos, the UCPB had to be rescued by (Continuation) the Philippine Deposit Insurance Corporation (PDIC) and the Bangko Sentral ng Pilipinas. He added Upon motion of Senator Drilon, there being no that the looting extended to UCPB subsidiaries, objection, the Body resumed consideration, on Second including the oil mills owned by small-time coconut Reading, of House Bill No. 5794 ( Committee Report farmers. He asked why the PCGG was so powerless No. 160), entitled in preventing the looting of these companies by its very own people who were assigned to protect them. AN ACT APPROPRIATING FUNDS FOR THE OPERATION OF THE GOVERN- Further, Senator Enrile pointed out that the case MENT OF THE REPUBLIC OF THE against former UCPB president Tirso Antiporda has PHILIPPINES FROM JANUARY ONE not prospered because of the apparent reluctance THURSDAY. NOVEMBER 30,2006 887 of UCPB and PCGG to pursue it. Senator Drilon in 1986. He asked whether the monies reached the stated that the Chairman Sabio has formed a Task Bureau of Treasury and how they were utilized. Force to prepare the report that he has committed to Moreover, he wondered whether Marcos’ shares of submit upon resumption of session in January 2007. stock in Security Bank were sequestered and who was holding them. He stressed that he knew these Asked on the status of cases filed against former facts to be true because he sequestered Security UCPB president Tirso Antiporda as well as Coconut Bank, and he has reports from Rolly Gapud and Industry Investment Fund (CIIF) president Roland0 Evelyn Singson on these matters. Golez who, in spite of violating PCGG rules, had been allowed to retain his loot and had not even SUSPENSION OF SESSION been disciplined, Senator Drilon said that the PCGG commissioners have no specific knowledge of these Upon motion of Senator Drilon, the session was cases but have committed to inquire into them and suspended. submit a report to the Senate next week. It was 10:45 am. Senator Enrile asked how the PCGG has handled the case of Philcomsat Holdings and the issue RESUMPTION OF SESSION concerning PCGG commissioner Ricardo Abcede who, according to reports, receives an allowance and At 10:47 a.m., the session was resumed. even got a Toyota Camry from the company for his personal use. Senator Drilon replied that the Senator Drilon confirmed that there was a PCGG does not know the amount of Mr. Abcede’s P1 billion Marcos deposit in Security Bank, of which allowance, and the order of Chairman Sabio to P800 million was remitted to the PCGG and, in investigate the matter has not been carried out so turn, the PCGG remitted to the National Treasury. far. He suggested that a deadline be set for the He explained that P200 million remains in litigation PCGG to implement and complete its investigation in a case pending before the Supreme Court because before the resumption of session in January 2007. the authenticity of the telegraphic transfer was However, he hoped to receive the written orders on doubtful. He clarified that the Marcos dollar account the investigation so that these could be presented to had also been remitted to the National Treasury. He the other Members as proof that PCGG has done agreed to furnish the Body with the records of the something about the matter. remittances.

Senator Enrile asked why Commissioner Abcede, On the Marcos shares in Security Bank, Senator unlike the other PCGG commissioners, has not made Drilon said that these were purchased by the Zamora an effort to attend the deliberations on the PCGG group for P151 million in a transaction authorized by budget. Senator Drilon said that while Chairman Sabio the PCGG and the Central Bank. has no knowledge of the whereabouts of Mr. Abcede, he concurred that Mr. Abcede should be made to Asked why the sale was not bidded out, Senator appear at the oversight committee hearing on Monday, Drilon said that the commissioners could not respond lest his failure to attend be a basis to cite him in to the question properly as they needed to look into contempt. the 1997 records.

On the suggestion that it would be in the best Senator Enrile asked why the 39 corporations of interest of government to fire Mr. Abcede from the Mr. Cocoy Romualdez were not sequestered while service, Senator Drilon said that the PCGG chairman the corporate interests of people suspected of being and commissioners have no comments on the matter Marcos cronies were sequestered. Senator Drilon as well as on Mr. Abcede’s alleged involvement in replied that those companies were indeed sequestered gambling activites. and subsequently sold for P160 million to the Lopa family as part of a compromise agreement during the Senator Enrile recalled that billions of pesos, time of then Chairman Gunigundo. He informed the including some US12 million to US$20 million, of the Body that the purchase price was based on the Marcos monies were deposited with the Security evaluation of the financial condition of the companies Bank at the time it was sold by the Aquino government at the time of sale. R P 888 THURSDAY. NOVEMBER 30.2006

On a related matter, Senator Enrile recalled that Asked why there is a need for intelligence and there was an issue between the People’s Republic of liaison officers in the office of the chairman, Senator China and Taiwan over the ownership of the Philippine Drilon said that the intelligence officer is the security Bank of Communications which President Marcos officer and bodyguard of the chairman, while the resolved in favor of the Philippine group that repre- liaison officer does liaison work to the legislative sented Taiwan and for that effort, the late president branch and the Office of the President. was allotted 10% ownership of the bank. Senator Drilon commented that this is a vital information for Asked what Mr. Charles Avila is doing as the new PCGG officers who were unaware of it. PCGG consultant, Senator Drilon replied that Mr. Avila assists the chainnan in the coco levy case. Asked about the Marcos interest in some banana plantations in Mindanao, Senator Drilon replied that Senator Enrile said that there is no need for the PCGG commissioners were also unaware of the any consultant in the coco levy case because the matter. records are open to everyone. He pointed out that it is public knowledge that the government spent only On the Marcos PLDT shares, Senator Drilon P2.5 billion to bring the coco levy collection down stated that the PCGG was able to protect the from P9 billion, now worth PlOO billion according to government’s interest in PLDT by winning the case, reports, to P1 billion; and that all coconut-based and a Motion for Execution was pending before the products in the country, including export duties, Sandiganbayan. were subsidized out of the P9 billion. Senator Drilon stated that Mr. Avila is a former official of the Senator Enrile noted that the 42 lawyers of the Philippine Coconut Authority and with his back- PCGG are assigned to the following offices/ ground and knowledge of the coconut industry, department: Office of Chairman Sabio - 6; the chairman found his assistance to be valuable Commissioner Javier - 2; Commissioner Conti - 2; and necessary. Commissioner Nario - 3; Commissioner Abcede - 1; and the rest, to the Legal Department. He asked Asked why there were two Ledofios in the why Commissioner Sabio needs so many lawyers in chairman’s staff, Senator Drilon replied that they are his office and why the PCGG needs to hire additional related to the chairman’s wife and they hold lawyers when there is a legal department. Senator confidential positions. Drilon explained that the 42 lawyers are not working full time, hence, their designation as special legal In reply to further queries, Senator Drilon counsels; they get a uniform rate of P24,OOO a month which serves as a retainer fee. He said that the chair- said that Commissioner Abcede’s internal chief of staff, Ms. Teresita Tabliso, receives an income of man has six lawyers presumably to assist him in all P24,OOO while the external Chief of Staff, Mr. Gener legal matters concerning the sequestered properties. Reyes, receives P28,OOO. He added that only the Asked on the basis of the difference in the commissioner knows the scope of their work. salaries of the lawyers, Senator Drilon explained that two lawyers report daily and are paid higher, and the SUBMISSION OF THE BUDGET rest report on a “need basis.” OF THE PHILIPPINE COMMISSION ON GOOD GOVERNMENT Apart from the retainer fee, Senator Enrile asked whether the lawyers get any cut in the monetary Upon motion of Senator Drilon, there being no value of a case resolved in favor of PCGG. Senator objection, the budget of the Presidential Commission Drilon replied that the lawyers are not paid any other on Good Government was deemed submitted for the amount on a contingent basis, although they are paid Body’s consideration. an additional P500 per appearance for travel expense. SUSPENSION OF SESSION Asked how much a lawyer receives, on the average, as additional compensation for hisher monthly appear- Upon motion of Senator Drilon, the session was ances, Senator Drilon clarified that the PCGG spends suspended. P8,OOO to P10,OOO monthly in additional expenses to cover the PSOO appearance fee for travel expense. It was I1:12 a.m. d P THURSDAY, NOVEMBER 30,200G

RESUMPTION OF SESSION SUSPENSION OF SESSION

At 11:19 a.m.. the session was resumed. Upon motion of Senator Drilon, the session was suspended. DEPARTMENT OF FINANCE It was 11.24 a.m. Senator Drilon presented the budget of the RESUMPTION OF SESSION Department of Finance and acknowledged the presence of Secretary Gary Teves. He stated that At 11:26 a.m., the session was resumed. the Committee has recommended a budget of P6,396,668,000 for the DOF, which is lower than NATIONAL ECONOMIC AND the President’s proposed budget because the DEVELOPMENT AUTHORITY Committee had to remove the confidential and intelligence funds of the Office of the Secretary, Senator Drilon presented the budget of the Bureau of Customs (BOC), and the Bureau of Internal Revenue (BIR). He said that he has National Economic and Development Authority. He said that the budget of the NEDA in the GAB is informed the finance secretary that in the period PI ,763,108,000 and the Legislative-Executive Dev- of amendments, the Committee would be redirect- elopment Coordinating Council, P1,616,000 and the ing some of the funds from the Commission on Committee has adopted them. Information and Communication Technology (CICT) to cover the P11 million requirement for the BIR’s QUESTIONS computerization program which is also funded OF SENATOR DEFENSOR SANTIAGO from other grants. With the permission of the Body, the Chair read In addition, Senator Drilon stated that the into the Record of the Senate the following questions Committee has also submitted a P1,086,542,000 of Senator Defensor Santiago on the NEDA budget: budget for the Municipal Development Fund as a budget cover for the proceeds of the World Bank 1. Who initiated the insertion of “Financial loan to be extended to the fourth- and fifth-class Assistance to the Partido Development Adminis- municipalities. tration” in the amount of P10,000,000 to the President’s budget? What is the status of the Senator Enrile moved that the DOF budget Partido Development Administration? Is it a be considered submitted for the Body’s consider- government agency? Is it local or national? ation. Assuming it is a national public agency, are the goals and activities of PDA germane to the mandate of NEDA? Senator Drilon stated that Senator Ejercito Estrada (J) has manifested that he would like to 2. Describe the objectives and expected raise questions on the BOC budget in the afternoon. outputs and outcomes of the Communications To hasten the proceedings and in view of the and Advocacy Program support project. What coming typhoon, he said that the Committee would is the legal basis of the CAP? When was it be willing to receive the questions of Senator Ejercito started and when is it expected to end? Of the P4.9 million in 2006, how much has heen actually Estrada (J) in the meantime and call on the BOC disbursed? What are the major outputs of the next week. support project this year?

SUBMISSION OF THE BUDGET 3. What are the objectives and expected OF THE DEPARTMENT OF FINANCE outputs and outcomes of the Management Information System Network project? What is the legal basis of this project? When was it Upon motion of Senator Drilon, there being started and when is it expected to end? Of the no objection, the budget of the Department of P12.6 million allocated in 2006, how much has Finance, including the Municipal Development been released and actually disbursed? What are Fund, was deemed submitted for the Body’s consi- the major outputs of the implementation of the deration. MIS network project this year? At the end of its ,# 890 THURSDAY, NOVEMBER 30,2006

project life, what outcomes can the Filipino He also presented the allocations to Local people expect from this project? Government Units, specifically of the following: Recommendation: Delete the proposed + Special Share of Local Government assistance to PDA. Units in the Proceeds of National Taxes - P7,095, 374,000 In reply to the queries, Senator Drilon informed + Barangay Officials Death Benefit the Body that the financial assistance to the Partido Fund - P37,000,000 Development Administration, a development planning office for a congressional district, was an insertion + Municipal Development Fund ~ by the House of Representatives. He submitted a P 1,086,564,000 description of the PDA in response to the questions + Pasig River Rehabilitation Conmission raised by Senator Defensor Santiago. He added that - P542,827,000 NEDA would submit a written response to the questions on the communications and advocacy Senator Drilon presented the following Special project and the management information systems Purpose Funds in the budget: Calamity Fund; network. As to the proposed deletion of the PI0 Contingent Fund; Miscellaneous and Personnel Benefit million to PDA, he said that the amendment would Fund; Priority Development Assistance Fund; Pension be taken up at the appropriate time. and Gratuities Fund; and Unprogrammed Fund.

SUBMISSION OF THE BUDGETS QUESTIONS OF THE NATIONAL ECONOMIC OF SENATOR DEFENSOR SANTIAGO AND DEVELOPMENT AUTHORITY AND THE LEDAC The Chair read into the record the following questions of Senator Defensor Santiago: Upon motion of Senator Drilon, there being no Background The special shares of local govern- objection, the budgets of the National Economic and ment units in the proceeds of national taxes Development Authority and the Legislative-Executive would jump from P1.9 billion in 2005 to P7.9 Development Coordinating Council (LEDAC) were billion next year - driven largely by two items: deemed submitted for the Body’s consideration. shares in VAT and prior years’ obligations. 1. Explain the near 10-fold increase in the SUSPENSION OF SESSION share of VAT of local governments - from P375 million in 2005 (and 2006) to P3.54 billion next Upon motion of Senator Drilon, the session was year. (Note: During the same period, total VAT collections have not even doubled). Who would suspended. be the biggest beneficiaries of this quantum jump in the VAT shares of localgovemments? It was 11:34 a.m Identify the top 10 provinces and the top 10 cities and the amount they would receive in 2007. RESUMPTION OF SESSION 2. Prior years’ obligation is a new entry. Explain the nature of this new appropriation item. At 11:37 a.m., the session was resumed. Which local governments would be the biggest beneficiaries of this new spending item? Identify DEPARTMENT OF BUDGET AND the top 10 provinces and the top 10 cities and MANAGEMENT, ALLOCATIONS the amount they would receive in 2007. TO LOCAL GOVERNMENT UNITS AND SPECIAL PURPOSE FUNDS Senator Drilon explained that under the Local Government Code, local government units have a Senator Drilon presented the budget of the share in the national taxes in accordance with the Department of Budget and Management. He stated schedule set forth therein. He said that the value- that the appropriation for the DBM in the 2007 added tax is a national tax so that the share of local NEP is P669.1 million which is the same amount government units is determined by law and not by approved by the House and recommended by the NEDA. He stressed that VAT is an automatic Committee. appropriation, so all that the DBM does is compute dg/ THURSDAY, NOVEMBER 30,2006 891 the share of the local governments and place it in the Senator Osmek observed that while the budgetary national budget. On the other hand, he informed the support to DPWH was itemized, the item “Other Body that prior years’ obligation is an appropriation Foreign-Assisted Projects” only stated the amount of to cover the national government’s failure to remit to P6,580,474,000. He asked for an itemized listing of the local governments their share in the national taxes. the amount. Senator Drilon said that he would provide a faxed document in a matter of minutes. Moreover, Senator Drilon disclosed that the top five local government units that have the biggest Asked how the House rounded off to P8 billion share are Metro Manila, Davao, Pampanga, Cebu the support to foreign-assisted projects, Senator Drilon and Iloilo, based on a specific formula on area and presumed that the P8 billion is a result of the population. He gave assurance that DBM would adjustment made by the House in the GAB, actually submit the list, in accurate order, of the provinces earmarkings that would be removed by committee and cities with the biggest share of the VAT and amendments. He clarified that the amount consists of IRA. two parts: 1) P6,580,474,000, “Other Foreign-Assisted Projects” and 2) P931,000,000, a balancing amount SUSPENSION OF SESSION resulting from the transfer of funds for foreign- assisted projects from the programmed portion to the Upon motion of Senator Drilon, the session was unprogrammed portion of the budget. suspended. Asked why the item was shifted from the It was 11:44 a.m. programmed portion to the unprogrammed portion of the budget, Senator Drilon reiterated that the House RESUMPTION OF SESSION transferred P931,526,000 to the unprogrammed portion so that the national budget would not be bloated At 11:SO am., the session was resumed. because the spending authority would be used even if it is placed in the unprogrammed portion of the budget. INTERPELLATION OF SENATOR OSMERA Senator Osmeila believed that it would be unfair Adverting to pages 908 to 910 of the General to the Filipino people if some items were transferred Appropriations Bill, Senator Osmeila noted six from the programmed portion to the unprogrammed items under Unprogrammed Fund amounting to portion of the budget to accommodate special P67.008,479,000: priority projects of some congressmen. At this point, he requested a copy of the breakdown of the 1. Budgetary Support to P18.479 billion budgetary support to government- Government-Owned andor owned and -controlled corporations. -Controlled Corporations P18,008,479,000 2. Strategic Govement Reforms 2,000,000,000 SUSPENSION OF SESSION 3. Support to Foreign- Assisted Projects 8,000,000,000 Upon motion of Senator Drilon, the session was suspended. 4. General Fund Adjustments 3,500,000,000 5. Support to Int?astructure It was 12:07 p.m. Projects and Social Programs 30,500,000,000 6. Gratuities, Pensions and RESUMPTION OF SESSION Separation Benefits 5,000,000,000 At 12:ll pm., the session was resumed. He noted that the item Budgetary Support to Government-Owned andor -Controlled Corporations Upon resumption, Senator Drilon stated that the includes funding for projects of the Department of budgetary support to government corporations goes Public Works and Highways involving roads, bridges into the National Treasury and reloaned to the and flood control. The other major component, he following: Light Railway Transit Authority (LRTA), said, is the item on other foreign-assisted projects P3,986,391,000; North Luzon Railway Corporation which is a lump-sum. (North Rail), PS,S98,S45,000; conversion of the LRTA ku 892 THURSDAY. NOVEMBER 30.2006 loan with the Bureau of Treasury into a subsidy, Asked why the Senate should participate in such P6,440,357,000; and the conversion of interest on the an anomalous transaction by approving this particular national government advances into subsidy with the item, Senator Drilon said that if the Senate does National Electrification Administration, P1,983,186,000, not approve it, there would be no authorization to for a total of P18.479 billion. relend the funding to the corporation.

Asked whether the figures are merely accounting On the matter of the North Rail project, Senator adjustments for sums that had already been advanced Osmeiia asserted that the concerned officials should by the national government or loans that had been explain to the Senate and justify the project’s contracted by the agency which were left unpaid and construction cost as he called the attention to the 38- for which the government covered the amortization kilometer Malolos to Clark portion to be constructed and interest payments, Senator Drilon replied in through the $700 million China Exim Bank loan. the affirmative, explaining that if the government Senator Drilon stated that he would act on the corporations could not pay the loans, these shall amendment to cut this particular item at the become liabilities that would have to be serviced by appropriate time. With regard to the grace period in the national government through an appropriation China Exim Bank loan for the North Rail Project, by Congress. he said that it is five-years.

On whether there was a grace period in the loan Senator Osmeiia asked how much of the loan that was contracted with the China Exim Bank for has been remitted to the National Treasury. the funding of the North Rail project, Senator Drilon said that the DOF would be more familiar with this SUSPENSION OF SESSION particular item. He assured Senator Osmeiia that he would be furnished with the pertinent information at Upon motion of Senator Drilon, the session was the soonest possible time. suspended.

Asked whether this loan was originally placed in It was 12:24 pm. the programmed portion and merely shifted to the unprogrammed portion, Senator Drilon replied that RESUMPTION OF SESSION the President has always instructed that the loans of government corporations be placed in the At 12:29 p.m., the session was resumed. unprogrammed portion of the budget to provide an authorization cover. Upon resumption, Senator Drilon explained that the system being followed by the North Rail project On whether the money was already with the is that direct payments arc made to the Chinese National Treasury and its release to the North Luzon supplier and, thereafter, the appropriation cover shall Railways Corporation should only be made official be put in place as a national sovereign guarantee in by Congress, Senator Drilon replied in the affirmative, case the North Luzon Railways Corporation could explaining that this item would no longer appear in not pay its obligation. He pointed out that the amounts the next GAB once the funding shall have been in the budget under the unprogrammed portion are remitted. He affirmed that the items under the mere book entries. unprogrammed portion are those that only require the authority to remit. Senator Drilon said that in 2005, the appropriation cover was P1.6 billion but for the current year, there Senator Osmefia said that there must be items in are no obligations because the GAB was not enacted. the budget that generate income which could account For 2007, he stated, an appropriation cover of P5.598 for the P5.598 billion. Senator Drilon explained that billion was submitted for the balance between the this is not part of the revenue side of the budget as P1.6 billion in 2005 and the balance of US$112 the loan proceeds would go directly to the National million which was theoretically released to the Bureau Treasury. He said that it is the North Rail Corporation, of the Treasury for relending to the government not the Philippine government, which entered into corporations. contract with the Chinese government; therefore, this could not be an executive agreement that is exempt Senator Osmeiia pointed out that under the terms from the procurement law. of the contract, the funds are to be released directlyN THURSDAY. NOVEMBER 30.2006 893

to the supplier, so there is no point in appropriating Senator Osmeiia said that at the proper time, he more funds. Senator Drilon stated that the purpose would propose the itemization of the Millenium of placing an appropriation cover is to record Challenge Fund and the deletion of the remaining the transaction and failure to pay the obligation P1 billion. He stated that with the conditions set by may force the contractor to invoke the sovereign the U.S., the Philippines would not qualify and have guarantee. access to the Millenium Challenge Fund because of the level of corruption, nontransparent transactions As to the participation of the North Luzon and bad practices in government. He inquired into Railways Corporation if the Chinese contractor the latest assessment of the U.S. government on the was already providing the equipment and labor, Philippines’ qualification to access the Millenium Senator Drilon presumed that the principal con- Challenge Fund. tractor may be subcontracting portions or other needs of the project. Senator Drilon agreed that the US$22 million is an initial fund only to get the Philippine campaign Senator Osmeria commented that even if started and if the country does not improve its the Corporation and the national government do campaign against corruption, it would no longer have not receive a single centavo, payments are being access to the fund. entered in the books based on the statements of the Chinese contractor. Senator Drilon agreed, as he On the request of Senator Osmeiia for a copy of recalled that one of the questions raised during the report, Senator Drilon stated that the Presidential the hearings was how one could determine the Anti-Graft Commission has a copy of the report, and reasonableness of the price in the absence of a it shall be submitted to Senator Osmefia. bidding and when it is the Chinese contractor who Senator Osmefia asked that the Committee also determines the price. be provided information per departmenVagency and per entry regarding the P5 billion item on gratuities, Senator Osmefia pointed out that the physical pension and separation benefits in the unprogrammed construction of the railways did not begin until a few portion of the national budget for the past ten years. months after the tracks had been cleared of squatters, He said that the “pay-when-able” arrangement is funding of which was not covered by the loan. He unfair to those in public service who have retired and then asked why there should be an immediate who have died without receiving their full benefits. drawdown payment of US$112 million. Senator Drilon surmised that “commissions” have to be paid in Senator Drilon stated that during the debates on advance to the suppliers. the DND budget, the DBM was also requested to submit this information to the Senate. He confirmed At this point, Senator Lacson asked why the that the bulk of the unpaid obligations represent the North Rail project should be subject to local benefits of uniformed personnel, in the amount of procurement laws when in the DepEd’s textbook P33 billion, and an appropriation of P5 billion was contract, the government acceded to World Bank placed in the unprogrammed portion of the GAA in terms and, in effect, violated those laws. Senator the hope that excess revenues could be used to pay Drilon replied that the contract between the Chinese them. He expressed hope that when there is a contractor and the Corporation shall be subject to clearer deficit picture, the appropriation could be local procurement laws because it is not an executive placed in the programmed portion. He revealed that, agreement. on the other hand, payments of obligations to other government retirees like teachers are updated as Asked by Senator Osmefia on the purpose these are provided for in programmed portion. of the P2 billion allocation for Strategic Government Reforms, Senator Drilon replied that part of the Senator Osmena bewailed that the Arroyo P2 billion is a P1 billion cover as standby appropria- administration has blamed Congess for not funding tion for the Millenium Challenge Fund which is a the unpaid pensions of government retirees, especially U.S. AID official development assistance in the uniformed personnel and veterans. He asked whether amount of US$22 million principally to upgrade the it could be concluded that the Arroyo administration capability of government with respect to its anti- was discriminating against uniformed personnel. corruption campaign, Senator Drilon agreed. & 894 THURSDAY, NOVEMBER 30,2006

Noting that the payment of gratuities, pension DBM had no objection to the inclusion of these and separation benefits is last among the top six details in the unprogrammed portion of the budget, it priorities, Senator Osmeiia asked whether the was not used to having such funds examined in obligations would remain unpaid if government fails detail. However, he said that the Committee was to raise an additional P67 billion, and as a consequence prepared to delete the P30.5 billion one-line item and retirees would have to wait until next year to be paid. incorporate the detailed projects instead. Senator Drilon clarified that the difficulty is in the payment of the administrative total liabilities which Asked how the P1.5 billion appropriation for eat up close to P20 billion out of the P26 billion state universities and colleges (SUCs) would be allocation for pension but there had been negotiations spent, Senator Drilon said that the DBM made the with veterans groups for a more affordable and lump-sum proposal to respond to requests of SUCs realistic liquidation. for capital outlay; however, he conceded that the fund could be used as pork barrel. Asked how the DBM has expended the item on gratuities, pension and separation benefits and the Senator Osmeiia proposed that the funding running total of the arrears, Senator Drilon replied for the Government Assistance to Students and that last year, close to P7 billion was paid for gratui- Teachers in Private Education (GASTPE) under the ties and pension and that by 2008, the government DepEd be included in the programmed items since would be able to liquidate its obligations on old-age it is needed at the beginning of the school year. pension, death pension and accrued pension, amounting Senator Drilon clarified that this GASTPE item to nearly P6 billion. under unprogrammed funds is separate from the programmed allocation for GASTPE in the GAB, Asked if there is a timetable for settling which the Committee has increased by P700 million. the veterans’ disabitity payments, Senator Drilon He agreed to the suggestion to delete the unprogram- replied that negotiations are still underway, as he med item. assured that the World War L1 veterans’ arrearages would be updated upon the passage of 2007 national Regarding the P5.2 billion item “Non-intrusive budget. Container Inspection Systems Phase IP’ of the Bureau of Customs, Senator Drilon said that it is a foreign- SUSPENSION OF SESSION assisted project that is in the pipeline in anticipation of the signing of the loan agreement. He agreed to Upon motion of Senator Drilon, the session was the suggestion to delete the same. suspended until two o’clock in the afternoon. As regards the P210 million fund for the PGMA It was 12:02 p.m. Scholarship Program of the Technical Education and Skills Development Authority (TEDSA) under RESUMPTION OF SESSION the DOLE budget, Senator Drilon said that a similar programmed P200 million item for the TEDSA has At 2:lO p,m., the session was resumed. been transferred to the CHED. He posed no objection to its deletion from the unprogrammed items. Thereupon, the Chair recognized Senator Osmeiia for the continuation of his interpellation. To the observation that the unprogrammed items are actually insertions in the GAB, Senator INTERPELLATION OF SENATOR OSMERA Drilon clarified that the unprogrammed funds (Continuation) were provided for in anticipation that money would become available either through loans or Noting that the items in the list under the unprog- excess tax collections. rammed funds amounting to about P28,295,000,000 does not jibe with the P30.5 billion one-line item, Asked why the construction of the Luzon Urban Senator OsmeAa asked why the list had not been Beltway which covers Subic, Clark, Tarlac and Aurora included in the National Expenditure Program is included in the GAB even though it is an ongoing considering the fact that a one-line item could be a project, Senator Drilon stressed that the project source of graft. Senator Drilon replied that while the should not be considered a pork barrel insertion since THURSDAY, NOVEMBER 30,2006 895 it is part of President Arroyo’s SONA commitments Senator Osmefia said that if the DA was serious, for the creation of “super regions.” it would have already enumerated the locations of irrigation systems and the farm-to-market roads. Asked why the P4.4 billion fund for airports Senator Drilon stated that the Committee would ask under the DOTC was not included in the programmed the DA to itemize the allocations. appropriation, particularly the P2.5 billion fund for the ongoing new Iloilo airport project, Senator Drilon But Senator Osmefia proposed that the items be said that the listing in the unprogrammed funds is cut and let the DA come back next year with an for projects of various departments which could not itemized budget. He doubted the absorptive capacity be funded in the coming year. He said that even if of NIA to use the allocation. Senator Drilon informed there is a programmcd item for the new Iloilo airport the Body that the DBM Secretary has agreed to of approximately the same amount, the local govern- delete the items. ment could not afford its share in funding the construction which is set to be completed by the end In closing, Senator Osmefia commented that the of the year. AFMA was passed in December 1997 and all AFMA-related allocations in the agrarian reform On the concern that government would end up budget since then have leveled off from P17 billion to with a P2.5 billion loan, Senator Drilon stated that the P19 billion and so he was surprised why the DA has airport is listed as a foreign-assisted project in the asked for an additional P10 billion for the AFMA. programmed portion of the budget under the DOTC He said that it would take a gradual ramping up of for P2,712,373,000, for a total project cost of P6.5 the agency’s absorptive capacity to use such an billion. He explained that while the loan proceeds amount. He charged that the DA was only paying lip have already been received, the allocation for the service to farmers who comprise 40% of the labor airport was prepared in this manner because the force with another 20% dependent on agriculture. DBM bas to keep within the P63 billion programmed He contended that the farmers were lucky that deficit so that if it could be determined in the course the bicameral conference report on the Biofuels of the year that the budget would have some leeway, Act bad been approved by the Senate. Instead of the government could utilize the standby authority to utilizing key production resources for the AFMA, increase the spending limits but still keep within the he believed that government should start prioritizing deficit program. sugar and coconut plantation areas for conversion into feedstock plantations for biofuel. He expressed Senator Osmefia expressed concern that the optimism that this would give the economy the government would be spending an overwhelmingly biggest boost for investment, citing news reports that huge amount for one airport project alone. Senator Chemres, the only biofuel plant listed in the Philippine Drilon said that the 2007 project allocation would be Stock Exchange, has been oversubscribed four times, the first substantial appropriation for the airport in the biggest ever in PSE history, because everybody these past years. was trying to buy shares. He proposed that the funds for additional farm-to-market roads be realigned to On mother matter, Senator Osmefia contended support efforts in biofuel production so that when the that the P2.4 billion fund for farm-to-market roads farmers plant their crops next year, there would be and P7.8 billion for the restoration of existing NIA- a road on which to transport their produce to the assisted irrigation systems under the Agricultural and biofuel plants. Perhaps, he said, the DA and PBM Fisheries Modernization Program (AFMA) would should hannonize their plans. become a pork barrel fund since the govemment does not have the capability to utilize the funds in just INTERPELLATION one year. Senator Drilon said that the AFMA and OF SENATOR LACSON DA budgets already contain P8 billion to P8.5 billion for irrigation projects, although a huge portion of Senator Lacson recalled that during the 2005 that is already covered by foreign-assisted projects. budget deliberations, he, along with Senators Drilon He said that these projects could not be accom- and Lim, decided to forego their pork barrel alloca- modated in the programmed portion of the budget, tions and that they even communicated their but the DA nevertheless submitted them as part of intention to Malacafiang with the request to be their program for 2007. informed, at the end of 2005, whether the P360M/ 896 THURSDAY, NOVEMBER 30,2006 million had been made part of the deficit reduction. SUBMISSION OF THE BUDGET He asked if Malacafiang or the DBM has sent OF THE DEPARTMENT OF BUDGET a reply on this matter. AND MANAGEMENT, THE ALLOCATION TO LOCAL GOVERNMENT UNITS, AND Senator Drilon stated that he has not received SPECIAL PURPOSE FUNDS any reply nor has he received any releases for his PDAF since 2005. However, he said that accord- Upon motion of Senator Drilon, there being no ing to the DBM Secretary, there are unreleased objection, the budget of the Department of Budget amounts in capital outlay and in PDAF, the latter and Management, the allocation to Local Government amounting to P349 million. He added that the Units and the Special Purpose Funds were deemed DBM has promised to provide the Senate the records submitted for the Body’s consideration. of the requests showing where the pork barrel allocations went. SUSPENSION OF SESSION

Senator Lacson asked whether the President’s Upon motion of Senator Drilou, the session was P134 billion Discretionary Fund included the estimated suspended. P16.5 billion PDAF allocations to 236 congressmen and P4.6 billion pork barrel allocations to senators It was 2t50 p.m. in 2007. Senator Drilon replied that one-line items in the budget such as the Calamity Fund, PI billion; RESUMPTION OF SESSION Contingent Fund, P800 million; Intelligence Fund, P6SO million; Reorganization Fund, P15 billion; and At 2:Sl p.m., the session was resumed. Pension and Gratuity Fund, P5.2 billion are within the discretion of the President. ZAMBOANGA CITY SPECIAL ECONOMIC ZONE AUTHORITY On whether the pork barrel allocations are within the discretion of the President, Senator Senator Drilon presented the budget of the Drilon explained that under the Constitution, the Zamboanga City Special Economic Zone Authority. President has the power to realign the budget of He stated that the Committee has recommended a the Executive branch; and as a question of checks P90 million budget for the agency, the same amount and balance, the President can deny the release in the NEP and GAB. of any amount. INTERPELLATION OF SENATOR OSMERA Asked on the total PDAF for 2007, Senator Drilon replied that the P9.1 billion in the Asked by Senator Osmefia if Ecozone Chair GAB was cut by the Committee to P6.42 billion, Georgina Yu was present, Senator Drilon replied but the Committee would restore it to the level of that she has been in the U.S. since November 14. the NEP. He said that the DBM Secretary could He said that Mr. Meynard Yanga, the Deputy not give the specific allocations per senator and Administrator, would be assisting the Committee congressman. during the deliberations.

To the contention that each congressman in Asked how much the national government has Luzon and Visayas was allocated P40 million and already expended for the Zamboanga free port in each congressman in Mindanao was allocated P30 terms of subsidy, equity contribution, and inftastmcture million based on the 2007 GAB, Senator Drilon projects since its inception, Senator Drilon stated that stated that these are allocations in the DPWH the amount has reached P936,4SO,OOO. budget. In reply to further queries, Senator Drilou stated In reply to further query, Senator Drilon stated that in 2005, the Zamboanga kee port spent P48,360,000 that the ungprogrammed fund releases were as in terms of operational expenses and collected only follows: P5,393,898 as support to GOCC in 2005; as P996,OOO in revenues; the projected expenses for of August 31, 2006, P4.926 billion as support to 2006 is P58 million, while only P1,309,000 in revenues foreign-assisted projects in 2005. has been collected as of September 10, 2006. % THURSDAY, NOVEMBER 30,2006 897

Asked on the number of locators in Zamboanga such as the Telecommnnication Office and the free port, Senator Drilon replied that there are Palawan Council for Sustainable Development. 18 locators but only one is involved in the export business. Senator Osmefia recalled that in 1995, he objected vehemently to the Telepono sa Bavungay Pointing out that the basic policy in the program of the Telecommunication Office, for which establishment of a free port is to import, add value government spent PlOO billion that could have been and export, Senator Osmefia asked whether it would used for other projects. He stated that at the proper be safe to assume that the Zamboanga free port has time, be would propose a drastic cut in the subsidy of not served its purpose, Senator Drilon replied in the the Zamboanga free port which should be converted affirmative. into an export processing zone. He pointed out that the free port has already spent close to P200 million With respect to the total assets of the free port, in the last couple of years, and that the P95 billion Senator Drilon presented the following data: which has been spent for infrastructure projects does not completely account for the almost P190 million Year Current Assets Noncurrent Assets Total Asset increase in the shift from current to fixed assets. (in Millions) (in Millions) (in Millions) 2005 P186 P297 P484 SUBMISSION OF THE BUDGET 2006 P38.9 P470 P509 OF THE ZAMBOANGA CITY SPECIAL ECONOMIC Senator Osmefia pointed out that about half a billion has disappeared from the books of the Upon motion of Senator Drilon, there being no Zamboanga free port. He asked how much the free objection, the budget of the Zamboanga City Special port has in terms of cash in banks or government Economic Zone Authority was deemed submitted for securities. Senator Drilon replied that the cash and the Body’s consideration. cash equivalent of the free port has gone down from P108.6 million to P22 million, while the assets in CAGAYAN ECONOMIC ZONE AUTHORITY terms of the property, plant and equipment have increased from P297 million to P470 million. Senator Drilon presented the budget of the Cagayan Economic Zone Authority. He stated that Asked how the property, plant and equipment the Committee has recommended a P214 million assets went up by aImost P200 million since there budget for CEZA, the same amount in the NEP could not have been a construction worth P200 and GAB. million in the last 12 months, Senator Drilon explained that the increase came from the implementation of INTERPELLATION OF SENATOR OSMERA power, road, and waste disposal projects. Senator Osmefia noted that the Cagayan Export Asked on the amount spent for the projects, Zone Authority is similarly situated as the Zamboanga Senator Drilon replied that P15.1 million was used free port except that the former was able to bring for the waste water treatment facility, P25.4 million in some locators because of the transfer of the for the 5 MDA power substations, P14.4 million for right-hand-drive vehicle importers from Subic to the 69 kV transmission line, and P39.4 million for the Port Irene, and the registration of internet gambling opening of roads and concreting of the seafront. hosts. He believed that CEZA benefited from the Supreme Court decision that did not allow the Subic Senator Osmefia asked how a government free port to import right-hand drives vehicles and investment such as the Zamboanga free port would sell them domestically. thrive in the future when it has no airport, seaport and locators in the last 12 years, as he contended Asked whether Port Irene would lose that that the government has been throwing money down competitive advantage should the Subic free port a black hole. He said that he would rather spend charter be amended to allow it to import, convert the P90 million to put up schoolhouses and clinics. and sell domestically right-hand drive vehicles. Senator Drilon stated that there are other government Senator Drilon conceded that it was a probability. agencies which could be considered black holes, But he pointed out that other locators, particularlyhf 898 THURSDAY, NOVEMBER 30,2006

in fishing, ethanol and biogas production, would be Senator Drilon stated that it is precisely the reason attracted to Port Irene even without that competitive that the RCBC operations are temporary and once edge. He agreed that these right-hand drive vehicle the infrastructure for the optic fiber connectivity locators would return to Subic if its charter is amended is completed, the operations would be transferred as investors always look for a more profitable base to Port Irene. He reiterated that these companies of operations. would transfer to Subic and Clark if the restric- tions are removed, taking into consideration con- On a related matter, Senator Drilon affirmed the venience, market accessibility and the ease of observation that another technical advantage of the hiring people. Cagayan and Zamboanga economic zones is the authority to grant franchises to internet gaming Asked how much the national government has companies without being subject to the regulatory spent for the CEZA, Senator Drilon informed the powers of Pagcor which is a clause found in the Body that since 1996, the total amount from the Subic charter. He acknowledged that a lot of these GAAs is P937,534,250 for equity and subsidy. He internet gaming operators would shift to Subic should disclosed that the P70 million in unprogrammed its free port franchise exempt these internet gaming fund for the Lallo Airport is not part of the CEZA locators from Pagcor regulations. appropriations. As to the development of the San Vicente airstrip, he said that private investors are Replying to further queries, Senator Drilon funding the project. informed the Body that of the 37 interactive gaming licenses issued to locators by the CEZA, 12 are in Senator Osmefia expressed surprise that inter- operation, four of which are in Port Irene and eight active gaming operators intend to develop an airstrip at the RCBC Building in Makati. He explained that when they do not need an airport for their activity. the eight Makati locators have an agreement with Senator Drilon said that since private funds are Pagcor that their Manila operations would only be presumably going to be used whether or not it is a temporary and the franchise fee would be split 50-50 wise investment is a matter that private investors between Pagcor and the zone authority. He added would have to decide for themselves. that of the 1,328 people employed in Port Irene, 25% are in the interactive gaming sector. Senator Osmefia asked if San Vicente Airport Development is a private entity as he noted a Asked how these internet gaming activities that request for P119 million for engineering works, run across borders are then regulated, Senator Drilon land acquisition, improvement and relocation. Senator disclosed that the CEZA is a member of the Drilon said that according to Administrator Jose International Internet Gaming Organization which Maria Ponce, the proposal was done before CEZA receives reports of the gaming operations in the found private investors who were willing to fund Philippines. He conceded that this international the project. organization has no regulatory powers but the zone authority has a computer program that monitors As regards the construction of the breakwater where the bets come from. He gave assurance that in the amount of P250 million, Senator Drilon replied no bets from the United States, which prohibits that it is a government project in Port Irene. He internet gaming, are accepted. clarified that the PI00 million item in the budget last year was not spent on the breakwater. Moreover, Senator Drilon affirmed that Port Irene has real time TV videos servicing the gaming Asked on the assets of CEZA, Senator Drilon industry. As to the cable connection, he said that replied that as of September 30,2006, they amounted there is presently a PLDT microwave connection to P684,142,126.97; cash and cash equivalents, while the fiber optic connection is being worked out. P48,146,850; receivables, P5.7 million; inventories, Senator Osmefia pointed out that RCBC has a cable P115 million; other assets, P136 million; property, connection with a capacity of 100 megabytes. plant and equipment, P484 million, net of depreciation; and investments. P10 million. On the observation that microwave transmission is not used very much in the country because Asked if P484-million item includes the P200 it is very sensitive to weather and other factors, million for the library, Senator Drilon disclosed that it # THURSDAY, NOVEMBER 30,2006 899

has been written off, and the allocation was spent on resort in Magbag Island and Sun Tai International studies, to wit: Fishing Corporation, a Japanese joint venture.

Study Proponent Cost Senator Osmeiia insisted that a free port is not needed for fishing or tourism, as neither Boracay Master Development Plan (I 997) Landseaire P33.7 million nor General Santos City is a free port. He added that Philippine laws already grant tax-free benefits Technical Studies to processing and re-exporting fish; in fact, the (1997) Landseaire PI.l million handline-fishing bill of Senator Magsaysay would Environmental even extend the tax-free privilege to Marina-registered Impact Study (2001) Dames & Moore P4.4 million smaller vessels so that they could go out into Aerial Photography/ international waters without having to declare their Metes and Bounds and F.F. Cruz & products as imports. Land Inventory (2001) Co.. Inc., P19.1 million Physical Master MBK Philippines, Senator Osmefia averred that, essentially, the Plan (2001) Inc., P113.1 million business model for the Cagayan and the Zamboanga Additional Studies MBK Philippines, free ports has not worked because it violated certain (2001) lnc., P14.7 million rules in establishing free ports, such as access to Tourism Development Center for Integrated market, access to resources or access to in&astmcture. and Marketing Plan Development and (2002) Social Marketing P7.995 million Noting that one of the new activities in the Public Information free port is the establishment of biofuel plants, Materials on Investment Senator Osmefia asked whether a free port is Promotion and necessary for that purpose, as he pointed out that Completed Projects the biofnel plants being established all over the (2004) IBS Consulting Corp., P1.2 million country do not require free ports. Senator Drilon said the plant would be established in Port Irene Senator Drilon said that the total cost of the with the hope that the products could be exported studies of P195,729,798.84 was written off. He said to neighboring countries. that Senator Osmefia would be provided copies of these studies next week. Senator Osmefia argued that since the feedstock for biohel plants is locally gown - whether sugar, SUSPENSION OF SESSION jathropa, or coconut - there is no need for free port status as the plants hardly import anything. As a Upon motion of Senator Osmefia, the session matter of fact, he said, many of the bioethanol was suspended. plants that have already been established or are being established in Bukidnon, Southern Negros, It was 3:35 p.m. San Carlos, Negros Occidental, Tarlac, Pampanga and even in Cagayan do not require free port status. RESUMPTION OF SESSION He disclosed that in the extensive hearings on the Biofnel Act, the plant operators did not ask At 3:36 p.m., the session was resumed. for free port status, but only to be given the same fiscal incentives to import their capital equipment In reply to the query of Senator Osmefia, Senator free of VAT, duties and taxes, and these was Drilon said that the current fiber optic connectivity of granted to them. 145 megabytes per second is being upgraded to 700 megabytes per second, the backbone of which is In the same manner, Senator Osmefia said that microwave. Senator Osmefia remarked that it is the PhilPhos, another locator at CEZA, does not need microwave portion that does not give transmission to be located in a free port because it manufactures dependability. its fertilizer in Isabel, Leyte. He said that PhilPhos only uses the warehouse in CEZA to store its Asked on the number of locators at the CEZA, fertilizer for distribution to farmers in Cagayan Valley Senator Drilon replied that there are two - an island because Port Irene is the only port in Cagayan. d 900 THURSDAY, NOVEMBER 30,2006

Senator Drilon agreed. Senator Osmefia said that it RESPONSE OF THE OFFICE OF THE is indeed an anonlalous situation because the manager OMBUSMAN TO THE QUESTIONS OF of Poro Point is also in the fertilizer business and SENATOR DEFENSOR SANTIAGO has literally grabbed the entire port for his own business -to the exclusion of competitors - which With the consent of the Body, the response of was not the contemplation of Congress when it the Office of the Ombudsman to the questions of approved the conversion of Poro Point, Clark and Senator Defensor Santiago was deemed read into all the former U.S. military bases into export the Record of the Senate, to wit: processing zones. November 30, 2006

On the budget request of CEZA, Senator Drilon HON. FRANKLIN M. DIULON said that according to the administrator, CEZA would Senator no longer need any subsidy by 2008. Chairman, Senate Finance Committee Senate of the Republic of the Philippines GSIS Financial Center, Pasay City Senator Osmefia pointed out that the subsidy is only P50 million a year, but CEZA is asking for Sir: P200 million. He said that he had already made In compliance with the directive of the Senate himself clear during the hearings that he was made during the Plenary Hearing on the 2007 for developing ports, highways, irrigation systems, proposed budget for the Office of the Ombudsman farm-to-market roads, and the like; but he was held last night, the 29Ih of November 2006, we against throwing money into free ports that serve humbly submit our answers to the questions of no purpose, except to serve as tax loopholes or the Honorable Senator Miriam Defensor Santiago. regulatory loopholes in gambling which was not the QLJESTION#l: intent of the law. He manifested that he would WHAT HAS THE OMBUDSMAN DONE IN make proper recommendations on the budgets of RECENT YEARS TO DESERVE SUCH A the Cagayan and Zamboanga free ports at the QUANTUM JUMP IN ITS BUDGET? proper time. A. Substantial improvement on conviction rate in the Sandiganbayan, from 14% in 2000 to Thereafter, Senator Osmefia requested a copy of 33% in 2005 or close to 120% improvement the Pagcor-CEZA Memorandum of Understanding. The Office of the Ombudsman embarked on Senator Drilon said that he would provide Senator substantial capacity building of its investigative Osmefia a copy next week. and prosecutorial arms, in terms of skills enhance- ment and personnel complement, resulting to a SUBMISSION OF THE BUDGET substantial improvement in conviction rate by as OF THE CAGAYAN ECONOMIC much as 120%, from 14% in 2000 to 33% in 2005. ZONE AUTHORITY B. While the country's standing in corruption perception indeces needs improvement, surveys Upon motion of Senator Drilon, there being no of those having first-hand knowledge say objection, the budget of the Cagayan Economic Zone otherwise. The nzost recent Social Weather Stntions survey of business enterprises shows Authority was considered submitted for the Body's signifcant decline in perceived incidence of consideration. bribery in public sector transactions especially in the payment of income taxes from 52% in SUSPENSION OF SESSION 2000 to 29% this year The poll results of the country's reputable Upon motion of Senator Drilon, the session was pollster, the Social Weather Stations, show a suspended. sharp and dramatic decline in public sector bribery attending the following transactions: It was 3:SO p.m. 1. Payment of income taxes, from a high of 52% in 2000 to 29% in 2005; RESUMPTION OF SESSION 2. Securing local government licenses and permits, from a high of 55% in 2000 to 33% this year; At 3:53 p.m., the session was resumed. and DJ' P THURSDAY, NOVEMBER 30,2006 901

3. Securing national government permits and 1. As to Investigation and Prosecution: licenses, from a high of 42% in 2000 to 29% Continuous capacity building by increasing the this year. staff complement of both the prosecution and The encouraging survey results above can investigation arms of the Ombudsman. The be attributed to the high profile lifestyle check present ratio of investigators to government campaign against officials and employees of personnel is around 1:6000. And there are about revenue generating agencies like the Bureau of a little over 200 agencies in government, so we Internal Revenue, Bureau of Customs, Department have to increase investigators; of Public Works and Highways, to name a few. 2. As to Corruption Prevention: Designating These ripple effects of this initiative also cascaded additional Resident Ombudsmen in key public in a number of government agencies as shown sector agencies and beef up corruption prevention by the significant decline of bribery in public personnel. Establish a foreign investor’s help sector contracts. Your Honor may consider the desk cutting red tape to reduce number of days following SWS survey results: iu settitlg up business 1. In the National Capital Region from 57% Systems reforms-based corruption prevention in 2003 to 46% this year; is the unfinished business in the Ombudsman’s 2. In Metro Cebu from 62% in 2004 to 47% capacity building programs. While we beefed up this year; our enforcement personnel (investigators and prosecutors), there has been no increase in conup- 3. In Cagayan de Ora from 65% in 2005 to 38% tion prevention personnel. There is a need to this year; designate more resident ombudsmen and cormp- 4. In Davao from 57% in ZOOS to 49% this year. tion prevention that would look into vulnerable systems and procedures in key public sector C The Ombudsman conducted pioneering corruption prevention initiatives that seek to agencies in a cluster fashion. address systemic roots of corruption through We also intend to establish a foreign the Integrity Development Review (IDR) Project investor’s help desk that would look into ways in BIR, BOC, DPWN, PNP and LTO and the and means to cut red tape and reduce number of roll out of our values formation seminars in days in setting up business. This program bas government agencies, giving focus on the IDR twin objectives, namely: Creating a conducive agencies to address corruption caused both by environment for foreign investments; and to make vulnerable systems and corrupt individuals. The the country qualify for compact status under the IDR is the Ombudsman’s response to its Millenium Challenge Account and make the constitutional and statutory mandate to country eligible for a substantial gradforeign determine causes of inefficiency, red tape, assistance. mismanagementfnrud and corruption and make 3. As to Public Assistance: Setting up of recommendations for their elimination. We additional five (5) regional offices and make the need additional resources to support monitoring services of the Ombudsman closer to the people mechanisms, sustain the initiative and roll out and establish a mediation system for the Office the IDR program to cover more agencies. to declog investigation-prosecution process. QUESTION # 2. Being true to the original concept of Ombudsman through the rendition of assistance A. WHAT DOES THE OMBUDSMAN INTEND TO DO WITH ITS HIGHER BUDGET? to the needy by way of bridging basic services like healthcare, pension claims, among others, The Office of the Ombudsman is tasked to there is a need to establish additional regional look at a little over 200 government agencies, offices to bring these servicesipublic assistance exclusive of local government units down to the closer to the people. harangay level. Given the 1.S million government personnel, we have at present one ombudsman While the establishment of the mediation investigator for every 6,000 government system will be implemented through MCA foreign grant, initial activities like documenting current personnel. Hence, with more personnel, we hope to cover more government personnel, speed mediation process, desning scope of “mediatable” up the investigation process, and deliver the cases and looking at ways and means to improve desired deterrent effect in administrative and the system require organizational costs for the criminal cases. This can be answered by looking Ombudsman outside the MCA grant. at the following mandates of the Office of the 4. As to anti-conuption education: Capacity Ombudsman: building towards empowerment of stakeholders 902 THURSDAY, NOVEMBER 30,2006

through public accountability, procurement reform Office of the Ombudsman to deliver the desired and values formation seminars in key public result. Given the foregoing verifiable indicators sector agencies. and expected outcomes and the needed budget- The proposed budget will also provide the ary assistance, we look forward to improving needed office building for the Office of the the organizational effectiveness of the Office of Special Prosecutor combined with the envisioned the Ombudsman. Ombudsman Training Institute and dormitory QUESTION #3: for its area/regional office personnel, the Office of the Deputy Ombudsman for Mindanao and IN TERMS OF VALUE FOR THE CITIZENS’ the two-storey expansion of the Central Office MONEY, ARE WE WILLING TO ACCEPT Building. THAT THE OMBUDSMAN IS A MORE WORTHY INSTITUTION THAN THE @) WHAT CAN WE EXPECT FROM THE SENATE, SINCE THE HOUSE-PROPOSED OMBUDSMANINTERMS OFVERIFN3LE BUDGET FOR TIIE OMBUDSMAN (P 1.48B) PERFORMANCE INDICATOR OF OUTPUTS IS MUCH HIGHER THAN THE SENATE‘S AND OUTCOMES? OWNBUDGETFOR 2007 (P1.38B)? - and - The Philippine Senate has always served as (C) WILLTHE PHILIPPINES’ PROGRESSIVELY an august pillar in supporting anti-corruption DETERIORATING RATING ON GOVERN- efforts and in combating corruption in the country. ANCE AND CORRUPTION BE REVERSED This is best illustrated by the Senate’s oversight AS ARESULTOFAHIGHERBUDGETFOR functions and anti-comption investigations, THE OMBUDSMAN? IN OTHER WORDS, as well as its supportive stand in passing CAN IMPROVEMENT IN OUTCOMES BE the budget of the Office of the Ombudsman EXPECTED AS A RESULT OF HIGHER in recent years. Recently, the Philippine Senate INPUTS? made the countiy proud by its decisive action in ratifying the United Nations Convention In line with the firm resolve of the Office of against Corruption (UNCAC) making the Philip- the Ombudsman to eradicate corruption and pines one of the fflst Asian countries to become consistent with our commitments under the not merely an observer but as a State Party Millenium Challenge Account, we have to the UN Convention - a fitting distinction established clear verifiable performance indicators for the Philippines as a pioneer member of and that would measure the Ombudsman’s as an ardent supporter of ideals of the United organizational effectiveness. Nations. A. As to Enforcement: Increase in convic- Consistent with the Senate’s indispensable tion rate to 40% by 2007 and beef up adminis- role as a vanguard of public accountability, we trative sanctions to deter the commission of wish to pursue and promote this spirit through corruption. the faithful fulfillment of our mandate; hence, we B. As to Corruption Prevention: Reduce seek the Senate’s continued support for the incidence of corruption and increase perception Office of the Ombudsman, as we give your of sincerity in combating corruption as well as Honor the assurance of our strong resolve and developing organizational integrity of key public commitment to discharge our mandate. sector agencies. Thank you very much. C. As to Public Assistance: Increase in the number of requests for assistance acted upon, With best regards. mediation system established and 300 cases mediated by 2007. Very truly yours, D. Anti-corruption Education: Reach and For: (Signed) Mark Jalandoni corruption perception index. With the capacity MA. MERCEDITAS N. GUTIERREZ building for the enforcement arms of the Ombudsman Ombudsman (investigation and prosecution) in terms of investigative and trail skills enhancement, BUREAU OF CUSTOMS we intend to achieve an increase in conviction (Continuation) rate by as much as 40% in 2007. At present, the impact of our programs At this jucture, the Body resumed the period may leave much to be desired and gives the of interpellations on the budget of the Bureau of imperative for the budgetary support for the Customs. M F THURSDAY, NOVEMBER 30,2006 903

INTERPELLATION Mr. Tuazon : I believe it is Yu. OF SENATOR EJERCITO ESTRADA (J) Senator Ejercito Estrada (J) : All right. What is she doing there in the Bureau of Customs? Upon query of Senator Ejercito Estrada (J), Throwing her weight around? Smuggling Senator Drilon stated that Napoleon Morales was containers everyday? appointed Customs Commissioner oil January 2,2006. Mr. Tuazon : No, Mr. President. She is a licensed customs broker. Asked whether the commissioner has already submitted the list of suspected smugglers operating Senator Ejercito Estrada (J) : And then? within the BOC, which he had requested in the Mr. Tuazon : She transacts business with the last budget hearing, Senator Drilon replied in the Bureau of Customs. affirmative. Senator Ejercito Estrada (J) : Is she not a smuggler? Senator Ejercito Estrada (J) asked whether the commissioner could recall their names. Mr. Tuazon : I cannot say she is a smuggler, Mr. President. SUSPENSION OF THE RULES Senator Ejercito Estrada (J) : How can we OF THE SENATE confirm that she is not a smuggler? Mr. Tuazon : Mr. President, we have not Upon motion of Senator Drilon, there being no apprehended and filed a case against her. objection, the Body suspended the Rules of the Senate to allow Customs Commissioner Napoleon Senator Ejercito Estrada (J) ; Does she Morales to respond directly to the queries of Senator control JULA Brokerage? JUNOB Brokerage? Ejercito Estrada (J). Mr. Tuazon : No, your Honor. Senator Ejercito Estrada (J) : You do not Following is the full exchange between Senator know? Ano iyong listahan nu under control ni Ejercito Estrada (J) and Commissioner Morales: Tina? What does she handle?

Senator Ejercito Estrada (J) : All right. I would Mu. Tuazon : Right now, your Honor, consump- like to ask the Commissioner if he knew of a tion and, at the same time, warehousing ship- certain Miss Tina Vidal alias Tina Vidal? But ments. Vidal is not her real surname. Her husband Senator Ejercito Eslrada (9 : What are the is surnamed Lapid but he has no relation to names of these brokerage companies? Senator Lapid. And her first husband is surnamed Ang, and no relation to Atong Ang Mr. Tuazon : It is not companies, your Honor, also. Does the commissioner recall of a person but rather per individual customs brokers. named Tina Vidal, alias Tina Vidal’? Senator Ejercito Estrada (J) : So, does the Commissioner Morales : Mr. President, I have gentleman mean to say you do not have any with me my chief intelligence officer. Can he proof that she is a suspected smuggler answer the question? throwing her weight around in the Bureau of Customs? Senator Ejercito Estrada (J) : Sure. Mr. : She is in our watchlist of Mr. Tnnzon : Mr. President, we have not heard Tuazon of the name “Tina Vidal” but we have been hear- suspected offenders. ing a certain “Tina” in the Bureau of Customs. Senator Ejercito Estrada (J) : So when you Senator Ejercito Estrada (J) : How long has say watchlist, what does that mean? Can you the gentleman been workimg in the Bureau? please enlighten this Representation? Mr. Tuazon : Nineteen years, Mr. President. Mv. Tuazon : A suspected offender as men- tioned in the watchlist will be persons or entities Senator Ejercito Estrada (J) : All right. Has or corporations that have high potential of the gentleman heard of a name “Tina”? committing offenses against the tariff and Mr. Tuazon : Yes, Mr. President. customs rules. Senator Ejercito Estrada (J) : What is her Senator Ejercito Estrada (J) : Has she committed family name? an offense? & P 904 THURSDAY, NOVEMBER 30,2006

Mr. Tuazon : From the records, none, your Mr. Tunzon : No, your Honor. Honor. Senator Ejercito Estrada (J) : Mr. Chairman, Senator Ejercifo Esfrada (J) : But were mors can he be administered the oath, mukhang circulating in the Bureau that this Miss Tina nagsisinungaling ito, eh. is a suspected smuggler and has a close Senator Drilon : Mr. Chairman, this is a plenary association with the First family? session. We just suspended the rules to allow My. Tuazon : There are rumors, that is why we the customs people to answer directly these placed her in the watchlist. questions as this has nothing to do with the budget figures that were presented. I do Senator Ejercito Estrada (J) : Only in the not really know. I submit to the Chair on this watchlist. You have not investigated her yet? question. Mr. Tuazon : Not yet. The President Pro Tempore : Maybe this is Senator Ejercito Estrada (J) : But why? more proper topic for hearing in one of our committees. Mr. Tuazon : But we are monitoring her shipments. Senator Ejercito Estrada (J) : Alright, Mr. Pres- ident, I will just let it go. What is your name Senator Ejercito Estrada (J) : How long have again? you been monitoring? Since yesterday? Mr. Tuazon : Femandino Tuazon, your Honor. Mr. Tuazon : Two years, your Honor. Senator Ejercito Estrada (J) : Ano ang posis- Senator Ejercito Estrada (J) : Two years already? yon mo sa bureau? You are the deputy? MY. Tuazon : Yes, sir. MI‘. Tnazon : No, your Honor. I am the chief of the Intelligence Division. Senator Ejercito Estrada (J) : So give me the report for two years. What have you been doing Senator Ejercito Estrada (J) : What about while watching the movements of Miss Tina? Mr. Tom Toh? Have you heard of him? Mu. Tuazon : Well, we have identified the Mr. Tuazon : I have read his name in the papers, companies she is using as consignees. your Honor. Senator Ejercito Estrada (J) : What are the Senator Ejercito Estrada (J) : What have you companies? read of him? Mr. Tuazon : One of them is Berde Mu. Tuazon : He was suspected of being a Komersiyantes. smuggler, your Honor. Senator Ejercito Estrada (Jj : What else? Senator Ejercifo Estrada (J) : What action did Mr. Tuazon : Light truck. the bureau take as far as Mr. Tom Toh is con- cerned? Senator Ejercito Estrada (Jj : How many companies does she handle? Mr. Tnazon : The bureau’s leadership created a committee to investigate the transactions Mr. Tuazon : I think four, your Honor. being done by Mr. Tom Toh in the Bureau of Customs. Senator Ejercito Estrada (J) : Only four? Mr. Tuuzon : Yes, your Honor. Senator Ejercito Estrada (4 : What did they find out? What was the result of the investiga- Senator Ejercito Estrada (Jj : Who is this Jun tion? Almeda? Do you know of any Jun Almeda? Mr. Tuazon : That Mr. Tom Toh had no transac- Mr. Tuazon : No, your Honor. tions made with the Bureau of Customs. Senator Ejercito Estrada : Hindi mo kilala? (Jj Senator Ejercito Estrada (J) : Who is his front Mr. Tuazon : No, your Honor. man? Senator Ejercito Estrada (J) : He is also a Mr. Tuazon : I do not know, your Honor. close associate and business partner of one of Senator Ejercito Estrada : How many the children of Mrs. Arroyo and he is the same (J) bonded warehouses does he control? person who imported the controversial race- horses tax-free. Are you aware of it? Mr. Tuazon : I do not know, your Honor. Ji@ THURSDAY. NOVEMBER 30,2006 on5

Senator Ejercito Estrada (J) : You have been Commissioner Morales : We found out that with the Bureau of Customs for years and still there is a strong reason that this Sammy Lee is you do not know how many bonded warehouses using a dummy. The trouble is that this dummy do Tom Toh and Miss Tina control. For your cannot reveal the name of Mr. Sammy Lee. information, the facilitator or the front man of Senator Ejercito Estrada (J) 1 Who is this Mr. Tom Toh is Elvie Castillo alias “Big Mama.” dummy? Do your know her? Commissioner Morales ; We do not know, your Mr. Tuazon ; No, your Honor. Honor. That is the problem that we are enc- Senator Ejercito Estrada (J) ; And Mr. Tom ountering right now. When he was apprehended Toh is in partnership with Mr. Sammy Lee, the by the CIDG, I do not have any information what one who was recently arrested. Do you know case was filed against him since he is not even Sammy Lee? an accredited importer or an accredited broker in the Bureau of Customs. Mr. Tuuzon : I just saw it in the papers Senator Ejercito Estrada (J) ; How did the Senator Ejercito Estrada (J) : Hindi ba siya elements of the CIDG know that he was a nag-ooperate sa bureau? notorious smuggler? Why was he apprehended? Mr. Tuazon : I have not seen him, your Honor. Commissioner Morales : Because of reports. Senator Ejercito Estrudu (J) : Kung wala kang Senator Ejercito Estrada (J) : Coming from laging nakikita sa bureau, you do not have the your office? right to work in the bureau because Sammy Lee Commissioner Morales : Yes. is very notorious. He was just arrested several months ago and still you do not know that he Senator Ejercito Estrada (J) ; See? was arrested. Commissioner Murules : Iyong records na Mr. Tuazon : I know, your Honor. I just read it sinasabi namin nu.... Based on records, we in the papers. I have not seen him. really wanted to prosecute him. Senator Ejercito Estrada (4 : Have you invest- Senator Ejercito Estrada (J) : Let me continue, igated Sammy Lee? Mr. Commissioner. The reason why the elements of the CIDG apprehended Mr. Smile, a notorious Mr. Tuazon : No, your Honor. It was not smuggler, was based on your recommendation, assigned to me. based on your findings, am I right? Or based on reports that you filed? Senator Ejercito Estrada (J) : Who among the personnel in the bureau investigated him? Commissioner Morales ; Yes. Mr. Tuazon : I do not know, your Honor. Senator Ejercito Estradu (J) ; All right. CommissionerMorules ; No, no. Mr. Chairman, Senator Ejercito Estruda (4 : Since we had because under the Task Force Anti-Smuggling, this budget hearing last year, even Senator Enrile CIDG is one of the members of the task force. mentioned his name as one of the notorious In its capacity as the task force, they appre- smugglers operating within the bureau. Now you hended Sammy Lee. do not have the balls investigating him. Senator Ejercito Estradu (J) : So, it emanated Mu. Tuazon : The assignment of investigation is from the BOC, if I am not mistaken. done by the leadership, your Honor. Commissioner Morules ; Yes, they are deputiz- Senator Ejercito Estrudu (J) ; Maybe we will ed, sir. let the commissioner answer that. Senafor Ejerciio Estradu (4 ; Sabi kasi nifong Commissioner Morales : Your Honor, as far as chief ng intelligence mo, wala silang alam. So, Sammy Lee is concerned, first and foremost in maybe it is better for you to answer my questions. the committee that we have created, it appears Mr. Commissioner, what prompted you to that a certain Sammy Lee is not even accredited recommend the filing of charges against Sammy with the Bureau of Customs. Lee? Is he really a notorious smuggler or not? Senator Ejercito Estrudu (4 : Why was he CommissionerMorales ; Your Honor, as I have apprehended and for what? If he is not a said, there is no evidence to show that he is the smuggler, why was he apprehended? broker nor is he the importer. What I am trying w‘ b 906 THURSDAY, NOVEMBER 30,2006

to say, Your Honor, this guy always use a Commissioner Morales : Well, I have instructed dummy. him, directing him that all shipments of Lucio co... Senator Ejercito Estrada (J) : If there is no evidence against Mr. Sammy Lee, why was he Senator Ejercito Estrada (8 : Sasabihin na apprehended by the elements of the CIDG? naman niya sa akin hindi niya kilala. Nakulong pa siya, hindi ba? Commissioner Morales : ...will be under alert. Commissioner Morales : I think, Mr. Chairman, With your permission, Your Honor. if I remember right, noong nakulong pa siya, Senator Ejercito Estrada (J) : No, I would like that is a case of bribery, not smuggling. you to answer my questions. Please do not refer Senator Ejercito Estrada (J): No. But he was me to your chief of intelligence. He will just say, arrested based on the recommendations that.. .. “I do not know, I do not know, hindi ko kilala.” Commissioner Morales : He was arrested based It is useless. Maybe you know Mr. Lucio Co. on that smuggling case. Unless he knows Mr. Lucio Co, you let him answer. Senator Ejercito Estrada (J): Yes. MY. Tnason : Your Honor, I only know Lucio Co Commissioner Morales : Noong i-validate po by the name. I do not know the person namin ang mga records, as a matter of fact, personally. iyong mga examiners noon, na this is a case of misdeclaration, kinasuhan pa namin. And also, Senator Ejercito Estrada (4 : Mr. Commissioner, I think we filed charges against the importer of your better answer. Do you know him personally? this. We have already filed criminal charges at Commissioner Morales : As I have said in the the DOJ, if I am not mistaken, Your Honor. What first hearing, your Honor, I do not know him I am saying, the name Sammy Lee does not also. appear in our records. Senator Ejercito Estrada (J) : But you knew Senator Ejercito Estrada (8 : Can you please that he was operating. He was smuggling answer me? Is Sammy Lee a smuggler or not? chickens and all kinds of items, vegetables, to CommissionerMorales : Well, based on record, no. the detriment of our farmers. Senator Ejercito Estrada (J) : But based on CommissionerMorales : Maybe, Mr. Chairman, what you know, yes. not under my watch. Commissioner Morales : Ang problema, Your Senator Ejercito Estrada (J) : Oh, come on! Honor, these people, as I have said, are using dummies. Well, if you use dummy, if there is a Commissioner Morales : We are very, very clear manifestation on the dummy that he is strict especially with refrigerated vans. We are being used by Sammy Lee that is the time that trying as much as possible.. .. we can file charges against him. Senator Ejercito Estrada (J) : When you were Senator Ejercito Estrada (9 : For your inform- not still a commissioner, and up to now when ation, if you do not know, Mr. Sammy Lee you are already a commissioner, did you not hear controls 24 bonded warehouses, and eight of the name Lucio Co operating during the time of, them were under investigation by your office maybe President Ramos, President Estrada, and during the time of Commissioner Lina. And he even up to this day, kay Mrs. Arroyo? facilitated an average total of 300 containers per CommissionerMorales : Your Honor, as a matter day or 1,500 containers a week in the recent of policy, regardless of the names, we have years, Mr. Commissioner. Just in case you do instituted our action plan. First and foremost, we not know. So I am just giving you the inform- have implemented proper description of goods. ation that all of these notorious smugglers that As you know, technical smuggling is being I have mentioned are still operating within committed; first I can notice that the good is the Bureau. generally described. So regardless of who they Okay, let us go to the next, Mr. Lucio Co. are, if any shipment was declared generally, What is your report about Mr. Lucio Co? automatically the shipment would be alerted and CommissionerMorales : Your Honor, can I refer inspected. again the matter to my chief intelligence? Senator Ejercito Estvada (J) : Have you ever Senator Ejercito Estrada (J) : Walang sasabi- encountered any shipment smuggled by Lucio hin iyan kundi hindi niya dam. CO? bv THURSDAY, NOVEMBER 30,2006 907

Commissioner Morales : Your Honor, I would like Commissioner Morales : I am giving that to emphasize that there is no importer by the assurance, Mr. President. name of Lucio Co. If you are referring.. .. Senator Ejercito Estrada (J): What about the Well, reports coming to my office that Lucio rest of the names that I mentioned? Kho owns Puregold, and that is my instructions. Commissioner Morales : Mr. President, when it That all Puregold containers should be subjected comes to meat importation, as a matter of fact, to 100% examination. So much so that my we do have a series of apprehension in the intelligence officer is doing that, and there will be piers. And the one lately, the four containers, a a rigid examination, that is my watch, your Honor. celebrated case, it was in the newspaper. It was Wala ho silang nakita na may diprensiya. Ang the Task Force Anti-Smuggling that apprehended ihig snhikin po noon, during my watch, these that. What I am saying is that 11 containers are people are paying duties and taxes. still in the piers and to be condemned soon. Senator Ejercito Estrada (3) : Minimal. Because of the strict implementation, as I have said, first and foremost, they cannot release the Commissioner Morales : I have set the valuation shipment. As a requirement, it needs an import and data base. Kasi, before, there is a container permit. When it comes to meat, import permit is paying only around P20,OOO or P30,OOO per coming from the BAI. When it comes to container. Ngayon wala na po iyan. It makes vegetable, import permit is coming fiom the double. Commissionpo P60,OOO to P70,OOO ang Bureau of Quarantine. So, strict monitoring, strict binabayaran niyan. watching, alerts, side by side, and all of these - Senator Ejercito Estrada (J) : Mr. Commissioner, I think we are very, very effective on this. a you were telling me while ago that all Senator Ejercito Estrada (J) : Has the shipments from Puregold are being examined by Commissioner reach this target? the bureau. Am I correct? Commissioner Morales : Mr. President, from Commissioner Morales : That is correct, your Januazy to October 31, we are above target by Honor. P6.3 billion. Senator Ejercito Estrada ; What kind of (J) Senator Ejercito Estrada (J) ; What is the shipments are these? Commissioner’s expected target? Commissioner Morales: Ifo ho iyong mga canned Commissioner Morales : The target last year, goods, grocery items. The Puregold is now 2005, is P151 billion. Last year, we only collected under post-entry audit. Pina-audit ko po iyan. P143 billion. So, there is a deficit of PS billion. Senator Ejercito Estrada (J) : Kaya nga. Bukod Now, the target is P196 billion, Mr. President. sa mga grocery items like canned goods, ano pa Basing it from actual cash collection last year iyong mga sini-ship nila? as against this year, there is 35% increase. We are very, very lucky that we are not only hitting Commissioner Morales ; Liquor and cigarettes, your Honor. it, but over-shooting the target. Senator Ejercito Estrada : Senator Ejercito Estrada (J) ; That is subject (a Does the Commis- to tax. sioner mean to say that there are less smugglers right now during his watch? Commissioner MoraIes : Opo. Commissioner Morales : Indeed, Mr. President, Senator Ejercito Estrada (J) : What else? What my logic is that if smuggling is rampant, we about vegetables? Chicken, mga manok? cannot collect really... it goes to the pocket. Commissioner Morales : Siguro noong aruw, Senator Ejercito Estrada 1 So last year, the your Honor. Not now. (J) Commissioner did not reach the target? Senator Ejercito Estrada (J) : Hindi na siya nag-ii-smuggle ng mnnok? Commissioner Morales : Yes, Mr. President. Commissioner Morales : Siguro noong uraw, sir. Senator Ejercito Estrada (J) : It is below the Commissioner’s expectation? Senator Ejercito Estrada (J) : Kailan iyong noong araw? Commissioner Morales : Yes, Mr. President. Commissioner Morales : Before my watch. Senator Ejercito Estrada (J) : There were a lot of smugglers last year. Senator Ejercito Estrada (J) : Are we assured that Mr. Lucio Co has not smuggled any item Commisswner Mordes : Most probably, Mr. Pres- since you took over as commissioner? ident. This morning, we filed cases with the #’ P 908 THURSDAY, NOVEMBER 30,2006

Department of Justice, 19 directors and personal- Senator Ejercito Estrada (J) : Smuggling ities from a forwarding agent, three customs Commissioner Morales : Sa computer po brokers and one bank officials by the name of ito, Ginoong Pangulo. Jugado. We just filed it this morning with the Department of Justice, Senator Ejercito Estrada (J) : Iyong white-collar smuggling? Senator Ejercito Estrada (J) : Who is this Jugado? Commissioner Morales : The system is this, Commissioner Morales : He is an Equitable Mr. President, this individual submits import Bank employee. entries in committing this crime. One entry is submitted to the Bureau of Customs which Senator Ejercito Estrada (J) : Ano siya, shows the real duties and taxes through cash smuggler? payment, while the other entry bearing the Commissioner Morales : Hindi PO. This is a same serial number was submitted to the bank, case of white-collar smuggling. purportedly, showing payment through tax credit certificate. With regard to the entries Senator Ejercito Estrada (J) : What does the submitted to the Bureau of Customs, the check Commissioner mean by white-collar smuggling? write was established to be spurious. Commissioner Morales : This was in the Senator Ejercito Estrada (J) : How did you newspaper - I think if I am not mistaken, detect it? Mr. President, in April - this “Pindot System”. Senator Ejercito Estrada (J) : “Pindot System”? Commissioner Morales : The investigation was made. We asked also the help of the CIDG in the Commissioner Morales : Yes. person of Attorney Pablico. And we started the Senator Ejercito Estrada (J) : Can the Comm’s- investigation in April and after the investigation sioner please enlighten this Representation for five months, I elevated it and formed a legal about this ‘‘ Pindot System”? panel to review this before filing it this morning. Commissioner Morales : Mr. President, this is Senator Ejercito Eshada (J) : All right. I have a compu’er fraud. already mentioned four notorious or suspected Senator Ejercito Estrada (J) : It is a computer smugglers operating within the bureau. Are fraud. there any other suspected smugglers that you are investigating right now? And may I know Commissioner Morales : Yes. their names, Mr. Commissioner? Senator Ejercito Estrada (J) : All right. Commissioner Morales : Mr. President, I have Commissioner Morales : We detected it imme- said that since that day, that was January 2, diately wheu I assumed office, MI. President. 2006, when I attended the Senate hearing, I was And I think the result of this is, we are hitting confronted with a list of these smugglers. I told the targets. myself, Mr. President, that I will try my best to enhance the capability of the Bureau of Customs. Senator Ejercito Estrada : What happened (J) So much so that despite the fact that the assigned to that Jugado? target was a mission impossible, basing it on the Commissioner Morales : We charged him actual cash last year which was only PI43 billion criminaly with the Department of Justice, and the assigned target is PI96 billion. Now, Mr. President. first and foremost, when I was in the Senate, Senator Ejercito Estrada (J) : What is the there is a certain name Jeffrey King. We have status of the case? now filed a criminal charge at the DOJ against this person, Jeffrey King. Commissioner Morales : We just filed it this morning, Mr. President. Senator Ejwcito Eshada (J) : Jeffrey King? Senator Ejercito Estrada (J) : Only this Commissioner Morales : Yes morning? Senator Ejercito Estrada (J) : Is he the son of Commissioner Morales : Yes, Mr. President. the owner of President Restaurant in Ongpin? Senator Ejercito Esbwda fJ) : All right. The Commissioner Morales : Mr. President, I do not Commissioner said there is white-collar fraud. know him exactly but as I have said ... White-collar fraud ba iyon? Senator Ejercito Estrada (J) : What does he k/ Commissioner Morales : Yes. import? THURSDAY, NOVEMBER 30,2006 909

Commissioner Morales : Mr. President, he is Senator Ejercitu Estrada (J) : You checked his engaged in the importation of steel, bakal pu. record from the SEC. What is his nationality? Senator Ejercito Estroda (9 : But based on Commissioner Morales : Filipino PO. reports received by my office, he is into Senator Ejercito Estrada (J) : Filipino. May importation of illegal drugs also from China. adddress naman iyon, hindi ba? Dapat nakuha Commissioner Morales : Coming from NAIA. ninyo. Commissioner Morales : Nakasuhan na pu Senator Ejercito Estrada (J) : Maybe. namin. Nag-file na kami ng criminal case. And Commissioner Morales : We will check into another, Mr. President, a certain Emmanuel that. Subia, iyong impartation ng sugar. Senator Ejercito Estrada : Who else? Senator Sjercito Estrada (J) : He also controls (J) a brokerage permit which is unknown to me. CommissionerMorales : We lack lawyers from All right. Who else aside from Mr. Jeffrey King? the Bureau of Customs, pardon us, so that under the Run After the Smugglers Program, I only Cornmissioner Morales : Yes, Mr. President, a have one lawyer. However, we are trying to certain Manuel Bergado. We filed also a criminal recruit the young ones in order to facilitate, case against him. He is the ukay-ukay king in because until now, there are 70 on case-building. Alabang. Also, another celebrity, we are very, However, I would like to report that 26 cases very lucky, by the name of Henry 0. He was have been filed already at the Department of engaged in the importation of these containers Justice with 135 respondents, all for criminal. of frozen agri-products. This was declared as Out of the 26 cases, 15 cases are under my watch mackerel and when we opened the containers, involving 98 respondents. we saw that mackerel was only on the doors, and the rest of the group are not mackerel but frozen Senator Ejercjto Estrada (5) : What about the meat. rest? Wala na? Commissioner Morales : Wala pa PO per0 as Senator Ejercito Estrada (J) : Who is this Henry O? Does he own a duty-free shop? Does I have said, we will be filing again until he own a grocery store? December. Senator Ejercito Estrada (J) : All right. Just to Commissioner Morales : He is one of the wrap it up, I have a list here, of all the names that importers of frozen agri. the gentleman mentioned, only Jeffrey King is on Senator Ejercito Estrada (J) : What does “0” my list. I have a list of 15 notorious smugglers stand for? still operating within the Bureau of Customs. If the gentleman does not expose the activities of Commissioner Morales : Unique nga ito, Sir. these notorious smugglers, I would be compelled to expose this in one of my privilege speeches. Senator Ejercito Estrada (J) : Henry 0 period (.) Ant these notorious smugglers concerned are or Henry Oh? connected, in any way, with personnel coming Commissioner Morales : Letter “0.” from the Bureau. I will not divulge it right now. If the gentleman cannot come up with the list of Senator Ejercito Estrada (J) : He can either be all those suspected notorious smugglers, I will a Filipino or a Chinese. be the one to expose it for him. I will also name who they are connected with inside the Bureau Commissioner Morales : Kaya nga noon, of Customs. sir, binalidate ko pa itu, pina-file namin na kasu. Commissioner Morales : We need the good senator’s help, possibly, give us the list of these Senator Ejercito Estrada (J) : Apelyido niya 15 personalities. talaga “O”? Senator Ejercito Estrada (J) : The gentleman Commissioner Morales : Letter “0” lamang, sir. will just read it in the newspapers when I expose it to the public because I feel that is my duty, Senator Ejercito Estrada (J) : Obviously he is as a senator, to expose all the activities of all not a Filipino. smugglers within the Bureau. Commissioner Morales : Even in SEC paper, we I do not have any more question with regard checked. It is only letter “0.”Unique nga. the Bureau of Customs.AI‘ 4% 910 THURSDAY, NOVEMBER 30,2006

SUBMISSION OF THE BUDGET the chairman nor the commissioners have seen nor OF THE BUREAU OF CUSTOMS touched the purported renovation fund.

Upon motion of Senator Drilon, there being no INTERPELLATION objection, the budget of the Bureau of Customs was OF SENATOR EJERCITO ESTRADA (J) deemed submitted for the Body’s consideration. (Continuation)

SUSPENSION OF SESSION On the PSC’s P40 million funding to 36 NSAs for international exposure, Senator Ejercito Estrada Upon motion of Senator Drilon, the session was (J) asked if, based on his computation, each NSA suspended. received more than a million each. Senator Drilon replied that each association received a different It was 4:34 p.m. amount - ice-skating got only P21,OOO and others like boxing, wrestling or wushu received P2.4 million, RESUMPTION OF SESSION P2.9 million and P3.4 million, respectively.

At 4:37 p.m., the session was resumed. Upon further query, Senator Drilon cited the events where the Philippine team shall participate in Doha: PHILIPPINE SPORTS COMMISSION (Continuation) . Aquatics . Karate . Archery . Rowing Senator Drilon presented the budget of the . Athletics ’ sailing Philippine Sports Commission (PSC). He recalled . Baseball . Sepak Takraw that the Body suspended consideration of the budget . Body Building ’ Shooting the previous day because of the PSC’s inability to . Bowling ’ Soft Tennis provide the Committee the needed assistance. He . Boxing . Squash presented anew the budget and stated that officer-in- . Canoe . TableTennis charge Commissioner Ambrosio de Luna has sent a . Kayak . Taekwondo letter dated November 30, 2006, the contents of ’ Cue Sports . Tennis which showed the following: 1) with respect to the ’ Cycling . Triathlon 15”‘ Asian Games in Doha, Qatar, the Philippines . Equestrian . Volleyball sent 350 individuals, 333 of whom are athletes, ’ Fencing . Beach Volleyball coaches and NSA officials and 17 PSC officials and . Golf . Weight Lifting employees; athletes, coaches and NSA officials were . Gymnastics . Wrestling and given the standard allowance of $30 per day and ’ Judo ‘ Wushu P2,032,488.72 allowances were issued to 17 PSC officials and employees; for expenses related to the Asked if a basketball team was sent to Doha, Games, P30 million was earmarked by the PSC from Senator Drilon replied in the negative. the National Sports Development Fund; as of October 26, 2006, the PSC provided P40 million to the 36 Replying to further queries, Senator Drilon stated NSAs for international exposure; on food and that P40 million of the PSC’s budget came from allowances of athletes and coaches, PSC provided Pagcor, pursuant to the law which provides that P63 million for the period January to September Pagcor shall remit 5% of its income to the Commission. 2006, and another P16 million for October and However, he noted that the PSC has received nothing November 2006, for a total of P79 million; 2) on the from PCSO whose allocation in the 2007 budget issue of Brent International School, for the 2Yd would be used to pay obligations in connection with Southeast Asian Games, as part of the PSC’s the Philhealth cards that were distributed in the 2004 preparations, it approved the rehabilitation and elections. He said that even though the PSC sent the renovation of facilities of the Philsports Complex, PCSO a letter requesting the remittance of the P500 formerly known as “ULTRA,” funding for which million, it was to no avail as the latter had no money. was sourced from the rental paid by Brent International School. He added that Commissioner Upon further queries, Senator Drilon replied that De Luna has assured the Committee that neither the PCSO’s average annual remittance to the PSC was fi P THURSDAY, NOVEMBER 30,2006 911

P11 million; and the last was in 2004. Nevertheless, 2005 reenacted budget for 2006, to P108 million for he believed that the proposed P500 million allocation 2007 is no longer necessary. For his part, Senator in the 2007 budget for subscription advanced by the Drilon explained that the proposed increase in the PCSO to LGUs to enroll indigents to the PhilHealth PSC budget is only expected to provide for the program could be used to meet its obligations. additional P 1,000 compensation which all govern- ment employees are entitled to pursuant to an Asked whether the PSC has other fund sources executive order. aside from the Pagcor and PCSO, Senator Drilon said that the PSC earns about P34 million annually SUBMISSION OF THE BUDGET 6om the rentals of its facilities. He clarified that while OF THE PHEIPPINE SPORTS COMMISION the Ultra Sports complex is owned by the DcpEd, the PSC has usufructuary rights over the property. Upon motion of Senator Drilon, there being no objection, the budget of the Philippine Sports As regards the total annual income of the Commission was deemed submitted for cousider- PSC, Senator Drilon said that its National Sports ation of the Body. Development Fund (NSDF) for 2005 amounting to P554,359,079.59 was sourced from Pagcor, TERMINATION OF THE PERIOD P494,658,391; PCSO, P38,332,109; and P20,400,937 OF INTERPELLATIONS ON in donations. HOUSE BILL NO. 5794

Senator Ejercito Estrada (J) noted that even with There being no other interpellation, upon motion such a huge fund, athletes complain that they have of Senator Drilon, there being no objection, the Body not received their training pool salaries, allowances closed the period of interpellations on the bill. and other benefits. Senator Drilon disputed the observation. SUSPENSION OF CONSIDERATION OF HOUSE BILL NO. 5794 Asked about the NSDF, Senator Drilon said that it provides financial assistance to the national Upon motion of Senator Drilon, there being no athletes. He affirmed that while the PSC’s proposed objection, the Body suspended consideration of PI08 million budget in the GAB is meant for grass- the bill. roots sports development, funding for the NSAs come from the NSDF. ADJOURNMENT OF SESSION

On whether the additional P27.6 million income Upon motion of Senator Drilon, there being no generated from taxes on horse racing was released objection, Senate President Pro Tempore Flavier to the PSC, Senator Drilon replied that the money is declared the session adjourned until three o’clock in part of the P554 million NSDF. the afternoon of Monday, December 4, 2006.

As regards consultants hired by the PSC, Senator It was 5t07 p.m. Drilon said the monthly fees ranging from P10,OOO to P15,OOO that are paid to each of the 15 consultants I hereby certify to the correctness of the are sourced from the NSDF. foregoing.

On another matter, asked about the PSC’s program for retired and injured athletes, Senator Drilon said that its pension fund for retired athletes is also sourced from the NSDF. Sew tory’& the enate $J Senator Ejercito Estrada (J) believed that with the PSC’s huge fund sources, the proposed P4 million increase in its budget from P104 million in the /“k Approved on December 11, 2006