2012 GAA Deliberation

REPUBLIC OF THE PHILIPPINES
Senat:e
Pasay City
Journal
SESSION NO. 32
Tuesday to Friday, November 15 to 18,2011
FIFTEENTH CONGRESS
SECOND REGULAR SESSION
SESSION NO. 32
Tuesday to Friday, November 15 to 18,20 II
CALL TO ORDER
At 10:43 a.m., the Senate President, Han. Juan
Ponce Enrile, called the session to order.
PRAYER
Sen. Teofisto "TG" L. Guingona III led the
prayer, to wit:
Dear Father God, we come before You
as we start again our budget session, our
legislative session.
We pause before You in prayer, dear
God.
We give You thanks for our esteemed
coHeagues in our government with their
families and communities and for the life
experiences that led them to these posi-
tions.
In great humility, remind us that our
decisions matter to people, matter to You
that You care deeply about what we decide
here.
Help us to be more accountable to our
actions, to be transparent to exercise good
governance, and to accomplish things beyond
selfish interests. And that when this session
has ended, when the final bill has been
passed, when the gavel comes down, when
we are back in the quiet of our homes and
praying to You in the privacy of our own
hearts, accept our prayers of forgiveness
for all the ways in which we have fallen
short of Your holy mission.
All these we pray in the most Holy and
gracious Name of Jesus.
Amen.
ROLL CALL
Upon direction of the Chair, the Secretary of
the Senate, Atty. Emma Lirio-Reyes, called the roll,
to which the following senators responded:
Angara, E. J.
Cayetano, P. S.
DrBon, F. M.
Ejercito Estrada, J.
Enrile, J. P.
Escudero, F. J. G.
Guingona Ill, T. L.
Lacson, P. M.
Lapid, M. L. M.
Legarda, L.
Marcos Jr., F. R.
Revilla Jr., R. B.
Sotto !!I, V. C.
With 13 senators present, the Chair declared
the presence of a quorum.
Senators Arroyo, Cayetano (A), Defensor Santiago,
Honasan, Osmefia, Pangilinan, Recto, Trillanes and
Villar arrived after the roll call.
Senator Pimentel was on official mission abroad.
530
APPROVAL OF THE JOURNAL
Upon motion of Senator Sotto, there being no
objection, the Body dispensed with the reading of the
Journal of Session No. 31 (November 14, 2011) and
considered it approved.
At this juncture, Senate President Enrile
relinquished the Chair to Senate President Pro
Tempore Ejercito Estrada.
REFERENCE OF BUSINESS
The Secretary of the Senate read the following
matters and the Chair made the corresponding
referrals:
MESSAGE OF THE
PRESIDENT OF THE PHILIPPINES
Letter of His Excellency, President Benigno S.
Aquino III, dated 27 October 201 I, certifying to
the necessity of the immediate enactment of
House Bill No. 50 I 5, entitled
AN ACT DEFINING THE CRIME OF
FINANCING OF TERRORISM,
PROVIDING PENALTIES THEREFOR
AND FOR OTHER PURPOSES,
to address the urgent need to criminalize the
financing of terrorism and classify it as a predi-
cate offense to money laundering, in order to
protect the citizenry from the evils of terrorism,
strengthen national security and safeguard public
interest.
To the Committee on Rules
MESSAGES FROM THE
HOUSE OF REPRESENTATIVES
Letter from the House of Representatives, informing
the Senate that on 10 October 20 I I, the House
of Representatives passed the following House
Joint Resolution/House Bills in which it
requested the concurrence of the Senate:
HOllse Joint Resolution No. 16, entitled
JOINT RESOLUTION EXTENDING THE
LIFE OF THE CONGRESSIONAL
OVERSIGHT COMMITTEE ON
TUESDAY, NOVEMBER 15,2011
DANGEROUS DRUGS, CONSTI-
TUTED PURSUANT TO SECTION
95 OF REPUBLIC ACT NO. 9165,
OTHERWISE KNOWN AS THE
COMPREHENSIVE DANGEROUS
DRUGS ACT OF 2002
To the Committee on Public Order and
Dangerous Drugs
House Bill No. 4145, entitled
AN ACT IDENTIFYING OTHER
PERSONS CRIMINALLY LIABLE
FOR ELECTION OFFENSES AND
INCREASING THE PENALTIES FOR
ELECTION-RELA TED OFFENSES,
AMENDING SECTIONS 263 AND 264
OF BATAS PAMBANSA B1LANG 881,
AS AMENDED, OR THE "OMNIBUS
ELECTION CODE OF THE PHILIP-
PINES," AND SECTION 46 OF
REPUBLIC ACT NO. 8189 OR "THE
VOTER'S REGISTRATION ACT OF
1996," AND FOR OTHER PURPOSES
To the Committee on Electoral Reforms
and People's Participation
AN ACT PRESCRIBING RATES OF PAY
AND ALLOWANCES FOR OFFICERS
AND ENLISTED PERSONNEL OF
THE ARMED FORCES OF THE
PHILIPPINES (APP) WHILE ON
OVERSEAS DUTY WITH A
PHILIPPINE EXPEDITIONARY OR
PEACEKEEPING CONTINGENT
PURSUANT TO A PHILIPPINE
COOPERATIVE COMMITMENT TO
A UNITED NATIONS SANCTION
OR POLICY AND FOR OTHER
PURPOSES
To the Committees on National Defense
and Security; and Finance
AN ACT TO FURTHER STRENGTHEN
THE ANTI-DRUG CAMPAIGN OF
THE GOVERNMENT, AMENDING
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TUESDAY. NOVEMBER 15.2011
FOR THE PURPOSE SECTION 21
OF REPUBLIC ACT NO. 9165,
OTHERWISE KNOWN AS THE
COMPREHENSIVE DANGEROUS
DRUGS ACT OF 2002
To the Committee on Pnblic Order and
Dangerons Drugs
and House Bill No. 5246, entitled
AN ACT RECOGNIZING THE EARLY
YEARS FROM ZERO (0) TO SIX (6)
AS THE FIRST CRUCIAL STAGE
OF DEVELOPMENT AND FOR THIS
PURPOSE STRENGTHENING THE
EARLY CHILDHOOD CARE AND
DEVELOPMENT COUNCIL, RENAM-
ING THE DAY CARE CENTER AS
CHILD DEVELOPMENT CENTER
AND FOR OTHER PURPOSES
Letter from the House of Representatives, informing
the Senate that on 12 October 20 II, the House of
Representatives adopted Senate Bill No. 2946 as
an amendment to House Bill No. 4357, entitled
AN ACT CONFERRING UPON A
MEMBER OF THE SANGGUNIANG
BA YAN, SANGGUNIANG PAN-
LUNGSOD AND SANGGUNIANG
PANLALAWIGAN THE APPROPRIATE
CIVIL SERVICE ELIGIBILITY
To the Archives
BILL ON FIRST READING
Senate Bill No. 3008, entitled
AN ACT IMPROVING THE PLIGHT
OF FILIPINO PUBLIC SCHOOL
TEACHERS BY UPGRADING THEIR
MINIMUM SALARY FROM SALARY
GRADE II TO 15
Introduced by Senator Villar
To the Committees on Education, Arts
and Culture; Civil Service and Government
Reorganization; and Finance
RESOLUTIONS
Proposed Senate Resolution No. 631, entitled
RESOLUTION DIRECTING THE APPRO-
PRIATE SENATE COMMITTEES
TO LOOK INTO, IN AID OF
LEGISLATION, THE RECENT SPATE
OF VIOLENCE COMMITTED BY
THE YOUTH
Introduced by Senator Cayetano (P)
531
To the Committee on Youth, Women and
Family Relations
RESOLUTION COMMENDING THE
DELEGA TlON WHICH REPRE-
SENTED THE PHILIPPINES IN
THE RECENTLY CONCLUDED
WIZARDS AT MATHEMATICS
INTERNA TlONAL COMPETITION
(WIZMIC) HELD IN LUCKNOW,
INDIA ON OCTOBER 21-24, 2011
Introduced by Senator Pimentel III
RESOLUTION URGING THE SENATE
COMMITTEE ON LABOR, EMPLOY-
MENT AND HUMAN RESOURCES
DEVELOPMENT TO CONDUCT AN
INQUIRY, IN AID OF LEGISLATION,
INTO THE REPORTED DEPLOYMENT
BAN ISSUED BY THE PHILIPPINE
OVERSEAS EMPLOYMENT ADMINIS-
TRATION IN FORTY-ONE COUNTRIES
WITH THE END IN VIEW OF
REVIEWING THE GOVERNMENT
POLICIES AND PROCESSES FOR
THE PROTECTION OF THE
OVERSEAS FILIPINO WORKERS
To the Committees on Labor, Employment
and Human Resources Development; and Foreign
Relations
532
RESOLUTION URGING THE COMMITTEE
ON AGRICULTURE AND FOOD TO
CONDUCT AN INQUIRY, IN AID
OF LEGISLATION, ON THE STATE
OF THE PHILIPPINE SOYBEAN
INDUSTRY WITH THE END IN VIEW
OF STRENGTHENING SOYBEAN
PRODUCTION WHILE ESTABLISH-
ING A VIABLE PRODUCT PROCESS-
ING INDUSTRY FOR THE SAME
To the Committee on Agriculture and Food
RESOLUTION CONGRATULATING
AND COMMENDING THE POUND-
FOR-POUND KING SARANGANI
REPRESENTA TIVE EMMANUEL
DAPIDRAN PACQUIAO OTHER-
WISE KNOWN AS THE PEOPLE'S
CHAMP MANNY "PACMAN"
PACQUIAO FOR SUCCESSFULLY
DEFENDING HIS WORLD BOXING
ORGANIZATION WELTERWEIGHT
WORLD TITLE, VIA MAJORITY
DECISION, FROM MEXICAN
BOXER JUAN MANUEL MARQUEZ
AT THE MGM GRAND GARDEN
ARENA IN LAS VEGAS, NEVADA,
THE UNITED STATES OF AMERICA
ON 12 NOVEMBER 2011
Introduced by Senator Lapid
COMMUNICA nONS
Memorandum from the Government Service Insur-
ance System, dated 4 October 2011, submitting
to the Senate its First Year Accomplishment
Report, which includes initiatives launched by
the current board and management to provide
responsive services to its members and
pensIoners.
To the Committee on Government Corpo-
rations and Public Enterprises
TliESDA Y, NOVEMBER 15,2011
Letter from the National Grid Corporation of the
Philippines, dated 7 October 20 II, submitting to
the Senate its 20 I 0 Year-End Performance
Highlights, containing NGCP's finances and
results of operations, in compliance with Section
15 of Republic Act No, 9511.
To the Committee on Public Services
Letter from the Office of the PI'esident of the
Philippines, dated 10 October 2011, transmitting
to the Senate the letter of His Excellency,
Benigno S. Aquino Ill, addressed to Speaker
Feliciano R, Belmonte Jr., certifying to the
necessity of the immediate enactment of House
Bill No. 5023, entitled
AN ACT APPROPRIATING FUNDS
FOR THE OPERATION OF THE
GOVERNMENT OF THE REPUBLIC
OF THE PHILIPPINES FROM
JANUARY ONE TO DECEMBER
THIRTY ONE, TWO THOUSAND
TWELVE, AND FOR OTHER
PURPOSES,
pursuant to Article VI, Section 26 (2) of the
1987 Constitution.
Letter from the Department of Labor and Employ-
ment, dated 14 October 2011, submitting to the
Senate the Department's M id-Year Report to
Congress (January to June 2011) based on the
submission of the department's 38 Philippine
Overseas Labor Offices, pursuant to Sections 2
and 3 of Republic Act No.1 0022,
and Human Resources Development; and Foreign
Relatious
Letters from the Bangko Sentral ng Pilipinas,
dated 19 and 26 October 2011, submitting to the
Senate the following:
BSP Circular No. 738, series of2011, dated
11 October 2011, in compliance with
Section IS(a) Republic Act No. 7653
(The New Central Bank Act); and First
Semester 2011 Status Report of the
Philippine Financial System, pursuant to
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Section 39(c) of Article V of Republic Act
No. 7653 (The New Central Bank Act).
To the Committee on Banks, Financial
Institutions and Currencies
Letter trom the OtTice of the Undersecretary for
Migrant Workers' Atfairs, dated 26 October
20 II, submitting to the Senate a soft copy in CD
of the Report to Congress on Assistance to
Nationals for the period of January to June
20 I I, pursuant to Section 33 of Republic Act
No. 8042 (The Migrant Workers and Overseas
Filipinos Act of 1995), as amended by Republic
Act No. 10022.
and Human Resources Development; and
Foreign Relations
Letter from the Bangko Sentra! ng Pi/ipinas,
dated 27 October 20 II, submitting to the Senate
the Report to Congress on Public Sector/
Publicly-Guaranteed Private Sector Foreign
Loans Approved by the Bangko Sentra! ng
Pilipinas in the Third Quarter of 20 II.
To the Committees on Economic Affairs;
and Finance
SPECIAL ORDER
objection, the Body approved the transfer of
Committee Report No. 79 on House Bill No. 5023
from the Calendar for Ordinary Business to the
Calendar for Special Orders.
COMMITTEE REPORT NO. 79
ON HOUSE BILL NO. 5023
objection, the Body considered, on Second Reading,
House Bill No. 5023 (Committee Report No. 79),
entitled
AN ACT APPROPRIATING FUNDS FOR
THE OPERATION OF THE GOVERN-
MENT OF THE REPUBLIC OF THE
PHILIPPINES FROM JANUARY ONE
TO DECEMBER THIRTY-ONE, TWO
THOUSAND TWELVE, AND FOR
OTHER PURPOSES.
533
Pursuant to Section 67, Rule XXIII of the Rules
of the Senate, with the permission of the Body, upon
motion of Senator Sotto, only the title of the bill was
read without prejudice to the insertion of its full text
into the Record of the Senate.
The Chair recognized Senator Drilon for the
sponsorsh ip.
SPONSORSHIP SPEECH
OF SENATOR DRILON
Senator Drilon presented House Bill No. 5023,
the proposed General Appropriations Act of 2012,
for the consideration of the Body.
The full text of Senator Drilon 's sponsorship
speech follows:
A BUDGET FOR THE FILIPINO PEOPLE
Today, I rise to sponsor a most important
piece of legislation that the Congress of the
Philippines is constitutionally mandated, through
its power of the purse, to enact every single year.
I speak of no less than the General Appro-
priations Act. More than a motley assortment of
figures, the national budget is a financial
blueprint that lays out the foundation of our
country's economic growth.
On July 26, 2011, President Benigno S.
Aquino III submitted a National Expenditure
Program to Congress, the first budget that is
entirely prepared under his administration.
The President proposed an obligation
budget ofPI.816 trillion for 2012, higher by lOA
percent over the 20 II budget, representing 16.5
percent of the country's Gross Domestic
Product. Net of debt servicing and Internal
Revenue Allotment, the 2012 budget is higher by
20.8 percent over the equivalent portion of the
20 II national budget.
On October II, 20 II, the House of Repre-
sentatives passed, without major amendments,
the President's 2012 national budget as con-
tained in House Bill No. 5023, or the General
Appropriations Bill.
As chairman of the Committee on Finance,
it is my humble submission that the President's
2012 national budget deserves our full support.
We therefore seek its immediate enactment.
Economic wi"ds of change
Two months ago, OUf nation's economic
managers, the Development Budget Coord ina-
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534
tion Committee (DBCC), laid down the macro-
econom ic assumptions that gave flesh to our
national budget for Fiscal Year 2012.
The economic indicators presented were
alarming. For the first semester of 20 II, our
economy grew by a lackluster 4.0% compared to
a robust 8.7% growth in the same period last
year. In particular, our second quatter growth
was 3.4% which, according to the NSCB, is less
than half of the 8.9% growth in the same quarter
of last year. The same was true for the first
quarter of this year, when our economy grew by
only 4.6%, barely half of our 8.4% GOP growth
rate last year.
And what were the contributory factors to
our weak economic performance this year
compared to last year?
External factors - the confluence of world
events beyond our control - all put undue
pressure on our domestic economy_ In particular,
the domestic economy is now reeling under the
adverse effects of the European debt crisis,
political unrests in the Middle East and North
Africa region, the natural disasters in Japan, and
the ensuing weak global economy. We see lower
growth for the U.S. economy engendered by its
fiscal problems and Standard & Poor's down-
grade of its credit rating to AA+ from the
previous Triple A. Added to that is the fiscal
underspending of the government which, as
admitted by our economic managers themselves,
unfortunately dragged down our economic
growth for the first semester of 20 I I.
To give the DBCC time to assess the impact
on our domestic economy of the dramatic global
changes around us as well as the government's
fiscal underspending, we had a third DBCC
briefing last October 12, 20 I I.
The revised GDP growth for 2011, at 4.5%-
5.5%, is now expected to be lower than the
5.0%-6.0% growth assumption that was approved
by the DBeC in July 2011. This is attributed to
the weaker than expected performance of our
economy in the first half of 20 II. To bolster
a'!tiyity, _ .!.!R. J?rJv.at_e_ __
confidence, and counter the adverse effects of
fiscal underspending, Pres. Noynoy Aquino
launched a P72 billion Disbursement Accelera-
tion Program consisting of projects with
multiplier effects on the economy.
No changes were made by the DBCC in
the projections for inflation, foreign exchange
rates, and Dubai crude oil for this year and
the coming year. However, the assumptions
for the domestic and foreign interest rates,
imports and exports growth for 20 I I and 2012
were lowered on account of the weak external
environment.
UResults-Focused Budget"
Dubbed as a "Results-Focused Budget," the
2012 national budget reflects the five priorities of
the Aquino Government's "Social Contract with
the Filipino People" as defined in Executive
Order No. 43, dated May 13,2011. These
priorities are:
A. Governance that is transparent, accountable
and participatory.
B. Empowenment of the poor and vulnerable,
and poverty reduction.
C. Economic growth that is sustainable,
inclusive and rapid.
D. Peace that is lasting and just, and
strengthening the rule of law.
E Integrity of the environment and climate
change adaptation and mitigation.
How does the 2012 budget support these
five pillars of the Aquino administration?
A. Transparent, accountable
and participatory governance
The Aquino administration defines good
governance as one that thrives in Daylight.
Thus, consistent with the principle, "Daylight in
Governance," several provisions were adopted
to foster transparency, accountability and
participation in the budget.
First, lump-sum funds were fleshed out, with
the allocation directed and released to the
smallest implementing units. Consistent with this
principle, the Committee has proposed that the
operating budget of the Bureau of Fire Protec-
tion's district, city and municipal fire stations,
based on the number of firemen, equipment
maintained, etc., shall be distributed within five
days from receipt of such allocation by the
Bureau's regional offices. Similarly, the MOOE of
the PNP's Support Units shall be distributed to
the said operating units based on established
crieri.!. - Rec-all that- h.lmp-;u;':' ----- -- - .
encouraged political intervention and allowed
anomalies in the use of public funds--such as
the fertilizer fund scam-to flourish.
Second, the generation and use, or abuse, of
"savings," which made possible anomalous
practices such as "conversions" and the
"pabaon" systems in the AFP, are sought to be
checked. Under this budget, Personal Services
were all funded based only on filled positions to
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TUESDAY, NOVEMllER 15,2011
prevent abuse in the use of savings from unfilled
positions, Thus, P23A billion was added to the
Miscellaneous Personnel Benefits Fund or
MPBF to cover the unfilled positions in the
DlLG, DepEd, DOH, DND, SUCs, TESDA, AFP,
PNP and the Constitutional Offices, with their
release subject to the submission of appropriate
documentary requirements.
As expected, the use of the M B PF to cover
the budget for the over 67,132 unfilled positions
in the bureaucracy has generated strong
objections, particularly from the Judiciary and
the other Constitutional Offices which asserted
their constitutionally-guaranteed fiscal auto-
nomy, To put this issue in context, the Judiciary
generates over PI. 985 billion annually in
"savings" for over 5,539 unfilled positions; the
eOA generates over Pl.8 billion in "savings"
from 6,482 unfilled positions; the Comelec,
PI623 million from 547 unfilled positions; the
Civil Service Commission, PI22 million from 269
vacancies; and the Ombudsman, P567,7 million
frolll 1,062 vacancies, Under the principle of
tiscal autonomy, these funds are automatically
released to these constitutional agencies and
can be realigned by the heads of these bodies
for purposes other than payment of salaries,
The House of Representatives cut the MBPF
by P5,025 billion allocated to the unfilled and
new positions in the constitutional agencies and
added the corresponding amounts to the budgets
of these offices, Thus, the budget of Congress
was increased by P28L7 million, The General
Appropriations Bill returned P5,025 billion
representing the funding for new and unfilled
positions from the MBPF to the Judiciary which
was increased by P2,039 billion; to the COA
whose budget was increased by P 1.851 billion;
to the Come lee whose budget was increased by
162.3 million; to the Civil Service Commission by
PI22,8 million; to the Ombudsman whose budget
was increased by P567,7 million; and to Congress
whose budget was retained to P28L7 million,
Moreover, the HOllse of Representatives
included a Special Provision, which reads as
1"lIows:
"Funding Requirements For The
Filling Of U ~ f i l l e d Positions, The
amount appropriated under [PI AlP]
shall be used exclusively to fund the
personal services requirements in filling
unfilled positions: PrOVided, That any
unutilized funds at the end of the liscal
year shall revert back to the National
Treasury in accordance with Section 28,
Chapter 4, Book VI of E,O, No. 292, S,
1987, in relation to Section 60 of the
General Provisions of this Act: Prov-
ided, further, That the [ state agency]
shall submit to the Office of the
President and Congress a report on the
utilization offunds on a quarterly basis,
Your Committee adopted the House version
with a slight amendment that would authorize the
use of savings from unfilled positions in the
Judiciary and other Constitutional Offices for
the construction of the Manila Hall of Justice
and the maintenance of other halls of justice
in the country, and the buildings housing the
Sandiganbayan, the Court of Tax Appeals, the
Court of Appeals, the Civil Service Commission,
the Commission on Audit, the Commission on
Elections, and the Ombudsman,
On the matter of the ARMM or the
Autonomous Region of Muslim Mindanao, your
Committee is alarmed at the corruption committed
with impunity in the regional government of the
ARMM, For example, in COA's Special Audit
Report No, 2010-05 for ARMM-DPWH, payments
to suppliers and contractors amounting to PI. 123
billion were considered spurious. In another
instance, deficiencies amounting to P363A million
were discovered in the implementation of
projects worth P422,7 million, In other words, out
of projects worth P422.7 million, about 85% of
this amount was pocketed and went to
corruption, These and many more findings of the
extent of corruption in the regional government
of the ARMM compelled your Committee to:
(1) provide that all disbursements be subject to
pre-audit by COA in view of inadequate internal
control; and (2) cut P96,943 million and P4 million
in discretionary expenses in the Office of the
governor and vice governor, respectively.
Likewise, we cut P37,532 million for
feasibility studies in the budget of the Southern
Philippines Development Authority, or SPDA,
which has totally failed in its mandate as an
economic office for Mindanao notwithstanding
its existence for several years.
On the use of Confidential and Intelligence
Funds, your Committee has proposed an
amendment that will require all agencies,
including GOCCs with such allocation, to submit
to the President, the Senate and the House of
Representatives a quarterly report on the use of
such funds, We oppose the House amendment
which would effectively allow LGUs to allocate
funds for confidential and intelligence activities,
Finally, to instill fiscal discipline in the
operation of GOCCs, your Committee allocated
535
536
PIOO million as the initial operating expenses of
the Governance Commission for GOCCs, or GCG,
created under the GOCC Governance Act ono I I.
B. Empowerment qf the poor and the
vulnerahle, and poverty reducaon
The 2012 budget is again decidedly biased
for the poor.
For one, the Social Services sector conti-
nues to receive the lion's share of 31.7% of the
budget, equivalent to P575.8 billion, an increase
of 10.4% over the current P521.4 billion.
The centerpiece program of this Administra-
tion's poverty reduction agenda ~ the Panlawid
Pami/yang Pilipino Program (4Ps), or the
Conditional Cash Transfer Program ~ is being
expanded to benefit three million households
by January 2012, with a proposed budget of
P39 billion. This represents an increase of
700,000 households Irom the current 2.3 million
beneficiaries. Your Committee recommends that
this Chamber support this program, given the
inroads that had been accomplished this year.
It is worthy to note that there will also be an
increase in the use of the National Household
Targeting System (NHTS), a tool for government
to locate and help the truly poor. Allow me to
mention also, at this point, your Committee's
amendment of the Special Provision on the
Conditional Cash Transfer of the DSWD, which
effectively transferred P800 million in adminis-
trative cost to Cash Grants to benefit 61,538
additional indigents families.
In support of this Administration's poverty
reduction program, your Committee proposed
the amendment of the special provision that
requires an amendment of the Phil Health Charter
as a condition before 5.2 million of the poorest
households, identified under the National
Household Targeting System, can be enrolled in
the National Health Insurance Program, This
Chamber is presently debating on the bill
proposed by Sen. Pia Cayetano which will amend
the charter of the Phil Health. The national
expenditure program would have imposed as a
condition the passage of this amendment before
an additional P8 billion can be released. By delet-
ing such condition, this amendment proposed by
your Committee will authorize the release,
without the need of amending the Phil Health
Charter, of P 12 bi I I ion from the national budget
to pay for the premiums of 5.2 million indigent
households at P2,400 per household per annum,
which is presently co-financed by local govern-
ment units. In view of the substantial increase,
your Committee proposed that the administrative
cost should not excced 5% of the premium
TUESDAY, NOVEMBER 15.2011
contribution. Further, all government health care
providers shall be automatically considered as
Phil Health-accredited effective April 1,2012, in
view of the absence of PhilHealth-accredited
public health institutions in a number of prov-
inces, depriving covered PhilHealth members of
medical care.
Since the appropriation of PI2 billion will
now allow the enrollment of the 5.2 million
poorest households, we now challenge LGUs to
work at subsidizing the second to the lowest
quintile of our population based on the National
Household Targeting System.
As part of the poverty alleviation program,
of the P1.5 billion allocation in the DILG budget
for first- and second-level water projects in
waterless municipalities, your Committee proposed
to transfer P750 million to the LWUA for third-
level potable water projects.
The Lower House realigned PI61 million in
the DepEd to add P300 to each public school
teacher's chalk allowance. Your Committee
supports this amendment.
C. Economic growlh thai is rapid,
inclusive and sustainable
To support a rapid, inclusive and sustained
economic growth, the proposed national budget
invested in economic services that support
drivers of growth, such as the significant
increase in the spending for infrastructure
services for irrigation systems and fann-to-
market roads that will spur agribusiness and the
roads to tourism destination. To support this
agenda, the economic sector will receive P438.9
billion, or 24.2% of the 20 12 national budget.
This is 21.3% higher than the sector's 20 II
allocation, and has the second biggest share of
the 2012 national budget. This year's expenditure
program calls for a larger infrastructure budget of
P 182.2 billion, or 25.7% higher than this year.
This will include funding for public-private
partnerships amounting to P20.6 billion.
To sustain the national projected disburse-
ments ofP1.855 trillion in 2012, revenues must be
increased by 11.1% to PJ.569 trillion from its
current year's target of P 1.41 I trill ion.
Next year's national budget is designed to
narrow our fiscal deficit to P286 billion or 2.6%
of our GDP in 2012. It remains on track with this
government's medium-term goal to achieve a
fiscal deficit of 2% of GDP by 2013.
As part of fiscal consolidation, the debt
burden on the national budget has been reduced
by three percentage points, from 22.6% or P372
billion in 2011, to 19.6%, or P356. I billion in 2012.
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TUESDAY. NOVEMBER 15,2011
Your Committee supports the Aquino
administration's program of achieving self-
sufficiency in rice by 2013. We believe this is a
little ambitious but we nevertheless Sllpport the
same. As Shimon Peres said when we had the
opportunity to sit with him, "The difficulty in
agriculture is that God is a joint venture pattncr."
Nevertheless, your Committee recommends that
this Chamber restore the P811 million in irrigation
projects which was cut and deleted by the
House of Representatives under the budget of
the Department of Agriculture.
D. A lust and lasting peace,
and the rule of law
President Aquino, in his budget message,
recognized that the state of our country's
national security, justice and peace poses a big
challenge to our economic and social develop-
ment. Thus, the budget allocates about P 196,8
billion or about 8.1 % more than the current appro-
priation, to support the government's etTorts in
attaining peace and promoting the rule of law.
As a strategy to end the long standing
conflict with the various rebel groups, the budget
provides for a PAMANA program, an inter-
agency project to build peaceful communities in
1,921 conflict-affected barangays in 171 munici-
palities in 34 provinces. The Payapa at Masa-
ganang Pamayanan, or PAMANA program, has
a budget of PI.9 billion, which the Committee
supports, with the amendment that it will be
identified as a single fund for better monitoring,
as proposed by the Senate President, to be
implemented by the DILG, the DSWD, and the
DAR, We deleted a provision for administrative
cost as the program will be implemented by the
existing bureaucracy in the amount of P138.3
million. The Office of the Presidential Adviser on
the Peace Process will monitor the implementa-
tion of the PAMANA program.
To protect our national territory and
boundaries, P107.8 billion is allocated to the
Department of National Defense (DND). Of
serious concern to the Committee is the fiscal
burden on the DND/AFP budget as a result of
retirement benefits provided under existing
laws. Under the present budget, out of P107.8
billion, P34 billion, or a full 32% of the DND
budget, is provided for the pension of veterans,
Compare this to the grossly inadequate P5
billion for AFP modernization program. And,
un less reforms are implemented, we have to
provide in 2016 a bUdget for our veterans bigger
than the regular salary of our soldiers in the
active service. We call on the Aquino
administration to address this problem,
On the matter of the Intelligence Funds, the
Lower House transferred PI 00 million from the
President's Intelligence Funds to the AFP. The
Committee supports this amendment.
The DOl has a budget of P9.7 billion for
2012, which is 14.8% higher than this year's. The
House of Representatives increased the DOl
budget by P200 million for the lUSIP program
and PIOO million forthe DOl building. The Com-
mittee does not endorse the House amendments,
and fUlther recommends a cut of P33 million
budgeted for the NJiS program, which is already
being undertaken by the NBI, and the creation of
an Office for Cybercrime, which has no enabling
statute. However, the Committee recommends
that the DOl prosecutors be allowed the use of
income derived from filing fees paid by the
parties in cases pending in the DOl.
E Environment and climate change
mitigation and adaptation
As President Aquino strongly emphasized
in his budget message, the 2012 budget must
ensure the integrity of our environment, for the
pOOl' are the worst victims of climate change.
Thus, the budget funds critical climate change
adaptation and mitigation activities with P36.2
billion, or 18,2% more than the 20 II allocation.
The Committee fully supports this budgetary
request of the President.
After conducting 45 or so budget hearings
and technical working group meetings over a
two-month period, the Committee on Finance is
fully convinced that this budget deserves the
support of this Chamber.
As proposed by the Committee, Programmed
Appropriations amount to PI,092,371,425,000 while
Unprogrammed Funds total P152,821 ,845,000.
All in all, the Total New Appropriations
amountto PI ,245, 193,270,000, the same level as
the House-approved General Appropriations bill.
When to say NO
The great communicator, former president
of the Ul1ited States, Ronald Reagan, once said,
"Balancing your budget is like protecting your
virtue. You have to learn when to say NO. "
With this proposed national budget, we
say "No" to budgeting methods that do not
foster transparency and accountability.
We say "No" to debilitating poverty that
slowly saps the life out of the truly poor and
vulnerable through better targeting systems.
We say "No" to unbridled graft and
corruption that consigns our people to perpetual
backwardness and underdevelopment.
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538
And we say "Yes!"
"Yes" to sustained and equitable economic
growth.
"Yes" to a budget that would empower
every Juan to eventually reap its benefits.
"Yes" to a budget that is truly biased for the
poor.
COSPONSORSHIP SPEECH
OF SENATOR ANGARA
At the onset, Senator Angara stated that his
speech was in support of the sponsorship speech of
Senator Drilon and would focus on the budgets of the
Department of Education, the Commission on Higher
Education, the State Universities and Colleges, the
Department of Science and Technology, the cultural
institutions, the Depart-ment of Trade and Industry,
and the housing agencies.
Following is the fuff lext (if his speech:
In today's knowledge-based and inforrnation-
driven age, we face multiple challenges
unthinkable in previous generations. Not only
are we overwhelmed by the dizzying pace of
technological innovation, we are also challenged
in raising the living standards of our people
through quality jobs and access to our far-flung
islands, both physically and digitally.
We need to boost our competitiveness
through education, technology, infrastructure
and smart governance. These issues are already
rocking the status quo in other countries and
even overthrowing governments abroad.
The Arab Spring is remaking the Arab
world, speedily gathering strength is the Occupy
Movement, overtaking Wall Street as well as main
streets in many communities in the developed
world, protesting against massive unemployment
and unrestrained corporate greed. This radical
change is one compelling reason why govern-
ment-as-usual will be harmful to our health and
prosperity and even more hurtful to our sense of
national dignity.
I rise to sponsor the budgets of the Depart-
ment of Education, the Commission on Higher
Education, the State Universities and Colleges,
the Department of Science and Technology, the
cultural institutions, the Department of Trade
and Industry, and the housing agencies.
Education, science and technology, culture
and the arts, trade and industry, shelter - these
are the core elements that define who we are and
what we can become. Let me briefly discuss each
of them.
III vesting in Education
Education is a precondition to any form of
development, whether social, economic, and so
on. This becomes even more apparent when we
evaluate our present situation.
In the latest Global Competitiveness Report
of the World Economic Forum, we only ranked
110'" out of 183 countries in terms of the quality
of our primary education. Our ranking in math
and science is even poorer - I 15
1h
If we allow
this situation to persist, we can only expect the
quality of our educational system to decline and
even jeopardize our 61" place in the world
ranking.
Yet, the country's public expenditure on
education amounts to only 2.6% of our Gross
Domestic Product and about 15% of the total
government budget, a figure lower than any of
the other Southeast Asian countries.
Basic Education: Gearing for the Future
During the DepEd budget hearings,
Secretary Luistro vowed to work fast to fill the
shortages in our physical needs.
The shortage in classroom today is about
66,000, and Secretary Luistro promised that by
the end of this year, the shortage will be reduced
to about 34,000, and the whole shortage will be
erased in 2012.
The DepEd also pledged to work on
overcoming other physical shortages like desks,
books, and water and sanitation facilities. That
is how it should be so that our teachers and
educators can concentrate on the more important
issues of curriculum change, effective teaching
methods, retraining of teachers in math, science
and 1)10st importantly in communication arts -
in language - and the use of educational
technologies.
We hope that future budget discussions will
focus on these issues rather than spending
agonizing time, year after year, at the appalling
school supply shortfalls.
There are two policy issues that still beg
some answers. The first is the need for connect-
ivity in our school system. The internet is a power-
ful medium for learning, yet our connectivity
penetration is very shallow, and that ought
to be a priority for 2012, and so we allotted
quite a substantial amount of almost P2 billion
for computerization. Second, we must scale up
#r
the school feeding program of the DepEd as well
as the DSWD because there are two million
children who go to school hungry every day.
Higher Education: Innovation Centers
In this fast-changing world. we need to
build our country's capacity to innovate through
research and development. Our spending for
research and development is a miniscule 0.12%,
about 11% of 1% as against the UNESCO's
prescription that we must spend at least I % of
our Gross Domestic Product on research and
development, the lowest in Southeast Asia,
we are one of the lowest, ahead only of Timor
Leste and Cambodia, so we have a lot of
catching up to do.
In the 2012 budget, however, with the
support of the chairman and the support of
DOST, CHED, DA, as well as the SUCs, we have
put together and incorporated a model of
innovation which we call innovation clusters.
Let me explain what innovation clusters will
be. For the first time, we will have an innovation
drive producing practical technologies that are
usable by the government, industry, and even
universities. This will be a consortium of the
government, the university, as well as the
industry - a tripartite joint venture in research
and development.
What areas wi II they concentrate or focus
on? We are suggesting areas like cloud
computing, which is the next level to our laptops,
storing all our fi les, among others. We already
have people in this country who can spread the
information on cloud computing. Another area to
focus on would be algae. It is a potential source
of animal feed as well as energy for ethanol. It is
perfect for us since we have vast areas that are
unutilized. The university, on the other hand, will
get a chance to demonstrate what they can do if
they have the funding whieh they have been
complaining about. And the government, on the
other hand, is simply willing to contribute their
funding to the enterprise.
Let me then enumerate the following areas
of innovation clusters:
1. Algae research cluster;
2. Cloud computing and sqftware as a service
cluster based in Cebu where there is already
a private industry set-up that universities like
the San Carlos University, the Cebu Institute
of Technology and the UP can do research;
3. Smart agriculture and preCision farming.
In this age of climate change and shrinking
land and water supply, we need to do
preCISIOn farming which utilizes satellite
monitoring and imaging to pinpoint the
productivity of our crops, the salinity of
our soil, the onset of pests, among others.
The technology is already available. An
outstanding Filipino scientist in Washington,
a NASA scientist, is already doing this and
helping the Mariano Marcos University in
Batac, Bocos Norte, training the faculty of
that university in precision farming and using
satellite data to help farmers become more
productive.
What else? We have natural plants that can
be source of medicine. We are not taking fuB
advantage of that, only foreign pharmaceutical
companies; and yet some of the best bio-tech-
nologists, biochemists in our country can help
us put together a natural medicine program and
a wellness program for Filipinos;
4. Responsible mining technologies. There are
technologies now, especially in Australia,
that do not use mercury or lead in the mining
industry. They are using water-based
products in mining that are environmentally
friendly.
5. Disaster Science and Management. We are
one of the countries most vulnerable to
climate change. In fact, we are No. lOin the
world. And that is why we need to set up a
research facility as well as trained people to
help us do better forecasting and prepare
our people how to cope with disaster, and
how to mitigate when disaster strikes. These
are six areas where Filipinos can excel. But
except for the lack of focus and funding, we
are unable to utilize the talents and the
natural supply of products in these areas.
The DOST, CHED, Department of Agri-
culture, and the E-Government Fund have all
fuBy cooperated to concretize these innova-
tion clusters by providing government's
contribution to the consortium.
Cultural institutions
In the area of intercultural institutions, we
have provided some modest funding to the National
Historical Commission for the first-decade
celebration of the Filipino-Spanish Friendship
Day, and to the National Library for digitization
and preservation of priceless papers and docu-
ments that are just bundled up in the National
Library. We are providing as well some research
money to the SUCs of Cordillera so that they can
continue to do their preservation and conserva-
tion work on their cultural heritage, on their bio-
diversity as well as to adapt to climate change.
539
540
Sheller allli h"u"illg
Shelter and housing, next to public works or
even parallel to public works, are the most
prolific creators of jobs, These are stimulative
activities that create the work and indirect jobs
in places where they are needed most, in rural
and poor communities, According to the
Housing and Urban Development Coordinating
Council, every 100 jobs generated in the housing
sector is accompan ied by another 18 jobs
created in the auxiliary industries supportive of
housing, The cost of creating one job in the
housing industry is so modest. It requires only
P6,500 to create one job in the housing industry,
And yet the multiplier effect of house
construction is such that for every peso invested
in housing construction, an equivalent of P2 is
created for the economy.
The magnitude of our housing backlog
is so staggering that we need some P361 billion
until 2016 to be able to close this gap, I do not
think the government alone can supply the
money needed to close this gap, We need
the active and bigger support of the private
sector.
Trade alld illllu,'try
We just came back from the APEC meeting
in Honolulu, There in Honolulu, a Trans-Pacific
Partnership is being created and is sponsored
by no less than the United States, There are
nine countries aspiring to join this Trans-Pacific
group: Australia, Brunei, Chile, Malaysia, New
Zealand, Peru, Singapore and Vietnam, apart
from the United States,
Why is the Philippines not applying as a
member? Well, if we want to expand our trade,
and we want to create more jobs here internally,
we better think seriously about joining this, I am
sure our economic ministers are studying this
prospect but if we are late, we will be again late
catching the bus, We encourage the Department
of Trade and Industry to pursue this new
grouping in the Pacific,
In the 16'" and 17'" centuries when Manila
was the center of global trade through the
Manila-Acapulco Galleon Trade, we were at the
center of global trade and we started the global-
ization that we are now witnessing, The Filipinos
were pioneers. Now we are seeing a return to the
Pacific, Even President Obama confessed that
the Pacific is the center of the recovery of the
world because the U,S" Europe and Japan are
down on their knees economically, But we
cannot just simply ride through the tide; we have
to do our own homework and be an active,
vigorous player rather than a bystander. I hope
that our economic ministers, headed by Secretary
Abad and Secretary Paderanga, are watching
this development very keenly because we may
be left behind as we are already being left behind
by our neighbors,
The budget is biased towards helping the
micro, small- and medium-scale firms and
enterprises-not the San Miguels or the PLOTs
of this country-because they are the ones
creating the jobs in this country and they are
mostly in the countryside, So, they really need
total support of our government.
Cone/usion
We are witnessing the economic turbulence
engulfing European Union, Japan and the United
States. These economic downturns are high-
I ighting how a world that has become prosper-
ous, by and large, is now ironically becoming
more inequitable - stoking widespread unrest
and discontent. We have seen that in the Arab
Spring and how it has remade the face of the
M idd Ie East. We are seeing it again in the
Occupy Movement of young people who have
absolutely no chance at landing a job and who
are now complaining - and complaining rightly
- that this is an unjust, inequitable system that
ought to be corrected,
Let us not wait for that Occupy Movement
to hit our shores, I remember the Quarter Storm
that hit UP in the 1960s, This Occupy Movement
was initiated by a small group of students in
France which spread like wildfire, 1 think this
Occupy Movement is such a phenomenon that
people and business are asked to monitor and
watch because this is a protest of young people
against an inequitable system and the corporate
greed and the growing inequity between the few
who are very rich and the millions who are very
poor.
The Philippines has a unique opportunity
to escape this economic turbulence abroad if
we do the right thing and at the right time,
I think the right time is the formula, We have got
to do it at the right time, not yesterday or two
weeks ago, but today,
Unless we do that, I am afraid we will be
swept away by the tsunami pace of change
taking place now all over the world,
This national budget is our foremost
weapon to do equity and justice, create jobs
and raise the living standards of our people if
we spend right, if we spend on time, and if we
push everyone to spend it honestly,
COSPONSORSHIP OF SENATOR RECTO
Senator Recto, likewise vice chairman of the
Committee on Finance, delivered the following speech:
Before I dwell on some specifics of next
year's budget, let me take a great leap backward
and discuss some details of the national budget
a 100 years ago.
Although a century separates 1912 and
2012, the issues they contronted then are the
same ones we are confronting now.
The national narrative remains unaltered,
even in the field of expenditures, that while
today's budget sports a lot of zeros, the
purposes for which they were appropriated then
still exist today.
In 1912, total expenditures reached P30.2
million, which is what our government intends to
spend in eight minutes next year.
One hundred years ago, the education
sector can operate on a P3.6 million annual
outlay, an amount which can barely build six
classrooms today but sufficient then to run 3,396
schools, pay the salary of a teaching corps of
8,360, and construct 135 schoolhouses.
One hundred years ago, the public works
budget was P4.39 million, which already included
the paving of 291 kilometers of road, the same
amount we spend today for the "reb locking" of
a postage-stamp-size span in EDSA.
Total capital outlays in 1912 was P8.35
million, an amount which would send a congress-
man into tantrums today if that is what is given
him as first tranche of his budgetary eannarks.
While the ledger of government disburse-
ments in 1912 features miniscule amounts by
today's standard, the uses for which they were
released were the same as today's: Solving the
Mora problem, eradicating mosquitoes, ending
the classroom shortage, promoting rice indepen-
dence, plugging tax leakages, among others.
I f the 2012 budget has allocation for interest
payments, so did its 1912 ancestor, but a measly
P 1.425 million.
The continuing past is also evident in the
way the budget was acted by the legislature. If
we think that reenacted budgets are a latter-day
phenomenon, the 1912 budget was also a
reenacted onc due to the failure of the Philippine
Assembly to pass one for that year.
If we think that 21"' century annual budgets
suffer fwm devaluation on account of popula-
tion increase and inflation, the 1912 budget was
smaller too by PI 0,000 in real terms over the
1911 level,
But on one score, the 1912 budget was
superior to its 2012 descendant, and that it was
premised on a surplus, as revenues realized were
P31.2 million which was P I million higher than
expenditures.
While the Bureau of Customs today plays
second fiddle to the BIR, a hundred years ago
it was responsible for 58% of total collections
as compared to Bureau of Internal Revenue's
equity of 30%. and in that age of the abacus, it
cost P3.06 to collect PlOD worth of taxes.
The composition, however, of some aspects
of the revenue effort, a century ago, hews to
contemporary fiscal contours. For example,
personal vices financed the virtues of American-
style governance. Wines, liquors, cigars and
cigarettes combined for almost P9 million of total
revenue take ofP31.2 million. Sin taxes accounted
for almost 30 centavos for every peso that was
remitted to the public coffers. In contrast, banks
chipped in less than one percent, which would
shed light on the DNA of this sector's legendary
parsimony.
I intentionally made a detour to this memory
lane to drive home one point that is constant in
appropriating funds. Whatever the era, whatever
the form of government, budgeting is bound by
this set of rules: That appropriation is a mere
downstream activity of revenue collection; that it
is taxation which makes appropriation possible;
that expenses are always pegged on income; that
the privilege to spend springs from the duty to
collect taxes.
Yes, the budget presented to us today is a
catalogue of expenditures. But because too often
we are mesmerized by big numbers, we seem to
overlook the important fine print - that every
peso that will be spent will be collected from the
people. Though the budget contains the price
tag of projects, it does not state who the payor
is, which is the taxpayer, because whatever peso
we will put in his pocket we actually pick from
his pocket first.
And yet, the legislative tradition is that
when it comes to the appropriations bill, we only
sponsor and highlight the expenditures. We
seldom sponsor the revenues it would entail.
It could probably be because of a political
culture which has led our people to demand pork
on their plate without giving a hoot on how the
pigs are raised and butchered.
541
542
So, today, let me break from tradition and
instead of delving on the spending side, walk
you instead through the revenue underpinning
of this budget, because the projects, activities,
programs therein can only rise on the scaffolding
of taxation.
Doing so would likewise give us a bctter
appreciation of the revenue-appropriation
dialectics, so when the temptation to finance
new spending arises, we will be reminded that
budgetary intentions are always tempered by
revenue limitations.
Before I proceed, let me acknowledge the
Finance Team-the Customs and BIR people
who are here. They are the people responsible
for raising the billions in this budget and for
translating our campaign rhetoric into reality.
Because in the division of labor in appro-
priating money, while it is the Budget people who
get the credit, it is they who must raise the cash.
And how much must they raise next year?
PI.816 trillion a year or about P4.98 billion pesos
a day lang naman. If government were a taxi,
they are the designated payor of the P207.5
million-meter charge per hour.
Of the P 1.1816 trillion, the revenue portion is
PI.568 trillion. Yung balance na P286 billion ang
deficit, ibig saMhin uutangm.
Of this financing requirement) the Bureau
of Internal Revenue has been assigned a goal
of PI.066 trillion and the Bureau of Customs
P365.1 billion. Non-tax revenues such as fees
and charges (P63 billion) and Treasury income
(P69 billion) will put in an additional PI38 billion.
Thus, on a daily basis, Kim's army at the
BIR must raise 1'2.92 billion while Ruffy's fiscal
stevedores must haul in 1'1 billion.
And that is a hard job to do in a political
culture that sees spending taxes as a virtue, but
collecting them as a sin; which treats their
evasion as a duty, but their imposition a crime.
The fact is, we have begun to treat taxes as
text promos: we want to pay little for unlimited
services.
And that thinking has even infected many
of those in government whose concept of good
governance is to grant as many tax breaks to as
many people. One example of this is the grant
of P44.8 billion of incentives to BOI and PEZA
of which an estimated P26 billion are redundant.
The DOF secretary has vowed to raise an
additional PI71 billion next year from BIR and
BOC alone. BIR's 2012 target is PI26 billion
bigger than this year's level while BOC's hike in
collection quota is P45 billion more.
Of the Pl71 billion projected increase, PI28
billion will be attributed to economic growth - so
the best way to raise taxes is to grow the
economy-while about P40.5 billion will accrue
from "tax administration measures",
The latter includes the drive to make honest
men out oftaxmen through various transparency,
integrity and anti-corruption measures.
This is good because the law only says we
must pay taxes. There is nothing in the Tax
Code that says that we must leave a tip or pay
extra for good service. Good performance at
work, after all, is not V AT-able.
If this is the tack to be taken, then our
taxmen might consider looking into the ratio of
tax burden to sales of major industries, which is
below the accepted curve.
For example, the petroleum industry pays a
tax - V AT, percentage, excise, among others,
included - of II :8% out of its gross sales, which
is below the 12% VA T which is the biggest fuel
additive today.
The power sector pays a total tax of 7.34%,
despite the fact that our monthly electricity bills
are peppered with taxes, fees and charges.
The car industry pays a gross tax of 8.83%,
yet a V AT is automatically tucked in all vehicle
sticker prices, not to mention excise taxes.
Telecoms which posted sales of P237 billion
last year, had a tax burden of 12%, which is a
whisker above the VAT benchmark.
Instead of trying to liposuction more taxes
out of plastic surgeons, the BIR may wish to
focus on these industries considering that when
it comes to the oil sector it has to deal with 2 I
returns only, 20 in telecoms, and 58 in power.
Each of these corporations has become
revenue agents of the government. Tax paid by
the consumer on every phone call made, every
liter of gas bought, every gallon of water flushed
down the toilet are paid to them and not to the
BIR. Businesses are supposed to breath through
tax loopholes. But let it be through their own tax
obligations and not through tax payments simply
coursed through them.
What we see in this budget are columns
of expenditures but if we view them from the
prism of taxes, we might fully grasp the real
value of each, appreciate the sacrifices made by
TUESD!\ y, NOVEMBER 15.2011
taxpayers, and embrace the need to properly
spend them.
For example, the projected individual income
tax payments in 2012 ofP222 billion will only be
enough to pay the salaries of DepEd employees
and the benefits of the govemment employees
who will retire next year.
In fact, if we combine individual income tax
payments with the projected corporate income
tax payments of P364 billion, the sum is still P7
bi Ilion short of the total PS requirement of P593
billion for 2012.
Our payroll burden now runs at PI.56 billion
a day.
BIR's forecast for excise tax collection of
P56 billion from both alcohol and tobacco will
just be used to pay for the pension of soldiers,
policemen and other uniformed personnel which
is pegged at about P54.5 billion next year.
Taxes frol11 mining activities in the amount
of PI.8 billion will just be used to cover
representation expenses of PI. 73 bill ion.
Taxes from automobile sales of about P2.9
billion is what the DOTC will spend in about one
month and three days in 2012.
If we will spend all BIR collections from
V A T in 2012 - P226 bi Ilion - in education it can
run public elementary and high schools but only
half of the state colleges.
All import duties to be paid in 2012 would
only be equivalent to 10 months budget of the
DPWH that year.
All excise tax collections of the BOC - from
gasoline, liquor, tobacco, vehicles in 2012 - can
only finance of DSWD
operations.
As I have said every expenditure carries a
hidden fiscal cost. If our people are informed of
the taxes it wou Id take to finance mundane
public projects and services, it may lessen their
agitation for more of these and demolish the
myth that the Senate is like a public mint that can
print money or a souped up Wowowee show of
24 genies who can give them all they want.
The fact is that it would require the excise
tax payments on 1,362,]97 bottles of locally
distilled rum to finance the concreting of a one-
kilometer of road; and it would require the excise
tax on almost two million sticks of Winston ciga-
rettes to fund the construction of one classroom.
To buy a police car, government must
collect the excise lax on the full tank of gas of
45,977 motorcycles.
And to pay for the basic salary of one
teacher for one year alone, the tax on 543,000
packs of noodles would have to be collected.
And who will pay for all of these? Not
Malacailang, neither the Senate, nor the House,
but the people themselves, those whom we
represent. Sila ang boss natin.
In closing, let me remind our friends from the
Executive branch who are here today that the
budget is meant to be executed because monies
collected from the people for the people are
meant to be spent.
If the budget is the book of tax rebates then
let us allow our people to enjoy the dividends of
their tax payments. Tax paid promptly must be
spent promptly.
I understand that holes in the spending
pipelines must be plugged first before the taps
are fully opened. I am, however, sure that after
500 days, the patching up has been finished.
Because if funds would still flow in trickles,
then I would be tempted to join those who are
clamoring that the finance managers be
canonized en masse as apostles of austerity.
Hopefully, the initial disturbing drift toward
a kind of parsimony that harms the public more
than it helps them will now stop. Otherwise,
some agencies may need laxatives to coax more
funds out of them.
My friends, reporting a surplus created out
of withholding services and strangling
infrastructure work can never be a fiscal virtue.
On the contrary, it is anti-progress because
funding delayed is development denied. Hindi
nangangahulugim na ang daang matuwid ay
dapat mabagal.
I thank you for bearing with this
sponsorship of mine. I do
believe that a holistic appraisal of the bill before
us entails the presentation of the other side of
the budgeting coin, which is revenue.
I urge my colleagues to pass this budget.
543
MANIFESTATION OF SENATOR SOTTO
Senator Sotto manifested that the Members have
been given a copy of the schedule of the plenary
debates on the budgets of the different departments
for th is week.
He said that for the day, the Body would take up
the following: the General Principles, the Department
,..... ,..
544
of Finance and its attached agencies, the National
Economic and Development Authority and its attached
agencies, the Joint Legislative-Executive Council, the
Department of Justice, the Presidential Communica-
tions Operations Office and the Department of
Environment and Natural Resources.
DEBATE ON GENERAL PRINCIPLES
Thereupon, the Body proceeded to the debate
on General Principles and the Chair recognized
Senator Drilon, sponsor of the measure, and Senator
Cayetano (P) for her interpellations.
INTERPELLATION
OF SENATOR CAYETANO (P)
Preliminarily, Senator Cayetano (P) commended
Senator Drilon for his thorough discussion of the
budget and also lauded Senator Angara for his eye-
opening speech on the topic of education, science
and technology; and Senator Recto for h is unconven-
tional but enlightening speech that he delivered.
She then asked Senator Drilon to give the details
regarding the P72-billion Disbursement Acceleration
Program that he mentioned in his speech.
SUSPENSION OF SESSION
Upon motion of Senator Drilon, the session was
suspended.
It was 12:18 p.m.
RESUMPTION OF SESSION
At 12:28 p.m., the session was resumed.
Upon resumption, in reply to the query of Senator
Cayetano (P), Senator Drilon stated that based on
the Disbursement Acceleration Program list, the
disbursements were as follows:
LRT I and II rehabilitation
- PI.8 billion
National Housing Authority
- PI I billion
PhilHealth subsidy for indigent families
- P1.496 billion
equity infusion to the Bangko
Sentrat ng Pilipinas
- PIO billion
Philippine Heart Center - upgrading of
physical plant and medical equipment
- P357 million
Credit Insurance Mortgage Guaranty
of the HGC - equity infusion
- P400 million
Philippine Postal Corporation-
purchase of foreclosed property,
payment of mandatory obligations
and franking privilege
- P644 mi II ion
PCMC - capital and equipment renovation
- P280 million
LCOP
- PI05 million
PEDCOR - equity infusion
- P570 million
Department of Agriculture -
irrigation, farm-to-market roads,
integrated community-based, multi-species
hatchery and farming
- P2.23 billion
Mindanao Rural Development Project - NIA
- Agno River Integrated Irrigation Project
- P2.23 billion
Department of Agrarian Reform
- P5.5 billion
Office of the Presidential Adviser
on the Peace Process - activities
for the peace process, PAMANA
- PI.8 billion
DOST

- P425 million
DOF/Bureau of Customs
- settlement of principal obligation with
POIC consistent with the CISS and SGS
- P2.8 billion
DPWH - various infrastructure
- P5.5 billion
TESDA - training program
- Pl.1 billion
ARMM - comprehensive peace
and development intervention
- PS.5 billion
DOST/MRT - purchase of additional
MRT cars
- P4.5 billion
,- r
TUESDAY, NOVEMI3ER 15,2011
LGU - SUppOll funds for various
other local projects
- P6,5 billion
GOCCs and GFls
- P26,9 billion
Senator Cayetano (P) noted that from the random
enumeration of the various projects, it would appear
that the funding was spread very holistically, She
requested a copy of the document, saying (hat she
wanted to see what projects have real mUltiplier
effects,
Moving on, Senator Cayetano (P) recalled that in
the budget last year, very little extra funding was
allotted for infrastructure because the government
apparently wanted to rely on the PPPs, However,
she noted that in 2012, the proposed budget
infrastructure allocation increased by 21 % over
last year's budget. She asked if the government was
successful with the PPPs or if the increase was an
acknowledgment that there had not been much
movement in the PPPs since public resources were
really funding the infrastructure projects,
Senator Drilon admitted that there was a dip in
infrastructure projects and unfortunately only a few
PPP projects took off, thus, the amount of 1'182.2
billion was allotted for infrastructure projects and
1'20,6 billion for PPPs in 2012,
As regards the savings of (he Department of
Health (DOH) from unfilled positions that were
created by laws establishing various hospitals but
were still being withheld by the DBM, Senator Drilon
disclosed that he had sat down with the budget and
health secretaries and it was agreed that for the
current budget, the DOH would be authorized to hire
12,500 nurses, 1,500 midwives and 125 physicians,
To the observation that the medical staff must be
supported by administrative personnel, Senator Drilon
informed the Body that the DBM had agreed that a
certain number of administrative staff would be hired
this year and next year,
Adverting to the automatic debt appropriation,
in particular with regard to fraudulent loans, Senator
Cayetano (1') suggested that the Senate look into the
existing foreign debts of the government and consider
suspending interest payments on some if there is
prima facie evidence that they were fraudulently
545
obtained or were wasteful or that charges had been
filed against individuals who were involved with
them, This, she believed, would be consistent with
the statement in the sponsorship speech that legis-
lators should say no to unbridled graft and corruption,
Senator Drilon agreed that the said loans should
be carefully examined, However, he admitted that
the Committee on Finance does not have the technical
staff to do so in detail. He gave assurance, nonetheless,
that the Committee would ask the DOF to examine
loans that were secured by the past administration,
Senator Cayetano (1') recalled that no less than
President Aquino himself had raised the same issue
when he was in the Senate, pointing out that in 2008,
the Senate put in the GAB a special provision on the
suspension of interest payments but President Arroyo
subsequently vetoed it. She signified that she might
consider proposing that the same provision be inserted
in the 20 I 2 budget. However, she requested that the
matter be discussed with the economic team, saying
she did not want the President to veto a special
provision that he supported some years ago,
Senator Drilon gave assurance that the Committee
would consider the proposal that would be discussed
with the econom ic team,
As regards the matter of self-sufficiency in rice,
Senator Cayetano (I') believed that preventing wastage _.
would not be a viable solution to the shortage in rice
but a conscious shift to the production of high-yield
crops,
Senator Cayetano (P) lamented that several of
her proposals had been denied by the DBM even
though these were consistent with the five priorities
underscored in the sponsorship speech of Senator
Drilon, For instance, she noted that the DBM rejected
a project for setting up solar lanterns in areas without
electricity even though this was in line with govern-
ment's goal to alleviate povelly, She also recalled
having appealed to the DBM to reconsider its decision
turning down a proposal to implement an IT-based
electronic health system that would enable a recipient
municipality to create a responsive, safe, streamlined
and evidence-based health delivery system, only to
be informed that the denial was due to the fact the
DBM could not fund the necessary software, She
pointed out that it would be difficult for the country
to move forward if fund limitations hinder it from
keeping pace with advancements in technology,
, f'6
546
Even as she acknowledged tliat environment
and climate change are priorities in the proposed
national expenditure program, Senator Cayetano (P)
questioned why the DBM denied her request to use
her PDAF to set up material recovery facilities
which is required under the Solid Waste Development
law. She disclosed that the DBM also rejected
another proposal for the construction of playgrounds
for children, citing various qualifications such as the
condition that these ought to be attached to a day-
care center. Moreover, she recalled that the agency
turned down her offer to use her PDAF to fund the
cinematics project of the Film Development Council
which would have helped enhance the creativity of
young film makers.
As regards the suggestion for the DBM to
review these proposals; Senator Drilon said that he
would request the DBM secretary to take a second
look at the projects that would be allowed earmarking
under the fund.
Senator Sotto informed the Body that Senators
Lacson, Legarda, Defensor Santiago and Arroyo
were also scheduled to interpellate on the general
principles of the bill.
Upon motion of Senator Sotto, the session was
suspended.
It was 12:49 p.m.
At 3: 16 p.m., the session was resumed with
Senate President Pro Tempore Ejercito Estrada
presiding.
Thereupon, the Chair recognized Senator Drilon,
sponsor of the measure, and Senator Lacson for his
interpellation.
INTERPELLATION OF SENATOR LACSON
At the outset, Senator Lacson congratulated
Senator Drilon and the two vice chairmen of the
Committee of Finance for conducting hearings even
during the recess. For his interpellation, he stated that
he would follow the lead of Senator Recto who
concentrated on the other side of the national budget
which is the budget expenditures and sources of
financing (BESF) book. Also, he observed that the
national budget is the most interesting yet most
complicated piece of legislation that he has
encountered as a lawmaker, noting that after the
Executive Department submits its budget proposal to
Congress, the House of Representatives and Senate
make it more complicated with amendments, insertions
or congressional initiatives, most of which are
inconspicuously part of some choice departments or
agencies' allocations to implement the congressmen's
or the senators' pet projects. But he surmised that
the most complicated aspect in the budget process
is in implementation as he hoped that the Department
of Budget and Management maintains its course
and continues to be in a reform mode under the new
Administration. He clarified that under the General
Principles, he wanted to focus first on the tax and
nontax revenues, the actual figures and projections of
which are source-generated and reflected in the
BESF book. He pointed out that in Section C of the
National Government Revenues documents covering
three fiscal years are found in Table C.I (Revenue
Program by Source), Table C.2 (Revenue Program
by Collecting Department or Agency by Source),
Table C.3 (Revenue Program by Collecting
Department) and Table C.4 (Nontax Revenue
Program by Collecting Department Agency by
Source). He stated that tax revenues arc the income
gained by government from taxation while nontax
revenues are collected from sources other than the
compulsory tax levies, for instance, payment for one
direct service rendered by government agencies to
the public; regulatory and investment activities; income
of the Bureau of Treasury from investment activities
particularly interest on bank holdings; gain on foreign
exchange; interest on deposits and other propriety
government ventures, including inputs from foreign
branch and income derived from privatization of
government utilities. At this juncture, he showed the
tabulation on the Revenue Program by Source from
the BESF of 2012 from which data he sourced a
consolidated overview of the national government
revenue for the period 2002 to 2012.
As regards the Taxes on Net Income, Senator
Lacson observed a stcady collection throughout the
period except in 2009 where there was a decline.
Comparing the 2002 collections ofP226 million against
the projected P647 million for 2012, which represents
an increase of only 186% over a ten-year period,
he asked whether such was the most that could be
r
expected in 2012 considering all the changes,
improvements, and developments made during the
aforesaid period. In reply, Senator Orilon assumed
that the projection for 2012 was based on historical
data as he confirmed the 180% increase from 2002
to 2012.
Senator Lacson explained that he asked the
question in the context of the revenue items on taxes
on property and taxes on domestic goods and services
which posted an increase of 394% and 306%,
respectively, for the same period. Compared to them,
he said, the taxes on net income and profits pale in
comparison. Senator Orilon explained that taxes on
net income and profit depend on how profitable the
companies are, although he surmised that there could
be some leaks in the tax collection. He said that the
OOF and the BIR were precisely taking extra efforts
in their tax collection initiatives and he expressed
hope that both agencies could be more robust in their
collection of taxes on net income and profits.
As regards taxes on the international trade and
transactions, Senator Lacson noted a reverse scenario
- tax collection went down starting 20 I 0, from
P260.9 billion in 2008 down to P220 billion in 2009
and further down to P80.89 in 20 I 0, then P79,4
bi II ion in 2011. Senator Orilon explained that
international trade and transactions are easier to
monitor, the reason the taxes thereon were projected
at a higher rate than taxes on income and profits.
Senator Lacson asked why there was a drastic
decline in the collection of taxes.
Upon motion of Senator Orilon, the session was
suspended.
If was 3:30 p.m.
Upon resumption, Senator Orilon stated that
according to the Bureau of Customs, the drop in tax
collection from 2009 to 20 I 0 was due to tariff rate
reduction, for instance, on petroleum.
Asked whether the V AT on toll fees imposed in
the current year was included in the data, Senator
547
Orilon replied in the affirmative, adding that VAT
collection on toll is not that significant as it is only
at PI.2 billion a year.
Asked what items were included in the "Other
Taxes" item, Senator Orilon enumerated motor
vehicles fees, the Bureau of Fire Protection fire code
tax, the real property tax, immigration tax, metro
flood control tax, fires charge, trouble tax and special
oil import tax.
Asked what significance the Revenue Program
by Source on Nontax Revenues has on the revenue,
program of the government vis-a-vis the tax revenue,
Senator Orilon stated that PI23 billion was projected
to be collected from nontax revenue in 2012.
As to the reason behind the drop from P138
billion in 2011 to PI23 billion in 2012 in terms of non-
tax revenues, Senator Orilon stated that it was due to
a drop in the national government's income, from
P3S.7 billion to P 17.6 billion. He also said that there
was a very high dividend collection from Government-
Owned and -Controlled Corporations (GOCCs) in the
amount of P23.99 billion while projecting only PS.5
billion for 2012. He stated that his Committee was
partly responsible for the good collection in 2011,
having collected and rearranged for the payment of
back dividends by the Central Bank amounting to
over P9 billion.
Asked why there was no definite pattern on the
nontax revenue collection of the Bureau of Treasury,
Senator Orilon explained that the rise and fall of the
income depends on the interest rate that is collected
by the Bureau of Treasury, therefore, the rates of
interest would be the determining factor.
As regards the P68.9-billion income ofthe Bureau
of Treasury as compared to the PIS.S-billion projection
of the same agency, Senator Orilon said that the
composition ofthe P68.9-billion income of the Bureau
of Treasury in 20 II is found in the revenue program
by source. He stated that despite the significant drop
in dividends on stocks from P23.7 billion to P5.5
billion, there was a drive to collect dividends from
GOCCs in 20 II which resulted in high income for
dividends. Thus, he surmised that the 2012 projection
for the dividends on stock was a little conservative.
He expressed hope that the newly constituted GOCC
Governance Council would be able to monitor dividend
declaration of GOCCs which, under the law, would
require them to remit 50% of their profits to the
national government as dividends.
r
548
Adverting to the Airport Terminal Free Report,
Senator Lacson asked why there was a projection of
P455 million when there was a collection of only P46
million in 2005. Senator Drilon responded that the
Committee would look into the matter.
Senator Lacson also observed that the Manila
International Airport Authority (MIAA) profit was
quite disturbing because there was a significant drop
in collections from more than PI billion in 2009 to
P550 million as projected in 2012. Senator Drilon said
that the Committee would ask the DOTC, which has
supervision over the airport terminal fees and profits
of the MIAA for explanation.
As regards the consolidated report on the
revenue program by source from 2002 to 2012,
Senator Lacson observed that the nontax revenue
steadily increased its performance of P70.7 billion in
2002 to P203 billion in 2007, but it drastically decreased
to PI23 billion as revenue projection for 2012.
Senator Drilon took note of Senator Lacson's
statement.
Comparing the highlighted revenue program by
source with the revenue program by collecting depart-
ment, Senator Lacson pointed out the discrepancies
in non-tax collections or nontax revenues from 2008
to 2010, citing a particular revenue by source amount-
ing to PI53,726,000,000 and revenue program by
collecting department amounting to P 155,419,000,000
in 2008. He posited that revenue program by source
should exactly be the same as revenue program by
collecting department because the source of revenue
would come from the collecting departments. In
other years, he said, the revenues were all exactly
the same.
Asked how such discrepancies would be
accounted for, Senator Dri Ion answered that he
cannot respond for a specific year but he pointed
out that a BESF footnote would show that the
total nontax revenues reflected in 2010 was based
on cash operations report; however, per agency
submission, the total nontax revenue amounted to
P 112, 746,000,000. He assumed that the lag in reporting
time has caused these discrepancies.
Asked which department is in charge of nontax
revenues, Senator Drilon stated that it depends on
the nature of fees being collected, saying that this
could be lodged in the different departments of the
bureaucracy, i.e. energy industry fees would be
collected by the (DOE), and employment permits
would be collected by the Department of Labor and
Employment (DOLE).
Asked if there is a single agency that monitors or
reviews all nontax revenues, Senator Drilon disclosed
that the amounts are directly remitted by collecting
agencies to the National Treasury. However, he said
that the budget preparation and projection ofthe revenue
for the following year is done by the DBM based on
the reports of the different collecting agencies. Thus,
he stated that there are discrepancies between the
two reports simply because the basis in the first case
would be actual collections and in the second case,
it would be projections by the different agencies.
To address the inconsistencies in the performance
of different departments on their collections, Senator
Lacson suggested that there should be a single
agency which should monitor and review the
collections, as he stressed that the other side of the
national budget is equally important as the expenditure
side. Senator Drilon agreed, saying that the Bureau
of Treasury should be the agency tasked to make
the report because all funds are remitted to them.
However, he said that once the Governance
Commission for Government-Owned or -Controlled
Corporations (GCG) is fully operational, it can take
charge of monitoring GOCC remittances.
Moreover, as far as the national government
agencies are concerned, Senator Drilon said that it
should be the Executive Secretary who should monitor
remittances since these agencies are all under the
supervision of the Office ofthe President He informed
the Body that there is a task force on fees and
charges under the National Tax and Research Center
(NTRC), which monitors the fees and charges of
different government agencies including the GOCCs.
Senator Lacson said that the task force personnel
should be invited during the deliberations on the 2013
budget to hear their view on certain inconsistencies
regarding the collection of fees.
Senator Drilon said that they will review the data
culled from the DBCC hearing as he adm itted that
the BESF was not closely scrutinized. Thus, for the
2013 budget, he said that the DBCC report should
present a more detailed exam ination of the sources
of funds. He apologized to Senator Lacson for not
being able to get all the data when the Committee
started the hearings on the 2012 budget
r
Referring to the earmarking by virtue of a law
passed by Congress, a presidential pronouncement,
or an international agreement, Senator Lacson noted
that a comparative review of earmarked revenues
from the BESF of 2004 to 20 I I would show that
all have reflected the amounts corresponding to
their total balance "as of December 3 I"; on the
other hand, the BESF for 2012 did not reflect a
total balance. He asked whether this was an
oversight.
suspended.
II was 3:55 p.m.
Responding thereto, Senator Drilon stated that
according to the DBM, it cannot indicate the total
balance because certain agencies failed to submit
their respective balance reports.
Senator Lacson observed that this marked the
first time a balance report was not given out, noting
that a balance report had always been indicated in
the previous years, the last being in December 31,
2009. Senator Drilon assured the Body that the
Committee would call the DBM's attention should
the same thing happen again in the 2013 budget
deliberations. He agreed to the observation that the
BESF was incomplete.
On another matter, Senator Lacson stated that
based on the BESF book, the Earmarked Revenues
item was classified into the General Fund Proper and
the Special Accounts in the General Fund - under
the General Fund Proper is the Use of Income; and
under the Special Accounts in General Fund are the
Annually Appropriated, Automatically Appropriated
and the Foreign Grant. He inquired into the mechanics
and utilization of the Use of Income.
suspended.
II was 3:57 p.m.
549
In reply, Senator Drilon explained that Use of
Income can be utilized I) through a substantive law
which specifies how the income realized by a
particular agency would be spent; and 2) through a
special provision in the GAA that provides for its
use. To amplify, he said that under the National
Prosecution Service Act of 20 I 0, the DOl is allowed
the use of income, in this case the filing fees it
collects, to augment the allowances of prosecutors,
but the same law provided for a iimitation period,
which has lapsed, determined by the effectivity of
the salary standardization law. Notwithstanding, he
said that the present budget also provides for a
continuation of the Use ofincome to supplement the
allowances of the prosecutors.
As to the mechanics and utilization of the Special
Accounts in the General Fund, in particular the
Annually Appropriated vis-a-vis the Use of Income
under the General Fund Proper, Senator Drilon stated
that funds in the Use of Income would be sourced
from the Special Accounts in the General Fund,
so that in the case of the DOl, the collection from
filing fees would go to the special accounts from
which the allowances of the prosecutors would be
drawn, as authorized under the GAA.
Adverting to the Department of Agriculture (DA),
Senator Lacson stated that the DA's balance, as of
December 3 I, 20 I 0, was P506 million and for 2012,
it has a projected revenue of PI41 million and a
projected expenditure of P45 million. He said that
several statutes authorize the DA to acquire
Earmarked Revenues from, among others, registration
fees, fines, penalties, funds and charges. Asked how
the fund was utilized, Senator Drilon stated that
because the special account is a continuing fund,
future expenditures can be properly charged to it. To
illustrate, he said that funding for the AFP Modern-
ization comes from the proceeds of the sale of land
under the jurisdiction of the BCDA and for that
purpose, a special account or trust account was
created whose continuing balance depends on the
utilization and income accrued for a particular year.
As to how the government would spend the
P50 billion Earmarked Revenues for 2012, Senator
Drilon replied that it can only be used for the specific
purpose for which it was collected and not for
jf'
r
550
general operations, To illustrate, he noted that
the specific purpose of the Motor Vehicle User's
Charge (MVUC) is for the maintenance of the
national roads,
Senator Lacson observed that there was a balance
of P94.5 billion as of December 31, 2009, and he
asked how government ran up a budget deficit in
2010, Senator Drilon explained that the deficit was
based on actual cash, He clarified that the whole
amount of the balance may not be disbursed in a
given year so there would still be an available
balance, but only to be disbursed for the specific
purposes for which the funds were earmarked, He
added that the agency in charge of reviewing the
earmarked revenues is the DBM.
On whether there were instances when the
earmarked revenues were indiscriminately spent or
abused by an agency, Senator Drilon replied that
according to the DBM no such incident has ever
happened because the disbursements were based on
specific requests and sourced only from earmarked
funds.
To the observation that the use of earmarked
revenues falls outside congressional scrutiny, Senator
Drilon agreed, saying that Congress has delegated to
the concerned agency the authority to appropriate
such funds,
At this point, Senator Lacson noted the balance
statements of different departments: Department of
Foreign Affairs - no balance from 2002 to 20 I 0;
Department of Agriculture - a complete balance
statement; DILG - balances as of December 31,
2002 and December 20 I 0 only; Judiciary - no
balance, revenues and expenditures for the ten-year
period except for 2004 and 2006,
Senator Drilon stated that the Committee would
take note of the deficiency as he added that even the
Bureau of Internal Revenue has not reported its
balance,
As regards overall savings, Senator Lacson
stated that the historical nature of the NEP rests
on three years of data containing the national
government budget, the corporate operating budget,
general provisions and detailed annexes. Specifically,
he expressed interest in the subtitles "Transfer From"
and "Transfer To." He inquired on the meaning and
nature of the "Overall Savings."
suspended.
It was 4:15 p.m.
At 4: 16 p.m., the session was resumed.
In response to the query of Senator Lacson,
Senator Dri Ion stated that as defined under Section
53 of the GAA, savings refer to portions or balances
of any programmed appropriations in the GAA
free from any obligation or encumbrance which are:
I) still available after the completion or final
discontinuance or abandonment of the work, activity
or purpose for which the appropriation is authorized;
2) from appropriations balances arising from unpaid
compensation and related costs pertaining to vacant
positions and leaves of absence without pay; and
3) from appropriations balances realized from the
implementation of measures resulting in improved
systems and efficiencies that thus enabled agencies
to meet and deliver the required or planned targets,
programs and services approved in the GAA at a
lesser cost .
Asked about the items under "Transfers From"
and "Transfers To" from one department or line
agency to another, Senator Drilon clarified that
"Transfers From" enumerated the agencies from
which savings were realized in the amounts indicated
in the overall savings portion of the budget, while
"Transfers To" enumerated the agencies to which
the amounts were transferred whose budgets in
effect were augmented.
Referring to his slide presentation, Senator
Lacson showed that from the item "Overall Savings
Transfers" covering the period 2002 to 20 I 0, the
DepEd reflected a total of P145,5 billion. However,
he pointed out that every year, there were complaints
from the DepEd about lack of teachers, desks and
classrooms. That being the case, he asked why the
DBM would take out P145.5 billion from the DepEd
and transfer it to other agencies or departments
and if such policy reflects the absorptive capacity
of the agency.
Replying thereto, Senator Drilon said that in
general, there are appropriations in the budget which
would 110 longer be utilized for various reasons
and therefore, on the basis of that judgment, the
funds are transferred to the agencies that needed
augmentation. In the case of the DepEd, he explained
that there were various reasons why the DepEd's
budget was not utilized. For instance, he said that as
a matter of policy, the DBM may not allow the hiring
of additional clerks or non-teaching personnel and
therefore, the funds appropriated for that purpose
would be considered as a candidate for transfer to
another agency. He further pointed out that under
the current budget, the DOH complained about the
lack of nurses and yet there Were 200,000 nurses
who were not practicing their profession. He said that
the DOH could not fill up these positions with nurses
because the itcms are clerical and administrative in
nature. He said that here is a situation where, on one
hand. nurses are needed yet the DOH has savings
on personal services because of the policy of not
increasing the non-technical pOltion of its bureau-
cracy. He remarked that this is one of the reasons
why funds are being transferred from an agency to
another that necd the funds for some activity.
Senator Lacson observed that while it was a
sound explanation, he still could not understand why
PI45 billion would be taken out of DepEd as a
"transfel' from" and then have P796 million as a
"transfer to" the DepEd. Senator Drilon clarified that
this was a realignment within the DepEd budget.
To the observation that there was also a transfer
to the DepEd from other depaltments, Senator Drilon
remarked that said amount was used for the tcachers'
productivity incentive bonus because there was no
appropriation for that pUl'Pose. He said that resources
had to be pooled from the other agencies since the
DepEd bureaucracy was so large.
Senator Lacson commented that it appears
that the I'e was no planning because he could not
understand why certain funds would be taken out
trom one agency, in this instance, the DepEd, and at
the same time, realigned or transferred from other
agencies to the DepEd. Senator Drilon did not dispute
the statement, noting that even the U.S. government
does not have an overall plan. He acknowledged that
there were unforeseen incidents that happened during
the course of the budget hearings.
Asked how the departments avail of overall
savings transfers and who authorizes them, Senator
Drilon replied that a particular agency might ask for
551
authorily for additional bonus but if it does not have
enough funds for that purpose, funds would be
transferred to it from other agencies upon approval
of the President.
To the observation that Congress is no longer
informed about the matter, Senator Drilon said that
Congress gets a report which is reviewed for the
next budget hearing. He explained that this was the
result of a non-line item budget, adding that the
power to realign is also authorized under the
Constitution. He explained that the latitude as far as
this matter is concerned would be limited to a certain
extent by putting all the appropriations for unfilled
items in the Miscellaneous Personnel Benefits Fund.
Asked if this was sound budget management,
Senator Drilon replied that given the size of the
bureaucracy, the DBM must be given leeway since
it cannot check all the amounts or figures which the
different department agencies submit at the start of
the budget hearings.
Senator Lacson said that he would not have any
problem if it was done very objectively. However, he
said that if it was done because one department is
the favorite of the one approving the transfer then
something is wrong with the bureaucracy.
Senator Dri Ion said that it is an accepted fact
that each agency would try to bloat its budget
proposal so that once it was approved, there is
enough fiscal space within the budget to enable the
head of the agency to declare savings and realign
funds. He revealed that there are a lot of budgetary
practices that the DBM is continuously trying to
correct but it takes time. He recalled that he had
pointed out in his sponsorship speech that the matter
of the allocation offunds for unfilled positions in the
Miscellaneous Personnel Benefits Fund has caused a
lot of complaints but it is a reform that has to be
implemented to have transparency in the budget.
Asked if there has been a serious study conducted
by either the Executive branch or Congress on
overall savings from unfilled positions, Senator Drilon
replied that no such study has been conducted so far.
He said that it only indicates that government has to
be more precise in the budgeting of the funds
because savings can only arise out of an appropriation
which is higher than what is actually needed. He said
that the DBM has started to monitor the allocation
of the budget for unfilled position more closely,
552
adding it was the first major step to have more
transparency in the budget process. He asked Senator
Lacson to be present in the next DBCC briefing of
the 20 I 3 budget so that the matter of the revenue
side and the sources of funds could be better
understood by all.
INTERPELLATION
OF SENATOR DEFENSOR SANTIAGO
Asked by Senator Defensor Santiago if the
budget secretary was present in the Chamber,
Senator Drilon explained that Secretary Abad was in
the Senate that morn ing but had to go to Malacanang
that afternoon for a conference on the TRO issued
by the Supreme Court in the petition tiled by former
President Gloria Macapagal Arroyo.
But Senator Defensor Santiago insisted that
Secretary Abad had nothing to do with that issue as
she proposed that the Senate discipline any member
of the economic team of any administration who
does not appear dUl'ing the budget hearings.
Asked if the finance secretary was present in
the Chamber, Senator Drilon repl ied in the affirmative,
adding that the NEDA Director General was also
there.
Senator Defensor Santiago congratulated Senator
Drilon for revising the GDP growth for 20 II at 4.5%
to 5.5%. For 2012, she doubted ifany weight can be
given to the economic growth forecast of 5.5% to
6.5% in light of recent developments such as the
debt crisis in Europe, the budget crisis and economic
weakness in the U.S. and the triple tragedy in Japan.
Referring to her slide presentation, she showed
that the major international financial institutions -
IMF, World Bank and ADB - have downgraded
GDP forecasts in 2011 and 2012. She asked what
the basis was for the revision for 2012 of the growth
forecast of 5.5% to 6.5%, given the fact that it
should only be 4.7% according to IMF; it should only
be 5.0% according to World Bank; and it should only
be 5.1 % according to the ADB.
Scnator Drilon stated that the forecast was made
by the DBCC at the start of the budget preparation
during the first half of the year. He said that the
reason why the DBCC was called for a second
briefing was to give them the oppOltunity to review
the GDP growth given the external factors, and the
DBCC decided to maintain the GDP projection for
2012 while the GDP projection for 2011 would be
lowered.
Asked who among the members of the Committee
dared to go against the predictions of major financial
institutions of the world, Senator Drilon replied that
the DBCC is composed of the Finance secretary,
NEDA secretary, Budget secretary, and the Central
Bank governor.
Adverting to Annex A on "Poor Budget
Implementation," Senator Defensor Santiago noted
that for fiscal year 20 II, the appropriate fiscal policy
was for the government to spend more on public
infrastructure and social services. She said that
Congress went along with the President's budget
request for 20 II which was approved on time and
with little amendments. She added that the agreed
budget deficit should be around P300 billion or roughly
3% of the GDP; however, the Aquino administration
has apparently failed to move projects as authorized
by Congress. She pointed out that for the first three
quarters, from January to September, actual spending
compared to program spending was lower by P214
billion while the total program expenditures was
P 1.283 trillion, which was much higher than the total
actual expenditures at P1.070 trillion. Even if interest
payments were excluded, she said that the total
program expenditures for the first three qUalters was
P 1.042 trillion while total actual expenditures was
P848 billion. She stated that the extent of under-
spending of the productive part of the budget was
PI94 billion.
Senator Defensor Santiago asked whether the
massive underspending was deliberate due to some
bureaucratic red tape or incompetence on the part of
the spending agencies. Senator Drilon shared the
concern of Senator Defensor Santiago that, indeed,
the underspending dragged down the country's
economic growth for the first semester, adding that
this was also admitted by the economic managers
who are tlying to have a catch-up program through
the immediate release of about P72 billion for fast-
moving projects which were enumerated during the
interpellation of Senator Cayetano (P) 011 the General
Principles of the GAA.
Considering the serious delays in project
implementation, Senator Defensor Santiago said that
the emerging scenario is that the targeted deficit of
P300 billion will not be met and, most likely, the
A""t'l
TliESDA Y. NOVEMBER 15.20 II
deficit will only be PI50 billion which is half of the
programmed deficit. In fact, she pointed out that
from January to September, the programmed deficit
was supposed to be P242 billion while the actual
deficit was only P53 billion or a difference of
P 189 billion.
As regards the P72-billion tiscal stimulus program
by the Executive Department and the PI O-billion
additional subsidy to BSP by the DBM, Senator
Defensor Santiago stated that these were not part of
the discussion when the 20 II President's budget was
being deliberated upon by Congress last year. She
surmised that the President has used the national
budget not as a tool for national development but, in
fact, acq u iesced so that the budget became a drag on
econom ic growth.
Senator Drilon stated that the source of the
stimulus would come from one windfall dividend
t)'om the OFls, the continuing appropriations for
2010, and the identified 2011 appropriations of slow-
moving projects of agencies or personal services
savings. He affirmed that the programs were not
discussed nor predicted at the start of the budget.
On the constitutional law issue, Senator Defensor
Santiago stated that spending adjustments require
congressional concurrence. She maintained that the
power of the purse belongs to Congress, and she
asked how the government was able to transfer
P72 billion without prior consultation with Congress.
She pointed out that the 2012 cash budget of
P1.84 trillion is 8.37% higher than the 2011 original
budget but it is 23.12% higher than the emerging
2011 budget of P 1.5 trillion. On the revenue side, she
said that there were serious doubts on the capability
of the Bureau of Customs to collect P365 billion in
2012. In 2011, she said that the BOC is expected to
have a revenue shortfall of around P49 billion, and
for the first three quarters, it has a realized shortfall
of P35 billion. She predicted that with uncertain
revenue collections partly because of slower growth
unexpected with about halfofthe 2011 infrastructure
spending expected to spill over to 2012, the emerging
deficit in 2012 might be around P350 billion rather
than P286 billion.
Senator Defensor Santiago explained that the
amount of P350 billion is equivalent to the target
deficit ofP280 billion plus P50 billion for a combination
of public infrastructure and fiscal stimulus that will
be paid in 2012 plus some revenue shortfall of
553
P20 billion which is a conservative estimate. She
then asked how the economic managers will address
the emerging large budget deficit.
Senator Drilon replied that the disbursement of
funds will take into account the collection of the
expected revenue so that with less collection, there
will be less disbursements in order that the government
will not exceed the projected deficit of P300 billion.
He also agreed that there is a great possibility that
the budget deficit cannot be held at the level of P300
billion because of a number of infrastructure projects
spilling over to 2012.
Senator Defensor Santiago asked if the budget
adjustment plan, in the event of larger than expected
deficit, has been explained to legislators from both
Houses of Congress, discussed within the Cabinet, or
it would be executed without prior consultation with
Congress as was done with the P72-billion stimulus
program. Senator Drilon stated that the Finance
Committee intends to fully activate the Senate
Oversight Committee on Public Expenditures, which
shall be required to prepare a quarterly report of
disbursements being done by various departments
with significant budgets so that the program deficit
and the ability of the government to raise the revenues
required to meet the goals of the budget can be
monitored more closely.
Senator Defensor Santiago recalled a privilege
speech she delivered, calling the attention of the
executive department on the need for transparency
and fiscal responsibility in the use of funds, some
created way back during the martial law years,
which are not subject to congressional review and
approval, citing specifically the PC SO Fund, Pagcor
Fund, Malampaya Fund, Road Users' Tax, and many
more. She said that the use of those funds have not
been subject to scrutiny; hence, these are prone to
abuse. She noted that some of their uses were now
being addressed by specific programs, projects, and
activities that are funded in the national budget, yet
these funds continued to be allocated and disbursed
by unelected officials who are not accountable to the
people. She asked the Sponsor's position on the
proposal to have the proceeds of these funds deposited
in the National Treasury and their uses subject to
congressional review and authorization.
Senator Drilon said that it was Congress that
delegated the power to appropriate the funds to those
agencies. He said that the abuses committed in those
554
agencies became the catalyst for the GOCC
Governance Act to have an agency that wou Id
monitor the use of public funds.
To the suggestion that the funds be returned to
the National Treasury and discussed during the budget
deliberations, Senator Drilon said that the funds are
already deposited in the National Treasury, adding
that it is in the budgeting of these funds that the
boards exercise the delegated authority of Congress
to appropriate the funds. Senator Defensor Santiago
stated that the delegation should be withdrawn, to
which Senator Driloll agreed.
INTERPELLATION OF SENATOR LEGARDA
At the onset, Senator Legarda stated that based
on the DBCC's recent adjustments, the projected
revenue for 2011 was 13.7% which is 0.4% below
the programmed 14.2%, and she attributed this to the
inability of the Bureau of Internal Revenue and the
Bureau of Customs in meeting their revenue targets
for the year compounded by the economic slowdown
all over the world. Therefore, she said that there is
a program tax effort of 12.6% and the outlook for
2011 tax effort is at 12.2%. For 2012, she noted that
the DBCC retained the 14.2% revenue target but it
increased its program tax effort from the 20 I I
outlook to 12.2% to a higher 12.9%.
Senator Legarda asked what justified the retention
of the 14.2% revenue target for 2012, given that the
government has failed to make its 14.2% revenue
target for this year. Senator Drilon replied that there
are two major components of the tax administration
program which makes the Department of Finance
confident that it would be able to make a higher
revenue program for next year: 1) new legislation to
restructure certain tax regimes like the rationalization
of the tax incentives or the sin tax law; and 2) the
existing intensified tax administrative effort which
involves the filing of cases against erring taxpayers.
He said that he would like to inculcate in the minds
of the taxpayers that it does not pay not to pay the
right taxes. Senator Legarda said that the programs
mentioned are ongoing although not effectively
implemented.
As regards certain legislative measures that should
be prioritized by Congress such as the rationalization
oftiscal incentives, which has been filed in previous
Congresses, and the restricting of sin taxes which
will allow the automatic adjustment of sin taxes using
the NSO-established tobacco and alcohol industries
and unifying existing tax rates, Senator Drilon stated
that these two measures were informally discussed
with Senator Recto, chairman of the Committee on
Ways and Means, and the vice chairman, and they
have agreed to work on the measures after the
budget so that by the end of the second regular
session, the new tax measures would be enacted.
With the administrative measures and the proposed
legislation, Senator Legarda asked what would happen
in the event that the tax measures are not passed.
Senator Drilon stated that the targets would not be
downscaled, the government should exert extra effort
on the administrative measures to increase tax collec-
tion, and the fee structure in certain areas should be
reviewed.
Asked on the amount lost in revenues from
Customs tariff and duties as a result of smuggling,
Senator Drilon said that according to the secretary of
Finance, World Bank studies estimate it to be
approximately P60 billion, and this includes smuggling
in airports and ports of every kind of product including
basic commodities such as rice, sugar and even oil.
Recalling the remark of the secretary of Finance
during a budget hearing that it is Utopia to even
dream of totally eradicating smuggling, Senator
Legarda asked on the realistic figure and percentage
of curbing, if not totally eliminating, smuggling. Senator
Drilon said that while there are no exact targets for
the Bureau of Customs, the expected improvement in
collections for both the BOC and BIR was
approximately P72 billion for 2011 and at least the
same amount for 2012. He disclosed that in 2011,
revenues rose to 14% compared to 2010 in an
economy that grew only by 4%. He opined that while
indeed the total elimination of smuggling would
generate P60 billion on top of the P70 billion generated
in 20 II, such is an ideal situation that may take time
to achieve. However, he expressed hope that the
government would be able to collect more by imposing
stricter measures to curb smuggling.
Relative thereto, Senator Legarda noted that the
DBCC revised its growth targets from the previous
assumptions of 5.5% to 6.5% for 2012 to 5% to 6%
similar to the projection llsed for the 2011 national
budget, in view of the fact that the country's GDP
growth rate hit only 4% on the first half of 2011.
She also noted that in his sponsorship speech, Senator
Drilon attributed the slowdown to external factors
like the tsunami and impending nuclear disaster in
Japan and tensions in the Middle East and North
African regions, worsened by the public sector's
underspending of P139,7 billion, and the absence of
election-related spending for the year. Given the
scenarios, Senator Legarda asked how the economy
wou Id actually be driven to grow by 5% to 6% in 2012,
In reply, Senator Drilon believed that the budget
for 2012 has been so crafted to achieve the projected
growth rate and in order that the domestic economy
would respond to the stimulus that the government
has been putting on stream. For instance, he said,
the infrastructure budget of P 182.2 billion for 2012 is
an increase of 25.7% from that of the previous year.
Senator Legarda also noted that based on the
July 2011 labor force survey, unemployment rate
was pegged at 7,1%, or 2.8 million unemployed
workers which hardly changed from the 7%
unemployment rate recorded in July 2010. Moreover,
she observed that the quality of jobs created as
measured by the unemployment rate also worsened
from 17.9% in July 2010 to 19.1% in July 2011,
affecting 7.1 million workers.
Asked how the government could substantially
reduce the number of unemployed and underemployed
and how it could improve the quality of oppo/tllnities
for 2012, Senator Drilon replied that there are a
number of drivers in the economy; for instance,
government efforts are geared toward the
establishment of BPOs in the country that would
result in employment-generating activities, and towards
higher production through improved infrastructure in
the agricultural sector. Given that the infrastructure
sector budget has been increased by 25%, he
expressed contidence that the private sector would
respond to the leadership of President Aquino and
would be able to pump in funds into the economy as
evidenced by its significant contribution in terms of
GDP growth which is expected to continue in 2012.
Moreover, he revealed that there are a number of
other measures in place such as job matching for
graduates, proper monitoring of what is foreseen to
be available jobs in the future, and gearing of the
school curriculum towards such opportunities that
would produce employable skills. He said that such
plans are in the pipeline aimed toward alleviating the
difticult employment situation in the country.
Senator Legarda commented that while the
BPO sector has grown massively in the past years,
555
neighboring countries like India and China, that
are aggressively encouraging their citizens to learn
English, are a big threat to the Philippines. She revealed
that a Filipino-American investor she recently met
who operates also out of the U.S. East Coast has, in
fact, warned on the probabJe decline of employment
opPOliunities in the sector in the next three years if
the Filipinos do not improve their English proficiency.
Given the lack of focus in English in the
educational system and the lack of support for the IT
sector, Senator Legarda asked how the Philippine
government would address the threat of losing its
niche in the market particularly because of the
aggressive stance of China and other countries.
Senator Drilon said that he would have a detailed
response when the DepEd budget is discussed.
However, he affirmed the need to address the
problem in view of the fact that the declining
proficiency in English has adversely affected the
country's ability to attract BPO companies, as
evidenced by the complaints of recruiters in the
industry that out of over a hundred that they interview,
about two percent only would qualify for the job.
Senator Legarda lamented that in the face of
numerous complaints about the lack of classrooms
and equipment, the need to train teachers better in
terms of English proficiency has somehow been
neglected.
On the issue of hunger, Senator Legarda said
that based on a Social Weather Stations survey for
the third quarter of 20 11, the proportion of families
experiencing involuntary hunger at least once in the
past three months was at 21.5%, or an estimated 4.3
million families nationwide, a 6.4 percentage point
increase from the four-year low of 15.1 %, or three
million families in June 2011, and 7.5 points higher
than the 13-year average of 14%, although still below
the 24% in December of 2009.
Asked if the proposed budget of 2012 seeks to
address the worsening self-rated hunger and poverty
by Filipino families, Senator Drilon said that he does
not believe that there is a worsening hunger situation.
Nonetheless, he said that the while the government is
conscious of the poverty situation in the country,
Congress has ensured that the budget is biased in
favor of the poor by providing two direct interventions:
first, the Pantawid Pamilyang Pilipino Program
(4Ps) or the conditional cash transfer where P39
billion has been allocated, increasing the coverage
~ t > r
556
by 700,000 beneficiaries, and the realignment of
P800 million so that it could provide benefits to
additional 63,000 beneficiaries; and second, with the
direct intervention of Congress, P 12 billion was
allocated for the enrolment in PhilHealth of the
poorest 20% of the population, or the amount of
P2,400 for PhilHealth premium per year per house-
hold. Moreover, he said that the government aims
to cover 5.2 million households in its National
Housing Targeting System.
Senator Dri Ion said that the Department of Social
Welfare and Development has been tasked to
commission the SWS to undertake a survey that
would provide an assessment of how far the CCT
program has been effective in alleviating poverty in
the country.
Senator Legarda expressed satisfaction over the
increasing number of poor families that are being
enrolled in PhilHealth, over and above the original
target of five million when the PhilHealth law was
still being enacted, and that such increase is being
effected without the need for a law.
On a related matter, Senator Legarda noted that
the DBCC attached a fiscal risk management to the
20 II General Appropriations Act that recognizes
disasters as creating large fiscal risks for the budget
She said that the statement also noted that "the
massive flooding 01'2009 caused by typhoons Ondoy
and Pepeng led to a staggering US$4,4 billion in total
damage and losses or the equivalent of 2.7% of the
country's GDP in 2009."
Senator Legarda quoted further the pOltion of
the statement, to wit:
In practice, the bulk of the cost of disasters
remains with the National Government as LGU
funds are rapidly depleted in the event of a
disaster and there is compelling reason why
disaster impact should be evaluated in public
investment planning from the national to the
local levels. Governments are responsible for a
stock of public assets which includes schools,
health facilities, roads. and intrastructure. At
the same time, they are often the insurers of last
resort for the houses and assets of low-income
households and communities. A well balanced
portfolio of investments for disaster risk reduc-
tion and management is therefore encouraged to
enhance the sustainability of public spending,
to strengthen financial protection and fiscal
stability, and to ensure a more predictable
recovery and reconstruction in the event of a
catastrophic disaster. This portfolio may include
a mix of various investments such as national
and local contingency funds, credit and
insurance.
Senator Legarda asked how the government
intends to substantially lessen its fiscal vulnerability to
disasters and how the budget would be effectively
used as a tool to build the country's resilience to
disasters and climate change.
Senator Drilon replied that the principal instru-
ment is a catastrophe bond which can be secured
from the World Bank and triggered by the OCCUrrence
of certain risks that can affect the country's economy
and growth rate. He explained that it was intended
as a standby measure that can respond to unforeseen
events that might affect the projections for 2012.
Asked if the catastrophe bond is a cushion in
times of calamities as a back-up measure in case the
GAA is insufficient, Senator Drilon explained that it
is intended as a liquidity cushion provided at a very
low cost or at a rate of less than I % spread over a
period of 25 years. It is a mechan ism that can
provide some comfort during calamities, he said.
On another matter, Senator Legarda disclosed
that the country has not availed of a single dollar
from the Adaptation Fund despite of the fact that it
is the third most vulnerable and at risk country in the
world simply because the government has not
appointed the National Implementing Entity (NIE).
She said that there are countries in Africa which are
smaller than the Philippines that have accessed the
Adaptation Fund of the UNFCCC. She recalled that
in one of the hearings of her Committee, Senate
President Enrile even suggested that the DBP and
Landbank be appointed as the NIE. Asked if the
DOF had indeed been designated as the NIE, Senator
Drilon replied that according to the finance secretary,
discussions on the matter were still being held led by
the Climate Change Commission.
At this point, Senator Legarda said that she was
glad both Secretaries Purisima and Padaranga were
present in the budget deliberations considering that
billions of dollars of the Adaptation Fund were
waiting to be accessed. She disclosed that in a recent
meeting with the UN Office for Project Services
(UNOPS), which manages the adaptation projects all
# ~ r
TUESDAY, NOVEMI3ER 15,2011
over the world, she learned that Maldives, with less
than a million population, had already accessed US$I 0
million for water projects. She said that the Maldives
was able to do so because it identified the UNDP as
its NIE, She opined that if a government agency like
the DOF would be appointed immediately as the
NIE, the country would be able to access the
Adaptation Fund during catastrophes and calamities
since the country has already been qualified to be at
risk. In response, Senator Drilon said that the finance
secretary has noted Senator Legarda's suggestions.
Further, Senator Legarda bal'ed that during the
meeting, the UNOPS executive director assured her
that the country could access the Adaptation Fund in
the form of grants at least six months from the
appointment of the NIE or after complying with
the requirements. She lamented that the P I billion
proposed budget for the PSF would not be enough to
meet all the needs.
Moving on to the public-private partnership
program, Senator Legarda recalled that the President
unveiled during his State of the Nation Address his
flagship infrastructure project until 2016. She said
that based on information she gathered from sources,
the PPP has almost grounded to a halt and that
of the I I projects for roll-out in 20 II, only the P 1.4
billion Daang Hari South Luzon or SLEX link
road project would start next year with the bidding
already scheduled in December 20 II, while the other
projects like the P7.7 billion MRT-LRT extension
program was still under review by the DOTC. She
said that the DOTC luis raised the possibility of a
PPP-hybrid scheme under which, using the aDA,
it would build, maintain and operate the facility.
She noted that under the original PPP program,
private sector financing would supposedly be used
to fund construction, Relative thereto, she asked why
the PPP program has not yet commenced and what
prompted the change of strategy from the original
PPP to the hybrid model, if reports were accurate.
In response, Senator Drilon said that one of the
major reasons in the delay of the PPP was that the
feasibility studies have taken longer than expected.
Insofar as the DOTC projects, such as the MRT, are
concerned, he said that there was a review of the
viability gap in the implementation of the MRT-PPP,
a fact that should give an assurance that extra
efforts were being undertaken to roll out more PPP
projects next year. He pointed out that the Daang
Hari SLEX link road project was on schedule with
557
the deadline for submission of bids set on December
8, 20 I I. He disclosed that there were other PPP
projects lined up for 2012 including the school
infrastructure project, which was already endorsed
by the ICC Technical Board, along with two or three
more projects, While admitting that there was not
much success in 20 I I, he hoped that there would be
more roll-outs in 2012 and more significant improve-
ments in utilizing the PPP to fast-track infrastructure
development.
Senator Legarda noted that in the 20 II GAA, a
total of P12,5 billion was set aside for PPP strategic
support fund, with the DPWH and the DOTC
receiving P5 billion each and the DA, P2.5 billion.
Considering that the roll-out of the flagship PPP
program failed to take off in 20 II, she asked whether
the P12,5 billion would be allocated to agencies in the
2012 GAA or returned to the National Treasury.
Senator Drilon replied that the fund would be carried
over to next year's budget and that insofar as the
DPWH is concerned, the amount would be used for
the acquisition of right-of-way and for feasibility
studies, while the DA has in its pipeline a number of
PPP projects. He expressed hope that by 2012, all
these projects would be successfully bid out.
Senator Legarda thanked Senator Drilon for
including environmental protection, climate change,
mitigation and adaptation in his five social contract
priorities, and as regards to reports that the mining
industry was being exempted from Executive Order
No, 23, which declared a moratorium on the cutting
and harvesting of timber in the natural and residual
forests, she said that there was a clarification later
that the mining industry was not exempted from the
ban although certain mining companies were exempted
in view of their current projects on environmental
protection. In response, Senator Drilon said that the
matter would be relayed to the DENR and, at the
proper time, the concerns of Senator Legarda wou Id
be addressed by Secretary Paje,
Senator Legarda agreed to defer her queries on
the allocation to cI imate change adaptation in the
2012 GAB, the data base on disaster losses and
vulnerability to disasters, and the flood control program
until the deliberations on the budget of the DPWH.
Proceeding to another matter, Senator Legarda
noted that the Medium-Term Philippine Development
Plan (MTPDP) was approved by the President
sometime in May 20 II which resulted in complaints
558
from environmentalists that not every aspect of the
MTPOP was actually green. She disclosed that a
green audit was conducted and some sectors were
not pleased with the way the MTPDP had not
acceded to the concerns of some NGOs over
environmental safeguards.
Asked whether the 2012 budget is actually attuned
to the MTPOP and how it diners from the previous
year's budget, Senator Drilon stated that the 2012
budget is attuned to the MTPDP as he noted that the
Philippine Council for Sustainable Development was
being revitalized and that regular meetings were
being held to make sure that the budget was being
used to address the climate change goal in the
MTPDP.
In answer to further queries, Senator Orilon
confirmed that MTPDP was still evolving and its
implementation was being closely monitored. He also
said that according to Secretary Paderanga, the
Council was already in the process of being formed
and that NEDA would be needing the assistance of
the Senator. For her part, Senator Legarda stated
that she had already offered her services.
INTERPELLATION OF SENATOR ARROYO
At the onset, Senator Arroyo recalled that in the
20 I 0 national budget, he proposed an insertion of a
provision, which Congress approved, that the national
debt should not exceed 55% of the Gross Domestic
Product (GDP) which, however, was vetoed by then
President Arroyo; the following year, he proposed
the insertion of a similar provision with a condition
that should the Executive Department exceed the
55% l i m i ~ it should ask the permission of Congress.
For this year, Senator Arroyo said that the Senate
could enter into a compromise with the Executive to
retain the 55% of the G DP as Congress cannot allow
the Executive branch to keep on borrowing unchecked
by any agency of the government.
On the present percentage of the foreign
borrowings to GDP, Senator Drilon replied that for
the current year, it is 50.9 % but it would be reduced
to 50.2% next year.
If the level of borrowings went down during the
last few years, Senator Arroyo commented that he
could not understand why the two presidents vetoed
the special provision for the same reason.
Asked if he would be open to reintroduce the
said provision which would be worded in such a way
that the Executive Branch would not feel threatened,
Senator Drilon replied that he has always been open
to it but it is a question of convincing the Executive
branch that there is enough leeway and flexibility in
the special provision. At the same time, he said,
certain limits have to be imposed so that there can be
a check on the ability of the Executive to keep 011
borrowing.
Assuming that the present debt was about 51 %
of the GDP, Senator Arroyo asked if the Committee
would agree to increase its level further to 55%.
Senator DrBon reiterated that in general, he would be
willing to incorporate a special provision that in case
the debt level reaches a certain percentage of GDP,
no further debt could be incurred unless authorized
by Congress. The key, he said, is to find that
percentage that would give the Executive flexibility
and, at the same time, ensure the appropriate check
is in place to prevent runaway borrowings. However,
he pointed out that for the past two years, the
Aquino Administration has shown a responsible use
of its power to incur additional debts, adding that the
national debt is projected to go down to 50.2% next
year from 51 % this year.
On a related matter, Senator Arroyo noted that
Congress has no say in the matter of debt payments
because the DOF and the National Treasury merely
submit bill of indebtedness and the legislature cannot
touch or question it. He asked if the Committee
would be willing to put in a certain degree of
operational system that would enable Congress to
know exactly what the national government is paying
for. He pointed out that as far as foreign borrowings
are concerned, the Constitution mandates that they
must be approved by the Bangko Sentral ng
Pilipinas but Congress, with its much-vaunted power
of the purse, has no say.
Senator Drilon agreed that Congress is almost
helpless as far as the power of the Executive to incur
foreign debts is concerned, pointing out that in the
past administration, projects like the North Rail
burdened the government with heavy debts that did
not even pass the Monetary Board, a clear case of
abuse of power. He reiterated that he was open to
the suggestion that at a certain level of national
indebtedness as a percentage of GDP, congressional
concurrence must be secured.
TUESDAY. NOVEMIlER 15.2011
Senator Arroyo commented that the hands of
Congress are tied because the Supreme Court had
sustained the power of then President Corazon
Aquino to automatically appropriate money, pursuant
to PO 1177, for foreign debt payments. He asked if
something could be done like crafting a legislation
which would, in effect, neutralize the decision of the
Supreme Court. Senator Drilon replied that it cannot
be done in the budget but Congress can certainly
legislate to amend PO 1177.
As to the attorney's fees being paid by the
govemment to lawyers handling cases abroad like
the Piatco, Senator Arroyo bared that when he
tried to inquire as to how much fees the lawyers
were getting, he was told that such information
cannot be revealed as it is covered by the
nondisclosure proviso in their contracts. He said
that he does not even know whether the matter
passed through NEDA.
Senator Drilon said that the matter of attorney's
fees does not pass through NEDA and the present
finance secretary is not aware how much fees
had been paid by the past administration. None-
theless, he believed that the matter was not covered
by any confidentiality clause as these are huge
public funds paid to private individuals. He gave
assurance that in the exercise of its oversight function,
the Oversight Committee on Public Expenditures
can raise the matter to the DBM at the proper
time.
suspended.
It was 5:53 p.l11.
TERMINATION OF THE PERIOD OF
DEBATE ON THE GENERAL PRINCIPLES
OF HOUSE BILL NO. 5023
There being no other reservation to interpellate
on the general principles of the proposed national
b u d g e ~ upon motion of Senator Drilon, there being no
objection, the Body closed the period of debate on
the general principles of the bill.
559
MANIFESTATION OF SENATOR DRILON
Senator Drilon informed the Body that Senator
Recto, vice-chair of the Committee on Finance,
would respond to queries on the budget of the
Department of Finance and its attached agencies.
DEPARTMENT OF FINANCE
AND ITS ATTACHED AGENCIES
Senator Recto presented the budget of the
Department of Finance and its attached agencies.
With the permission of the Body, the session was
suspended.
It was 5:58 p.m.
Preliminarily, Senator Legarda noted that the
World Bank's board of executive directors has
approved a P500 million contingent line of credit for
the Philippines called the Disaster Risk Management
Development Policy Loan with catastrophe deferred
drawdown option which allows the country to have
immediate access to funding for emergency relief,
recovery and reconstruction efforts following a major
disaster. Since drawdown from this financing support
would be triggered by a presidential declaration of a
state of calamity, she pointed out that the operation
would give the country flexibility to lise the funds
only if needed. Moreover, she pointed out that the
country could avail of the funds for 15 years since
the three-year borrowing period could be renewed up
to four times. She believed that the loan is a positive
development in improving the country's post-disaster
activities, relief, rehabilitation, reconstruction and
recovery. However, she noted that the disaster risk
reduction and management framework stresses the
need to allocate resources more flexibly to deal with
disaster risks in a proactive manner which is disaster
preparedness and prevention.
Relative thereto, Senator Legarda asked what
priority actions the Department of Finance is initiating
to lessen the government's fiscal vulnerability to
560
disasters and if the catastrophe drawdown option
could be used for disaster prevention as well.
In reply, Senator Recto said that local government
units as well as all major departments, such as the
DPWH, have incorporated disaster risk reduction
programs in their budgets as part of the Medium-
Term Philippine Development Plan for Disaster
Risk Reduction.
However, Senator Legarda pointed out that while
LGUs use part of the internal revenue allotment
(IRA) as calamity funds for disaster preparedness,
not all government agencies have set aside funding
for disaster risk reduction. Senator Recto agreed
that sllch allocation should be included in the budget
of every depmtment.
Since the country is visited by at least 20 typhoons
every year, Senator Legarda asked whether the
catastrophe drawdown option could also be used for
disaster preparedness and if the DOF would be in
charge of disbursing the funds to the agencies that
would be in need of reconstruction. Senator Recto
explained that the DOF would borrow the funds but
would turn over the money to the Treasury for
eventual disbursement by the Department of Budget
and Management to the departments and agencies of
the Executive branch.
Upon further queries, Senator Recto explained
that the fund is essentially a standby loan which
works like a grant as the creditor is not required to
pay interest on it. Moreover, he said that the
Philippines has become a model for the World Bank
as it is the first Asian nation to be offered such a
vehicle due to the fact that it is ranked third among
countries that are prone to disasters in Asia.
Asked if the fund could be used to purchase
mobile shelters/hospitals in flooded areas, Senator
Recto replied that while this was possible, allocations
for such programs were not included in the proposed
budget. He clarified that since the fund - which is
still unutilized- is considered as budgetary support,
the government does not need to consult the World
Bank on how the funds wou Id be spent.
Senator Legarda cited a World Bank study which
revealed that government resources allotted for
post-disaster reconstruction from 1992 to 2008 was
below 10% of the total direct property damages
incurred annually or approximately 3% of total
post-disaster recovery and reconstruction needs.
This, she said, showed that the current public system
of disaster risk financing in the country could not
cope with the annual aggregate effects of disaster
events.
She pointed out that various priority actions
had been proposed and studied including the
following:
1. The introduction of fiscal incentives and
proactive risk management at LGU level;
2. To address the existing impediments that under-
mine the insurance provision in the country;
3. Encourage innovative micro-insurance solutions;
and
4. To promote the structural integrity, particularly
of LGU-owned facilities.
Asked on the status of these proposals and
which are being pursued by the DOF, Senator Recto
replied that the DOF is being assisted by the World
Bank and the ADB in studying the feasibility of'
implementing micro-insurance solutions.
In closing, Senator Legarda lauded the DOF
for giving serious consideration to the proposal for
micro-insurance solutions. She asked to be given
more information on the program as she believed
that this priority action would not only encourage
the development of innovative micro-insurance
programs that can help alleviate poverty and gene-
rate income for millions of poor and indigenous
people but would also be used as a buffer against
disaster risks.
SUBMISSION OF THE BUDGETS
OF THE DEPARTMENT OF FINANCE
There being no other reservation for interpellation,
upon motion of Senator Sotto, there being no objection,
the budgets of the Department of Finance and its
attached agencies, namely, the Office of the Secretary,
Bureau of Customs, Bureau of Internal Revenue,
Bureau of Local Government Finance, Bureau of
Treasury, Central Board of Assessment Appeals,
Cooperative Development Authority, Insurance
Commission, National Tax Research Center,
Privatization and Management Office and Securities
and Exchange Commission were deemed submitted
for the Body's consideration.
,- r
With the permission of the Body, the Chair
suspended the session,
It was 6: 12 p,lI1.
At 6: 16 p.m" the session was resumed,
NATIONAL ECONOMIC
AND DEVELOPMENT AUTHORITY
National Economic and Development Authority and
its attached agencies,
INTERPELLATION OF SENATOR SOTTO
Senator Sotto inquired on the role of the National
Economic and Development Authority (NEDA) as
regards foreign grants or technical assistance to
private institutions in the Philippines. In reply, Senator
Recto stated that NEDA has nothing to do with
foreign grants to the private sector.
Asked by Senator Legarda what particular matter
he was referring to in his question, Senator Sotto
replied that an international organization, the
International Planned Parenthood Federation (JPPF),
which is connected to DKT, the top manufacturer of
condoms and contraceptives in the world, gave
US$617,000 to the Family Planning Organization of
the Philippines, supposedly for "nurturing legislators."
Asked further by Senator Legarda what the
phrase "nurturing legislators" meant, Senator Sotto
said that he was not given an answer when he raised
the same question during the plenary debates on the
reproductive health bill,
Senator Legarda manifested that she would ask
that the matter be clarified when the plenary debates
on the RH bill resume.
Senator Legarda stated that she would be asking
NEDA about its programs on Disaster Risk Reduc-
tion (DRR) and Climate Change Adaptation (CCA).
She disclosed that as of June 20 II, there were 340
3
nl
and 6
th
class LGUs that still needed to update and
561
incorporate simple hazard maps into their Compre-
hensive Land Use Plans (CLUPS), aside from the
23 provinces that had not institutionalized the DRR
and CCA in their local plans,
Asked how NEDA was assisting the LGUs in
mainstreaming DRR and CCA into their local plans,
Senator Recto replied that the national government,
through NEDA and the different departments and
agencies like the DA and DENR, plans to pool
resources and purchase a national map to determine
the hazardous areas in the country and also provide
the LGUs with their respective maps,
To the comment that the geohazard map has
been 100% completed as relayed to her by the
DENR during the committee hearings, Senator Recto
clarified that the geohazard maps are only for f1ood-
prone areas and not for the other disasters and have
a very low resolution of I :50,000 which is still not
applicable and not enough to assist the LGUs with
their CLUPS,
Senator Legarda clarified that precisely, she
asked assistance from NAMRIA since there were
no flood-risk maps, noting that geohazard maps are
different from flood-risk maps, which are important
to a flood-prone country like the Philippines, Senator
Recto revealed that the NEDA was currently working
on the different maps.
On whether the NEDA was also assisting the
LGUs with their CLUPS, Senator Recto answered in
the affirmative, saying that the CLUPS would be
incomplete without the maps. He bared that the
Australian Agency for International Development
was also assisting NEDA in an ongoing project
called Integrating Disaster Risk Reduction and Climate
Change Adaptation in Local Development Planning
and Decision-Making Process, a program intended
for all provinces, which started in August 2009 and
is expected to end in July 2012,
Asked what the NEDA was currently working
on in terms of vulnerability and risk mapping and how
much its allocation for 2012 is, Senator Recto stated
that at the provincial level, the NEDA was assisting
LGUs to come up with risk assessments, the results
of which would be incorporated in the CLUPS.
In answer to further queries, Senator Recto
supposed that the CLUPS of the 340 LGUs were
incomplete but he gave assurance that it would be
S62
made a priority project of NED A since it is funded in
the 2012 national budget and also by foreign grants.
On a related matter, Senator Legarda revealed
that Mr. Jan Mattson, UNOP Executive Director,
had asked her to request the NEDA and the DENR
to come up with any project proposal on Disaster
Risk Reduction and Climate Change that the UN
could fund. She said that she would give the NEDA
and the DENR a copy of the project proposal of
Maldives as a format or guide to give them an idea
what is acceptable to the United Nations.
Senator Recto gave assurance that NEDA would
work with Senator Legarda on the matter.
SUBMISSION OF THE BUDGET
OF THE NATIONAL ECONOMIC
AND DEVELOPMENT AUTHORITY
There being no other reservation for inter-
pellation, upon motion of Senator Sotto, there being
no objection, the budget of the National Economic
and Development Authority and its attached agencies,
namely, Office of the Director General, National
Statistics Coordination Board, National Statistics
Office, Philippine National Volunteer Service Coor-
dinating Agency, Public-Private Partnership Center
of the Philippines, Statistical Research and Training
Center, the Tariff Commission and the Philippine
Institute for Development Studies were deemed
submitted for the Body's consideration.
suspended.
It was 6:33 p.m.
JOINT LEGISLATIVE-EXECUTIVE COUNCIL
Legislative-Executive Development Advisory Council
(LEDAC).
Senator Sotto stated that Senator Defensor
Santiago has expressed her desire to interpellate on
TUESDAY, NOVEMBER IS. 201 I
the budget of the LEDAC but she was not present
in the hall. He reminded the Body that as agreed
upon during the caucus, the Body would try to
facilitate the passage and submission of the budgets
of the different agencies and departments whose
officials are present in the gallery.
He said that he would have no objection to the
motion of Senator Recto to submit the budget of the
LEDAC for the Body's consideration, without pre-
judice to the possibility of a motion for reconsideration
in case one who is in favor of the submission would
move to reconsider the same.
Thereupon, the Chair recognized Senator Recto,
sponsor of the measure, and Senator Osmefia for his
interpellation.
INTERPELLATION OF SENATOR OSMENA
Asked by Senator Osmefia on the budget
allocation for LEDAC, Senator Recto replied that
the total budget for 2012 is P2 million which is the
same as last year's.
Asked how many LEDAC meetings have been
held in the current year, Senator Recto said that
there was one meeting.
Asked how much was actually spent for one
meeting in 20 II, Senator Recto stated that LEDAC
spent P860,000.00.
SUBMISSION OF THE BUDGET OF THE
LEGISLATIVE-EXECUTIVE DEVELOPMENT
ADVISORY COUNCIL (LEDAC)
objection, the budget of the Legislative-Executive
Development Advisory Council was deemed submitted
for the Body's consideration, without prejudice to the
motion of Senator Defensor Santiago to reopen and
discuss the budget of the LEDAC.
suspended to allow the PCOO staff to enter the hall.
It was 6:52 p.m.
, r
PRESIDENTIAL COMMUNICATIONS
OPERATIONS OFFICE (PCOO)
Senator Orilon presented the budget of the
Presidential Communications Operations Office and
its attached agencies. He likewise acknowledged
the presence in the Chamber of Secretary Coloma.
Senator Orilon stated that the budget of the
pcao is P997,439,000, the same amount indicated
in the NEP. He added that the House of Representa-
tives introduced no amendments and the Committee
also had no amendments to the proposed budget of
the office.
He recommended that the Body favorably
consider the same.
Senator Legarda noted that there is no annual
line item allocation in the GAA for the operation of
the national television station PTV -4. She stated that
in the past, the funds for PTV -4 came from the
discretionary fund of the Office of the President and
congressional initiatives.
Asked if PTV -4 has an allocation from the P90
million budget of the PCOO, Senator Orilon replied in
the negative, adding that PTV-4 is not under the
PCOO.
Senator Legarda surmised that only the PIA and
the Radyo ng Bayan are under the PCOO. She
inquired how PTV-4 was able to operate without an
allocation from the government when its charter,
which recently expired, prohibits it from raising
commercial revenues.
Scnator Orilon noted that PTV-4 is able to
generate revenues trom the Philippine Charity
Sweepstakes Office. He stated that during the
previous administration, the station operated out of
congressional insertions but there were no similar
proposals in the 2012 budget. However, he assured
that funds for the network's operations would come
from government agencies that utilize it to air info
shows like organic agriculture by the OA.
Senator Legarda believed that presently, the
people behind PTV -4 are seeking to amend its
chmter precisely to allow them to sell commcrcial
563
spots for their viability. Senator Orilon disclosed that
PTV -4' s chmter allowed it to air commercial materials
for the first 10 years of its operation, after which it
is no longer allowed to engage and generate funds
commercially. He stressed that the 2012 budget does
not provide for subsidy for the network.
On whether it is possible for Congress to insert
a provision in the GAA that would grant PTV -4 a
budget, Senator Orilon stated that it would have to be
reviewed and taken up with the OBM. He said that
it would not be possible for Congress to earmark a
portion of the POAF for the operations of the
network because OBM sets the policy. However, he
said that according to Senator Sotto, the bill amend-
ing the charter of PTV -4 was among the priority
measures agreed upon during the last LEOAC
meeting.
Senator Legarda informed the Body that she
authored the bill amending the charter of the network.
She inquired if it is possible for Congress to pass the
bill on Third Reading before the Christmas break
since I) it is a LEOAC bill; 2) it is the national
television station; and 3) it is a simple bill. She stated
that it is only a matter of extending the charter. She
said that she would request Senator Honasan to
create a subcommittee that she would chair to hear
the proposed bill. She believed that the national
network has potential, not for propaganda, but for
information dissemination of the various projects of
the departments. She proposed that part of the P4
billion generated by the National Telecommunications
Commission (NTC) from the use of cellular phones
and airwaves be used instead to resuscitate and
sustain PTV -4. Senator Orilon supposed that the
OBM would be willing to fund the operations of
PTV-4 with whatever is in excess of the P4 billion.
On whether that would partake of an amendment
to the GAA, Senator Orilon pointed out that the
GAA does not provide for funds for PTV -4.
At this juncture, Senator Legarda asked what
Congress would have to do in order to transfer the
excess of NTC's P4 billion to PTV-4.
suspended.
It was 7:06 p.m.
564
At 7:07 p.m., the session was resumed,
Respond ing thereto, Senator Drilon stated that
Congress would have to pass a bill increasing the
capitalization of the network and for the government
to subscribe to the share of PTV -4 in excess of the
P4 billion.
Asked if it is possible for Congress to provide
bridge financing to PTV-4 until such time the bill is
enacted into law, Senator Drilon expressed doubt
Congress could do so, saying he did not know where
to source the fund. He stated that the PCOO would
look into the matter of bridge financing, and that it
wou Id be best to leave the prv -4 issue to the Execu-
tive Department which, he believed, would not allow
the network to go down with the charter amendment
pending, He explained that the bridge financing would
require the Committee to look for funds within the
GAB which could displace other budgets,
Senator Legarda stated that even in the remotest
possibility, Congress could find the funds, she would
be supportive of it. In the meantime, she said that the
bill to amend PTV's charter is in the hands of
Congress and urged the Members to support it.
INQUIRY OF THE CHAIR
Asked by the Chair whether there are plans to
privatize RPN-9, Senator Drilon replied in the
aftirmative. He stated that 22.8% of the equity of
Channel 9 is owned by government; 34%, by Solar
Enteltailllnent; 32%, by FEMIl, the group identified
with former Ambassador Benedicto; and 14%, by
other sectors. He said that the government has no
eq u ity contro I.
Asked if RPN-9 and Solar Entertainment have
an agreement, Senator Drilon replied that Solar
Entertainlllent is a blocktimer of the station.
At this juncture, the Chair disclosed that he was
in receipt of a letter from the president of the
employees union of RPN-9 stating that they have not
been paid their salaries and that an estimated P300
million of separation and retirement pay have yet to
be paid to retired or resigned employees.
Senator Drilon clarified that as far as salaries are
concerned, the payment is current but there were
claims tor unpaid salaries which remain to be addressed,
He stated that certain benefits were not given because
of cash flow problems,
As regards the retirement and separation pay of
retired or resigned employees, Senator Drilon stated
that because government is not a majority equity
owner, the liability remains with the corporation
assuming that the station is privatized. He explained
that under the Corporation Law, the backpays would
remain a liability of the corporation. He said that it
was unfortunate that as the Committee was defending
RPN-9's budget, it cannot speak for the private
stockholders.
The Chair stated that according to the letter,
there was a Special Allotment Release Order
involving the amount of PI13 million issued to
RPN-9; however, Mr. Albano, president of the station,
did not pay the salaries of the employees. The Chair
added that the employees were requesting the Senate
to look into the matter.
PRESIDENTIAL COMMUNICATIONS
OPERATIONS OFFICE AND ITS
ATTACHED AGENCIES
upon motion of Senator Satta, there being no objection,
the budgets of the Presidential Communications
Operations Office and its attached agencies -
Presidential Communications Operations Office
proper, Bureau of Broadcast Services, Bureau of
Communication Services, National Printing Office,
News and Information Bureau, Philippine Information
Agency and the Presidential Broadcast Staff - was
deemed submitted for the Body's consideration without
prejUdice to a motion to reopen the period of
interpellations at a later time.
Senator Solto manifested that consideration of
the budget of the Department of Environment and
Natural Resources was suspended indefinitely
because the DENR secretary was indisposed.
suspended.
It was 7:19 p.m.
At 7:21 p,m" the session was resumed with
Senate PI'esident Enrile presiding,
DEPARTMENT OF JUSTICE
Senator Dri Ion presented the budget of the
Department of Justice (DOJ) in the amount of
P8,488,000,728, He said that the DOJ budget was
increased in the GAB by P200 million for the JUSIP
program and PI 00 million for the DOJ building but
the Committee did not endorse the House amendments
and, in fact, recommended that the P33 million for
the NJIS program be cut since, in the view of the
Committee, it was already being undertaken by the
NBI. He bared that the Committee also found no
basis for the creation of the Office of the Cybercrime
because it has no enabling statute, However, he said
that the Committee recommended that the DOJ
prosecutors be allowed the use of income derived
from the filing fees paid by the parties in cases
pending in the DOJ,
RESERVATIONS
TO INTERPELLATE
Senator Sotto manifested that the following
senators have made reservations to interpellate on
the DOJ bUdget: Senators Ejercito Estrada, Guingona,
Legarda, Escudero and Defensor Santiago, in that
order,
INTERPELLATION
OF SENATOR EJERCITO ESTRADA
At the outset, Senator Ejercito Estrada stated
that he would not ask any questions on policy or the
DOJ budget itself. However, he asked for the reaction
of the justice secretary to the temporary restraining
order (TRO) that the Supreme Court issued in favor
of former Pres. Gloria Macapagal Arroyo.
Senator Drilon replied that according to Secretary
De Lima, as of that time, the DOJ has not yet
received a copy of the TRO issued by the Supreme
Court and that being the case, the watchlist order
against former President Arroyo stands.
Senator Ejercito Estrada expressed his full support
for the justice secretary's decision not to allow
former President Arroyo to leave the country for
565
fear she might not come back and face the charges
against her.
Asked when the justice secretary would resolve
the cases against former President Arroyo and her
spouse, Senator Drilon said that while the justice
secretary cannot pinpoint a particular date, she gave
assurance that every effort would be exerted to
resolve them before the end of the year.
Senator Ejercito Estrada recalled that within
three months after Mrs. Arroyo grabbed power from
then Pres. Joseph Estrada in 200 I, the President and
himself were jailed even without any charges being
filed against them, He observed that a lot of cases
have been filed against Mrs. Arroyo, perceived to be
the most corrupt President of the Philippines, yet she
has not been jailed. He said that he wanted the cases
resolved immediately and to see Mrs. Arroyo behind
bars because of the numerous anomalies during her
Administration.
Further, Senator Ejercito Estrada revealed thaI
when media asked him whether Secretary De Lima
should apologize to the Arroyos for saying that the
former President was seeking political asylum from
the Dominican Republic, he replied that the Secretary
should not because the Arroyos had a lot to answer
to the nation.
Asked where Secretary De Lima got information
that former President Arroyo was seeking political
asylum from the Dominican Republic, Senator Drilon
said that when asked by media whether she had
received reports of the purported request of the
former President for asylum, Secretary De Lima
confirmed that she did and that it was her duty to
verify and investigate such reports.
Asked if it has been verified that former
President Arroyo was seeking political asylum
from countries other than the Dominican Republic,
Senator Drilon said that the information of the DOJ
was that the ambassador-at-Iarge of the Dominican
Republic visited the Philippines in October 20 II,
which visit was never coordinated with the Depart-
ment of Foreign Affairs. He said that the DOJ
was still verifying the purpose of the visit of the
Ambassador but that there was no confirmation as to
whether the former President sought political asylum
from the Dominican Republic or any other country.
He added that the report was still being investigated
by the DOJ.
r
566
Asked on the timeline to resolve the cases
against the former President, Senator Drilon reiterated
that there was no timeline but the DOJ would
endeavor to resolve them before the year is over.
In closing, Senator Ejercito Estrada stated that
the resolution of the cases against the former
President would be the best Christmas gift for the
Filipino people.
INTERPELLA TlON
OF SENATOR GUINGONA
Asked by Senator Guingona to conlirm if the
special allowance for the DOJ prosecutors to be
collected from the National Prosecution Service and
the Office of the Chief Special Counsel has been
continued or restored, Senator Drilon confirmed that
through a special provision, the Committee has
allowed the use of income by the prosecutors as
authorized under a previous law. He said that this is
income emanating Irom the filing fees paid by litigants
with cases pending before the DOJ Prosecution
Service.
Further, Senator Drilon suggested that the justice
secretary review the cases where fees were being
charged, saying that government should be extra
sensitive to the people's constitutional right of access
to courts. For instance, he asserted that persons
who filed rape cases should not be made to pay filing
fees but in cases involving the collection of private
debts which are considered criminal in nature, the
collection of filing fees is justified as this is the civil
aspect of the criminal complaint. With that caution,
he said that the Committee has allowed use of
income to augment the income of prosecutors sourced
from the filing fees collected by the DOJ.
Senator Guingona hoped that the justice secretary
would move to rationalize the fees, underscoring the
need to balance access to justice and the allowances
for prosecutors.
As to the difference between the House version
and the Senate version as regards the DOJ budget,
Senator Drilon replied that the House version added
P200 million for the halls of justice and PI 00 million
for a DOJ building, which the Senate Committee on
Finance did not endorse. He said that the Committee
intends to discuss the proposal with the House of
Representatives in the bicameral conference committee
to seek further c1aritlcations regarding those items,
Asked if the House version authorized the special
allowance provisions from any increase in fees or
new fees imposed upon the effectivity of RA 9279,
Senator Drilon stated that he was not aware since
there was no amendment in the General Appropria-
tions bill which would allow the use of income for the
prosecutors. He said that this was actually the
amendment that the Committee on Finance proposed
in the Senate version, He gave the assurance that
both Houses can always reconcile the use of income
provision proposed by the Senate and the PI35
million found in the General Appropriations bill.
INTERPELLA nON
OF SENATOR ESCUDERO
Citing information that former President Arroyo
was on her way to the airport to catch one of the
flights that night, on the assumption that she has a
copy of the TRO which shall be presented before the
Bureau of Immigration officials, Senator Escudero
asked on the standing instruction ofthe DOJ Secretary
to the Bureau of Immigration officials in the airport.
Senator Drilon said that according to Secretary De
Lima, since she has not been served a copy of the
TRO, she has instructed the Bureau of Immigration
oftlcials to bar the former president from leaving the
country, and that once she has received the TRO, a
motion for reconsideration would be filed.
Senator Escudero stated that he was one with
the DOJ Secretary in finding ways and means to
prevent, although through a different means, the
former President from escaping liability from cases
that may be filed against her. But he pointed out a
'fRO is, by nature, ex parte, and it is heard and
issued by the court on the basis of the petition filed
by the petitioner, without hearing the other party
which, in this case, is Secretary De Lima and the
other officials of the Executive branch. He added
that the filing of a motion for reconsideration and
the pendency of a motion for reconsideration, even
if filed timely, might not stall the effectivity of a TRO
as commonly practiced, that is why oral arguments
are immediately scheduled after the issuance of
the TRO because it is when the court would decide
whether or not the restraining order should be
maintained or lifted.
Senator Drilon acknowledged the statement and
citation of authorities made by Senator Escudero but
he stated that the DOJ has taken the position that a
motion for reconsideration would stall the effectivity
HJESDAY. NOVEMBER 15.2011
of a TRO, a risk the Secretary was willing to take
and argue before the Supreme Court. In the end, he
said that it would be the court which will resolve the
validity of the position taken by the Secretary of
Justice.
Senator Escudero pointed out that the statement
made by Court Administrator Midas Marquez, that
the TRO is immediately executory would raise several
issues: I) a possible constitutional crisis between two
coequal branches of government, namely, the Supreme
Court and the Executive branch; and 2) the lawyer
offormer President Arroyo would most probably file
cases of contempt for violation of the order of the
court. He expressed hope that Secretary De Lima
would look after the lower employees of the Bureau
of Immigrations who might be caught in between,
and cover them with the mantle of protection that
she has as DO} Secretary and alter ego of the
President. Senator Drilon assured the Body that the
Secretary of Justice has taken full responsibility for
the acts of her subordinates who are acting on her
orders. He said that for proper order, the Court
Administrator should refrain from making rulings on
the issue since it is a matter for the Supreme Court
to resolve, othelwise, there would be confusion in the
interpretation of the ruling of the Supreme Court
arising from the statements of the Court Adminis-
trator. Senator Escudero joined Senator Drilon in his
admonition with respect to the remarks made by the
COUll Administrator.
Asked on the number and status of pending
cases tiled against former President Arroyo, Senator
Drilon said that two of the three plunder and other
anti-graft cases pending, and a case of election sabo-
tage have already been submitted for resolution. He
clarified that the two plunder cases pertain to the
fertilizer fund scam, which was filed in July 20 II and
is still at the preliminary investigation stage; and
the OWWA fund, which was filed in May 20 II and
submitted for resolution in October 20 II. He said
that there was a third plunder case, filed by a person
named DaniloLihaylihay arising from nonpayment of
capital gains tax for the Iloilo Airport. However, he
pointed out that this was a peculiar case that would
probably be dismissed because the government was
the purchaser of the land and it cannot be determined
how the former president could be liable for non-
payment of taxes for capital gains.
Senator Escudero hoped that the DOJ can
expedite or facilitate the resolution of these cases so
567
that the government can take the safer route of
getting a hold-departure order from the courts.
Senator Escudero asked if representations can
be made with a country that does not have an
extradition treaty with the Philippines for a national to
be brought back home. He surmised that there are
some situations where it might be easier because of
the absence of certain procedures and rules that are
normally required in an extradition treaty that the
Philippines entered into with another country and
which might be even limited to certain crimes. He
asked what would happen if the DF A cancels the
passport of a national who is staying in a country
which does not have an extradition treaty with the
Philippines. To the question involving a person who is
the subject of a request for return to the Philippines,
Senator Dri/on stated that it would depend on the
municipal laws of the country where the person is
situated. As far as the cancellation of the passport is
concerned, he said that it would mean that the holder
would become an undocumented alien in the country
where the person is situated, and his deportation
would depend on the municipal laws of that country.
He confirmed that it is not an automatic bar simply
because of the absence of an extradition treaty with
the other country and neither an automatic return to
the Philippines just because of the cancellation of the
passport.
On another matter, Senator Escudero stated
that while reading through laws, all he could find
was a provision saying that the Ombudsman has
primary jurisdiction as far as cases filed with the
Sandiganbayan are concerned. He then asked
whether the DOJ could file cases directly with the
Sandiganbayan against government officials who are
under the jurisdiction ofthe Sandiganbayan. Replying
in the negative, Senator Drilon recalled that during
his incumbency as DOJ Secretary, the DOJ had an
understanding with the Office of the Ombudsman
that the DOJ prosecutors would conduct the
preliminary investigation, the results of which would
have to be endorsed to the Office of the Ombudsman
which would have the authority to review and, if it
agrees with the information, wou Id file the case
within its jurisdiction. He stated that presently, the
same procedure was being followed.
Asked why such cases are not simply endorsed
to the Office of the Ombudsman as soon as they are
filed with the DOJ to shorten the process, Senator
Drilon pointed out that there are instances when the
'r
568
Ombudsman has no personnel in a particular locality
to investigate, thus, a prosecutor has to be deputized
and conduct the preliminary investigation, the results
of which are submitted to the Resident Ombudsman
who has jurisdiction of the area, for appropriate
action, He added that it would be terribly inconvenient
for a respondent in a far-flung area to be haled to
an area where there is a Resident Ombudsman.
Senator Escudero cited, for instance, a plunder
case involving a person residing in Metro Manila
against the former President which clearly falls
under the jurisdiction of the Sandiganbayan. He
pointed out that the resolution of the case would have
been expedited. He stated that while he understood
that it could not be filed directly with the Office
of the Ombudsman during the incumbency of
Merceditas Gutierrez, he could not comprehend why
it was not filed in the same office considering that
it was filed already in May and July 20 II. Senator
Drilon clarified that the cases were filed when
Merceditas Gutierrez was still the Ombudsman whose
impartiality the petitioner might have found doubtful.
He opined that the DOJ, having commenced the
investigation, might have deemed it convenient and
necessary in the public interest to continue with the
preliminary investigation and submit the results of
such investigation to the Ombudsman for appropriate
action. Likewise, he affirmed Senator Escudero's
observation that the Ombudsman, by virtue of its
being a constitutional body, has the authority to
decide whether or not to file or dismiss the case.
On another matter, Senator Escudero disclosed
that while in Davao the previous week, there was an
uproar in the local media over the release of four
alleged drug pushers because their petition for habeas
corpus was granted by the court. As a background,
he narrated that the prosecutor resolved that cases
should be tiled against them and his resolution was
sent to DOJ Manila for review pursuant to Circular
No. 19 but after a year it remained unacted upon. He
recalled that in a conversation with President Aquino,
the latter expressed concern about how drug cases
were being handled, noting that many are dismissed
by the courts due to technicality. Expressing the need
to review in parti-cular incident of drug cases dismissed
at the local prosecutor level, he suggested the delega-
tion of some of the filllctions of the DOJ in handling the
cases so that these may be acted upon with dispatch.
Senator Drilon stated that Cil'cular No. 19 which
requires an automatic review of drug cases was
issued by DOJ secretaries after his incumbency from
1990 to 1992 when such automatic review was non-
existent and only the fiscals decided the cases. He
said that in case the pol ice officer or the private
respondent is not satisfied, he can elevate the case
by way of an appeal to the Secretary of Justice;
however, the filing of the case is not held in abeyance
pending resolution by the Secretary.
Recognizing the merit in reviewing such cases,
Senator Drilon said that the DOJ Secretary has
informed him that in some cases, the review is
lodged with the Regional State Prosecutor. He
suggested that the DOJ Secretary consider letting
the ordinary appeal process take its due course so
that if the respondent is not satisfied with the ruling
of the fiscal, he can always elevate the matter to the
Secretary of Justice by way of a regular appeal and,
in the meantime, the information is filed in court.
Senator Escudero expressed hope that the Secretary
would indeed review the particular circular including
some of the previous practice of previous secretaries
with respect to the formation of special panels
which effectively deprives a respondent of a one-
level appeal process, as practiced in celebrated cases,
Senator Drilon said that, on the other hand, the
removal of one layer in the appeal process could also
expedite the prosecution of the case. But he pointed
out that the decision of the panel is approved by the
Chief State Prosecutor and is still appealable to the
Office of the Secretary of Justice.
As regards the disembarkation of certain nationals
in airports, Senator Escudero said that he was
informed by Commissioner David that such policy is
in line with the implementation of the anti-trafficking
laws of the country which he fully subscribes to. He
noted, though, some shades of arbitrariness with
respect to disembarkation, particularly in light of the
report that 60,000 of Filipino nationals with valid visas
and passports and tickets who were about the leave
the country were ordered to disembark from the
plane because they have been previously profiled by
the Bureau of Immigration as suspect or liable for
trafticking.
Senator Escudero said that what bothered him
was that profiling might be based on how the person
looks or how much money he carries with him. He
asked on the remedy and appeal process when a
person is wrongfully ordered to disembark, especially
considering that much money has already been spent
TUESDAY, NOVEMIlER 15,2011
for the ticket and for terminal fees which might have
been borrowed, In reply, Senator Drilon said that a
technical working group was constituted to review
the existing policies on offloading and the Secretary
expects to receive the recommendations within the
week, He recognized, however, that the offloading
issue is difficult to resolve because there are indeed
people who desire to go abroad without the appropriate
employment contract, eventually becoming a burden
to the Philippine government He believed that the
right to travel of individuals must be balanced with the
public welfare, especially since they would be exposed
to abuses as they are unprotected by any contract
Asked on the exact figure of offloaded Filipinos,
Senator Drilon confirmed that there have been 60,000
cases, although a number of them were allowed to
proceed with their travel after a review of their case,
He assured Senator Escudero that he would be given
the number of those who were eventually allowed
to leave together with the report of the technical
working group,
Senator Escudero said that he raised the issue in
view of several complaints of wrongfully offloaded
passengers who were not allowed to rcbook their
tickets, He expressed hope that an arrangement
could be done between the BID or the DOJ and the
airlines so that wrongfully offloaded passengers could
still fly to their destinations or could be granted some
accommodation,
Asked how a person should look like for him/her
to be ordered offloaded, or how the BID profiles or
identifies a person who can or cannot leave the
country, Senator Drilon clarified that profiling is not
based on appearance but is primarily based on their
employment contracts, He said that BID agents are
trained to ask a set of questions on the basis of
which a judgment is made whether he/she is a tourist
or is seeking employment abroad,
Senator Escudero, however, pointed out that not
all passengers are asked such questions, He believed
that the immigration official must have a basis of
who he is going to question, in the same manner that
a police officer, when arresting a person without
warrant, is required by the COUll to be able to
verbalize and put into words what led him to believe
that the person is about to commit a crime or has
committed a crime, and, in the case of passengers,
whether the person is about to be trafficked or has
the intention of being trafficked into a foreign land,
569
Senator Drilon said that before further inquiry is
made for purposes of determining whether or not a
passenger will be offloaded, taken into account,
among others, is the age, admittedly based on how
young they look and how scantily they are dressed,
particularly those who are going to Japan or Italy
but do not look like they could financially afford to
travel there on their own, He said that the use of
sixth sense would help in spotting those who are
potential burdens to the government if allowed to
leave the country,
Senator Escudero expressed apprehension on
the use of sixth sense and questioned how a BI
officer wou Id be able to use that as basis to make a
judgment to offload a female passenger who was
wearing a mini-skirt, boots, tight-fitting top and
holding a Louis Vuitton or Hermes bag that could be
genuine or fake, He said that he cannot agree with
the use of sixth sense in selecting, segregating and
isolating these people from the rest of the passengers
as it would be done in an arbitrary manner.
Relative thereto, Senator Escudero asked on the
mode of compensating those passengers who were
wrongfully offloaded as he disclosed that his office
has received numerous complaints about the matter,
adding that 60,000 is not a small number to trifle
with, For clarification, he asked whether the intention
was to protect the interest of travelers or to prevent
human trafficking, and if the case is the latter,
whether majority of the 60,000 Filipino offloaded
passengers were females,
In reply, Senator Drilon said that he could not
say with certainty that majority of them were female
since trafficking applies to both genders, He admitted
that Senator Escudero raised very difficult policy and
constitutional issues and expressed hope that the
recommendation ofthe technical working group could
clarifY a number of these issues to minimize, if not
totally avoid, the occurrence of the practice,
Asked whether the policy could be suspended
while on review, Senator Drilon said that according
to the justice secretary, the recommendation could be
submitted within the week so she would presumably
issue the pertinent circular before the month is over.
Senator Escudel'o suggested that the issues on
remedies and appeal of an offloaded passenger and
the mode of compensation he/she can avail of be
discussed during the budget deliberations,
570
Finally, Senator Escudero asked why the
appointment of the justice secretary has not yet been
submitted to the Commission on Appointments for
confirmation as he assured Secretary De Lima of his
support. He noted that Raul Gonzales sat as justice
secretary for seven years without being confirmed as
he was bypassed by the CA several times although
the President kept reappointing him. He recalled that
as a result of the Gonzales case, then Senator
Aquino filed a bill providing that the President can no
longer reappoint a nominee who had been bypassed
thrice by the CA. He also recalled that Senator
Drilon appeared in the hearing on the bill as a private
citizen to oppose it, saying it could tie the hands of
the President. In response, Senator Drilon said that as
relayed to him by Secretary De Lima, she has already
complied with all the documentary requirements.
Senator Escudero assured Secretary De Lima of
his support in seeking justice and making sure that
those responsible for past crimes and sins would not
get away. He expressed hope that the people in the
new majority would be a cut above the people ofthe
past administration as far as how they did things
against the members of the then opposition and that
even then, those in the opposition were right. He
hoped, moreover, that the new majority would follow
the processes outlined in the law and abide by any
decision of the court.
At this juncture, the Chair interjected to announce
that former President Arroyo was at Terminal 1 of
the airport where she intended to board a flight to
Singapore and that the BI officials were blocking her
departure.
In reaction, Senator Escudero hoped that the
incident would not escalate and result in a constitu-
tional crisis and that the BI officials concerned would
have adequate legal representation from the DOJ
in the event a contempt charge was filed against
them. He opined that what was being done to fonner
President Arroyo may appear to be the right thing
to do considering what she did to the country, but
he asked how it would be perceived if it was done
against a person whose guilt is not that apparent to
the people.
At this point, the Chair inquired into the status of
the plunder charge against General Ligot, et al. In
response, Senator Drilon said that the case has been
submitted for resolution while the tax evasion case
was still pending before the Court of Tax Appeals.
As to when the DOJ would finally resolve the
plunder case, Senator Drilon said that the Chief State
Prosecutor assured him that the office was working
on it and it would be resolved before the year is over.
To the comment of the Chair that the case has
been languishing before the DOJ for several months
already, Senator Drilon explained that the DOJ
received the case in May 20 II but before it could be
acted upon, the complaint was amended in July 2011
and that according to the Chief State Prosecutor, the
office was trying its best to resolve the case at the
soonest possible time.
Sharing the concerns of Senator Escudero,
Senator Sotto hoped that nothing untoward would
happen at the airport as he recalled that the down-
fall of another President started at the airport
many years ago.
Preliminarily, Senator Legarda asked about the
programs of the Department of Justice (DOJ) in
stepping up its campaign against human trafficking.
She stated that she was one of the authors and
cosponsors of the 2003 Anti-Trafficking Law which
her subcommittee was presently seeking to amend.
She recalled that in her 20 II Global Repolt on
Trafficking in Persons on June 27, 2011, U.S. Secretary
of State Hillary Clinton cited the country for its
increased prosecution of traffickers and its efforts to
address con'uption and trafficking-related cases, which
has raised the country'S scoreboard on trafficking-in-
persons under Tier 2 status in 20 II. She lamented,
however, that not too long after that, U.S. Ambassador
Thomas mentioned in a forum that 40% of male
tourists come to the Philippines for sex, a statement,
although eventually withdrawn, had factual basis as
shown in a confidential letter the Ambassador wrote
the Department of Foreign Affairs.
She said that while said letter was not made
public, the Ambassador's statement was based on an
NGO's report, and it was enough reason to be
alarmed at the unabated human trafficking in the
country. She believed that vigorous efforts must be
pursued to eliminate human trafficking and to punish
perpetrators of the crime, Precisely, she stressed,
there is need to expand the coverage of the anti-
human trafficking law by holding liable even
those who attempt to traffic persons, especially the
most vulnerable - the women and children, She
then asked about the DO],s current campaigns
against human trafficking, the prosecutorial services
rendered as well as the convictions secured in
human trafficking cases, and a feedback on the
problem areas that the prosecutors have encountered
in the course of prosecuting human trafficking
cases, which infonnation, she opined, would be helpful
in determining the areas in the law to be amended
or revised, In response, Senator Drilon pointed to an
appropriation of P50 mi II ion for the implementation of
the Anti-Trafficking in Persons Act, including a PI 0
million confidential fund, with the DO.l being the
council-secretariat. He explained that per the inventory
of cases fi led before the DO] from 2003 to 20 I 0,
there were a total of 976 trafficking-in-person cases
prosecuted by the DO.l, segregated as follows:
trafficking for sexual exploitation, 930; organ traffick-
ing, I; and labor tl'afficking, 45, He added that out
of the 976 cases, there were 39 convictions, two
acquittals, 85 were archived, 190 were dropped,
withdrawn or dismissed, 21 were filed under other
penal laws, 301 were submitted for resolution; and
338 were filed in court.
Upon further queries, Senator Drilon replied that
most of the victims in the 976 cases came from the
provinces of Zamboanga, Davao, Cebu and Samar.
He also said that there seemed to be no pattern as
to the gender of the victims and the location where
they were brought except that some were trafficked
to the NCR and eventually abroad,
Asked whether cases had been filed against
trafficking syndicates who trafficked Filipinos in
Malaysia, Nigeria and other countries in Africa,
Senator Drilon stated that the justice secretary had
informed him that task forces had been sent to
Malaysia, Taiwan and Hong Kong to gather evidence
on trafficking of women,
Senator Legarda lamented that there are places
nearby where women and children are clearly
trafficked and exploited. She rued that while law
enforcement agencies have tried to close down some
establishments or joints where women were trafficked,
others continue to operate even with the knowledge
of law enforcers, She asked how the DO] as chair
of the Inter-Agency Council Against Trafficking
571
(IACA T) was coordinating with law enforcers to
stem human trafficking, She also asked on the
working relationship between the NBI and the PNP
to apprehend human traffickers,
In reply, Senator Drilon informed the Body that
the NBI has been closely coordinating with the PNP
as part of the national inter-agency task force on
human trafficking,
Senator Legarda inquired whether the high
incidence of human trafficking in the Philippines is
due to the lack of seriousness on the part of govern-
ment authorities to strongly implement the law or
the low conviction rate of human trafficking cases,
Senator Drilon replied that there were 39 convictions
in trafficking-in-person cases, but he admitted that it
would be difficult to cite any particular reason for the
delay in the prosecution of said cases, He assumed
that causes for the delay in the prosecution of
ordinary criminal cases would apply to trafficking-in-
persons cases,
As to which agency or branch of the government
has the responsibility to create special courts for
human trafficking cases, Senator Drilon clarified
that the power to create special courts is with the
Supreme Court,
Asked how the prosecution of anti-human
trafficking cases could be expedited, Senator Drilon
stated that the Supreme Court was constantly
instituting measures to speed up the resolution of
cases, He admitted though that there are so many
reasons for the delay like lawyers resorting too much
to the Rules of Court, the laxity of the presiding
judges, and the huge numher of vacancies in the
courts,
As to which part of the anti-trafficking law
should be amended to strengthen it, Senator Drilon
suggested that the confidentially clause be deleted
so that those who were charged with the crime could
be shamed before the pUblic,
As regards the issue of human trafficking through
the Internet, Senator Legarda inquired whether the
NBI has a cybercrime unit and a separate anti-
trafficking section that work hand-in-hand with the
PNP in stemming, if not totally eliminating, human
trafficking in the country, Senator Drilon replied in
the affirmative, He confirmed that the NBI is a
member of the IACA T,
'f
572
As to how the U.S. government was helping
the Philippine authorities in improving the situation,
Senator Drilon stated that the U.S. government was
providing technical support and information but not
monetary assistance.
In this regard, Senatror Legarda requested the
DOJ to provide hel' with copies of the so-called
shared information between the U.S. government
and the Department and other pertinent data to be
used in amending the law at the proper time.
On whether the DOJ has provided the NBI
with modern and necessary equipment in its fight
against drug and kidnap-for-ransom syndicates,
Senator Drilon said that the budget for equipment of
the NBI would be considered in the GAB because
it has separate fundings for the purchase of crime-
fighting capabilities such as slll'veiliance equipment.
He gave assurance that he would earmark an
amount from his congres-sional initiative fund for
DNA machines.
At this juncture, Senator Legarda said that she
would suspend her interpellation until the next day's
session.
suspended.
It was 8:45 p.m.
SUSPENSION OF CONSIDERATION
OF THE BUDGET OF THE DEPARTMENT
OF JUSTICE
Upon motion of Senator Drilon, there being no
objection, the Body suspended consideration of the
budget of the Department of Justice.
MANIFESTATION
OF SENATOR SOTTO
Senator Sotto manifested that Senators Arroyo,
Defensor Santiago and Trillanes had reservations to
interpellate on the budget of the DOl
TUESDAY. NOVEMIlER 15.2011
objection, the Body suspended consideration of
the bill.
objection, the Chair declared the session suspended
until ten o'clock in the morning of the following day.
It was 8:48 p. m.
At 10:15 a.m., Wednesday, November 16,2011,
the session was resumed with Senate President
Emile presiding.
(Continuation)
objection, the Body resumed consideration, on Second
Reading, of House Bill No. 5023 (Committee Report
No. 79), entitled
AN ACT APPROPRIA TlNG FUNDS FOR
THOUSAND TWELVE, AND FOR
OTHER PURPOSES.
Senator Sotto stated that the budgets of the
following departments and its attached agencies would
be taken up for the day's session: Department of
Foreign Affairs, International Commitments Funds,
Department of Energy, Energy Regulatory Commis-
sion, and State Universities and Colleges. He said
that deliberations on the budget of the Department of
Justice would resume later in the afternoon.
Chairman of the Committee on Finance.
DEPARTMENT OF FOREIGN AFFAIRS
Senator Drilon presented the budget of the
,. I'"
TUESDAY & WEDNESDAY. NOVEMBER 15 & 16.2011
Department of Foreign Affairs (DFA) and its attached
agencies, namely, the Office of the Secretary, Foreign
Service Institllte, Technical Cooperation Council of
the Philippines, and UNESCO National Commission
of the Philippines.
He stated that DF A is mandated by the Foreign
Service Act to implement the three pillars of the
country's foreign policy:
I) Preservation and enhancement of national
security;
2) Promotion and attainment of economic security;
and
3) Protection of the rights and promotion of the
welfare and interest of Filipinos overseas.
Moreover, he said that the budgetary allocation
for DFA including its attached agencies is PIO.91
billion for 2012, the large bulk of which goes to the
Office of the Secretary.
Senator Sotto inquired into the Legal Assistance
Fund (LAF) being utilized by the DFA for Overseas
Filipino Workers (OFWs) who need legal assistance
abroad.
suspended.
It was 10:19 am,
At 10:20 a.m., the session was resumed,
Upon resumption, Senator Drilon said that for
2011, the LAF amounted to P80 million, of which as
of November 9, 20 II, it amounted to P7,157,902,
leaving a balance of P72,842,097,58, He stated that
the disbursements pertained to about 10 posts, the
most significant of which is the utilization of the
LAF in the following Philippine embassies abroad:
Kuwait, P2 million; Riyadh, PI.6 million; Amman,
P867,000; Beil'ut, P538,000; Cairo, P522,000; and
Doha, P686,000.
For 2012, Senator Dri Ion said that the allocation
for the implementation of the Migrant Workers and
573
Overseas Filipinos Act amounts to PI92.9 million
which includes an additional P30 million for the LAF
so that by January 2012, there will be a total balance
of over PIOO million,
Asked how much the Overseas Workers Welfare
Administration (OWWA) Welfare Fund contributed
to LAF in 20 II, Senator Drilon replied that it
contributed P20 million, the same amount it would
contribute in 2012. He explained that the LAF can
only be used for legal assistance to all distressed
overseas Filipinos, and he stated that there might
have been insufficiencies in the fund for general
assistance in the national aspect such as when there
is repatriation, that is why OWW A funds are tapped
for repatriation purposes which is part of the
assistance to the nationals portion of the budget.
However, he said that as far as the LAF is concerned,
records would show there are sufficient balances.
As to the meaning of an OFW in distress,
Senator Drilon stated that a distressed OFW could
be a runaway or victim of abuse in need of assistance
to be repatriated or the repatriation is due to civil
strife. He informed the Body that the DFA has
assisted around 7,100 OFWs languishing in various
jails abroad,
Senator Sotto clarified that he was not scrutinizing
the DF A budget because he has nothing against the
agency, He said that he would like to find out ifthere
was enough budget for the DFA, in view of the
complaints of some OFWs that they have difficulties
in seeking help from the DFA. He cited the incident
involving the use of blood money for an OFW in the
Middle East, which was funded by the Philippine
Charity Sweepstakes Office (PCSO),
Senator Drilon said that there is no provision for
blood money in the 2012 budget but this would be
sourced from the Office of the President's
discretionary funds or PCSO,
Asked whether an OFW needing blood money
can be classified under the category of "distressed
OFWs," Senator Drilon posited that although there
were OFWs who were convicted of crimes and in
distress, it did not trigger an allocation for blood money.
INQUIRIES OF THE CHAIR
Asked by Senate President Enrile how much of
DFA's total budget would be spent abroad and
574
within the Philippines, Senator Drilon replied that
about 66,33% of the fund or P72 billion will be spent
for 94 posts abroad consisting of embassies, consular
offices, missions, the UN, as well as representations
in international bodies. He said that these postings
should be rationalized because their presence in
terms 'of political, economic or consular services
cannot be justified in many countries. He added that
whatever savings the agency has from the closure of
celiain embassies would be placed in areas where
there are most Filipinos in order to augment the LAF.
He said that he was very pleased to note that the
Foreign Affairs Secretary was very receptive of this
thrust, adding that appropriate recommendations have
already been made to the Otlice of the President on
the matter of postings abroad.
INTERPELLATION
Asked by Senator Ejercito Estrada on the
whereabouts of Secretary del Rosario, Senator Orilon
replied that the Secretary was currently in a meeting
with U.S. Secretary of State Hillary Clinton.
As she expressed full support for the DFA
budget, Senator Legarda extended her warm welcome
to the officials of the DFA who, she said, were
always organized and often assisted her during her
trips abroad. She stated that the absence of the
foreign secretary in the Chamber was understandable
because he would be in a meeting in Malacaiiang
with U.S. Secretary of State Hillary Clinton that she
and the Senate President would also attend.
Senator Legarda informed the Body that the
Technical Cooperation Council of the Philippines
(TCCP), created by virtue of Executive Order
No. 17 issued on September 1, 1992, and chaired
by the Secretary of Foreign Affairs, is tasked to
undertake research on the technical assistance
requirements of the Philippines. She believed that
government must exhaust all technical cooperation
agreements and reactivate those that may be lying
idle. She inquired if the TCCP has a secretariat that
implements its directive and whether the Philippine
posts abroad were aware of it.
WEDNESDAY, NOVEMBER 16,2011
suspended.
It was 10: 36 a.m.
At 10:38 a.m., the session was resumed.
Responding thereto, Senator Drilon said that the
DFA has formed the TCCP but given its very
insufficient budget, it has concentrated on providing
technical assistance to lesser developed countries
like Laos, Cambodia, Fiji, Samoa, Myanmar and Sri
Lanka.
But Senator Legarda clarified that she was
referring to the technical cooperation being extended
by First World nations to the Philippines.
suspended.
It was 10:39 a.m.
Senator Drilon stated that the Philippines has not
received any technical assistance from foreign
countries under the UN Resolution on Economic and
Technical Cooperation Among Developing Countries.
Senator Legarda pointed out that it would be timely
and relevant for the DF A to activate its research on
the technical requirements of the Philippine so that
it could ask assistance from developed countries with
regard to science and technology, climate change
adaptation and disaster risk reduction. Senator Drilon
reiterated that the DFA has concentrated on providing
technical assistance to least developed countries.
However, he stated that the Department would take
note of the suggestion of Senator Legarda.
Senator Legarda reasoned that even as the
Philippines gives technical assistance to Laos and
Cambodia, the DF A could activate the secretariat
and seek technical cooperation from developed nations.
WEDNESDAY, NOVEMBER 16,20 II
As to who is in charge of the TCCP, Senator
Drilon stated it was Ass!' Sec, Jose Maria Carino,
also the head of Cultural Diplomacy,
Senator Legarda underscored the need 10
prioritize the TCCP, saying it would be a waste not
to take advantage of agreements when the country
can have access to research through technical
cooperation, Moreover, she expressed full support
for Cultural Diplomacy, believing as she did that
beyond economic, political and social diplomacy, it is
the name of the game today,
Asked ifthe Cultural Diplomacy unit has sufficient
funding to be tidly operational by 2012, Senator
Drilon replied it has no funds at aiL
But Senator Legarda recalled that during the
hearing, the DF A declared cultural diplomacy as one
of the pillars of international relations, Without a
budget for cultural diplomacy, she asked how the
DFA can proclaim it as part of its diplomatic efforts,
In response, Senalor Drilon explained that with
the very limited budget of the DFA, it would rather
prioritize assistance to over 9 million overseas Filipinos
who remit more than $20 billion a year. But he
acknowledged that the DF A should not neglect
cultural diplomacy, He stated that precisely, the
Committee has asked for the rationalization of the 94
postings abroad so that the DFA can have some
fiscal space to provide for meritorious activities such
as cultural diplomacy, For her part Senator Legarda
believed that for the Philippines, cultural diplomacy
can be one of the country's strongest points on the
globa I stage,
Agreeing that every OFW must be protected,
Senator Legarda asked which countries are cate-
gorized as highly problematic, Senator Drilon replied
that the DF A could brief the Senator on this matter
and provide her a list He opined that diplomatically,
it would not be prudent for the Committee to identify
these countries into the record,
On whether the term "highly problematic
country" I'efers to a country where Filipinos are
being trafficked or where a big number ofOFWs are
not being protected, Senator Drilon opined that a
country would qualifY as such if; for instance, it plays
host to many Filipino nationals who are distressed
or find themselves in trouble, or if its culture and
legal systems do not provide adequate protection to
migrant workers,
575
In closing, Senator Legarda reiterated support
for the DFA budget and expressed hope that it would
be increased to allow the Department to extend
assistance to Filipinos abroad and also pursue other
matters such as techn ical coopemtion and cultural
diplomacy,
In connection therewith, Senator Drilon informed
the Body that the assistance fund for overseas
Filipino nationals would be increased by 89% in the
proposed budget, that is from P793 million to P150
million.
INTERPELLATION OF SENATOR ANGARA
At the onset, Senator Angara stated that the
Philippines is a maritime country with future potential
sources of income from food and energy from the
West Philippine Sea which is part of the country's
territory, He recalled that Justice Coquia and former
Senator Tolentino were part of the assembly of
experts that looked into this issue at one point.
Asked on the state of preparation to safeguard
the country's territory and whether the DFA has a
maritime office, Senator Dri Ion informed the Body
that the DFA has an Office of Ocean Concerns
headed by Assistant Secretary Asuque, a maritime
lawyer, and Dir, Niel Ferrer, an expert on UNCLOS,
He stated that various agencies were working with
the Office in crafting a unified position on issues
relating to seafarers, shipping and ports, He added
that the Office coordinates Philippine participation in
meetings of international maritime organizations,
Senator Angara believed that the description
given by the Committee is a broad mandate that
includes seafarers' concern, However, he said that
he was more concerned about how government can
develop expertise in natural resources found in the
oceans, He recalled that when the Spratiy issue
erupted, the only ASEAN country that sided with the
Philippines was Vietnam, He stated that earlier, Bali
proposed to declare the Spratly as a peace zone but
it received a lukewarm reception and the ASEAN
members, according to news reports, were not even
united behind the concept.
Moreover, Senator Angara stated that as soon as
the Spratly issue erupted, Vietnam immediately hired
the best international lawyers trained in maritime law
from Washington, Geneva and New York, He said
that Vietnam, which cannot be pushed around,
576
subsequently sat down with China and arrived at a
modus vivendi. He inquired if the Philippines
government has done likewise.
In reply, Senator Drilon said that the DFA was
currently negotiating with a New York law firm for
legal and technical assistance on issues concerning
ocean concerns in general and the Spratly in palticular.
Senator Angara observed that the Philippines
was sti \I in the process of negotiating with international
law experts when its neighbors had already engaged
expelts and were already receiving legal advice.
Senator Angara said that there are only two
surviving Filipino experts on the law of the sea as of
this time - Prof. Florentino Feliciano and Atty.
Estelito Mendoza, both of whom were not exactly in
the pink of health. He recalled that along with
Senator Tolentino, Attorney Mendoza was part of
the negotiating panel that concluded the UNCLOS.
On the other hand, he disclosed that Indonesia has
retained its original negotiators so that its institutional
memory was kept intact. He asked if the DF A has
an institutional memoly.
Further, Senator Angara stressed that the stakes
are so high because China was ready to go to war
over the Spratly, knowing it has gas and oil deposit
so huge it can sustain another 25 years of
development. He asserted that the Philippines made
the mistake of joining ajoint exploration survey with
China because it is the only one in control of the data
and it is selective in sharing the same. He said that
it is a pious hope that the Spratly wou Id be declared
a zone of peace, underscoring that the Philippines
must prepare itself
Senator Angara disclosed that six young
outstanding students of the U.P. recently came back
from Yale, The Hague and John Hopkins, all of
whom were trained in international law. He said that
he has taken the initiative of convincing the Dean
and UP President Pascual, who was present in the
Chamber, to put up an Institute of Maritime Affairs
at the U.P. Law Center so that it can provide the
academic support the DFA would require. He said
that the Philippines has human talents but it lacks the
organizational ability to mobilize them and engage the
best minds in the world when so much is at stake.
Senator Angara surmised that most Filipinos
probably have Chinese blood and this could either be
a bludgeon or an instrument of good, He cautioned
though that should the counlty have a problem with
China, these Filipinos might have difficulty choosing
sides, but they can also be instruments of diplomacy
and mediation. He said that he understood the legal
implications of having to negotiate and sit down and
negotiate again because Filipinos may be deemed to
have waived their right under the UNCLOS to
pursue a legal remedy under the United Nations.
He said that these are judgments on where the
ultimate national interest lies. He pointed out that the
country could willingly give up that technical legal
right to pursue a legal case in the U.N. versus the
potential of concluding an agreement, for instance, on
the NOIth Sea oil, similar to what the contending
countries like U.K. and Norway, or Norway and the
Northern countries did. He reiterated that there was
so much at stake and the country needed to tap
every single talent in this effoll.
Senator Drilon concurred with Senator Angara,
noting that there was indeed an urgency and need to
put up a group to provide technical expertise on
maritime issues. He said that he would take it upon
himself to constantly remind the DF A of the need to
strengthen institutional knowledge of maritime issues
given the fact that the country has over 7,000 islands
and these concerns should be given top priority.
He agreed likewise that the country was grossly
unprepared at this time as he acknowledged the
perception that it is not a top priority of the DF A. He
requested the DFA, in the next 30 days, to submit to
the Senate a definite plan of action on this concern.
Senator Angara appreciated the suggestion of
Senator Drilon, noting that action is an essential part
of diplomacy. He expressed hope that the DF A
would attend to the request and see it as an
opportunity.
Moving on to another matter, Senator Angara
asked whether the DFA has training, scholarship and
fellowship programs within the foreign service for
young career diplomats geared towards a definite
career path similar to that given by ASEAN countries
like Thailand, Malaysia, Singapore and Indonesia.
Senator Drilon replied that the program for the
development of career diplomats is basically handled
by the Foreign Service Institute (FSI) which was
mandated under the Foreign Service Act to serve as
the center for the development and professionalization
of the career foreign service corps.
WEDNESDAY. NOVEMBER 16.2011
Asked on the allocation for scholarships, training
and fellowships, Senator Drilon replied that it is
P40,870,OOO for the Foreign Service Institute and out
of that amount, PI ,271 ,000 is allocated for "training
and scholarship expenses" which he assumed can
also be used for foreign scholarships.
Senator Angara disclosed that he has just sent
two scholars from the U.P. to train in archival
conservation in Mexico and he pointed out that P 1.2
million might not be sufficient for the transportation
and accommodation expenses of even one scholar.
He noted that the D FA does not really have a
systematic institutional program for sending out young
career diplomats to train in the same way that other
countries do. Senator Drilon revealed that he has
strongly suggested to the foreign affairs secretary
that the DFA rationalize its postings and use part
of its funds for training and scholarship for young
diplomats. He said that he cannot see the wisdom of
having 94 postings and spending an average of about
P20 million per post. With this redirection, he stated
that the government can provide funds for the training
and scholarship expenses of career diplomats.
Senator Angara expressed support for the
suggestion and disclosed that he has supported some
of the DFA scholars because the DFA does not
provide any scholarships. He said that it was a pity
that with such a talented pool of officers, the
government does not have enough funds for their
training. He noted that the country has so many
offers of scholarships and wondered if the NEDA
passes them on to other departments. Senator Drilon
said that he was informed that the DF A receives
scholarship grants Irom various foreign entities which
supplement the budget for training and scholarship.
Senator Angara commented that it is a chancy
contingent funding because it would depend upon the
generosity of the donors. But he expressed concern
that a recipient of an Australian scholarship, for
example, might have divided loyalty because he/she
might feel beholden to Australia that has given him/
her the opportunity to advance his/her career. He
stated that a young career diplomats would have to
come back to the Philippines rather than stay in his
foreign posting. He rued that career diplomats do not
have an attachment for their own country not because
they are unpatriotic but because their country has not
given them the opportun ity to advance their careers.
As regards the total contributions to international
organizations where the Philippines sits as a member,
577
Senator Drilon stated that the 20]2 budget for the
International Commitment Fund (ICF) amounts to
P2,628,248,000. He proceeded to enumerate various
international agencies or organizations of which the
following departments or agencies are members:
DAR - Center on Integrated Rural Develop-
ment in Asia-Pacific (CIRDAP);
DA - Animal Production and Health Commis-
sion for Asia and the Pacific, International
Agriculture Research, Food and Agriculture
Organization, IRRI, the World Organization for
Animal Health, UN Convention to Combat the
Certification;
DepEd - Southeast Asian Ministers of Educa-
tion Organization, the Southeast Asia Ministers
of Education Organizational Regional Center for
Education, Innovation and Technology, the
SIMMEO Regional Center for Graduate Study
and Research in Agriculture (CIRCA);
SUCs - University of the Philippines Eastern
Regional Organization for Public Administration;
DOE - International Energy Forum;
DEN R - UN Environment Program (UN EP),
the Coordinating Committee for Coastal and Off-
shore Geosciences Programs in Eastern South-
east Asia, International Hydrographic Organiza-
tion, International Tropical Timber Organization,
Asean Center for Biodiversity, etc.
DOF - Asian Development Bank (ADB), Inter-
Government Group of 24, World Custom
Organization, the Micro Economic and Finance
Surveillance Office;
DFA - APEC, ASEAN, International Committee
of the Red Cross (ICRC), UN, Organization for
the Prohibited and Chemical Weapons and 25
other organizations.
Senator Angara pointed out that among those
organizations, some are really outstanding and add to
the enhancement, improvement and development of
the economy in agriculture; however, many of them
do not really contribute at all to the overall prosperity
and development of the country. He stated that it is
time to rationalize the membership, similar to the
suggestion of rationalizing posts to concentrate on
agencies that are really meaningfully helping in the
social, economic and academic development of the
country.
578
Senator Drilon said that the 2012 budget would
show a reduction by about P823 million in terms of
funding contributions to international organizations
li'om the present level of contribution, Senator Angara
suggested that the reduction be done selectively and
not across-the-board, He said that the contributions
for organizations with minimal impact On the country
should be reduced while the contributions should be
increased for organizations that really help the country,
like FAO, UNESCO, IRRI, among others. Senator
Drilon said that the DFA would lead the rationalization
but it has to consider the inputs of other agencies
before deciding on the matter, Senator Angara asked
that the DF A take the leadel'ship in doing the
rationalization by offering the main recommendation
and doing the inter-agency consultation.
On a Iinal note, Senator Angara stated that the
Philippine Sea problem partakes ofa policy statement
because it comes from the Senate which is an active
participant in diplomacy and in foreign relations, He
hoped that the DFA would seize the supportive
stance of the Senate towards conserving and protecting
the country's maritime assets.
Commenting on the suggestion to hire law firms
from other countries to give advice on the West
Philippine Sea (South China Sea) issue, Senator
Osmefia pointed out that there were already local
experts like the Kalaw, Carpio-Villaraza, and Romulo
Mabanta law finns, He said that there have been
numerous discussions and analysis on the issue by
distinguished thinkers like Justice Carpio, Peter
Galbraith, and Heidi Yorac. However, he cautioned
that the specifics of this issue should not be debated
in public so as not to divulge the plan to the other
party, and he advised that it has to be a multipronged,
multi-lateral effort. He noted that the UNCLOS
seemed to be the only legitimate internationally
accepted forum that can help settle the issue since it
is a treaty to which China has already acceded,
Although they could withdraw anytime, he said that
a multi pronged pressure from different nations,
particularly in Asia, would be more effective than a
one-on-one effOit. Senator Drilon pointed out that the
approach the Philippines has always taken is a
multilateral rather than a bilateral approach as far as
the Spratly and China are concerned.
Asked on the total budget of the DF A, Senator
Drilon replied it is PI 0.9 billion, but as regards the
WEDNESDAY, NOVEMBER 16.2011
number of commercial attaches, he said that he
would secure the information from the DT\'
Upon further queries, Senator Drilon said that there
are two agricultural attaches - one in Washington
and another in Rome, four defense attaches (subject
to verification), and quite a number of labor attaches,
Asked if the labor attaches report to the DOLE,
Senator Drilon explained that pursuant to the Foreign
Service Act, it is a one-country team approach led
by the DF A with the head of the post as team
leader who would coordinate all efforts of the
various attaches posted in the embassies. As regards
budgetary support, he stated that various agencies
would have control over the budgetary releases so
that, for instance, defense attaches would be funded
by the budget of the DND, and insofar as their policy
thrust is concerned, it is under the supervision of the
agencies to which the attaches are attached,
But Senator Osmefia recalled that in his recent
trip to Thailand for an inspection visit, he was
surprised to discover that there was no agricultural
attache in the embassy, although there was a very
competent commercial attache who did some
research on Thai agriculture, He asked if there are
plans to revisit the way the departments are supposed
to work together to provide better service from the
various outposts that were set up around the world,
He stressed that the agriculture attache is important
since the country purchases rice from other countries,
and this contributes to food security. He lamented
that the country has not yet reached the level of self-
sufficiency in rice, nor will it achieve it in the near
future, because the DA does not even know where
it can get its statistics and neither does it have the
men on the ground to do the proper inventory.
Senator Drilon explained that the detennination as
to which country a particular attache would be posted
is determined by the line agency, He said that the
DFA, particularly the head of the post in a particular
country, could recommend and would have its own
inputs but the decision rests in the head of the cabinet
agency or department, who will be in charge ofthe
particular activity. He emphasized that whether or
not an agriculture attache will be posted in Thailand
is an issue which the Secretary of Agriculture will
determine,
Senator Osmefia recalled that about two or three
decades ago, Malaysia formed super ministries to
cover multi-departmental focus on a particular
industry. To illustrate, he said that Malaysia's super
ministries - Department of Trade and Department
of Industry - for primary industries covered rice,
rubber agriculture. He surmised that certain problems
would be difficult to resolve if it would be left to one
ministry that is focused only on its mandate.
Further, Senator Osmeila believed that the
mandate after the first processing step for primary
agricultural crops should fall under the DTI so that if
the govemment would like to go beyond simply rice
production, for instance, it could package and sell
rice like Minute Maid or Uncle Ben's Rice in the
U.S. He stated that a super ministry should be
formed so that, in this case, the DA and DTI could
work together on the particular issue. He hoped that
the DFA officials would encourage and push
agricultural attaches in different countries to be on
top of things so that they could compare notes and
send periodic reports to the Senate, the DA, DFA,
UP, and other agricultural schools to keep up with
the progress that other countries have been making.
Asked whether the Philippines has a cabinet-
level representative to the Food and Agricultural
Organization in Rome (FAO), Senator Drilon informed
the Body that the ambassador to Italy serves a dual
purpose since he is also an ambassador to the FAO.
Senator Osmef\a asked if it would be difficult to
separate the two and have someone focus on the
FAO, which is a very important UN agency in view
of the peculia!' needs of the country.
suspended the session.
If was 11:33 a.m.
At II :35 a.m., the session was resumed.
Upon resumption, Senator Drilon said that the
DF A had been requested to rationalize its postings
abroad to be able to field more people in inadequately
manned areas where assistance to nationals is a
principal issue. He expressed hope that with such
rationalization, the DFA could also find a physical
space to consider a separate ambassador to the FAO.
579
Senator Osmeila requested Senator Drilon to
intervene in urging the Department of Agriculture to
send some agricultural attaches to four or five countries
in Asia that really need monitoring to be able to learn
how to time the country's purchases right as well as
to source cheaper food, particularly rice.
On another matter, Senator Osmeila said that he
was shocked beyond belief to have found for himself
in a visit to the Philippine Embassy in Washington
two to three months ago the absence of furniture in
the official residence of Ambassador Cuisia because
of looting. He recalled that the embassy used to be
a very lovely house when he frequented it as a
student at Georgetown University.
Asked if the proposed budget contains funds for
the refurbishment of embassies, Senator Drilon replied
that the DF A's capital outlay has been increased by
a hefty 224%, or from Pl.38 million in 2011 to P4.5
million in 2012. Senator Osmefta, however, lamented
that P4.6 million is merely US$1 00,000, barely enough
to furnish one embassy. He expressed hope that at
the proper time, the Committee on Finance would
entertain a proposal to increase the capital outlay to
ensure that the major diplomatic functions are carried
out in a more respectable way that would at least
reflect the Filipino culture and people. Senator Drilon
surmised that the DFA has other sources that can be
utilized for capital outlay such as the Building Fund.
Senator Osmena pointed out that with assets of
about US$I 00 million, Congress could authorize the
setting aside of one tenth of I % for the wear and
tear of such assets, following ratios used in account-
ing and finance, to just simply maintain and avoid
the ring-around-the-collar look which reflects on
the country.
Articulating complaints on the nonpayment of
retirement benefits, Senator Osmena asked on the
amount of total payables. Senator Drilon replied that
retirement benefits of regular plantilla personnel are
paid on time and, if there might indeed be outstanding
balances, these are already under process and they
are claims that are not beyond 12 months. He also
said that if there are complaints in the release of
benefits, these come not from plantilla positions but
from some local hires, on minor issues such as
documentation which are now being resolved.
Senator Osmefta requested a report on the local
hires and their aging schedules, stating that he gets
embarrassed every time people approach him
tP'1
580
complaining that they have not been paid their benefits
for 3, 4 or 5 years.
As regards passport application, Senator Drilon
stated that the Aseana Business Park building can
accommodate the public with an average waiting
time of one hour for the entire passport application
process.
INTERPELLATION
Replying to the query of Senator Ejercito Estrada,
Senator Drilon said that the Philippines has an
extradition treaty with nine (9) countries-China,
Hong Kong, Switzerland, South Korea, United States
of America, Australia, Canada, Thailand, Indonesia,
United Kingdom, India, Spain and Micronesia.
Asked which of the countries recognize the right
to asylum. Senator Drilon said that it would depend
on the policy of each country where asylum is being
sought, particularly in relation to its national interest.
He affirmed that Singapore is not one of the countries
with which the Philippines has an extradition treaty.
INTERPELLATION
OF SENATOR ESCUDERO
At the outset, Senator Escudero lauded the
deployment ban ofOFWs in certain countries which,
he said, manifested the concern of the POEADOLE
for them. However, he also agreed to the DFA's
raising of alarm over such a decision because it
would affect the standing of the countries where the
ban is imposed.
Asked by Senator Escudero why both agencies
would have to argue the ban in public, Senator
Drilon admitted that, indeed, the two agcncies did not
talk. He affirmed that while the DOLE issued the
ban to protect the OFWs, the DFA has requested for
time (0 discuss the issue with the countries concerned
in order to find ways and means by which the
Philippines can prosecute the national interest and
the interest of the OFWs without prejudicing the
country's relations with the countries concerned.
He likewise disclosed that the DFA has given itself
90 days to come up with labor agreements with the
41 countries.
Senator Drilon said that as a fonner Secretary of
Labor he finds it extremely diftlcult to
compel foreign governments to enter into labor
agreements with the Philippines that aim to provide a
modicum of legal protection to overseas workers. In
fact, he said, there are many instances when municipal
laws of these countries would not even recognize
workers as part of their Labor Code. He expressed
hope that such episode of the DOLE's banning
deployment in 41 countries would result in a situation
where the countries would be compelled to sign labor
agreements with the Philippines.
Senator Escudero expressed sympathy with the
DFA as far as the issue was concerned, particularly
in its actual pursuit to obtain a migrant workers'
agreement or treaty with other countries, just to
show the OFWs that the DFA is fighting and pushing
for such agreements.
Asked ifPOEA-DOLE has lifted the deployment
ban, Senator Drilon replied in the affirmative, as he
cited the DF A's request for 90 days within which to
sit down and discuss with 41 countries what measures
could be undertaken in order to protect the welfare
of Filipino workers, given the fact that the primary
consideration for the issuance of the deployment ban
is the lack of protection of OFWs in the countries
concerned.
Senator Escudero noted that the Philippine
government has been haled to court by a German
company in connection with the NAIA Terminal III
contract, also by a Belgium company as regards the
cancelled Laguna Lake contract, and possibly by
France or by the United Kingdom regarding the
bridge program that the Philippine government is
reviewing. He then asked whether the DF A is being
consulted in contract cancellations involving foreign
companies. Senator Drilon said that the DFA was
never consulted; however, the cancellations were
premised on the fact that many of the contracts were
found to be prejudicial to the national interest. He
clarified that the policy issue is either to honor the
contract and suffer its burden or cancel the contract
and face a lawsuit. He cited as an example the P 18-
billion Belgian contract to dredge Laguna de Bay.
Senator Escudero stressed that he was not taking
issue with the cancellation of the contracts which
was done on merit and for good cause but the
government, he pointed out, should have at least
consulted or informed the country's representatives
and ambassadors abroad to let them know what to
say to their foreign counterparts. Senator Drilon
agreed that the pertinent agencies should have briefed
the OF A on the basis of the action taken on a
particular contract.
Asked whether the OFA was consulted or took
part in setting up the meeting in Japan between the
President and the head of the MILF, Senator Orilon
said that the meeting was held upon the advice of the
Office ofthe Presidential Adviser on the Peace Process
and while the OFA was not intimately involved in the
decision, it was duly informed of the meeting.
Senator Escudero stated that based on pictures
later released, the setting of the meeting was similar
to talks between two heads of states. Relative
thereto, he asked how the OF A would classify or
characterize under diplomatic laws the meeting
between the head of state and the head of a rebel
group, in a foreign land. In response, Senator Orilon
said that it was characterized as an informal meeting
on internal issues and under its mandate, the OF A
has no role to play. He added that the absence of
a OFA representative in the meeting strengthened
the position of the government that the matter was an
internal issue that did not involve a foreign government.
Senator Escudero countered that his only
reservation was that the meeting was done in a
foreign land. He sympathized and empathized with
the OF A with the hope that it would be informed and
consulted more often so that it is better equipped
to answer queries.
Upon further query, Senator Orilon corrected
that 7,100 OFWs, facing one case or another, should
be aptly called "distressed OFWs" and that they
were not necessarily in jail. He clarified that 12,000
OFWs were actually in jail, most of whom had
problems with immigration or had employment-related
problems, while others committed common crimes.
He stressed, however, that the figure is no cause for
alarm because many of the immigration cases carried
with them a penalty of detention in immigrationjails.
He added that the figure 7, I 00 refers to OFWs that
the OFA actually assisted.
Senator Escudero said that the OFA should
know exactly how many OFWs were in jail and their
specific cases. Senator Orilon explained that the
OF A did not have the exact figure, pointing out that
the number fluctuates from 4,000 to 12,000 and the
nature of their offense was principally immigration-
related, mostly lack of proper documentation.
581
Senator Escudero requested to be furnished
with the exact number of detained Filipinos abroad
as well as the actual classification of their cases.
As regards the particular office in the OF A
that oversees the matter, Senator Orilon said that it
is the Office of the Undersecretary for Migrant
Affairs headed by Usee. Esteban B. Conejos, Jr.
Senator Escudero explained that he raised the
issue because he wanted to know if the funds
allocated for distressed Filipinos, which include those
who are detained, were adequate and sufficient
based on the experience of the OF A the previous
years. Senator Orilon said that the sum of PI 50
million - an increase of 89% over the present
allocation of P79.3 million - was allocated for
assistance to nationals abroad.
Asked whether said allocation has a counterpart
in the OOLE budget, Senator Orilon said that as far
as the workers who pass through the POEA are
concerned, there is the OWWA fund with an
approximate asset of P 12 billion. He added that there
were instances when the said funds were tapped for
non-registered or non-OWW A members when so
authorized by the government subject, however, to
reimbursement. He disclosed that part of the alloca-
tion next year is the reimbursement of previous
obligations to OWW A, which, incidentally, has a total
budget of P162.5 million was allocated for assist-
ance to nationals abroad.
Proceeding to another matter, Senator Escudero
recalled that Spain pursued and entered into a prisoner
exchange agreement or treaty with the Philippines
because one of its nationals in the Philippines was
incarcerated by virtue of a final judgment of the
court. He asked whether the Philippines has entered
into a prisoner exchange treaty or agreement with
other countries. He added that a Filipino national
incarcerated abroad should be given the option to
choose to serve his sentence at home where he can
be visited by his family unless he prefers to remain
incarcerated abroad. For instance, he pointed out that
in the case of a Filipino adjudged guilty for having a
committed a crime, justly or otherwise, and ordered
to suffer the penalty of 30 years imprisonment in a
Saudi Arabianjail, that 30-year sentence is tantamount
to a death sentence as far as his family is concerned
because they would never be able to visit him in jail.
He stated that Filipino workers are constrained to
582
work abroad because they do not have money but
once incarcerated abroad, the families they left in the
Philippines cannot be expected to spend their last
money to visit them in jail even once a year. He also
inquired as to the prognosis of having a similar
agreement with all countries where there were
Filipino workers.
In response, Senator Drilon said that as a matter
of policy, the DFA pursues agreements on bilateral
transfers of sentence to persons, and he cited similar
agreements with Hong Kong and Thailand. He said
that Rep. Ronald Singson would stand to benefit
from the agreement with Hong Kong, upon request.
He added though that while these agreements exist,
he was not aware of the corresponding conditions.
As to multilateral convention, he said that it was still
being reviewed to determine whether acceding to it
would be of national interest.
Senator Escudero pointed out that it was Spain
that pursued the agreement for only one national.
He then asked about the efforts undertaken by the
DF A, to pursue the same in other countries where
there are many Filipino workers. In reply, Senator
Drilon said that there were ongoing negotiations with
Denmark, Kuwait and the Kingdom of Saudi Arabia
in the pursuit of similar agreements on the transfer of
sentence of persons.
Senator Escudero advised the DF A to become
more active in this pursuit with special focus on the
top 10 or 20 countries where there are a lot of
Filipinos who are either residing or working there so
as to provide them the benetit of the option under
said agreements. Senator Drilon agreed that Filipinos
should be given an option to be transferred to the
country's penitentiaries.
Senator Escudero remarked that while incarce-
rated Filipinos abroad would most likely choose not to
avail of the option because conditions in foreign jails
might be better, just the same, they should not be
depl'ived of the option to be closer to their families.
Relative to the travel ban and TRO fiasco involv-
ing the Arroyos, Senator Escudero asked on the
effect of the cancellation of a passpOit of a Filipino
national who is abroad, whether or not the Philippines
has an extradition treaty with it; and, on the possible
grounds for the cancellation. In response, Senator
D"ilon said that the cancellation of a passport can
take place under the following instances: by viliue of
a court order, by conviction in a criminal offense, or by
the declaration ofthe person as a fugitive from justice.
As regards the effect of the cancellation of the
passport of a person who happens to be abroad,
Senator Drilon said that he/she becomes an
undocumented alien and the policies and laws of the
foreign country would govern whether or not he/she
should be deported.
In a situation where a court has issued an arrest
warrant against a person who cannot be found,
Senator Escudero asked if all it would take for the
DF A to cancel his/her passport is a declaration from
the Secretary of Justice that he/she is a fugitive from
justice. Senator Drilon stated that it is the court that
must declare a person a fugitive from justice but in
a situation where the arrest warrant cannot be
served because the person is outside the jurisdiction
of the court, it can order the cancellation of his/her
passport. He pointed out, however, that the passport
can be cancelled without a court order when, for
instance, said document was found to have been
tampered with or obtained fraudulently. He said that
on a limited basis and under that circumstance,
administrative action is feasible.
Asked what the next step wou Id be once the
passport of a Philippine national has been cancelled
and after representations had been made by the
DFA with its counterparts in the country where the
person is located. Senator Dri Ion recalled that when
he was still justice secretary, there were instances
when he received notices, diplomatic notes or requests
from foreign countries seeking the deportation of
their nationals whose passpOits had been cancelled.
He stated that he acceded to the requests on a
number of occasions, especially in the absence of an
extradition treaty with the requesting foreign govern-
ments. The Philippines, he underscored, has absolute
discretion on what to do with undocumented al iens.
Senator Escudero observed that when the passpOit
of a person is cancelled, the usual practice is for his/
her government to request his/her deportation back
to his/her country. He asked whether such is also
being practiced in the Philippines and which agency
is authorized to make the request. In reply, Senator
Drilon said that the DFA is not aware of such a policy
but he surmised that it might be a policy of the DOJ.
Senator Escudero pointed out that in the case of
Senator Lacson, there was no court order cancelling
, r
his passport precisely because the case was pending
before the Supreme Court. Senator Drilon said that
he did not really know if the passport of Senator
Lacson was cancelled or not, but if it was, it could
be assumed it was pursuant to an order of the court.
Asked if it should be the DOJ, through the
Bureau of Immigration, that should request the
deportation ofa Philippine national abroad as a result
of the cancellation of his/her passport, Senator Drilon
replied it would be the logical step, whether or not
the Philippines has an extradition trea1y with the
foreign country, as he emphasized that the Philippines
takes action on the basis of national interest.
DEPARTMENT OF FOREIGN AFFAIRS AND
ITS ATTACHED AGENCIES
There being no other interpellation, upon motion
of Senator Drilon, there being no objection, the
budget of the Department of Foreign Affairs and its
attached agencies was deemed submitted for the
Body's consideration.
INTERNATIONAL COMMITMENT FUND
There being no interpellation, upon motion of
Senator Sotto, there being no objection, the budget of
the International Commitment Fund was deemed
suspended.
It was 12:22 p.m.
ANNOUNCEMENT OF SENATOR SOTTO
At this juncture, Senator Sotto announced that in
the afternoon session, the budgets of the following
agencies would be considered: Department of
Justice, Department of Energy, State Universities
and Colleges, Department of Labor and Employ-
ment, Department of Health and the Department of
Interior and Local Government.
583
suspended until three o'clock in the afternoon.
It was 12:24 p.m.
At 3:20 p.m., the session was resumed with
presiding.
DEPARTMENT OF LABOR
AND EMPLOYMENT
Depal1ment of Labor and Employment (DOLE) in
the amount of P6.990 billion representing an increase
of P597 million or 9.4% higher than the present
budget of P6.39 billion. He said that the P2.746
billion allocation for the Technical Education and
Skills Development Authori1y (TESDA) is 39.3% of
the entire DOLE budget, while the Office of the
Secretmy has a proposed budget of P2.3 billion.
INTERPELLATION
OF SENATOR CAYETANO (A)
Asked by Senator Cayetano (A) on the current
national unemployment rate, Senator Drilon replied
that it was pegged at 7.1 % which represents the
percentage of Filipinos who have no jobs in the labor
force and are actively looking for employment.
On whether the DOLE's unemployment statistics
does not include a person who is not actively looking
for work, Senator Drilon replied in the affirmative.
Asked if the DOLE considers a person to be
employed even if he only works for a season,
Senator Drilon explained that based on international
standards, a member of the labor force who works
for at least an hour during the reference period
(week that the survey was taken) is considered to
be employed.
To simplify the gathering of such information,
Senator Cayetano (A) suggested that the government
utilize the "happiness factor" or similar user-friendly
surveys to gauge the country's development. He
recalled that a survey conducted in Taguig revealed
that 50% or one out of two residents considered
r
584
himself to be unemployed, He asked whether the
DOLE had conducted a survey on the ordinary
Filipino's perception regarding the unemployment
situation in the country, Senator Drilon replied that
the DOLE did not have such information, However,
he surmised that the results of the Taguig survey
might have been due to the fact that the respondents
do not consider work activity in the informal or
agricultural sectors as actual employment He believed
that the question "May trabaho ka 0 wala?" can
elicit a response which would be completely different
from the data that is based on internationally accepted
standards of measuring employment
Senator Cayetano (A) explained that he asked
the question because he wanted the public and the
government agencies to have a true picture of the
unemployment situation so that the government would
see the enormity of the problem and take steps to
address the same, He noted that the 7, I % unemploy-
ment rate - which does not take into consideration
the estimated 10 million Filipino overseas workers-
gave the erroneus impression that 90% of Filipinos
are employed, He suggested that the DOLE work
in pal1nership with local government units or survey
companies to develop a system of determining the
actual employment situation around the country so
that it could, in turn, work on creating more jobs in
the areas that are in need of the same,
Moreover, Senatol' Cayetano (A) cited a World
Bank study which revealed that the lack of emphasis
on science, technology, engineering and mathematics
was the reason why higher education does not yield
the expected growth and advancement for the nation,
He pointed out that many people learn only too late
that getting a diploma is not a guarantee for employ-
ment He informed the Body that when he found out
that 50% of the people in Taguig do not have work
or think that they do not have work, this gave him the
extra zeal to find a work or livelihood for them, or
sponsor entrepreneurship seminars,
Senator Cayetano CA) believed that the govern-
ment's weakness in the area of research and statistics
hinders it from providing the public with a clear
picture of the actual employment and economic
situation in the country, For instance, he said that
most Filipinos do not experience the economic growth
reported through government data which showed
increases in gross national product (GNP) and the
gross domestic product (GDP), He also pointed out
that the changes made in the parameters of the
Family Income and Expenditure Survey (FIES) make
it more difficult to determine the actual income of
families,
In a related matter, Senator Cayetano (A) also
expressed concern over DOLE statistics which
revealed that there were more unemployed educated
individuals than those who had less education (high
school graduates 1,270,000, college graduates
1,249,000 and elementary graduates 339,000), He
noted that while only 14% of the 23% of Filipinos
who went college were able to complete their tertiary
education, 1,27 million of these graduates were
unemployed, He then urged the different agencies
and departments to provide more user-friendly
infonnation that would enable educational institutions,
including state universities and the TESDA, to reformat
their programs in a certain area, and give a more
accurate picture of the jobs that are available and the
skills needed for gainful employment
On another matter, Senator Cayetano (Al recalled
Chief Justice Artemio Panganiban's column entitled
Shabby Treatment r<f OFWs at the Airport in 2008,
He asked why an ordinary OFW would find it hard
to get an exit penn it whereas fonner President Arroyo,
who was being accused of plunder, did not need one,
Acknowledging that exit permits were meant to
protect OFWs, he asked, however, how many OFWs
who tried to secure exit permits were protected and
how many were hassled, He recalled that in his
column, Chief Justice Panganiban asked the OFWs
to e-mail him their problems and based on the
information they submitted, he made a matrix and a
chart on who to deal with in government and what
documents were required relative to such matters as
applying for overseas jobs, pre-departure, working and
living abroad, vacation (baUkbayan) and reintegration,
In connection therewith, Senator Cayetano (A)
asked whether any group has studied the system and
simplified the process, as he also asked the POEA to
look into the situation of OFW s Hong Kong who had
to pay HK$50 for certain forms that ran out In reply,
Senator Drilon stated that the POEA has a continuing
review of its rules and regulations which is necessary
to prevent unscrupulous agents from victimizing OFWs,
He admitted though that in the process of simplifying
the process, there is a tendency to overdo things
which sometimes result in undue difficulties for OFWs.
Senator Cayetano (A) suggested that DOLE put
up in its website a blog where OFWs can channel
their complaints, problems and suggestions on how to
make the system better and easier, after which a
group can sort out or categorize the issues, Senator
Dri Ion acknowledged the suggestion and revealed
that a standard Q and A and Frequently Asked
Questions (FAQl forms would be made available
in the POEA website,
On a related matter, Senator Cayetano (Al
assumed that agencies like the DOLE, POEA and
the OWWA were being blamed for the proliferation
of unskilled or underage OFWs, He recalled his
meeting with Filipinos from Mindanao, aged 16
and below, who were working as OFWs in Jordan
although they cannot even speak English, Apparently,
he said, the parents of these young people borrowed
money to send them to Jordan to work and they
were afraid to be sent home for fear of being
scolded by their parents,
Asked how those OFWs were able to get
passpOlts, Senator Drilon stated that falsification of
birth certificates is not unusual, especially in the case
of Muslims in Mindanao where one needs only to get
a certification from the Office of Muslim Affairs that
he is IS-years old or older and it is accepted at face
value by the POEA because it is a public document
He admitted that because of these incidents, there is
a tendency to overregulate and balancing becomes
very critical and difficult
Senator Cayetano (A) pointed out that the DOLE
should not be blamed for these incidents but
emphasized that somebody must be held accountable,
Senator Drilon stated that precisely, as regards the
issue of offloading, one of the things that the Bureau
of Immigration would look into is the age of the
recruited worker, acknowledging that many in the
bureaucracy face difficulty when the birth certificate
does not reflect his/her correct age,
Senator Cayetano (A) surmised that such
problems arose because nobody was apprehended
and jailed, and many of the victims do not cooperate
for various reasons, He narrated that one of his
neighbors was sent home after being maltreated by
his employer but he refused to file charges because
some people at the Embassy supposedly told him to
keep quiet or else he would not get any assistance
from them, He stressed that unless the DOLE
coordinates with the other agencies, it would be
blamed for untoward incidents because it is at
the frontline,
585
DEPARTMENT OF LABOR AND EMPLOY-
MENT AND ITS ATTACHED AGENCIES
of Senator Sotto, there being no objection, the budget
of the Department of Labor and Employment and its
attached agencies, namely: the Office of the Secretary,
Institute of Labor Studies, National Conciliation and
Mediation Board, National Labor Relations Commis-
sion, National Maritime Polytechnic, National Wages
and Productivity Commission, Philippine Overseas
Employment Administration, Professional Regulation
Commission and the Technical Education and Skills
Development Authority was deemed submitted for
the Body's consideration,
suspended,
It was 3:53 p.m,
At 4: 14 p,m" the session was resumed,
At this juncture, the Chair recognized Senator
Angara, vice chairman of the Committee on Finance,
STATE UNIVERSITIES AND COLLEGES
Senator Angara presented the budget of the
state universities and colleges (SUCs),
INTERPELLATION
Preliminarily, Senator Cayetano (A) requested
that he be allowed to show couple of slides to set the
tone of the questions he would like to ask, He
pOinted out that the first slide illustrates the fact that
the more education a person has, the less poverty he
will suffer; however, the next slide showed that,
unfortunately, whether it is basic or tertiary education,
the past governments, including the present one, say
that the country should have more than enough
funding before the government can increase the
budget for education; the third slide showed that the
budget for education in 20 II is only 229% of the
Gross Domestic Product (GOP), which is way below
the 6% GOP or P300 billion short of the level
586
recommended by the United Nations and even below
the 3,9% average GDP in the East Asia region, He
pointed out the direct relationship between the
spending in education and how the Philippines is
being lell behind by its neighboring countries,
Adverting to another slide, Senator Cayetano (A)
pointed out that:
One out of 10 Filipinos never goes to school;
Out of 100 who enter Grade I, only 86 reach
Grade II, wh ich means that 14 drop out from
school;
76 finish Grade III and only 65 finish Grade VI;
58 go to high school but only 43 graduate
therefrom; and
23 enrol in college but only 14 graduate with a
college degree,
Citing the enrolment facts and figures for 2009-
20 I 0, he stated that there were 2.7 million Filipinos
attending school- 1 million in public schools and
1,6 in private schools but only 469,654 graduated
from schooL He said the next slide would show that
according to the records of the National Statistical
Coordination Board (NSCB), 83.3% dropped out
from college from 1994 to 2004; recent UNESCO
statistics (2008) showed that 73% of the Filipino
youth were forced to drop out of school due to the
unattainable price of higher education in the country,
Moreover, Senator Cayetano (A) said that there
are three major reasons for nonattendance of
those in the 16-24 age bracket based on the 2008
FLEMMS study: unemployment or job hunting; high
cost of education; and lack of interest
In addition, he said that there are more
unemployed educated individuals, He enumerated the
following unemployment statistics in the country:
College graduates - 1.249 billion;
High school graduates - 1.270 billion;
Elementary graduates - 300,039
He stated that unemployment may be a reflection
of the quality of jobs available in the country and
disconnection of courses, or because ofthe 10 million
Filipinos working abroad,
Referring to the next slide, Senator Cayetano
(A) slaled that the graph indicated that there was an
increase in enrollment but it also showed that the
budget has not kept pace with enrollment He said
that the NEP for 2007-2012 on the graph appears like
a pine tree, climbing in 2007, peaking in 2009-20 I 0
and sliding down in 2012, He noted that the statistics,
on the other slide, came from the CHED and DepEd
websites and they were shown to the people,
Senator Cayetano (A) explained that he wanted
to show the sl ides before asking questions because
the Members of the House of Representatives and
the Senate have different views on the SUCs, He
recalled that last year, he was disturbed by the
announcement of President Aquino that "SUCs
should be self-sustaining," and Senator Angara then
discussed how Harvard University and Stanford
University were able to do it But he pointed out that
compared to the SUCs, Harvard and Stanford had
good locations and alumni who are world leaders, or
leaders of companies listed in the Fortune 500,
circumstances that are not applicable to many SUCs,
Asked how CHED views the number of SUCs,
Senator Angara opined that there were too many
SUCs and to complicate matters, chartered cities
have even put up their own colleges and universities,
He stated that there were about 80 city-chartered
colleges and universities, many of which were
substandard, lacked supervision and without standards
for recruiting faculty and formulating curriculum,
Senator Angara stated that at present, there
were 111 SUCs and counting, Fortunately, he said
that Chairperson Licuanan of CH ED and Congress
had agl'eed to hold back on the creation of SUCs and
study how they can be consolidated within each
region, the idea being to create one regional university
and attach some of the smalier SUCs to it He said
that CHED had implemented a consolidation program
in Region XI and the SUCs seemed to be receptive
because I) it would improve the overall supervision
of tertiary education and make it more competitive;
and 2) it would rationalize scarce state resources and
allow SUCs to employ more people, He opined that
other economies, other than economy of scale, could
be achieved in having one central management within
one province,
Citing the 12 SUCs in Samar and Leyte, Senator
Angara stated that many of them are small and
struggl ing to survive, yet they are close to each OtllCr.
He noted that many SUCs create more branches
than UP which has more resources, He maintained
WEDNESDAY. NDVEMBER 16,2011
that by consolidating the SUCs on a regional basis,
CHED would be able to target and concentrate
scarce resources.
Senator Cayetano (Al observed that Senator
Angara mentioned many key concepts that he could
not disagree with, one of which is the quality of many
local universities or SUCs. But he pointed out that
there are also some local universities like the University
of Makati with very impressive facilities and faculty
development and growing to such a degree that it has
become even patl of Taguig City, which is being
disputed. However, he disagreed that there are too
many SUCs as he pointed out that 23 out of 100
students only attend school, 14 of whom graduate,
and 77 cannot go to school because of the lack of
SUCs or that SUCs do not have enough resources to
absorb them.
On the matler offamily income and expenditure,
Senator Cayetano (Al asserted that the 2003 survey
was better than the 2009 survey because it was done
in detail. He then proceeded to read the data based
on the 2009 survey, to wit:
ANNUAL INCOME OF FILIPINO
under P40,000 - 4.1 %;
over P40,000 to PS9,999 - 8.7%;
P60,000 to P79,999 - 11 A%; and
P80,000 to P99,999 - 10.9%.
But after the P99,999 level, he noted that the
diffet'ence skipped by more than P20,000: PIOO,OOO
to P299,000 - 46% - and it gave an impression
that half of the Filipinos were eal11ing almost P300,000
a year.
Using his own computation, Senator Cayetano
CAl asserted that a family earning P300,000 a year
would have a monthly income of P2S,000 a month;
if a person spends P30 per person per meal, a meal
for a family of five would cost P150, or P450 per
day, or a total of P13,500 a month; assuming that all
five members either go to school or work, the lowest
transportation fare would be P40 two-way a day, or
P6,000 a month; food and transportation would cost
PI9,SOO while the remaining P5,500 would be for
housing rent, electricity and water. Under such a
situation, he said, family members are refrained from
getting sick, buying new clothes, and even sending
text messages unless it is unlimited or pam-load.
He supposed that if the 46.7% were added to those
belonging to the lower-income brackets, it would
show that less than 20% of Filipinos can afford to go
587
to college. He stated that even with the next level of
P300,OOO to P499,OOO, with the average tuition fee of
a private or state university, it would still be difficult
for parents to send three children to schooL
Senator Cayetano CAl stated that government is
investing so much in basic education as he
commended Sec. Armin Luistro for convincing
President Aquino to increase the budget of the
DepEd. However, he lamented that the SUCs were
being left behind as he begged the Committee to add
a little to their appropriation.
Senator Angara disagreed with the observations
of Senator Cayetano CAl on income levels, as he
maintained that not all those belonging to the lower
income bracket would be able to send their children
to tertiary education. However, he opined that those
belonging to the 20% with income of P300,000 and
above would rather send their children to private
schools like Ateneo, La Salle and Miriam and some
to UP because it is competitive. He believed that
there is no correlation between the inability of the
Filipino family to spend for higher education and the
small number of SUCs. Moreover, he stated that
even if correlated, there would probably be more
SUCs that can absorb students. However, he said
that many are prevented because only 23 enter
tertiary education right away from high school when
only IS graduate. He averred that there is a huge
community of non-graduates because there is no
system that takes care of them. He stated that
basically, the Filipinos do not have the income level
to enable them to send their kids to higher education.
He said that tertiary education, in this age of inform-
ation and communication, is an essential preparation
for life; without it, the next generation would be as
illiterate as if they never went to schooL
Senator Cayetano CAl asserted that SUCs are
hard up because government is not giving them enough
money and, therefore, they could either limit their
student population or increase tuition fees. Thereafter,
he gave a comparison of tuitions fee for a Computer
Science course in a semester in private schools as
against SUCs and local universities and colleges:
Private Schools Tuition
De La Salle University P60,OOO.OO
De La Salle-SI. Benilde University P20,OOO.OO
San Beda College PS5,OOO.00
San Juan De Letran University P42,700.00
San Sebastian College P37,OOO.OO
588
SUC,-!Loeal University and College
TUP
Pamantasan ng Lungsod
ng Maynila
Taguig City University
Tuition
P 4,800,00
P 3,648.00
o
Senator Cayetano (A) noted that there were
11,000 students in Taguig City University and that
the local government of Taguig City, which allotted
P200 million to the university, does not charge them
a single centavo, not even for ID, He stressed that
if government would give more to tertiary education,
there wou Id be more than 23 student-enrollees and
more than 14 graduates,
Moreover, Senator Cayetano (A) stated that
even if government docs not increase the enrollment,
the quality of education would not be sacrificed. He
said that the idea that "an education from La Salle
would be better than from TUP" is debatable. He
cited UP-PGH which is a premier medical school
despite its low funding.
Recalling the budget message of the President
last year, Senator Cayetano (A) argued that instead
of putting the burden of public education on the
students, government must provide for it. He agreed
that tertiary education cannot be shouldered 100% by
the government but he maintained that it could be
done at the local level. Citing Taguig City University,
Senator Cayetano (A) stated that the local govern-
ment allotted a budget of PI 00 million for scholarship
for 2011; P200 million in 2012; and by 2014, every
Taguigefto would be guaranteed P30,OOO to P50,000
a year for the school of his/her choice. He reiterated
it could be done at the local level because the local
government can choose its pet project.
Senator Cayetano (A) stated that admittedly the
national government can provide SUCs only so much
but he noted that based on the statistics, the budget
of the SUCs does not increase every year. He com-
mended Senator Angara's advocacy for education,
as a senator and as a private citizen, by putting up
scholarship programs for science and the arts. He
asserted that the cheaper but more quality education
from the SUCs, the more students would enroll. He
stressed that of all the departments and programs of
government, there seems to be resistance from the
Aquino government in putting more funding in SUCs.
Agreeing with Senator Cayetano (A), Senator
Angara posited that of all the sectors in the education
WEDNESDAY. NOVEMBER 16,2011
system, government is underspending the most in
tertiary education which is the most crucial stage in
a person's life. For this reason, he said that during
the 2012 budget hearings, with the help of Senator
Drilon, the CHED and other departments like the
DOST and the DA, the Committee tried to augment
the funding of the SUCs.
Senator Angara agreed with Senator Cayetano
(A) that the figures nominally increase but he
conceded that the per capita spending is going
down in real terms. He noted that government
was at a crossroad because it was uncertain whether
to continue financing a system that is expanding in
(erms of number because doing so might be only
spreading misery all around because the pie is not
getting bigger. He remarked that CHED Chair
Licuanan was right when she suggested that the
whole terrain be surveyed to see whether it could be
rationally restructured, not by removing or eliminating
any institutions, but in terms of curriculum, and
recruitment and deployment of faculty and from then
on, to begin really vigorously helping the advance of
tertiary education. He opined that the principal fault
in public tertiary education system is not so much
that the State is not giving it enough but that 85% of
the higher education enrollment is in the private
higher education system which responds to market
demand even in terms of academic offering.
Senator Angara recalled the time when nursing
was so popular that everyone was offering it, then it
was followed by IT, and it caused a glut in nursing
and 11' graduates because the private sector was
responding to what it perceived to be the market
demand. He observed that most private tertiary
institutions were motivated by a genuine desire to
educate but it is unfortunate others were motivated
by profit. He clarified that government was not
proposing to remove or diminish the role of the
private sector in higher education since it has a
unique role especially in the whole of Southeast Asia.
The private sector, he observed, was actively handling
85% ofthe education of the Filipino youth compared
to 95% government support in Malaysia and almost
100% in Singapore. But he acknowledged that if
the State did so, it would go bankrupt. However, he
asserted that there must be more than just physical
consolidation and rationalization; the government
should begin to put together a massive large-scale
student loan and financial assistance program to
address the root cause of low attendance and low
graduation rate from tertiary education.
Senator Angara believed that ultimately, more
than just a student loan assistance program,
government must also create a public institution that
can extend assistance to private tertiary education in
terms of capital outlay, noting that many higher
education institutions have outstanding laboratories,
libraries, playgrounds, and campuses, He said that if
govern-ment can put together such a system, it
would correct Senator Cayetano's concern that the
youth are being shortchanged by starving higher
education system,
For his part, Senator Cayetano CA) said that on
a policy level, he does not disagree with Senator
Angara who basically articulated the problem of the
higher education system, However, he argued that
while the private highel' education institutions may be
motivated by profit, it makes them more efficient
since they can offer better facilities and attract more
people who can afford to pay for quality education.
He posited that the answer to the problem is
competition. He observed that by fully funding UP, it
has been a good competitor to San Beda, Ateneo,
UST and La Salle. He stressed that it is not just an
issue of money but also of professors and faculty.
He agreed with the proposal to increase the scholar-
ship and student loan programs for higher education.
However, he believed that there should be a change
in the thinking that higher education is equal to a
better future or more jobs and that SUCs should be
self-sufficient. Economic conditions, he said, are not
right to expect the SUCs to fund themselves or
increase tuition fees.
Senator Cayetano CA) said that the debate
becomes really difficult because the legislators!
policy-makel's are looking at the situation from the
aspect of theory and from actual practice where
universities were able to develop and academic
freedom flourished under certain conditions. For this
reason, he said, most legislators wanted to consolidate
SUCs. He lamented that transportation fares to and
from SUCS are so expensive that local government
officials - congressmen, mayors and governors -
have lobbied for their own satellite schools because
the closer the school is to the student, the lesser the
chance for him!her to drop out.
On another matter, Senator Cayetano CA) opined
that President Aquino should not stick to his campaign
promise of no new taxes. He revealed that when he
asked people ifthey would agree to tax text messaging
and put the revenues raised from it to education,
589
more than half said it was okay. He calculated that
the Special Education Fund, which is an extra one
percent of the real property (ax collected by the
LGU, is equivalent to P 15 billion or P20 billion a year,
so that if another one percent for a Special Education
Fund for higher education was added, the government
would have PI5 billion more which would be about
P 150 million for each SUC. He explained that for a
P5 million condominium unit in Makati, Ortigas or the
Fort, the real property is 20% of the assessed value
or PI million and 1% of it is PI 0,000. He said that
even half a percent would give the government
between P7.5 and PIO billion a year, and that it
would only cost the Owner of the condominium unit
an extra P5,000. But he posited that it would be
good for the condominium owner in the long term
because with a better economy, there would be more
jobs, more people would finish college and work,
and more people would buy condominiums with
higher value.
Senator Cayetano (A) commented that the Aquino
Administration seemed to expect the SUCs to generate
funds for their programs or that they should be left
to fend for themselves, but unlike UP, he pointed out,
they have no prime land to rent out. He said that many
of the proposals to generate additional funds have
already been discussed but he wanted them aired on
the floor because many of the allies of the Aquino
administration were listening. He expressed hope
that many of the ideas being discussed on the floor
would be the subject of legislation by next year or the
year after, halfway into the current administration.
On another matter, Senator Cayetano (A) recalled
that during his sponsorship of the amendments to (he
UP Charter bill, there was a debate between some
of the progressive faculty members and some of the
more conservative members ofthe UP administration
on whether or not UP could sell its land, and the
compromise was that UP would be given PIOO
million a year for the next five years, as a Centennial
Fund, to develop the land.
Asked if the PIOO million Centennial Fund was
allocated or appropriated for the UP in the 2012
budget, Senator Angara replied that the Centennial
Fund was given only once, during the centennial year
of UP.
But Senator Cayetano CA) pointed out that the
agreement was for UP to be allocated or given PI 00
million for five years. Senator Angara explained that
590
such legislative promise was hardly kept because the
Higher Education Fund has never been increased
nor augmented despite the provision that Pagcor and
PC SO would put in a certain percentage of their
income, Besides, he noted that the flow of income to
these agencies is irregular and unpredictable,
Nevertheless, Senator Angara took note of
Senator Cayetano's observation that there seemed
to be a reluctance on the part of the Aquino
Administration to create new sources of revenue
either by taxation, levy or any other way, He opined
that the government may have to slowly reopen the
door for taxes similar to what administrations abroad
did, like U,S, Pres, George H, Bush who raised
taxes in spite of his campaign promise not to do so,
He noted that even today's Republicans are saying
no to new taxes, concerned as they were that the
treasury would go bankrupt because of the high
deficit. He pointed out that no one should write in
stone a promise not to raise taxes, He recalled that
Senator Recto very aptly pointed out in his sponsorsh ip
speech that the Philippines is a revenue-loving or a
spending-loving country, however, Filipinos seem to
forget that there must be some source for that
spending which is taxation, He also took note of
Senator Recto's observation of the under-taxation
of energy and sin taxes on liquor, cigarettes, among
others. He said that if government does start to
il11pose new taxes, even just I % to the Special
Education Fund can be dedicated to the most essential
social services - education, health and housing.
He pointed out that if government increases by 1%
the Special Education Fund, the SEF of all LGUs
would be increased by almost PIO billion a year.
He added that it is a known fact that the I RA share
of local governments has been increasing in the
aggregate so that if 5% of the 20% development
fund were dedicated to tertiary education, it would
bring in another P5 billion to PIO billion to higher
education. He emphasized that there were so many
ways to augment the funding for higher education if
only there was some leadership signal towards that
direction.
Senator Cayetano (A) observed that for the
Special Education Fund, the proposed increase could
be time-bound, for instance, for three or five years,
He reiterated his previous example that an additional
I % or PIO,OOO for every P5 million worth of
condominium unit will give the State PIS billion to
1'20 billion or P 150 million to P200 million per SUC;
and just half of it could yield about P75 million for
each SUC. He pointed out that there were certain
LGUs like Makati, Manila and Taguig that spend a
lot on their local colleges and not all of them rely on
the IRA. He cited Makati which only relies on 6%
to 8% of its IRA, so much unlike a lot of LGUs that
are 70% to 90% dependent on their IRA, that is
why they cannot really fund scholarship programs.
He acknowledged the efforts being exerted by
Senator Angara and the CHED for higher education
as he suggested that they can be part of the lobby
group to convince the Aquino Administration that
there need to be additional sources of revenue for
higher education. He said that the SUCs really need
this boost in funding through student loans, scholarship
programs or by giving them the money directly,
Senator Cayetano (A) suggested that the duty to
collect dues be passed on to SSS and GSIS and that
the loans be repaid when the borrowers get jobs,
He mentioned a study made by the World Bank
which noted that for generations, Filipinos have
been promised higher education and better lives,
jobs and economy but that has no longer been the
case in the last few decades, and the study concluded,
that the focus was wrong.
Senator Cayetano (A) stated that in the next
budget hearings, he wanted to see an analysis of
what the priority courses shou Id be, He suggested
that every public employment officer in the munici-
pality collect data from every company applying
for permit regarding employment qualifications and
statistics, and then forward the information to the
SUCs. He added that the trend in a particular area
should be carefully analyzed and developed.
Senator Angara agreed that the old belief
regarding higher education is no longer true at the
present time since the quality and nature of jobs and
the global demands have completely changed, Five
years ago, he recalled that people would never think
that young women would be working in night shifts
as it was prohibited by law. At present, he said that
almost 600,000 women work in night shifts in the call
center industry and in the next three years, they are
expected to number about a million.
Senator Angara also observed that at present,
the jobs that are in great demand are "creative jobs"
such as animators, artists, painters, engineers and
inventors, He underscored that the world has
completely changed and the education system must
accol11modate changes. He lamented that the country
is quite slow in responding to the almost radical
global transformation at the workplace, He stated
that there is a need to catch up and confront the
issue to slowly eliminate unemployment among the
mass of people who are nonetheless educated,
Senator Cayetano (A) recalled that college
students used to take for granted their language
elective since they saw it as a subject to be passed
for the sake of getting a degree, At present, he said
that since call centers give 30% to 50% premium to
those who know a foreign language, students even
major in foreign languages, He pointed out that when
CHED, TESDA and DepEd were created, there
was really a good reason (0 specialize, But right
now, he said, the three agencies should come together
and come up with a curriculum that would develop
students in a holistic manner. To illustrate, he said
that foreign languages should be taught to the fastest
learners - kindergarten and elementary students,
He said that discussions should be made on how
all the changes can be integrated in the DepEd,
TESDA and CHED as he acknowledged that the
problem is more than just lack of funds, He hoped
that by next year, the funding sources for the SUCs
would be identified.
INTERPELLA nON
Senator Cayetano (P) noted that English, Spanish
and Chinese are the three most spoken languages in
the world, Compared to any country in the world,
she believed that the Philippines is in the best position
to be the leader in outsourcing since Filipinos already
speak good English, the Filipino language shares
common words with the Span ish language, and
Chinese schools are abundant in the country, She
asked if CHED could seriously look into this
opp0l1unity,
She recounted that during her visit to two special
schools in Ncw York - the Art and Design School
and Quest to Learn, a school which uses gaming to
teach children - she learned that the former was
already teaching students concepts in architecture,
fashion design, illustration, and even animation,
jobs that would be eventually outsourced, and she
believed that the Philippines can dominate these
outsourced jobs,
Asked if the government was working on fine-
tuning the education system to meet demand, Senator
591
Angara agreed that the Filipinos have a unique
opportunity to learning foreign languages, He stated
that languages as electives could be offered in either
K-I I or K-12 and even high schooL
As to the current requirement for foreign
language, Senator Angara recalled that during his
time, it was 24 units, then it was reduced to 12 units,
and now to six units,
Senator Cayetano (P) suggested that learning a
foreign language like Spanish or Chinese be made a
requirement 01' a serious option for students who do
not have an idea what course to major in, Senator
Angara stated that these ideas could be incorporated
in the new education system, adding that it is quite
fortunate the education system seems to be in a
period of reform,
Senator Cayetano (P) also mentioned that a lot
of jobs were already being autsourced so the Filipinos
must be prepared to tap them, otherwise, they would
go to India or China, She cautioned that South Korea,
China and even Japan were focusing on English to
accommodate all the business of English-speaking
countries, and the Philippines just have to step up,
Senator Angara said that while the Philippines is
in the process of looking at its education system, the
opportunity to upgrade the call centers into genuine
data processing centers should be looked into, For
instance, he mentioned that many of the advanced
countries were outsourcing medical diagnoses, and
the massive number of unemployed nurses in the
country could be trained in that area, He claimed that
the country was not yet prepared to train nurses,
physical therapists and other health workers in this
kind of skill, so TESDA can begin the process.
Further, Senator Angara said that the massive
number of lawyers doing notarial work could also be
trained to do documents from pharmaceuticals, drug
companies and other sectors in the West that need
lawyers to analyze and put them in proper storage,
He said that there is a huge potential for the
unemployed and underemployed to upgrade their
skills and do work related to their training, He
stressed that the country's education and training
centcrs must be prepared to train and retrain these
professionals in those fields,
With regard to the clamor among students
for an increase in the budget of the SUCs,
/r
592
Senator Cayetano (P) said that to support the increase,
a program must be presented to ensure the students
that they are getting valuable education that would
redound to jobs,
Senator Cayetano (P) stated that she has always
maintained the belief that not all SUCS must survive
and that, akin to Darwin's theory of survival, only
those who are titlest do, Therefore, she said that
more funds should be poured into specializing the
SUCs and providing for alternative learning institutions
in the region for everybody else,
Asked how the University of the Philippines-
the national university of the country-could bring
back its fonner glory, Senator Angara believed that
UP must leverage its own natural assets, particularly
its well-trained faculty, its well-developed curriculum
and its well-endowed landholdings, However, he
lamented that UP lacks an international outlook and
has become so parochial and insular that it tends to
think that it is the best when it is not He said that
even if UP might be the best among local universities
because of the breadth and reach of the discipline it
handles, it badly needs to internationalize its faculty
and even its student bodies especially in view of the
fact that intel'l1ational collaboration with universities
is very essential and crucial to academic excellence,
Asked if UP has tie-ups with other universities
similar to the tie-ups of American universities with
Asian universities, such as the National University of
Singapore, as well as the universities in Tokyo, Hong
Kong, and Australia, Senator Angara replied that UP
has similar tie-ups but in a very small scale when
compared to the National University of Singapore,
and even of Malaysia, Indonesia and Korea,
Considering the fact that the Philippines is the
second IT capital next to India, Senator Cayetano (P)
asked how UP could present its case to Ivy League
schools and mention its place in the rankings of top
universities in Asia, Senator Angara expressed
confidence that UP and the other leading universities
in the country would not have difficulty competing
with other universities because it has the advantage
of having Western models of education and is an
attractive partner to many topnotch universities,
However, he underscored the need, for a little drive
and resources, particularly in being able to offer the
visiting professors the same facilities and laboratories
and even accommodation they are accustomed to,
otherwise, they would not be attracted to come to
Manila but to other Asian universities, What is
required, he said, is an effort and a deliberate
systematic campaign to internationalize higher
education in the country lest it remains in the bottom
of world ranking,
Senator Cayetano (P) hoped that initiatives
towards such end cou Id be presented to her after the
debates, saying that she would be very happy to
support a budget increase for 20 12 so that such plans
could happen as soon as possible, Senator Angara
gave the assurance that he would sit down with
CHED Chairman Licuanan and some representa-
tives of SUCs who already have their own exchange
programs to find out whether they could set up a
framework for internationalization that could be utilized
by UP to strengthen its own academ ic offering,
strengthen its faculty, and enliven campus life,
Asked if UP continues to attract young graduates
into its faculty, Senator Angara said that it is attracting
and is continuing to recruit bright, young graduates-
even summa and magna cum laudes-and has a
massive upgrading of faculty training, In fact, he
said, almost 90% of its faculty hold doctoral as well
as masters degrees, He recalled that when he once
attended a UP commencement exercise where 300
summa, magna and cum laudes graduated, he tried
to convince one of them to join his staff but his offer
was declined when the particular student expressed
commitment to teach in UP, He hoped that UP
could make teaching a permanent attraction so that
young, bright Filipinos could make it a part of their
ambition to be able to teach in the country's premier
university,
To recap, Senator Angara affinned that nominally,
the budget of sues for 2012 is slightly lower at its
face, However, when looking deeper into it, he said
that it is larger than the 20 II budget because almost
P400 million was put together frol11 the budgets of
the agencies of Chairman Licuanan, Secretary
Montejo and Secretary Alcala into what are called
"innovation clusters" or state colleges and universities
formed into a consortium with the industry and with
the government.
Replying to further queries, Senator Angara stated
that the fund that is deposited with CHED is an
innovation fund for very specific areas of growth in
specific universities all over the country, The second
source of funding, he said, is a P500 million fund
under the CHED budget, half of which is open to
MOOE as well as Capital Outlay but not available
to all 110 SUCs, only to deserving ones that are
encouraged to apply for such extra funding.
Asked if government has the political will to shut
down SUCs if necessary, and grow where growth is
needed, Senator Angara clarified that the SUCs
would not be threatened to shut down but would be
advised to rationalize and shift focus so that they
become relevant. He admitted, however, that there
are more SUCs than local universities, the former
totaling over 200 in addition to about 1,700 private
colleges and universities, way too much even for a
large population like the Philippines. He said that in
the public sector, Chairman Licuanan is doing a fine
job stalting it with Region XI, or the Davao provinces.
He disclosed that all the regions want also a review
and overhaul oftheir respective structures not towards
narrowing the opportunity to enroll but towards
expanding.
Senator Cayetano (1') expressed the belief that
what is needed is just closer and better working
relationship with the students so that they would also
be informed that the objective is to provide them
with physically accessible and affordable yet relevant
education.
At the outset, Senator Legarda stated that
economic growth could be best sustained through
technological innovations that come about from
research and development. As regards the so-called
innovation clusters, she revealed that the country's
Asian neighbors have allocated an average of at
least .5% of their GDP for science and technology
(S&T), while the Philippines has been allocating only
an average of .12% of GDP for S&T. She said that
the results of such priorities clearly show that those
that have had high rates of capital formation including
in research and development have enjoyed higher
productivity and economic growth. She recalled that
during a COMSTE hearing, a very creative idea that
Senator Angara had posed was to partially address
the problem by the so-called innovation clusters.
Asked ho'w the five (5) innovation clusters would
be divided geographically and equitably among SUCs
in the country so that most regions competent in such
areas are actually served, Senator Angara revealed
that it would be the first time for government to
launch the innovation cluster which would be expert-
593
based. He said that if the person's expertise is in
smart farming or agriculture and he knows something
about the use of satellite in agriculture, then he would
be supported through the cluster for precision farming
and sma.t agriculture. He said that Mariano Marcos
State University in Batac, llocos Norte is probably
one of the first state universities that focused on
acquiring the skill at using satellite imaging to foretell
the quality of soil, the moisture, the weather, and
even the onset of pest or threat to crops. He said
that smart farming, which is still new in the Philip-
pines, is already widely used by farmers in NOIth
America and Europe. He revealed that Filipino
farmers are being taught precision farming by a
Filipino NASA scientist, and that the DA, DOST and
CHED have been convinced to put more money
towards advancing the technology.
He affirmed that the Mariano Marcos State
University would be one of the consortium of SUCs
that would be the center for such an endeavor.
At this juncture, Senator Legarda disclosed the
alarming decline of mango production in the country,
saying that according to Gov. Imee Marcos, there
was a 20% decline brought about by climate change.
Indeed, she said, there is a correlation between
climate change and agriculture, in this case mango
production. She noted that aside from !locos Norte,
Zambales, Guimaras and Cebu also produce mangoes.
Senator Angara agreed as he noted that mango
production has become nationwide and not merely
confined in Zambales and Guimaras.
To Senator Legarda's observation that mango
production could be an area of research for precision
farming and smart agriculture, Senator Angara replied
that it is one of the advantages of training farmers in
using satellite data and imagery which are available
at a click or at a push of a button.
Senator Legarda noted that another cluster is
responsible mining technology and asked to be
enlightened about it in view of the controversy about
small mining. She believed that the innovation cluster
for said area should focus on Mindanao in order to
allay the fears of environmentalists, local governments,
POs and NGOs and also to avoid opposition to
SUC- or CHED-support for small mining for fear
that they could adversely impact the environment.
Senator Angara pointed out that if things were
done right, there could be an estimated US$1 0 bi Ilion
594
investment in the mining sector alone in the next
five years, He lamented, however, that it is being
deterred because communities object to mining for
fear that it destroys their environment and it does
not deliver the promised jobs and overall upliftment
of their conditions. He said that responsible mining
implies doing research on the whole mining world for
technologies that are friendly to the environment and
redound to the general welfare of the commun ity.
As an example, he pointed out that there is now a
substitute for mercury and lead in leaching gold and
copper since both are known to destroy the
groundwater and the soil, infecting the environment
in the process, and resulting in all sorts of ailments
for people exposed to them. He explained that the
newly discovered technology could convince people
that mining need not be against their own interest, the
environment and nature itself and that mining could
be another way of improving the community with the
creation of good and well-paying jobs.
Asked which SUC would be the center for the
cluster, Senator Angara said that there would be a
consortium of state and private universities in
Mindanao which includes the Mindanao State
University, the University of Southern Philippines in
Kabacan, Cotabato, the University of the Philippines
in Davao, and Xavier University in Cagayan de Oro.
He said that the consortium and some mining
companies were willing to put almost US$2 billion in
the next five years into building water-testing and
soil-testing laboratories to help not only the entire
community but also improve the facilities of the
participating universities.
As to the third cluster which is algae research,
Senator Angara explained that algae, which can be
created out of carbon dioxide and bioenergy, has
been found to be a rich source of animal feeds,
ethanol and food supplement, but feeds for either
poultry, hogs, dairy or fish are considered to have the
most attractive use. He said that if produced on a
commercial scale, animal feeds could considerably
lower the cost of feeds itself and eventually the
cost of fish, poultry and hogs. He further pointed
out that the potential of algae is so huge that it is
already being produced in commercial quantity in
the United States and that all that has to be done
is to bring in the technology and adapt it to the
country's needs. He disclosed that algae is consi-
dered a magic feed because its energy and protein
content is better than soya and corn as shown in
laboratory tests.
Senator Legarda noted that the ICT for cloud
computing is one of the five clusters which is not yet
popular in the country but is already being used
by corporations in the United States. She said that
instead of archiving hard copies in external hard
drives or USBs, the Philippine Senate could archive
everything through cloud computing,
Asked how the SUCs would benefit from the
innovation cluster of ICTs for cloud computing and
which of the SUCs would be its center, Senator
Angara said that Cebu was the venue chosen for
cloud computing research because it has good state
and private higher education schools like San Agustin,
San Carlos, UP Cebu, and the Cebu Technological
University that were already advanced in computer
education and most importantly, more, a big American
company, has already invested almost a billion U.S.
dollars for its laboratory in Cebu.
Senator Angara noted that there was already an
existing application in Google to which state universities
could subscribe to get rid of their traditional storage
system by storing their data in the cloud. He said that
there would be an infinite vast storage space which
only required the use of an internet connection.
He further clarified that the innovation cluster would
primarily aim to train people on the use of cloud
computing for the purpose of adapting the technology.
He said that the hard process of basic research
would be leapfrogged in order to immediately apply
technology to the system.
As regards the innovation cluster on disaster
science and management, Senator Legarda pointed
out that more than 20 typhoons hit the country yearly
and that the Philippines ranked as the third country
most vulnerable or at risk to climate change. She
asked how the innovation cluster in this area would
work out in SUCs and what SUCs were selected as
centers for said innovation,
In response, Senator Angara said that he did not
know of any institution which mitigates the effects of
disaster. However, he disclosed that the Hyogo
Prefecture in Kobe, Japan has a center for disaster
risk reduction and that the Taiwanese and Korean
governments have already offered to provide the
country with equipment and trainors, He explained
that the disaster management center would train
local officials as well as school officials for disasters
and cope with damages. He said that Japan, which
is disaster-prone but considered the most prepared
country in the world, was able to immediately
rehabilitate itself after it sutfered an earthquake,
tsunami and nuclear explosion owing to its long
experience in disaster management. He informed the
Body that the centers are strategically located along
the Pacific side of the Philippines where the early
warning devices of PAGASA and the PHIVOLCS
are located and where most typhoons and even
earthquakes originate. He disclosed that initially, a
center would be put up in the Aurora State College
to which Japan, Taiwan and Korea have already
pledged equipment and trainors once the physical
facilities were in place; other centers would be in
Visayas and in Mindanao, on the Pacific side.
Senator Legarda said that while this matter had
been discussed in the hearings, she wanted it on
record during the budget deliberations to make sure
that the funding mechanism for the operationalization
of these innovation clusters would be realized in the
2012 budget so that during the deliberation on the
2013 budget, the fruits of the allocated resources
could already be seen.
Senator Angara stressed, however, that the
innovation would still be experimental in nature and
he hoped it would be successful so that it could be
utilized throughout the country. He said that the first
five clusters would be very crucial in proving to the
government and its foreign partners that the innovation
could and would work in the Philippines.
Senator Legarda proposed the inclusion, if viable,
of a sixth cluster for natural resources and forestry,
asserting that deforestation has wrecked so much
havoc in forest reserves. In response, Senator Angara
said that the sixth cluster is on generating alternative
medicine out of the country's biodiversity but he gave
assurance that the Committee would work vigorously
towards setting up a natural resource cluster.
To the observation that there is a Traditional and
Alternative Medicine Act authored by then Sen. Juan
Flavier but which is not being implemented, Senator
Angara said that the Committee wanted to explore
more the plethora of plants in the country, not just
{agundi, because thc world is now more inclined to
use organic and natural products which favors the
Philippines that has, fortunately, a deep and wide
biodiversity and very good biochemists and biotech-
nologists. Senator Legarda stated that she would lend
her knowledge and experience to the creation and
operation of said cluster.
595
On another point, Senator Legarda said that the
quality of education depends largely on the
qualifications and competencies ofthe faculty, mentors
or teachers. She asked if enough was being invested
to ensure that the pool of academic experts were
being assisted and supported, noting that there
appeared to be a lack of support for improving
competencies and skills of teachers.
Asked how legislators were actually helping the
CHED in realizing the objectives of Memorandum
No. 40 that required all faculty members to have at
least a master's degree by 2012, Senator Angara
said that every SUC has a faculty development
program but its supporting budget is not enough to
support a genuine faculty development in the direction
it wants to go. But, he pointed out, there is budgetary
support in the 2012 budget for teachers' training in
the consortium of 10 to 12 normal universities and
support for engineering and research development in
the consortium of the top eight engineering schools
with the aim of producing a corps of scientists and
technologists that can become the critical mass for
technological innovation in the country. He expressed
hope that in the future, the support would also cover
other disciplines like arts and humanities.
As to how CHED was preparing college students
for growth in the areas of IT and BPOs, Senator
Angara acknowledged that there is a need to adjust
the curriculum to make it responsive to the fast-
changing world where there are jobs that were
unknown several years ago. In addition, he recalled
that during the hearing on the DOLE budget, he
suggested that the Department come up with a
manpower planning or job survey every three years
to enable the schools to adjust their course offerings.
He said that DOLE would not simply publish a
manpower mapping survey but would also coordinate
with the CHED, DepEd and educational institutions
so that the programs could be matched with the
market and in the process eliminate many course
offerings and even specific subjects in technical
disciplines that have become obsolete or irrelevant.
In this regard, Senator Legarda read into the
record a portion of a publication by KPMG-EquaTerra
which compared the Philippines to China and the
possibility of the latter overtaking the former in the
BPO outsourcing industry, to wit:
The Philippines is particularly strong in
voice-based processes and remains a location of
choice for the next three to five years until, we
596
expect, China becomes a viable mature location.
For a "future proof" alternative to India, for back
office data support technical helpdesk and IT
application services, China would be the
recommended location of choice today.
China is really developing quickly and its
rate of development is likely to be exponentially
higher than other outsourcing locations. Indeed
the sheer skill of industry in China and the size
of the graduate population (around three million
per year), coupled with the aforementioned
investment will make China a very compelling
proposition. At the moment, English linguistic
skills in China are lagging behind other locations,
but this is expected to change quickly as oral
English is now being taught in schools (pre-
viously it was not). It is expected within a few
years there will be more English speakers in
China than any other country.
The Philippines has the most wel1 developed
outsourcing industry of those assessed in terms
of maturity, capability, and the range of services
offered. But its overal1 appeal was hampered by
its lack of infrastructure development. If this
issue however can be addressed it shOll Id
continue to be a major player.
She explained that she put the article into the
record to set a direction and assist the CHED, SUCs
and even the S&T sector to focus on the possible
threats that China could pose to the Philippines.
Senator Angara pointed out that right now the
Philippines has taken the title "Call Center of the
World" ti'om India but it is actually a strategy, on the
part of India, to slowly give up the voice part of the
BPOs and call centers and concentrate on providing
high value services like animation and software
design. He stated that the country ought to go in that
direction, taking advantage of the ingenuity and
creativity of Filipinos in the field of linguistics.
On the obselvation that the curriculum must be
revised to meet the challenges of the future, Senator
Angara informed the Body that CHED and the
Business Processing Association of the Philippines
have signed a memorandum of understanding to
adjust course offerings to current needs which, he
believed, should be done as fast as possible
considering that changes and innovations in the field
of technology are taking place at a very fast pace.
In closing, Senator Legarda expressed hope that
the quality of graduates of the SUCs would greatly
improve.
STATE UNIVERSITIES AND COLLEGES
of Senator Satta, there being no objection, the budgets
of the State Universities and Colleges were deemed
COMMISSION ON HIGHER EDUCATION
Likewise, upon motion of Senator Sotto, there
being no objection, the budget of the Commission on
Higher Education (CHED) was deemed submitted
suspended.
It was 6:23 p. m.
Upon resumption, the Chair recognized Senator
Recto, vice chairman of the Committee on Finance.
DEPARTMENT OF ENERGY
Senator Recto presented the budget of the Depart-
ment of Energy (DOE) and its attached agencies.
At the outset, Senator Legarda stated that she
would limit her queries to two issues which include
rural electrification. Relative thereto, she asked how
the DOE aims to complete its rural electrification
program which seeks to provide electricity to 90% of
all unelectrified households by 20 I 7 and whether its
proposed 2012 budget would be sufficient to meet
the six-year deadline. Senator Recto said that the
administration has a plan to provide electricity to an
estimated three million households using the proposed
P2.S-billion appropriation subsidized from the budget
of the National Electrification Administration (NEA)
for 20 I 2. He said that the P2.5 billion annual allocation
for the next six years will allow the DOE to meet
its target.
.JPr
Asked whether the DOE has mapped out the
otT-grid coml1lunities and determined the extent that
renewable energy sources could be tapped to service
their needs, Senator Recto clarified that the three-
million household estimate would include 2.5 million
homes in the grid area and 500,000 that are in off-
grid locations,
As regards the Renewable Energy Law, Senator
Recto clarified that the implementation of the law
was not sidelined as it was being handled by the
Energy Regulatory Commission (ERC). He explained
that while the ERC was tasked to study the tariff
mtes for potential RE investors, it had to put electricity
rate increases on hold while it determines whether
utilizing more renewable energy could lead to
higher electricity rates since the Philippines charges
the most expensive electricity rates for residential
consumers in Asia, However, he pointed out that the
Philippines is way ahead of other industrialized
countries in the utilization of alternative energy
sources, He noted that while other countries promised
to save on 20% of energy sources, green energy
currently makes up 46.3% of the Philippines' total
primary energy mix while 40% sources renewable
power.
On whether the DOE was assessing the
implementation of incentives to RE developers,
Senator Recto replied in the affirmative,
Asked whether the DOE or the National Power
Corporation (NPC) has undertaken a mapping of
unelectrified areas to establish the viability of using
cleaner and renewable forms of energy for those
areas through private sectol' support, Senator Recto
I'eplied that said activity was a continuing process,
Given the energy sector's vulnerability to weather
disturbances, Senator Legarda sought assurance
that the reSOUrce allocation for the DOE's 2012
budget would be climate-I'esilient budget for the
sector, Senator Recto pointed out that the govern-
ment only manages a small portion of the energy
sector while 70% has been privatized through private
sector ownership of various distribution utilities,
transmission firms and gencos, He noted that the
private sector and the government acted quickly to
insure that power was restored to areas hit during
two calamities the previous month, This, he said, was
in line with the DOE's mandate to insure sustainable,
stable, secure, sufficient, accessible and reasonably-
priced energy,
597
Through pol icymaking, Senator Recto pointed out
that the DOE continues to invest in clean energy and
promote energy efficiency as illustrated by the
fol/owing:

Launching of the National Renewable Energy
Program on June 4, 20 II;
Drafting of renewable portfolio standards/rules
for finalization;
Conduction of feed-in tariffs;
Production of 149.5 million liters of bio-diesel
(with the private sector);
Issuance of certificate of accreditations to
manufacture bio-ethanol which produced 13
million liters/year;
Issuance of certifications of registration and
notice to proceed for green fortune innovations
which is expected to produce 99,4 million liters/
year;
41 CNG fed-buses operating in the Batangas-
Laguna-Manila route resulting in savings for
importation and burning of diesel equivalent of
630,000 liters;
Electric veh icles program;
Alternative fuel bill which has resulted in
savings of 88.6 million liters of gasoline
displacement from 17,500 taxis using LPG;
Engaging of the Japan International Coopera-
tion Agency (JICA) for the updating and
expansion of the master plan study for the
development of the natural gas industry in the
Philippines;
Engaging of the World Bank for feasibility
studies for LNG in Mindanao; and
Launching of a low carbon future through
renewable energy, natural gas and sustainable
fuels for transport to promote energy efficiency,
Noting that the President has organized a water
task force committee, Senator Legarda sought the
DOE's commitment to urge the NAPOCOR to
update its dam protocols. She recalled that during
the hearing of the Disaster Reduction Oversight
Committee concerning the pre-emptive release of
dam water last September which resulted in loss of
lives and livelihood, the NAPOCOR blamed the
National Water Resource Board (NWRB) of the
DENR for not allowing the former to release the
.lIP f"i
598
water and lessen the effects of flooding in the
affected areas. She sought an assurance that the
DOE and the DENR shall work closely with conces-
sionaires operating these dams since they also have
a responsibility not only to produce power and help in
irrigation but also to protect the lives and livelihood of
the downstream communities such as those in Central
Luzon who were adversely affected not only by
rainwater but by the release of water hom the dams.
Senator Recto gave assurance that the DOE was
supportive of Senator Legarda's proposals.
Senator Legarda also requested a more pro-
active coordination between the DoE and other
concerned agencies.
SVBMISSION OF THE BVDGET
OF THE DEPARTMENT OF ENERGY
of Senator Sotto, there being no objection, the budgets
of the Department of Energy and its attached
agencies, namely, the Energy Regulatory Commission,
the National Electrification Administration and the
Philippine National Oil Company, werc deemed
SVSPENSION OF SESSION
suspended.
It was 6:41 1'.111.
Senate President Enrile presiding.
DEPARTMENT OF HEALTH
Department of Health and its attached agencies.
REMARKS OF SENATOR DRILON
At the outset, Senator Drilon stated that for
2012, the health sector has a budget of P58. 7 billion,
of which P42.69 billion would go to the Department
of Health (DOH). He stated that under the National
Expenditure Program, a total of P3 billion was
allocated for enrolment in PhilHealth of 20% of the
country's population and another P8 billion, subject to
the condition that the PhilHealth Charter would be
amended first, which proposal was amended by the
Committee by making available PI2 billion for the
enrolment of 5.2 million households covered by the
National Household Targeting System that would
cover the lowest quantile of the population. Also, he
revealed that the Committee has required all public
health units to get PhilHealth accreditation so as
not to deprive the very poor families of the 0ppoltunity
to avail of the much-needed medical care. Another
amendment to the NEP, he said, is the setting of a
5% limit on administrative cost but the Committee
might amend it later so as not to unduly restrict the
ability of PhilHealth to administer its program.
INTERPELLATION
At the onset, Senator Ejercito Estrada adverted
to reports that Health Secretary ana visited and
personally checked on the condition of former
President Arroyo, after which a report was made
and submitted to Justice Secretary de Lima.
Asked on the result of the visit and whether
Mrs. Arroyo was really sick, Senator Drilon "eplied
that according to the report, fanner President Arroyo
was recuperating well from the operations that she
underwent.
Since her condition is not a matter of life and
death, asked why Mrs. Arroyo was in a !'Ush to leave
the country to seek urgent medical treatment abroad,
Senator Drilon proposed that the former President be
subpoenaed by the Senate to answer that question.
At this juncture, Senate President Em'i!e
At the outset, Senator Sotto expressed support
for the Department of Health, particularly the addi-
tional funds for PhilHealth. He recalled that during
the budget hearing, he asked Secretary ana for a
breakdown of an item ofP2.5 billion on Family Health
and Responsible Parenting, an increase of PI. 7
billion from the 2011 allocation, which the Secretary
subsequently provided. He noted that in the 2012
budget there is an allocation of PI,752,599,700 for
WEDNESDAY. NOVEMBm< 16,2011
senior citizens' vaccines and activities and he asked
what vaccines would be administered to senior citizens.
Senator Drilon explained that senior citizens aged 60
to 69 years old need pneumococcal and influenza
vaccines, as specified in the Senior Citizen's Law.
Asked how much is one anti-pneumonia vaccine,
Senator Drilon replied that the prices range from
PI,OOO to PI,700, which is good for five years,
Senator Sotto revealed that Senate President
Enrile recently got a vaccine shot which cost only
P500. Senator Drilon clarified that the amount of
PI,700 is for pneumococcal vaccine which currently
costs P500 per dose and would increase to P650
next year; and for influenza vaccine which currently
costs P350 per dose and would increase to P403
next year. He added that the pneumococcal vaccine
is given once every five years, while the influenza
vaccine is given once a year.
At this juncture, Senate President Enrile clarified
that the influenza vaccine is given yearly and the mix
is sometimes changed.
Senator Drilon clarified that since the influenza
strain oftenly changes, the vaccine must be changed
to adapt to il.
Asked by Senator Enrile if the Institute for
Tropical Medicine prepares the influenza vaccine
as it does vaccines for certain types of diseases,
Senator Drilon replied that the influenza vaccine was
being imported.
Upon further queries of Senator Sotto, Senator
Drilon clarified that the P 1.8 billion item for
"preventable diseases control" is intended for children
but does not include dengue vaccine which is yet to
be developed. He clarified that the cervical cancer
vaccine falls under another item.
As regards the PI97 million for Maternal
Newborn, Child Health and Nutrition (MNCHN)
Strategy to CHDs and LGUs, asked what the
objectives of the item are and whether it includes a
provision for family planning, either in cash or in kind,
Senator Drilon stated that it is part cash grant to
LGUs based on their performance, for instance, in
immunizing a certain number of children.
Senator Sotto recalled that he mentioned in his
privilege speech last year that several provinces did
599
not receive any cash grant but were nevertheless
listed by the DOH as recipients. For instance, he
bared that according to DOH records, 1I0cos Norte
supposedly received P644,525 in 2008; P602,000 in
2009; and P2.4 million in 20 \0. Senator Drilon
explained that said funds were made available to
1I0cos Norte but the province did not actually receive
them because it failed to sign a Memorandum of
Agreement with the DOH. He added that Batangas
and Quezon also failed to execute the MOA, hence,
no deliveries were made to them.
As to where the funds of the three provinces
went, Senator Drilon said that they became
unexpended savings which were realigned for training
and suppl ies of other provinces.
Senator Drilon informed Senator Sotto that there
is a COA report thereon which can be made available
to Senator Sotto. Thereupon, Senator Sotto requested
to be fum ished with a copy of said report.
On what supplies were bought through the
MNCHN grant, Senator Drilon stated that it was
used for vitamins, training materials and transportation
expenses or maintenance and operating expenses in
general.
Noting that one of the objectives of the MNCHN
Strategy is to increase the contraceptive prevalence
rate, Senator Sotto asked what the current rate was
and the programs aimed towards attaining that
objective. In response, Senator Drilon said that it
was 51 %, and he cited the programs for responsible
parenthood such as family planning, maternal and
child health, and nutrition.
Senator Sotto noted that under the "leveraging
services for priority health programs of family health
and responsible parenting" item in 2009, the procure-
ment of MNCHN commodities amounted to P500
million or P300 million but this was cut to P200 million
in 20 I 0, at the instance of Senate President Enrile
and himself, when they found out that it was supposed
to be used to buy condoms and contraceptives.
Asked if the P300 million for MNCHN
commodities in the 2012 budget included family
planning supplies and what they are, Senator Drilon
clarified that the family planning supplies would
depend on the choice of the LGUs. He confirmed
that if the LGUs so decide, IUDs and condoms can
be included.
600
At this juncture, Senate President Enrile pointed
out that the RH bill lists condoms, IUDs, injectables,
etc. as safe, legal and effective family planning
supplies or essential medicines.
Senator Sotto noted that a portion of the allocation
for family health and responsible parenting is for
micronutrient supplementation for women and children,
management of childhood illness and newborn
screelll ng.
Asked if such programs are in line with the
MNCHN Strategy, Senator Drilon replied in the
affirmative. As regards the allocation for the
supplements and where they would come from,
Senator Drilon stated that micronutrient
supplementation has an allocation of P245,109,279.
Senator Sotto pointed out that P40,431 million of
the allocation to family health and responsible parent-
ing is for capability-building or training on NBS,
BEMONC, CEMONC, ENC and micronutrients.
On whether the DOH conducts capability building
or training on a regular basis, Senator Drilon affirmed
that it does.
Senator Sotto stated that the DOH was
implementing the MNCHN Strategy in line with
DOH Administrative Order 2008-0029 and that part
of it is a provision for Basic and Comprehensive
Emergency Obstetric and Newborn Care, i.e.,
BEMONC and CEMONC, which already exist and
are P3lt of the 2012 budget. Senator Drilon stated
that the implementation was only up to 50%.
Asked on the allocation to the Health Facilities
Enhancement Program, Senator Drilon replied that it
is PS billion in 2012, adding that the program seeks
to reduce maternal and newborn morbidity and
mortality.
On whether the allocation of P4 billion to contra-
ceptives can be added to BEMONC and CEMONC
instead, Senator Drilon explained that many pregnancies
occur among the poorest of the poor and the program
that targets 5.2 million households is for unplanned
pregnancies. But hc denied that the program has to
do with abortion clinics.
At this juncture, Senator Legarda asked if the
DOH program aims to get rid of unplanned preg-
nancies. Senator Drilon clarified that the program is
on responsible parenthood and responsible parenting
to prevent unplanned pregnancies.
Asked by Senator Legarda if the program would
require the procurement of equipment or contracep-
tives like IUDs and abortifacient pills, Senator Drilon
replied in the negative. He reiterated that there is no
budget for abortions and that he was referring to
unplanned pregnancies.
Senator Sotto observed that in the Special
Provisions of the budget of the Department of Health,
there is an item of PS billion for "Health Facilities
Enhancement Program" meant "to upgrade hospitals
and health care facilities of the DOH in compliance
with the Millenium Development Goal to improve
maternal health."
Upon query, Senator Drilon explained that the
health facilities refer to existing DOH district hospitals
and rural health units with birth capabilities and new
birthing homes in far-flung areas. He confirmed that
included in the program are pre-pregnancy services,
antenatal care, care during delivery and post-natal
and post-partum care.
At this point, Senator Sotto enumerated the
projects under the "Family Health and Responsible
Parenting" program, to wit:
Adolescent Health Manual
Family Health Guide
Community Health Team
Training Manual
Family Health Guide Book
P 500,000
P35,000,000
P31,2S0,000
P37,500,000
On whether family planning education is included
in said program, Senator Drilon replied in the
affirmative, adding that it also includes birth spacing
and responsible parenthood seminars.
Asked how the materials would be distributed,
Senator Drilon stated that the program aims to cover
the 5.2 million poorest families listed in the National
Household Targeting System for Proverty Reduction.
As regards the PI22 million allocation to
Women's Health and Safe Motherhood Project II,
Senator Drilon explained that the target beneficiary
of phase two, which would be in the form of infra-
structure projects, are provinces with the highest
mortality rate: Sorsogon, Albay, Masbate, Catanduanes
and Surigao del Sur.
r
Asked how many doctors, midwives and health
workers the DOH would hire in 2012 under the
Human Resource Development Program that has an
allocation ofPI.905 billion, Senator Drilon stated that
the Department would hire 17,283 nurses in two
batches, the tirst one this year and the next, in 2012;
567 midwives; and 331 physicians. He added that the
program includes training and development.
At this juncture, Senator Sotto stated that his
assertion that the DOH has an existing reproductive
health program had been contirmed by the existence
of projects related to it. He asked if the Committee
is allocating P7.7 billion for health services which are
interrelated with the RH bill. He believed that since
the DOH was already implementing an RH program,
even without the passage of the RH bill, Filipino
women would not be deprived of reproductive health
service. In reaction, Senator Drilon stated that 50%
of Filipino women belonging to the poorest family
would not be covered by the allocation. He explained
that 5.2 million households belong to the lowest
quintile and another 5.2 million households to the next
20%. He said that these families belong to the
category that earns less than P6,000 a month.
On whether there is a bias against the 50%,
Senator Drilon stated that it is the lack of funds that
dictate services would be limited to only 50%.
Senator Sotto questioned the ability of the DOH
to cater to the remaining 50% even if Congress
enacted the RH bill.
On the same point, Senator Legarda asked if
only 50% of the poorest of the poor Filipino women
would be served with the P7.7 billion budget and if
the DOH was pushing for the RH bill to serve the
other 50%. Senator Drilon insisted that the matter
be taken up when consideration of the RH bill
resumes, not during the budgt deliberations.
However, Senator Legarda questioned the need
to pass a measure whose resources can be utilized to
fund the same DOH program to wholly serve the
poorest of the poor Filipino women.
For his part, Senator Sotto suggested that
add itional funds be given to the Department for the
program instead of passing the RH measure.
Senator Legarda observed that with a P7. 7
bill ion budget, the DOH can serve only 50% of
601
the poorest women while the other 50% remain
unserved. However, she said that there is an
argument that passing the RH bill would enable
the DOH to serve the other 50%. If the 2012
budget is inadequate, she asked why Congress
should pass the RH bill if it would just be an
unfunded law.
Responding thereto, Senator Solto stated that the
best argument against the RH bill would be the DOH
which was already implementing an RH program.
Hc supposed that the only thing that the RH bill
wishes to do is to prescribe the use of contraceptives.
He said that Congress does not oppose the
reproductive health program of the DOH but it would
nitpick on the funds to be spent for contraceptives
and condoms.
Asked if the 2012 DOH budget provides for
infant mortality rate and maternal health, Senator
Drilon replied in the affirmative.
On whether the 2012 budget would allow the
Philippines to meet the Millennium Development
Goals by 2015, Senator Drilon stated that it would be
extremely difficult to do.
Proceeding to the budget of the Commission
on Population (POPCOM), Senator Sotto observed
that from P290 million in 20 II, it increased to
P291 million in 2012.
As regards the item on Coordination of the
Population Policy and Programs that has a P220
million allocation, Senator Drilon replied that the
amount is really used for maintenance and operating
expenses, advocacy, printing and information
dissemination in pursuing a project, like responsible
parenthood, at the barangay level.
Asked with whom the POPCOM coordinates,
Senator Drilon explained that there are national,
provincial and municipal activities that the POPCOM
coordinates with the private sector.
Asked what POPCOM has been doing since its
creation in 1971 and the impact of its activities on
popUlation control, Senator Drilon stated that the
POPCOM is basically an advocacy body and that
it would be difficult to measure the results of these
advocacies. He added that the POPCOM has
conducted seminars, printed and disseminated family
planning materials, among others.
602
Senator Sotto asked on the difference between
what is being done by the DOH and the POPCOM
with regard to population programs as he pointed out
that the DOH has PI48389 million allocated for
grants, subsidies and contributions in support thereof,
Noting that there might be redundancy in what the
DOH and the POPCOM are doing, he further asked
to whom the grants, subsidies and contributions are
given, In response, Senator Drilon said that the
POPCOM operates through the LGUs to which it
gives grants for population-related activities,
To the observation that there seems to be a
parallelism between the activities of the POPCOM
and the DOH with regard to population activities,
Senator Drilon said that since the DOH cannot cover
all areas it would want to cover, the POPCOM is
doing complementary activities and supplemental
services, especially support to the private sector,
Senator Sotto pointed out another parallel ism as
he adverted to line I, page 565 which states that:
"The Population Commission provides for formulation
and development of long range and annual population
family planning plans and programs and coordination
of the implementation of the national popUlation
policies" with an allocation of P20 million, He noted
that the DOH also has this item,
At this juncture, the Senate President Pro
Tempore relinquished the Chair to Senator
Legarda,
Asked on the budget of the National Nutrition
Council, Senator Drilon stated that it is P321,892,000
for 2012,
Senator Sotto noted that pursuant to Administrative
Order No, 2006-0012 (Revised Implementing Rules
and Regulation of Executive Order No, 51, otherwise
known as the Milk Code), advertisement or promotion
of infant formula breast milk substitute and other
related products are prohibited because they tend to
exaggerate or leave impressions that undermine
breastmilk and breastfeeding, However, he said that
while it is ideal for mothers to breastfeed their babies
there are instances when she is unable to do so, for
instance, when she is too weak after giving bilth or
when she cannot produce milk at aiL However, he
disclosed that despite these conditions, some hospitals
still do not allow mothers to use formula milk, He
asked if the inter-agency committee (lAC) that was
created by EO 5 I has addressed the issue of formula
milk advertisements by issuing the guidelines as it is
empowered to regulate advertisements, Senator Drilon
stated that there are guidelines and, basically, the
milk formula advertisements are not allowed pursuant
to the provisions of the Milk Code, He said that the
lAC was just implementing the policy set by Congress
in the Code,
Senator Sotto noted that a Supreme Court decision
declared that the absolute prohibition on promoting
formula milk is ultra vires of the DOH, therefore
making the AO null and void, Senator Drilon clarified
that the Supreme Court decision did not invalidate the
whole law but only three provisions, the most
significant of which is the voiding of the administrative
sanctions,
suspended,
It was 7,'54 p,m,
At 7:56 p,m" the session was resumed,
Upon resumption, Senator Sotto said that he has
been enlightened by Senator Drilon on the issue,
On the matter of the guidelines issued by the
lAC of the FDA, Senator Drilon said that the
Committee would furnish Senator Sotto with a copy
thereof,
Senator Sotto said that there are some products,
especially contraceptives like condoms, that are
endorsed by some movie stars and the public is not
properly informed of their complete side effects,
INTERPELLATION
Senator Sotto informed the Body that Senator
Defensor Santiago has submitted a list of questions
on the budget of the Department of Health (DOH),
which he read into the record, to wit:
The country is under pressure to attain the
MDGs by 2015, The eight MDG goals: I, Eradi-
cate extreme poverty and hunger; 2, Achieve
universal primary education; 3, Promote gender
ft'-'f
WEDNIOSDAY. NOVEMBER 16.2011
equality and empower women; 4. Reduce child
mortality; 5. Improve matel'11al health; 6. Combat
HIY! AIDS, malaria and other diseases; 7. Ensure
environmental sustainability; and 8. Develop a
global partnership for developmcnt.
At least four of those goals are directly
related to health: poverty, child mortality,
maternal health and HIY/AIDS and other dreaded
diseases. However, budgetary support continues
to be inadequate in spite of the enormity of
health problems of the country.
Both the Department of Health and the
Alternative Budget Initiative of Social Watch
agree that the country's health spending is way
below global standards. The DOH states that
World Health Organization pegs the standard
health expenditure at 5% of a country's GOP.
The Philippines' health spending has never gone
beyond 3.9% of GOP. From 1995 to 2008, health
expenditure on the average was 3.52 I % of GOP,
lower than that ofYietnam at 5.4%, China at 4.6%,
India at 4.4%, Japan at 7.7% and the US at 13.4%.
The FY 2012 Gene"al Appropriations Bill
(GAB) recommended P42,279,963,000 for the
Department of Health, compared to P32 billion
for FY 20 II. The Senate Committee on Finance
has reduced the GAB recommendation to
P42,204,963,000 which means a cut ofP75 million.
The net addition ofPIO billion compared to
the 20 II budget is miniscule compared to the
huge increases in social welfare, education and
public works.
/. Of the eight MDG goals, the goals on
nutrition and reduction of maternal mortality
may not be attained. This assessment is
based on monitoring reports of government
agencies collated by NEDA.
Quest;o,,: With inadequate increase in the
DOH budget, can the MOG goals on health
which the Philippines committed to the United
Nations be attained?
Senator Legarda inte,jected that she asked the
same question earlier, to which Senator Drilon
answered that it would be almost impossible that the
MDG goals on infant mortality and maternal health
would be reachedby 20 I 5.
2 Health authorities rcport that universal health
care financing will cost at least P360 billion
for the next three years. The DOH has
originally proposed that its budget be
increased to P80 billion to include part of the
costs of universal health care financing.
Questioll: The Senate Committee on Finance
has recommended only one-half of what is
necessary to assure basic health services for the
Filipino people. What steps are being under-
taken to assure that national funding can be
generated to cover the huge tinancial gap?
603
Senator Drilon replied that this is a question of
availability of funds. Since the funding is inadequate,
he said that the DOH has come up with some
innovative ideas like the public/private sector
partnership in order to improve the hospital facilities.
However, he acknowledged that more funds would
be needed; thus, new taxes may be imposed, the
proceeds of which would be specifically earmarked
for the health sector. He noted that a lot of public
funds are spent to address ailments arising from
smoking and liquor, therefore, as a matter of policy,
there should be enough rationale and basis to increase
the sin taxes, and such increase, he said, can be
earmarked for the health sector to address the
inadequacies in the budget.
3. For several decades now, the Department of
Finance under different administrations has
been recommending increasing the rates of
so-called sin taxes. These are the taxes which
are imposed on cigars, cigarettes, wine and
alcoholic drinks. The proceeds from the
increases in these taxes can be used to
augment the budget for health.
The objective here is twofold: discourage
the consumption of tobacco and alcohol
which are considered dangerous to health,
and to generate funds to augment deficiencies
in the health budget.
Questioll: Is the Senate Committee on Finance
prepared to SUppOlt the increase in so-called
""sin taxes" to raise more revenue for health?
Senator Drilon said the he had earl ier expressed
support for the increase of sin taxes, the proceeds of
which would be earmarked for the health sector.
He pointed out that smoking alone is a burden to
the DOH since an estimated P60 billion in public
funds is spent annually to address cigarette- and
cigar-related ailments.
4. As pointed out earlier, the government itself
has admitted that the goal of reducing
maternal mortality rate is at risk. At the same
time, other health problems are escalating
due to factors like climate change, inadequate
health facilities, lack of trained health
personnel, etc.
604
Questiol/: Since the Committee members
are unable to increase the budget of the
Department of Health significantly, are the
individual members of the Committee
prepared to support the passage of the
Reproductive Health bill as a declaration of
commitment to enhance the health of mothers
even with inadequate budget support?
Senator Sotto, an advocate against the RH bill,
answered in the negative.
The Chair said that Senator Sotto has told him
that most of the reproductive health issues are
funded in the present DOH budget including maternal
health care concerns.
Instead of increasing the small health
budget rccommended by the GAB, the Senate
Finance Committee has further decreased it
by P75 million.
Questiol/: What is the justification for the
Committces action? What were the budget items
specifically reduced?
Senator Drilon clarified that the DOH budget
was not reduced, as he explained that the Committee
simply rejected the House amendment because of
disagreement 011 the funding sow'ce of this P75 million
that the House inserted in the DOH budget, which
involves the slashing offunds from the irrigation budget
of the DA. He said that if there was an acceptable
source for the additional P75 million, the Committee
would have no problem in adopting the amendment.
To further clarify, Senator Drilon stated that the
House increased the National Expenditure Program
or the President's budget by P200 million which was,
however, sourced out of the funds allocated for irriga-
tion projects of the DA, and he believed that such a
move would be inconsistent with the plan of the DA
to achieve rice self-sufficiency by 2013. He said that,
in effect, the original allocation for the DOH under
the President's budget or the National Expenditure
Program was restored. He maintained that it was not
a cut made in pursuit of a policy but simply a cut
made because of the disagreeable source of fund.
SUBMISSION OF THE BUDGETS
OF THE DEPARTMENT OF HEALTH
the budgets of the Department of Health and its
attached agencies, namely, the Local Water Utilities
Administration, Lung Center of the Philippines,
National Kidney and Transplant Institute, Philippine
Children's Medical Center, Philippine Institute for
Traditional Authority of Health Care, Commission on
Population, and National Nutrition Council, were
deemed submitted for the Body's consideration.
suspended.
It was 8: 13 p. m.
Senator Legarda presiding.
DEPARTMENT OF JUSTICE
(Resumption)
Upon resumption, the Body resumed consider-
ation of the budget of the Department of Justice.
Chair of the Committee on Finance, and Senator
Sotto to present the questions prepared by Senator
Defensor Santiago.
QUESTIONS
On behalf of Senator Defensor Santiago, Senator
Sotto presented the following questions and Senator
Drilon provided his answers, accordingly:
I. The advances to officers and employees
account of P85,nO,924.09 which included
advances to the Witness Protection, Security
and Benefit Program ofP74,800,290.52 remain
unsettled at year-end contrary to existing
auditing rules and regulations thereby
resulting to the nonrecording of the related
expense accounts for travels, supplies, and
others. What has the sponsor done to
remedy the situation?
Senator Drilon said that out of the unliquidated
cash advances in the amount of P85.7 million, only
5.5% or P4, 731,481.66 has remained unliquidated as
of September 30, 2011, P2.952 million of which
represents cash advances under the Witness
Protection Program. He said that the appropriate
documents have been submitted to the Commission
on Audit which has yet to issue a credit advice. As
regards the unliquidated cash advances for local
travel amounting to 1'948,382, he said that this has
been reduced to 1'66,694, the appropriate documents
for which have also been submitted to the COA
auditor for issuance of credit advice.
2. Under Executive Order No. 292, Title 3,
Chapter 2, Section 6, the Secretary of the
Department of Justice shall be assisted by
three undersecretaries. However, in 2007,
two undersecretaries were appointed. Do we
still have 5 undersecretaries? Or are you now
complying with the mandate of EO 292?
Senatol' Drilon said that there are only three under-
secretaries in the Department, as required by law.
3. We always hear the DOJ filing charges
against public personalities. To date, have
we ever convicted anyone under your watch?
Senator Drilon pointed out that the conviction
Or acquittal would be dependent on the courts.
He affirmed that a number of cases have been filed
against prominent personalities and are pending
before the courts particularly those involved in
violating the Internal Revenue Code.
4. What is the status of Mr. Nori Unas? They
presented him before the media as their star
witness in poll fraud charges against the
members of the previous administration. Has
he been admitted in the Witness Protection
Program being the Provincial Administrator
of Maguindanao from 200 I to 2009. When
Ampatuan Sr. was Governor, Unas has been
described as the Ampatuan family's under-
boss and conciliary rolled into one. Do they
really consider him a credible witness con-
sidering his alleged role in the Maguindanao
massacre?
Senator Drilon said that Unas has been accepted
provisionally into the Witness Protection Program
and the evaluation of his testimony is a continuing
process.
5. What is the status of the murder of Palawan
journalist and environmentalist Dr. Gerry
Ortega? On June 8, 20 II, a panel of prose-
cutors ruled that there was no probable cause
to indict former Palawan Governor Joel Reyes,
his brother Mayor Mario Reyes of Coron,
Palawan and former Marinduque Governor
Jose Antonio Carreon. Indicted was a certain
Edrad who gave testimony that he received
money from Reyes for the hit job, another
suspect identified as Marlon Recamata and
three others who were found by the panel to
have taken part in the plot to ki II Ortega.
There are rumors that Mr. Reyes is a relative
by affinity of a Malacanang official.
605
Senator Drilon stated that a reinvestigation is
ongoing and would be decided accordingly once the
case is submitted tor resolution. He said that Secretary
de Lima has no information whether or not Mr.
Reyes is related to somebody in Malacanang.
6. On the Parole Information Administration:
The funds transferred to NCC which is
recorded in the agency books as due ITom
NGAs amounting to PI 17,296,412.37 remained
unliquidated for several years leading the
2009 COA report to describe it as of doubtful
validity. What is the status of this account?
Have it made the necessary adjustments to
fairly present the account due from NGAs?
suspended.
It was 8:31 p.m.
Upon resumption, Senator Drilon said that upon
the directive of the Office of the President, the funds
were transferred from the Parole Information
Administration to the National Computer Center
pursuant to a policy that all the funds related to
computerization should be consolidated with the
National Computer Center. He revealed, however,
that the advances have not been liquidated,
notwithstanding etTorts on the part of the PIA.
7. The same COA report found out that
management realigned and transferred funds
ITom the central office to its regional offices
and vice versa out of the savings from
Personal Services to the Maintenance and
Other Operating Expenses. This is contrary
to Section 69 of Republic Act 9524 which
explicitly stated the direct release of funds to
the regional offices from the DBM. What
has the agency done to address this?
, r
606
Senator Drilon replied that accordingly, the funds
were remitted by the DBM to the regional offices,
He said that at the end of the fiscal period, the
regional offices would submit a report to the Office
of the Secretary of Justice which would, in turn,
transmit the consolidated report of all the regions to
the Department of Budget and Management He
added that whatever unexpended balance there is
would be returned to the National Treasury,
8, On the Bureau of Immigration: Deliveries
costing Pili ,299,759.082 by the Procurement
Service of DBM consisting of IT equipment
and software were not recorded in the books,
thus understating the IT equipment and
software account and overstating the due
from NGA's account. The remaining balance
ofP41,214A08.76 continues to be undelivered
for more than two years. Have the records
of its office been reconciled with the records
of the PS-DBM to reach the correct receivable
balance?
Senator Drilon said that reconciliation has
already been done on BIR's accounts, P24 million
of which is a balance consisting of undelivered
equipment
9. On the Public Attorney's Office: In the 20 I 0
eOA audit report, the balances of various
Property, Planned and Equipment (PPE)
accounts totaling P 168,074,625.71 did not
reconcile with the property records of
PI52,795,367.89, or a difference of PI 5,279;2.57.82
due to recording of undelivered PPE
amounting to P I 1,545,805.39 and unaccounted
PPE ofP3,733,452.43. Has the relevant depart-
ment been ordered to regularly update
and reconcile the PPE records and do the
necessary adjustments, if necessary?
Senator Drilon stated that reconciliation is
ongoing and (here is assurance that the account
would be placed in order in five weeks' time.
suspended.
[/ was 8:38 p.m.
At the onset, Senator Lacson noted that letter
(d) of locally-funded projects under the item
"Construction and/or completion of the Manila Hall
of Justice" in the amount of P400 million in the
2012 NEP was amended as follows by House Bill
No. 5023 (House version): "Construction and/or
repair, rehabilitation of the halls of justice nation-
wide (JUSIP)" with an allocation of P200 million.
He also noted that letter ( e) was inserted in the
House version which reads "Construction and/or
repair, rehabilitation of the DOJ building, Padre Faura,
Manila" with an allocation of P1 00 million. He said
that the Senate Committee on Finance disagreed
to these House amendments and instead it reduced
to zero the original proposal under the 2012 NEP.
Asked why said items were deleted and whether
or not the construction of the halls of justice nationwide
or the Manila Hall of Justice was not among the
priorities of the Administration, Senator Drilon
confirmed that there was, indeed, an appropriation of
P400 million in the NEP for the construction of the
Manila Hall of Justice at the old site of the Jai Alai
building. He explained that said item was deleted
because subsequent to the NEP, the Supreme COUlt
officially informed in writing the Executive branch
and the Committee of its intention to rehabilitate the
old GSIS building. He said that the Committee did not
agree to the House amendments that provided for
separate allocations of PI 00 million for the Padre
Faura building and another P200 million for the
JUSIP; instead, the Committee provided that the P2
billion savings of the Supreme Court from unfilled
positions be moved from the Miscellaneous Benefit
Personal Fund to the Judiciary so that it could be the
source of funding for the hall of justice in Manila,
He said that the special provision so provides that:
"Unutilized funds from unfilled positions may be used
to fund the renovation, repair of the old GSIS building
in Arroceros Street, Manila to a Manila Hall of
Justice and the repair and maintenance of other Halls
of Justice." He pointed out that there is a budgetary
authority for the use of the savings although the
amount for the construction of the Manila Hall of
Justice cannot be determined at present in view of
the intention of the Supreme Court to renovate
instead the old GSIS building.
Senator Lacson said he was surprised that the
P400 million allocation for the construction of the
building of the Manila Hall of Justice was deleted in
'r
the Senate version because he knew for a fact that
one of the factors that contribute to the slow
dispensation of justice is the lack of courtrooms,
Senator Drilon recalled that when he reassumed
the position of justice secretary in 1992, a bidding
was held for the construction of the Manila Hall
of Justice which was won by a joint venture but
the DOJ waS restrained trom doing so by no less
than the judge of the RTC of Manila upon the
petition of the losing bidder. He lamented that up
to now, the DOJ was still trying to build the Manila
Hall of Justice.
Asked why the Committee cut P33 million from
the budget of the DOJ - P5 million from the Office
of the Cybercrime and P28 million from the National
Justice Information System (NJIS), Senator Drilon
explained that the NJIS was already being undertaken
by the NBI and there is no law creating the Office
of the Cybercrime,
Asked whether the P28 million allocation for the
NJIS was transferred to the NBI, Senator Drilon
replied that there was no such request from the
NBI. He said that the NJIS is a new center to be
established in the DOJ but the Committee deemed it
to be a duplication of the work being done by the
NBI that has its own NJIS allocation of P20 million
in the 2012 NEr.
Senator Lacson said that he raised the question
because in h is budget message, the President
mentioned that the facilities and equipment of the
NBI crime laboratories and forensic investigation
would be modernized and upgraded. Senator Drilon
explained that the P20 million NJIS budget of the
NBI was not cut but the P28 million under the Office
of the Secretary of Justice for the same purpose,
Asked where the P400 million for the Manila
l'lall of Justice and the P33 million from the NJIS and
Otllce of the Cybercrime would go, Senator Drilon
said that the Comm ittee used the amount as a source
of allocation for some budgetary amendments - for
instance, PI million was allocated to the Governance
Commission for Government-Owned and Controlled
Corporation wh ich had no budget and part of the
amount was allocated for the purchase of equipment
of various govef'lllllent hospitals.
Senator Lacson pointed out that in the NEP, the
budget proposals for the following agencies are as
follows:
PNP
AFP
BID
NBI
P73, 181 ,682;
P95,985,516;
P461 ,997,000; and
P842,559,OOO
607
He appealed to the Committee that part of the
P433 million taken from the DOJ budget be reallocated
to the NBI and the BID, arguing that they are also
law enforcement agencies albeit with less personnel
than the AFP and the PNP, In response, Senator
Drilon said that the Committee would be open to
amendments at the proper time, adding that P20
million was, in fact, allocated to the NBI for equip-
ment purchase in recognition of its need to augment
its assets and to help it become more effyctive as
a law enforcement agency.
Senator Lacson said that it was his understanding
that there is a pending bill for the modernization of
the NBI but since it would take time to enact it into
law, he would introduce amendments to augment the
budgets of the NBI and the BID at the proper time.
At this juncture, Senator Legarda relinquished
the Chair to Senate President Pro Tempore Ejercito
Estrada.
Senator Sotto manifested that Senator Trillanes
would no longer interpellate on the DO) budget.
OF THE DEPARTMENT OF JUSTICE
objection, the budget of the Department of Justice
and its attached agencies, namely, the Office of the
Secretary, Bureau of Corrections, Bureau oflmmigra-
tion, Land Registration Authority, National Bureau of
Investigation, Office of the Government Corporate
Counsel, Office of the Solicitor General, Parole and
Probation Administration, Presidential Commission on
Good Government, and the Public Attorney's Office,
was deemed submitted for the Body's consideration.
suspended.
It was 8:55 p.m.
608
Senator Legarda presiding.
DEPARTMENT OF THE INTERIOR
AND LOCAL GOVERNMENT
Upon resumption, Senator Drilon presented the
budget of the Department of the Interior and Local
Government.
Preliminarily, Senator Drilon stated that the budget
of the DILG, including the PNP, is P94,SI2,741,OOO
in the NEP and the GAB-House version but
the Committee reduced the amount by PI.7 billion.
Of that amount, he explained, P7S0 million was
transferred to the Local Water Utilities Administration
for third-level water projects since the GAB-House
version and the NEP already allocated PI.S billion
for tlrst- and second-level water system. Further, he
said that the Committee provided additional funds for
the Pamana Fund of the DILG and the Pamana
Funds under the Office of the Presidential Adviser
on the Peace Process (OPAPP) were moved to
other operating agencies because OPAPP is not an
operating nor an implementing agency. He explained
that 76.7% or P73.8 billion of the DILG budget
would go the Philippine National Police (PNP).
At the onset, Senator Lacson read special
Provision No. I of the DILG budget, to wit:
U,<e of II/come. In addition to the amounts
appropriated herein, fees and charges authorized
to be collected by the Philippine National Police
by virtue of its absorption of the then Philippine
Constabulary Integrated National Police of the
PC/INP and AFP units shall be classified as trust
receipts to augment its appropriations. Provided,
that the PNP shall submit either in printed or by
way of electronic document to the DBM, the
House Committee on Appropriations and the
Senate Committee on Finance separate quarterly
reports on its income and status of the trust
receipts. Failure to submit said requirement
shall render any disbursements from the trust
receipts void and shall subject the erring officials
and employees to disciplinary action in accord-
ance with Section 43; Chapter 5 and Section 80,
Chapter 6, Book 6 of E.O. No. 292 and to
appropriate criminal action under existing penal
laws.
Senator Lacson asked if the amounts collected
by the PN P from license fees, charges, etc. were
being disbursed following said procedure.
suspended.
It was 9:10 p.m.
In reply to the query, Senator Drilon stated that
the collection varied from P800 million to P900
million in the previous years, but for this year, it is
estimated to be about P800 million. He gave assurance
though that the Committee would submit a more
accurate data in the next day's session.
As to how the PNP disburses the amount
collected as trust receipts, Senator Drilon explained
that the funds are, in effect, supplemental allocations
to the PNP and are being spent in accordance with
a work program approved by the Napolcom and the
DBM, like scholarships.
On whether the PNP is the sole beneficiary of
the trust receipts, Senator Drilon replied that 40% of
the fund goes to the PNP, 20% to the Bureau of Fire
Protection, 10% to the Bureau of Jail Management
and Penology, and 30% to the Armed Forces of the
Philippines. He added that the scholarship funds are
sourced from firearm fees.
Asked if the Napolcom had arrogated unto itself
the 40% share of the PNP, Senator Drilon replied
that the funds are being managed by the Napolcom
but the scholars are the legitimate children of members
of the PNP.
As to why Napolcom manages the fund which
come from trust receipts collected by the PNP,
Senator Drilon surmised that it was the consequence
of the constitutional provision that the PNP shall be
under the supervision and control of the Napolcom.
suspended.
It was 9:18 p.m.
r
WEDNESDAY. NOYICMBER 16.2011
Upon resumption, Senator Drilon explained that
the disbursement of the trust fund is covered by
Republic Act No. 6963 that established the scholar-
ship program for the legitimate children of deceased
or permanently incapacitated members of the PNP
at the elementary, high school, vocational and college
levels. He said that under the law, the scholarship
benefit is limited to the payment of tuition and
miscellaneous fees payable to the school which shall
be remitted by the Napolcom to the school upon
presentation of the required documents such as the
approved enrolment or registration form.
On whether R.A. 6963 specifically identified
trust receipts as the funding source for the scholarship
program, Senator Drilon replied that while he has not
examined the law itselt; the information and notes
that he had received from the DILG showed that
the scholarship fund is sourced from fees collected
by the PNP.
Senator Lacson recalled that during his term
as PNP chief, the PNP, as the sole manager of the
fund, distributed shares to agencies like the AFP and
BJMP, and the Napolcom never benetitted from the
fund. Senator Drilon said that while the matter was
not reviewed during the committee hearings, the
DILG has given assurance that it would review the
procedure and submit a report to his committee and
to Senator Lacson within the week.
Asked on the number of scholarship beneticiaries
among the members of the PNP, Senator Drilon
replied that 1,079 scholarships wOlth P12.5 million-
or an average of P II ,500/scholar - were granted
in 2010.
Senator Lacson noted that before 2009, the
payment for licenses, fees, permits and school IDs
for security guards was covered by an order of
payment addressed to the Land Bank; however, he
learned that under the new scheme, the Land Bank
receives P200 while P 150 is paid to the contractor,
Nanjing Industrial Tools and Equipment Company
without the accompanying order of payment. He
believed that the Land Bank ought to receive all the
proceeds since it was improper for the contractor
to get a share of the collection without an order
of payment.
609
suspended.
It was 9:25 p.m.
Senator Drilol1 informed the Body that during
the break, Senator Lacson showed the DILG and
PNP officials some contracts which were entered
into by the previous administration and which
violated certain government auditing rules. He said
that DILG Secretary Robredo has given assurance
that the documents would be reviewed and he
would take appropriate action if these are found to
be inconsistent with auditing rules.
Senator Lacson said that P65,60 I ,956,000 of the
P674.7 billion allocated for all departments and
agencies in 20 I 0 was appropriated for the DILG.
Moreover, he said that the 20 I 0 GAA had a Special
Purpose Fund ofP629.6 billion and P355.1 billion for
automatic appropriations.
As regards the huge amount that was allocated
to the D1LG from the Special Purpose Fund (SPF)
and the automatic appropriation, Senator Drilon
explained that in 2010, certain funds, particularly
allocations to the LGU such as the Barangay Ofticial
Death Benefits Fund (P27.120 million), Intemational
Commitment Fund (P9.125 million), Miscellaneous
Personnel Benefit Fund (P328.759 million), PDAF
(P4.750 million) and Retirement and Gratuity Fund
(PI I\.9 million), were transferred to the DILG.
For his palt, Senator Lacson noted that the
DILG received funds from the following:
P735 million - from Contingency Fund (P800
million) ;
PIO billion - from MPBF (P74.1 billion);
P4.7 million - from PDAF (PI0.8 billion); and
P 18.4 billion - from Pension and Gratuity Fund
(P79.9 billion)
Relative thereto, asked how the DILG used the
monies it received from the Contingency Fund, Senator
Drilon gave assurance that Senator Lacson would
be given a report on the matter before the end of
the week.
610
Senator Lacson pointed out that based on the
20 I 0 GAA and the 2012 NEP, the total obligations of
the DlLG increased by more than 30% or P99,S
billion, Of this amount, he noted that the depaIiment
had an unused appropriation of P4263 billion,
unreleased appropriation of 1,9 billion, and unobligated
appropriation fo P2,3 billion, Senator Drilon I'eplied
that this was possibly due to the fact that other items
in the budget were transferred to the PNP, He said
that his Committee would provide Senator Lacson
with a detailed repOli on the actual funds that had
been trails felTed to the DILG, He explained that the
Executive branch used such fund transfers to augment
or adjust the budgets of the different agencies when
exigencies would require such action,
Senator Lacson commented that from the point
of view of sound budget management the DlLG has
failed to properly manage its budget considering that
it received much appropriation but failed to obligate
certain amounts as evidenced by the P250 million
it had in savings, and yet it has Pl02 million in over-
savings, Senator Drilon said that budget management
ultimately depends on the leadership of the agency
and the approving authorities, However, he assured
Senator Lacson that unlike its predecessor, the present
leadership has greater respect for the budget process.
Senator Lacson recalled that the previous DlLG
secretary was able to haggle tor the transfer of
funds from other items in the budget due to his close
association to the former President.
Senator Lacson hoped the Senate would take a
closer look at its oversight functions, especially in
the next budget hearing.
On another matter, Senator Lacson adverted to
RA 6975, on the power of the LGUs over the PNP
un its. As a matter of practice, he noted that the
mayors pick their chiefs of police from the three
names submitted by the PNP while governors choose
from among five nominees of the PNP.
Asked on the role of the Napolcom in the
designation of such police officials, Senator Drilon
replied that the list of nominees generated by the
Chief PNP is submitted to the Napolcom for
confirmation. He added that the legal basis for the
procedure is the Constitution which mandates that
there shall be a PNP, national in scope and civilian
character, under the supervision of the Napolcom.
Senator Lacson argued that the procedure is
tantamount to micromanaging. Besides, he pointed
out that there is a Napolcom circular saying that it
shall review the nominees in case of disagreements
or conflicts. Senator Drilon assumed that it was the
200 I circular as he gave assurance that the Napolcom
exercises its powers pursuant to Section 14 of the
PNP law which vests it with administrative control
over the PNP.
But, Senator Lacson noted that based on the
circular, the Napo1com will only come in in case of
conflict or disagreement between the LGUs and
the PNP as regards the nominees. Senator Drilon
admitted that the DlLG Secretary was not aware of
the circular, stating that the present procedure is
that nominees are submitted to the Napo1com for
confirmation. As regards the legal basis for the
action, Senator Drilon cited Section 14 (Powers and
Functions of the Commission) of the PNP Law
which states, "a) Exercise administrative control over
the Philippine National Police."
INTERPELLATION OF SENATOR HONASAN
Primarily, Senator Honasan said that he would
focus his queries on the regular reporting system of
different agencies under the DlLG.
Senator Honasan observed that the procurement
program of the PNP recently came under scrutiny
when issues were raised regarding the purchase
of helicopters and rubber boats, among others.
Nonetheless, he lauded the PNP for submitting to
the Committee on Public Order and Dangerous
Drugs its initial proposed 2013-1016 procurement list
under the capability enhancement program, which
was currently under deliberation. He opined that the
proposal should be part of an expression of capability
reflected in an approved table of organization and
equipment because the intended equipment must
address a long-term objective. He added that a long-
term procurement plan would insulate the procure-
ment process from unnecessary external influences.
He requested that after the budget deliberations,
the proposal be included in the regular reporting
system of the PNP under the DlLG. Senator Drilon
acknowledged the suggestion and assured that it
would be made part of the agenda of the Committee
in the exercise of its oversight function.
As regards the issue on firearms, Senator Honasan
stated that preparatory to the reporting out of the
firearms regulation bill, the PNP reported that 99%
of crimes are committed with unlicensed firearms.
He recalled that during the hearing on October 11,
20 II, he suggested that the Committee study the
feasibility of implementing, free of charge, a registration
progmm to compliment an amnesty proposal. He
revealed that the PN P estimated that about one-
million unregistered firearms were circulating as of
August 31,20 II, while the Chief of the PNP Firearms
and Explosives Division agreed that the free
registration of unlicensed firearms would motivate
people to register their firearms. For the record, he
asked the PNP for an update on the results of the
study. Senator Drilon gave assurance that the proposal
would be studied by the PNP, taking all consideration
into account and regular reports would be submitted
to the Comm ittee.
On another matter, Senator Honasan stated that
the Bureau of Fire Protection (BFP) is authorized to
collect Fire Code fces as provided in Section 13 of
RA No. 9514 (Revised Fire Code of the Philippines).
As part of the reporting system, he asked the BFP
to submit a matrix of the Fire Code fees collected
and their utilization since the effectivity of the law in
December 2008; the status and the impact of the
fund utilization on the modernization of the BFP, its
acquisition and improvement of facilities, fire trucks,
fire fighting emergency and rescue equipment Senator
Drilon replied that the data requested are intact as he
assured Senator Honasan that the same would be
made available to him within the next seven days.
QUESTIONS
At this juncture, Senator Sotto read into the
record the following questions of Senator Defensor
Santiago on House Bill No. 5023.
No. I: According to several news
reports, there is a deficit of firetighters in the
country. What steps have its agency taken to
improve the recruitment rate of firefighters?
The 2012 GAB allocates a budget for the hiring
of 500 additional Fire Officers I.
Que.'tion No.2: In the 2009 eOA Report, it
was alleged that the construction of the national
headquarters' building has remained incomplete
due to a defaulting contractor. Has the building
been completed already? Were they able to
coordinate with the DPWH on the disposition of
the contract on the possible recoverable amount
f1'om the defaulting contractor?
611
Senator Drilon stated that the building has been
completed and the BFP has transferred (0 it
Questioll No.3: The 2009 eOA Report
also claimed that a balance of PI 9,874,378.02 due
from nongovernment agencies includes an
advance of P17,OS2,374.S9 to the Department of
Budget and Management Procurement Services
for the procurement of firefighting equipment
and supplies which have remained undelivered
in 2009. Have these firefighting equipment and
supplies been delivered already?
Senator Dri Ion revealed that some of the
equipment were delivered already but were recon-
ciled to come up with the exact figures as to how
much should be returned to the National Treasury.
He stated that those funds were transferred to the
DBM under the Procurement Law, thus, there is a
need to reconcile the deliveries and whatever balance
will be used for additional equipment or remitted to
the Na(ional Treasury.
Questioll No.4: In the 2009 GAA, P2.1
million was allocated under the locally-funded
projects for the construction of police stations.
The same amount was allocated in the 20 II
budget How much of the P2.1 billion appro-
priation has been released. In which areas are the
police stations newly constructed? In which areas
will the 2012 proposed appropriations be con-
structed and does the Sponsor have an estimate
total requirement for police stations that would
need new construction for the next five years?
Senator Drilon clarified that the P2.1 billion
allocation was for capability enhancement; P2 billion
for firearms, transportation and communication
equipment; PIOO million for the construction of police
stations, from which 19 police stations would be built
To a related que,y, Senator Drilon said that none
of the P2.1 billion has been released but a a request
for the release of PL8 billion was pending before the
OBM. He then cited the areas where new police
stations would be built, to wit: Natividad, Pangasinan;
Gonzaga, Cagayan; Lukban, Quezon; Calintaan, Mindoro
Occidental; San Andres, Catanduanes; San Jose de
Buenavista, Antique; Oimiao, Bohol; Pinabacdao,
Samar; Tungawan, Zamboanga Sibugay; Cagayan de
Oro City; Pantukan, Compostela Valley; T'boli, South
Cotabato; Jabonga, Agusan del Norte; Dumalondong,
Lanao del Sur and Bontoc, Mt Province. He stated
that there are 15 locations and 13 were being bidded
out; the T'boli station in South Cotabato was 70%
612
complete as of July 4, 20 II; the Bontoc station in
Mt Province was 30% complete as of June 20 II.
He added that in 2012, 19 police stations would be
built. He added that the total cost of 15 police
stations is PIOO million, and 13 out of the IS stations
are already in the bidding process.
Asked how many police stations are proposed to
be constructed for 2012, Senator Drilon answered
that there are 19 police stations, He added that
more than 700 pol ice stations would be needed for
the next five years,
As regards the Philippine Public Safety College,
Senator Sotto observed that P21 ,200,000 is allocated
to the education and training program under the
Colleges Capital Outlay in the 2012 GAB which
is more than PI3 million or 136% increase from
the P8,980,000 budget in 20 I L Senator Drilon
explained that there is a capital outlay of P21.2
million for the construction of a two-storey dormitory
building and two-storey 6-unit classroom and P2.5
million for the purchase of a mini bus. He also
informed the Body that there has been no capital
outlay in the previous year.
The Chair stated that Section IS(b) of the Climate
Change Act designates the DILG, along with the
Local Government Academy, to facilitate training
programs for LGUs on climate change adaptation.
It then asked if the DILG has complied with the
provision on capacity building and adaptation, Senator
Drilon replied that it is being done in 27 provinces
for the current year.
Thereafter, the Chair requested that it be
furnished with a copy of the curriculum of the Local
Government Academy and the DILG and an update
on the status of capacity building programs.
SUBMISSION OF THE BUDGETS OF
THE DEPARTMENT OF THE INTERIOR
AND LOCAL GOVERNMENT AND ITS
ATTACHED AGENCIES
objection, the budgets of the Department of the
Interior and Local Government and its attached
agencies, namely, the Bureau of Fire Protection,
Bureau of Jail Management and Penology, Local
Government Academy, National Police Commission,
WEDNESDAY & THURSDAY, NOVEMBER 16 & 17,2011
Philippine National Police, and Philippine Public
Safety College, were deemed submitted for the
Body's consideration,
the bill.
Upon motion of Senator Sotto, the Chair declared
the session suspended until ten o'clock in the morning
of the following day.
It was 10:05 p.m.
At 10: 15 a.m., Thursday, November 17, 20 II,
the session was resumed with Senate President
Enrile presiding.
(Continuation)
objection, the Body resumed consideration, on Second
Reading, of House Bill No, 5023 (Committee Report
No. 79), entitled
AN ACT APPROPRIATING FUNDS
FOR THE OPERATION OF THE
GOVERNMENT OF THE REPUBLIC
OF THE PHILIPPINES FROM
JANUARY ONE TO DECEMBER
THIRTY-ONE, TWO THOUSAND
TWEL VE, AND FOR OTHER
PURPOSES.
Senator Sotto stated that the parliamentary status
was still the period of interpellations.
Sponsor of the measure.
DEPARTMENT OF AGRICULTURE
Department of Agriculture.
THURSDAY. NOVEMBER 17.2011
REMARKS OF SENATOR DRILON
Senator Dri Ion stated that the developing
experience of cmerging Asian economies shows a
strong link between agricultural growth and overall
economic performance. The rapid growth in the
agriculture of a country, he said, induces rural non-
farm growth that reduces substantial poverty in the
rural areas, citing as a prominent example Thailand.
Given the challenges, he revealed that the Department
of Agriculture and its attached agencies set the
following objectives for 2011 and 2012:
I. Improve food security and increase rural incomes;
2. Increase sector resilience to climate change
risk; and
3. Enhance policy environment and governance.
Senator Drilon said that the DA and its attached
agencies and corporations have a budget of P61.7
billion in 2012, representing a 60% increase over the
P38.5 billion budget in the current GAA. He added
that the Committee has sustained the P6I, 181 ,522
budget recommended by the President in the National
Expenditure Program; and it disapproved the House
amendment to cut P800 million from the allocation
for irrigation projects, believing as it did that irrigation
projects are necessary to help the country achieve
rice sufficiency by 2013.
INTERPELLATION OF SENATOR ANGARA
At the outset, Senator Angara lauded the
extraordinary fortune ofthe Department of Agriculture
(DA) at achieving a 60% increase in its budget in
2012. For his interpellation, he said that he would
ask policy questions on food in general and coconut
security in pmticular.
As regards food security, Senator Angara stated
that at present, one of the hottest topics in the global
community is the looming food crisis as borne by the
fact that food prices have risen to 27% from January
to the present this year; that global investment in
agriculture over the past decade has been at its
lowest; and the gains in the Green Revolution of the
'60s and '70s were eroding. He pointed out that
many food analysts and agricultural scientists were
pJ'edicting that prices of food, across the board,
would increase in leaps and bounds.
Nonetheless, Senator Angara expressed elation
that the Philippines has always been optimistic about
613
achieving rice sufficiency by 2013. He hoped that it
would come to pass or else, he cautioned, a rice
crisis might trigger civil unrest, rice being the staple
food of Filipinos. He underscored that Filipinos,
however, have to produce a basket of food to sustain
their body and spirit, saying that they cannot subsist
on rice alone.
Adverting to an article he read in a newspaper
as regards the methods to increase the yield in food
production, Senator Angara cited its principal premise
that Filipinos cannot continue cutting trees in forests
to increase agricultural land since it has minimal
gains compared to the damage it brings to the
environment. Instead, he said, the article suggested
that to get the extra yield in agriculture, Filipinos
ought to maximize and increase the yield out of
existing natural resources, whether land or fishpond
or orchards or the sea in marine culture; second,
modern farming techniques, for instance, the applica-
tion of fertilizer and more innovative irrigation system,
like using less water for more yield, should be
adopted; and third, cutting food wastage in households
and restaurants should be aggressively pursued. He
pointed out that according to studies, almost a third of
the food annually produced in America and Europe
go to waste. He asserted that government must
extensively fund post-harvest facilities, which concern
not only the traditional drier but also food storage and
preservation equipment. He pointed out that there is
now a vital shift in diet, from meat and dairy to
vegetables.
Senator Angara asked if the DA has any plans
in the next four years of the Aquino Administration
not just to increase the yield but also productivity
through the suggested methods. He believed that the
DA is capable of introducing modern farming,
innovative irrigation and post-harvest facilities.
Asked on the allocation in 2012 for the
aforementioned programs, Senator Drilon replied that
the DA recognizes the need not only for self-
sufficiency in rice but also to make food staples
available and secure, realizing the role that a stable
food supply plays not only in the economy but also in
social stability. As regards sufficiency in rice, he
informed the Body that the DA has the Philippine
Food Staples Sufficiency Program aimed at eliminating
dependence on rice imports, producing more
domestically to provide food security, irrigating new
lands and rehabilitating and restoring existing irrigated
lands. As regards the DA programs, he stated that
614
the biggest increase is in the expenditure for irrigation
projects - Pl2 billion in 2012 from the current
budget of P7, 7 billion,
Senate Pres,ident Enrile asked whether the DA
has any inventory of the grains that can be grown in
the Philippines, He pointed out that there are many
types of grains, oats, millet and sorghum in other
countries aside from rice and corn, and he asked if
there are similar types of grains in the country that
can be planted on the rolling hills and which are
adaptable to the climate and soil condition in the
country. He suggested the use of every square inch
of arable land to produce camote, yam, togue or ube
as a substitute for carbohydrate requirement in order
to reduce dependency on rice and corn.
Senator Drilon replied that the DA is doing an
inventory of grains and seeds that can respond to the
needs of the people such as drought-tolerant rice
seeds, submarine type seeds that can be used even
when there are floodings, upland rice programs, and
hybrid varieties.
Senator Angara said that apart from the diverse
variety of rice strain, based on soil testing, sorghum
can also be grown in the country. Further, he infonned
the Body that he has been advised on the potential of
the sago plant which grows mainly on marsh land
and provides high protein and energy, and that this
was being used extensively in Mindanao. He
suggested that agricultural scientists look into this
because it can be a good substitute for rice or corn.
Citing the country's extensive experience in root
crops, Senator Angara said that the people can join
the global shift from basic staple food to plants that
provide carbohydrate, energy and protein. Senator
Drilon stated that the DA is fully familiar with this;
however, it will take a little more time before the
general population would make the shift. In the
meantime, he said, the government should provide for
the trad itional needs of the people especially those in
the rural areas who still consider rice as the basic
staple food. He informed the Body that the DA is
embarking on an information campaign to show other
substitutes and expanding the areas for sorghum
planting, which are part of the DA's program.
Asked by Senator Angara on the funding for the
program of providing substitute grains, Senator Drilol1
replied that the budget is about P 1.9 billion, which
also covers the planting of high-value crops.
THURSDAY, NOVEMBER 17, 2011
At this point, Senate President Enrile recalled
that during the term of President Marcos, there was
scarcity of rice in the country, causing food riots in
Manila, and in order to solve the rice crisis, the govern-
ment made use of white corn that were converted
into corn grits and mixed with rice to supplement the
available rice supply. In this regard, he suggested
that the DA promote the production of white corn
instead of spending money for the importation of rice
from Cambodia, Vietnam and Thailand.
Senator Drilon replied that the DA is fully
cognizant nf the merits of the program on corn grits,
pointing out that aside from creating a task force to
look into this area, it has an aggressive program
which targets the production of 1,5 million metric
tons of corn grits. He informed the Body that the
department's Nutritional Corn Program has a budget
of nearly PI billion for 2012, which shall cover the
promotion of open-pollinated white corn varieties,
cost-reduction technologies for yellow corn and
provision for more post-harvest facilities. He estimated
that about 14 million Filipinos would be taking corn
grits as a basic staple.
Senate President Emile said that Filipinos will
never be hungry if edible root crops like camote will
be planted to all available lands.
Still on root crops, Senator Drilon stated that the
DA would have a higher budget of P 1.34 billion in
2012 to be used for high-value crops, which is a 44%
increase compared to its budget in the previous year.
Senator Angara said that over and above the
programs promoted by the DA, research and
development (R&D) in agriculture has the highest
economic and social return. He said that without
R&D, more resilient varieties on rice or fruits, longer
life shelf for fruits and vegetables, or better preserved
and conserved fish and marine resources, will never
be discovered.
Asked on the R&D allocation for agriculture,
Senator Drilon said that it is about PI.9 billion: P960
million for the Bureau of Agricultural Research;
P341 million for the Philippine Rice Research Institute,
and P455 million for various research projects under
the DA.
Senator Angara stated that the country has very
good agricultural scientists and technologists, but the
DA only contracts R&D to different SUCs, which
do velY limited in-house research. He asked on the
breakdown of the rice research program of the
department as he would later on connect this to the
matter on innovation clusters that will place the SUCs,
government research institutes under the DOST and
the industry, the first time that there would be a consor-
tium of the three big participants that would increase
R&D money by tenfold and would provide the lever-
age in the country's agl'iculture and fanning assets.
suspended.
II was 10:49 a.m.
Upon resumption, Senator Drilon informed the
Body that the DA's R&D budget of about PI.9
billion shall also cover P398.4 million for the corn
program, P123.2 million for high value crops, and
P6S.S million for the livestock program. He said that
the department does not stop at research as there is
a program which calls for applying the results of the
research to the actual operation.
Senator Angara commented that the resident
research capability is not as extensive because DA
is a line operational agency rather than a staff
research type. He stated that the researches farmed
out to Los Banos, CLSU, Western Visayas State
University, Cabacan, among others, involve a pool of
high-class and well-trained agricultural scientists and
technologists. He asked whether the R&D budget
would be used purely for research purposes. Senator
Drilon stated that the allocation shall be used solely
for research purposes since there is a different
budgetary allocation for extension services.
As far as the Philippine Rice Research Institute
is concerned, Senator Drilon stated that 20% of its
budget shall cover extension services while 80% shall
be used for general operations. Senator Angara said
that the Committee on Finance can disaggregate the
portion devoted to pure R&D for agriculture and
fisheries.
On another matter, Senator Angara recalled that
during the budget presentation of CBED and SUCs,
615
it was agreed that the government must begin
leveraging the research capability and assets of
SUCs in the country in view of the fact that the
outstanding SUCs are largely unfunded and untapped.
Senator Angara informed the Body that in a
meeting with the science secretary, the CHED chair
and Agriculture Secretary Alcala, five clusters were
created to heJp R&D in agriculture, stressing that
R&D is not about coming up with a discovery and
putting it on the shelf but about practical inventions
and discoveries that are quickly commercializable.
For instance, Senator Angara stated the DA
could adopt a program on precision and smart
agricultural techniques, where farmers can rely on
satellite imaging to determine the state of the soil and
its fertility, and when droughts and infestation are
coming. However, he said that the farmers need to
be trained on how to use the data. Fortunately, he
stated that several state universities (SUs) have
embarked on this kind of program and that thanks to
the government's Balik-Scientists Program, a top
NASA scientist has introduced the use of satell ite
imaging and remote sensing in agriculture.
Senator Angara identified the SUs where
precision and smart agricultural techniques were
being applied: Mariano Marcos State University,
1I0cos Norte; Visayas State University, Baybay;
Bicol University, Albay; University of Southern
Mindanao, Kabacan; Mindanao State University,
lIigan. He stated that these SUs, together with the
DOST-Philippine Council for Agriculture and Forestry
and Natural Resources Research and Development
(DOST-PICARRD) and the Philippine Council for
Aquatic and Marine Research and Development
(PCMARD), would form a consortium and share
trainers, knowledge and inform-ation. He expressed
his appreciation for Secretary Alcala's substantial
contribution in setting up the cluster on precision
farming and smart agriculture.
Likewise, Senator Angara informed the Body
that the other cluster formed was for algae research
in which the U.S. was far advanced. He said that
there is no need to reinvent the technology; it just
needs to be brought into the country and adopted.
Moreover, he noted that algae have a higher
energy content than soya and corn; their protein con-
tent is better and they can be produced very cheaply,
one product derived from them being animal feeds.
616
At this juncture, the Chair inquired as to the type
of water the algae breed in. Senator Angara stated
that both fresh-water algae and brackish-water algae
are being used. He said that meat, poultry, fish and
dairy would cost much cheaper if fed with algae-
based feeds. He informed the Body that the
Alcantaras from Sarangani were already producing
algae and scientists from the University of Southern
Mindanao, Mindanao State University and UP
Mindanao were already utilizing them. He stressed
that for the first time, the country's natural endowment
is being used to increase productivity and yield. He
said that there would be more clusters to be set up,
all of them impacting agricultural productivity.
Senator Angara stated that he would take lip
more agricultural innovations at the proper time. He
believed that R&D in agriculture especially at this
time of climate change and unpredictable weather
and funding, must be focused and government needs to
apply concentrated, systematic and institutional efforts.
Senator Drilon commended the efforts of Senator
Angara in putting up the clusters thereby joining
together different agencies and SUs in coming up
with innovative, consolidated and targeted R&D in
agriculture. He stated that Secretary Alcala has
expressed his support for these endeavors and wanted
to sit down with Senator Angara to coordinate the
relationship and synergy between the DA and the
SUs conducting the research.
Apart from the clusters already formed, Senator
Angara disclosed that there would be other clusters
on marine and other aquatic resources which would
be supportive of Secretary Alcala's drive for higher
productivity and food security. As regards the issue
of sufficiency, he clarified that it means almost
attaining the level of production that can feed the
country; while in food security a rate of90% - 100%
in production need not be attained as the shortfall can
be compensated either by exporting the excess and
thereby earn foreign exchange or impOlting the
balance which might be the more cost-benefit formula.
Senator Angara opined that everyone aims for
food security to ensure there is food when needed.
He stated that rice is very unpredictable and unlike
other grains, it requires massive water, fertilizer and
inputs. He believed that the clusters can serve as the
research arm of the DA that need not do R&D as
it is, in fact, being undertaken by the cluster with
financial backing Irom the industries.
THURSDAY, NOVEMBER 17,2011
Moving on to another matter, Senator Angara
stated that one-fourth of the country's popUlation
depends on coconut for livelihood and that 69 of 81
provinces grow it. He stated that because coconut is
abundant in Quezon and Aurora, he was able to
obtain his education on income derived from it. He
said that even President Aquino was euphoric about
coconut water when he came back from the U.S.
He added that a partner of Pepsi Cola in the United
States came to the Philippines last March, went to
Mindanao and Sariaya and Tiaong, Quezon, to talk to
coconut millers and plantation owners and concluded
a PI billion deal to buy coconut water.
As regards the sudden increase in the value of
coconut, Senator Angara stated that coconut water
was found to have better energy content than
Gatorade, the most popular energy drink in the
market, which is every athlete's favorite drink but
whose micronutrients are chemical-based. On the
other hand, he said that coconut water is natural
water and, like banana, rich in potassium,
However, Senator Angara lamented that most of
the coconut trees in Calabarzon have been cut; and
while Bicol has still a lot of coconut trees standing,
some are infested with kadang-kadang and it is
prohibited to bring coconut seedlings out of the region.
He said that the largest concentration of coconut trees
in the country is found in Mindanao. He revealed that
he and Senate President Enrile have been pushing
for the long overdue release of the coco levy fund so
that it could be spent on the development of the
coconut industry. He hoped that with the leadership
of Senator Pangilinan, chair of the Committee on
Agriculture, the Senate could tackle the rehabilitation
and recovery of the coconut industry so that the
PCA could utilize the multi-billion peso fund.
Senator Angara recalled that the Philippines used
to be the number one coconut producer in the world
but Indonesia has overtaken it and Thailand would
follow soon. He lamented that at the rate the trees
were being cut and not replaced soon enough through
replanting, the country might lose the agricultural
advantage it used to have. He said that every part of
a coconut tree is now commcrcializable, usable and
saleable. The coconut has now turned into a golden
tree; it is not a tree of life anymore, he said.
Senator Angara expressed hope that there would
be enough allocation for R&D in the PCA so that
many researches on coconut could be disseminated
and technology transferred to the grassroots.
,r
TIIURSDAY, NOVEMBER 17,2011
In reaction, Senator Drilon stated that the DA
Secretary concurred with the sentiments of Senator
Angara, He said that recognizing the coconut
industry's potential, the Committee has doubled the
PCA budget from the current level ofP539,9 million
to pl.ln billion in 2012, Moreover, he said that of
the proposed budget, P502 million would be allocated
to replanting, P336 million to fertilization, P36 million
to coconut R&D and P75 million to agriculture
R&D, In addition, he stressed that no cutting of
coconut tree would be allowed unless there is a
simultaneous program of replanting,
Senator Angara stated that there has been 'a
cutting-replanting policy for a long time but nothing
has happened,
The Chair informed the Body that there was a
pending bill in Congress proposing the liquidation of
all investments of the Coconut Investment Fund
under the trusteeship of the United Coconut Planters'
Bank (UCPB) into cash. He said that Congress
expects to raise at least P I billion from the sale of oil
mills, San Miguel shares and the probable privatization
of the UCPB, He believed that PI 00 million has
been earmarked for the purpose of reviving and
modernizing the coconut industry, He said that it is a
given that the future oftlle country lies in agriculture,
especially in the coconut industly, He added that
sugar, with low glycemic index, can be made from
the coconut flower, adding that there is a plant in
Davao that produces 50,000 tons of sugar at US$3,000
per ton. Finally, he said that Senator Recto was due
to submit his committee report on the bill soon,
Senator Angara stated that there is a huge
treasure that government has not tapped by not
developing the coconut industry, He said that the
PIOO billion principal does not matter anymore
considering that there is a potential to earn 8% or
P8 billion a year from the industry, It is important,
he stressed, for the PCA and the coconut industry
people to try to put together a master plan, He stated
that if everyone gets a conditional cash transfer or a
chunk of the 100 billion allocation but has nothing to
show for it in ten years' time, it would be such a
waste, He dpined that P36 million for R&D in PCA
is very miniscule and can only do so much.
Senator Drilon enumerated the other allocations
to PCA, to wit:
Product Research
and Development - P20.5 M
Agricultural Research
and Development - P75A M
Market Research
and Development - PI6 M
617
Senator Angara suggested that government tap
outstanding SUs - specifically the Visayas State
University in Baybay, the premier center of coconut
research in the country; Bicol University; and UP
Los Banos, along with private firms that can do
aggressive marketing to teach the PCA so that it
need not spend the P75 million for R&D. He explained
that this collaborative work between the line agency
and research institutions for the benefit of the coconut
industry can multiply maybe even 10 times the small
amount allocated to the DA for research purposes,
For his part, Senator Drilon said that he recog-
nizes the merit of synergy and collaboration and that
the suggestion would be aggressively pursued so that
funds allocated for particular endeavors would yield
more value.
In closing, Senator Angara thanked the agriculture
secretary for allowing him to sit down with the DA's
R&D staff so that they could put together a focused,
targeted agenda for R&D in agriculture.
relinquished the Chair to Senator Honasan.
MANIFEST A nON
OF SENATOR PANGILINAN
At the outset, Senator Pangilinan stated that his
statements are more of a manifestation of support
for the proposed budget of the Department of
Agriculture (DA). He recalled that he attended quite
a number of Finance Committee hearings and raised
quite a number of issues concerning the agriculture
sector. He said that he fully supports the proposed
2012 DA budget as presented and defended by
Senator Drilon.
He noted that it was manifested earlier that there
is a 60% increase in the budget of the agriculture and
fisheries sectors, the highest probably in the history
of the DA and in all departments. He lamented that
for the past 20 years, the agriculture and fisheries
sectors have been neglected, citing the annual income
of a farmer which, to date, is P23,OOO that is in large
part (60%) augmented by otf-farm income from
sales of a sari-sari store, remittances from relatives
618
working and living abroad, sale of iongganisa in the
wet mal'ket, among others. He said that it was
interesting to note that the 60% increase in the
budget of the agriculture and fisheries sectors is
giving their members the recognition they have long
been denied and deprived of.
Senator Pangilinan noted that there is a healthy
respect for and recognition of the farming sector in
China, Taiwan, South Korea, Malaysia, Thailand and
.Japan. He said that the lesson learned from these
powerhouses in agriculture is that when farmers are
secure, the country can secure food. Thus, he
stressed, if the Philippines wishes to achieve food
security it must secure its farmers and fisherfolk.
He pointed out that China, Taiwan, South Korea,
Malaysia, Thailand and Japan were able to fast-track
their industrialization by primarily focusing on increasing
the incomes of their farmers and fisherfolk, and the
corresponding increase in the income of farmers and
lisherfolk led to a greater demand for manufacturing
and consumer goods which created a multiplier effect
in the entire economy.
He opined that the 60% increase is not only
necessary but long overdue. He said that if the
Philippines wanted to reach the level of industrialization
and development of the likes of China, Taiwan, South
Korea, Malaysia, Thailand and Japan, it has to precisely
address the largely agriculture-based economy. He
noted that on record, 34% of the country's labor
force is directly employed in agriculture.
He clarified that if other agri-related industries
like manufacturing and milling are considered, the
figure increases to almost 66%; and according to
expelts, if manufacturing and agro-industrial enter-
prises are included, the figure would be higher.
He said that the figure should also include GDP
contribution since 18% or 1/5 of GDP comes from
agriculture. He hoped that in the next five years, the
support for agriculture would be sustained.
Senator Pangilinan narrated that when he was in
China, he noticed that the country had about six 01'
seven government TV channels called CCTV which
are devoted to education, entertainment, news, and
one channel to agriculture and national defense,
a clear indication that China gave primacy to agri-
culture as it has placed it in the same category as
national defense, which is tantamount to saying that
food security is a national security issue.
Senator Pangil inan said that another reason why
he supports the DA budget is that for the first time
in a long time, the Department of Agriculture has
focused on increasing the income of the rural
population. He noted that before, the DA's focus
was on yield, output, increasing the farm-to-market
roads, increasing the irrigated lands, but unless the
increase in irrigated lands, increase in farm-to-market
roads and increase in access to credits result in
increase in the income of the farmers and fisherfolk,
they remain sound representing nothing. He stated
that ultimately, the country cannot have a sustainable
economy even if the yield increases but the farmers
remain poor. He said that this refocus on the income
of farmers and the fisherfolk that will improve their
quality of life must be supported. He pointed out that
the average age of the Filipino farmer is 57 but when
he was in Sinoloan, he met farmers aged 60,61,71,
74 and 78 who should already be retired but they are
constrained to work because the present generation
of Filipinos are not interested in farming. He cautioned
that the situation should ring alarm bells because if
the new generation of Filipinos see no future in agri-
culture, the Philippines would have no future as a nation
because there will be no one to feed the people.
In closing, he reiterated that the 60% increase in
the agriculture budget is something that must be
supported because increasing the quality of life of
farmers and fisherfolk is the right direction for the
nation to take.
Senator Drilon thanked Senator Pangilinan for
his support for the budget of the Department of
Agricu Iture.
INQUIRY OF SENATOR SOTTO
Senator Sotto asked if the Filipino farmers, based
on the profile and age bracket, would be beneficiaries
of the PI.7 billion for vaccines for senior citizens in
the DOH budget. Senator Drilon wished that there
would be a closer synergy and collaboration between
the DOH and the DA as far as senior citizens are
concerned.
At the outset, Senator Legarda said that her
questions are meant not to block the budget of any
agency but to support it, provide enlightenment and
clarification and heighten the level of debate in the
Chamber. She noted that for 2012, there is a budget
for irrigation amounting to P24,765 billion which, she
believed, is P 17 billion more than the 20 II budget of
P7.753 billion.
Senator Drilon c1aritied that the irrigation project
would be increased from P7.7 billion (2011 OAA) to
P19,9 billion in 2012, and that this is in addition to the
P4,8 billion worth offoreign-assisted irrigation projects
and another P2 billion subsidy to the National Irrigation
Administration for repair and maintenance of existing
irrigation assets. He bared that he was also working
on additional funding from the Republic of Korea for
the Halaur River Irrigation Project in the Island of
Panay which will rehabilitate 22, 000 hectares of
existing irrigated rice land plus an additional 12,000
hectares or a total of 34,000 hectares. He said that
the irrigation project will cost about P13 billion and he
hoped to achieve it in 2012,
Senator Legarda believed that the impact of
climate change on the country's water supply and
irrigation must really be focused on. She asked
whether the selection of the projects took into
consideration the impact of climate change on water
supply in various regions and provinces and whether
the DA has conducted a mapping survey to indicate
which provinces were experiencing the worsening
EI Nino or drought.
Asked whether the DA was able to distinguish
the impact of climate change on the various regions
of the country through mapping, Senator Drilon replied
that the DA has created the National Agriculture
and Fisheries Council Committee on Climate Change
where agriculture and fisheries stakeholders are invited
to pallicipate in its policy-making and strategy-
building, and that most of the members are
representatives ti'om the private sector who provide
recommendations and solutions to climate change
policies and programs. He added that the depaIlment
has crafted its climate change policy thrust and
program to insure Philippine agriculture and fisheries
against climate risks by building the adaptive capacity
of fanning and fishing communities. To aid in the
implementation of these programs, he informed the
Body that the department is working on a climate
change information system that will provide useful
information to the agriculture and fisheries sectors to
help them decide on how to adapt to the impacts of
climate change through the Unified Enterprise
Oeospecial Information System (UEOIS). He stated
that the Strategic Agriculture and Fisheries Develop-
ment Zones (SAFDZ) maps will be updated and
619
overlaid with six climate change risk maps to
determine the production areas that are vulnerable
to climate change.
Senator Legarda requested the newly-formed
council to furnish her with a copy of their findings on
risk mapping and how the irrigation facilities and the
increased irrigation budget were distributed among
regions, taking into consideration the unique climate
in various regions of the country,
Asked if the SAFDZ has been finally completed,
Senator Drilon replied that it was still ongoing, and
that he would ask the department to give the definite
date of its completion. Senator Legarda recalled that
the completion of the SAFDZ was a prerequisite
towards making the AFMA more effective, an act
which was enacted more than 10 to 15 years ago
when she was not yet in the Senate. She asked why
the SAFDZ has not yet been completed when she
was about to end her second term in the Senate.
Senator Drilon attributed it to the LOU's failure to
take the initiative of providing the necessary
information, However, he gave assurance that the
current administration is seriously pushing the
comp letion of the SAFDZ maps. Senator Legarda
asserted that if the SAFDZ would zone the whole
country in terms of agriculture needs, and if the
combined SAFDZ and risk mapping would give
information on locations prone to heavy rainfalls,
drought, and the crops that would be productive in a
given area, it would provide an essential guide on
detai ling the budget and making it effective, Senator
Drilon agreed, saying that the SAFDZ maps will be
updated and overlaid with climate risk maps to
determine the production areas that are vulnerable to
climate change.
Senator Legarda lamented that there has been so
much systems loss not only because of corruption but
because of the inefficient utilization of the country's
scarce resources.
Adverting to a COA report in 2009, Senator
Legarda noted that 93% of the National Irrigation
Administration's (NIA) property plant and equipment,
including irrigation canals and laterals, under its general
fund amounting to P64 billion were deficient and with
inadequate records, prompting the Alternative Budget
Initiative (ABI) to suggest that the NIA's budget
should not be increased. She clarified that this was
before Secretary Alcala's term. She asked if the
NIA has already complied with the COA requirements
620
since the present budget for irrigation is being
increased. Senator Drilon admitted that there was
indeed a COA finding during the past administration,
as he gave assurance that the present leadership of
the DA is looking into the findings in order to resolve
the problem. He said that it is a question of failure to
reflect accurately in the records of the department
the projects that were implemented under the budget.
Senator Legarda said that she wanted to make
sure that the agency for which a substantial amount
would be given should also liquidate and perform its
function of transparency in governance which is one
of the pillars of the present administration.
On another matter, Senator Legarda pointed out
that the feasibility studies and detailed engineering
budget of various projects have been allotted a
significant amount of P250 million. She asked whether
these are feasibility studies of existing DA projects
or for possible PPP projects, requested by LOUs, or
conducted in-house by the DA or contracted out.
Senator Drilon explained that every project with a
substantial budget requirement would need to have a
feasibility study as required by the Investment
Infrastructure Committee of the NEDA. He stated
that the P250 million allocated for feasibility studies
would be for big-ticket items and even for possible
PPP projects.
Asked if the DA works in coordination with
the NEDA for the completion of feasibility studies,
Senator Drilon said that these two agencies conduit
with each other as far as agriculture-based projects
are concerned.
Senator Legarda asked the DA for a copy of
feasibility studies that would need more funding from
the government since the department is in a better
position to give specific projects which the farmers,
fisherfolk, and the most vulnerable agricultural
population would need and which can be funded
internationally not by loans but by grants. She pointed
out that there are U.N. agencies and adaptation fund
projects ti'om the UN FCC where funds can be
accessed. Senator Drilon said that a list would be
provided by the DA to serve as guide in determining
possible source of funds for feasibility studies in
areas where this is necessary.
Senator Legarda sought information from the
R&D department of the DA regarding the decline in
mango production, not only jj'om the !locos Region
THURSDAY, NOVEMBER 17,20 II
where a 20% decline was felt, but from all over the
country, a problem which was brought to her attention
by Governor Marcos and mango producers in other
parts of the country. She asked if this was a new
phenomenon and if aggressive research and develop-
ment was being undel1aken to correct the situation.
Senator Drilon confirmed the tindings that there
was a decline in mango production, and the initial
suspicion was that the fruits were falling off the trees
due to climate change. He said the department was
caerfully studying to see what kind of interventions
can be undertaken to help the mango farmers. He
expressed concern that unless this problem is
immediately addressed, the government might lose
this very lucrative market. Senator Legarda remarked
that the same was true with the coconut industry as
earlier discussed by Senator Drilon; the government
was not maximizing or exploiting the country's
potential to be a major coconut producing and
exporting country. She cautioned that the govel11ment
might lose the agriculture, which the Philippines is
known for, because of lack of funds for R&D.
Asked whether the implementation of the
National Information Network, which has a budget
of P92,446 million in 2012 and P91.872 million in
2011, would cover the monitoring of mango and
climate-resilient crops, and whether this can be tapped
to enhance and cite specific knowledge on the
vulnerability of agriculture and fisheries to climate
change, Senator Drilon stated that the matter on the
vulnerability of crops is not under the National
Information Network budget but in another program,
as he clarified that the National Information
Network's budget is for the farmers' registry and
database to determine the location of farmers, and
their produce. He said that the department is in
the process of computerization.
As regards the Philippine Crop Insurance
Corporation that has a budget of P 184 million which
is a farm subsidy to attached corporations, Senator
Legarda agreed with the increase of the budget from
PI13 million in 2011 because the weather index crop
insurance protects farmers from the financial risks
associated with extreme weather changes. She asked
how many small farmers have crop insurance policies
and how etfective these policies have been in
protecting them from extreme weather events.
Senator Drilon reported that in the current year,
the Philippine Crop Insurance Corporation has covered
, r
THURSDAY. NOVEMBER 17,2011
120,000 farmers, and with the 60% increase in the
subsidy next year, this can cover 220,000 farmers.
Likewise, he informed that Body that the Philippine
Crop Insurance Corporation (PCIC) has paid P330
million to the fanners in Central Luzon affected by
typhoon Pedring.
Senator Legarda disclosed that she was briefed
the previous day by Bulacan Governor Alvarado and
the Secretary of Agricu Iture on the damage wrought
by typhoons Quiet and Pedring amounting to more
than P2.5 billion in the Province of Bulacan alone,
half of which represented loss of livelihood in the
agricu Iture sector.
Asked whether the claim that the promises of
assistance from the national government have not
found their way into the province up to this time,
Senator Drilon expressed certainty that the PCIC
has paid P330 million to farmers affected by typhoon
Pedring. He said that while there are additional
assistance coming, the government cannot cover one
hundred percent of the losses. He added that there
are programs being worked out to alleviate the
difticulties of farmers in Central Luzon.
Senator Legarda stated that as an advocate
of organic agriculture since decades ago, she would
hear complaints about the high cost of organic
produce. She asked how traditional farmers could
be convinced to shift to such healthier and more
cost-efticient products, noting the complaints of
farmers in Mountain Province and Benguet that
the DA's regional and provincial oftices are not
promoting their production. She pointed out that there
is willingness on the part of traditional farmers
to welcome the shift, in spite of the cynicism in
some areas, but there was apparent absence of
technology and knowledge.
Senator Drilon confirmed that under the leadership
of Secretary Alcala, one of the DA's thrusts is the
promotion and development of organic agriculture.
He admitted, howcver, that organic products are
generally more expensive, particularly those that are
nearer the point of sale because of the marketing
thrust that the nearer the source, the fresher the
produce. He agreed that organic products should be
cheaper because high-priced fertilizer are not used,
however, as the law of supply and demand dictates,
the low supply of organic products results in an
increase in the price.
621
Asked by the Chair if the DA has a program that
allows it to converge with the other departments like
the DOH and DepEd in making the next generation
competitively healthier and smarter as in the case of
Brazil where a certain percentage of its agricultural
produce is allocated towards feeding school children,
Senator Drilon cited, among other activities, the
convergence with the DepEd in promoting "Gulayan
Sa Paaralan," and with the DPWH for water
impounding projects. He gave the assurance that there
is enough funding for these convergence activities.
SUBMISSION OF THE BUDGETS OF THE
DEPARTMENTS OF AGRICULTURE AND
ITS ATTACHED AGENCIES
objection, the budgets of the Department of
Agriculture and its attached agencies, namely, the
Office of the Secretary, the Agricultural Credit Policy
Council, Bureau of Fisheries and Aquatic Resources,
Cotton Development Administration, Fertilizer and
Pesticide Authority, Fiber Industry Development
Authority, Livestock Development Council, National
Agricultural and Fishery Council, National Meat
Inspection Service, Philippine Carabao Center,
Philippine Center for Post-Harvest Development and
Mechanization, were deemed submitted for the
consideration of the Body.
suspended.
It was 12:10 p.m.
At 12: I 0 p.m., the session was resumed.
SUBMISSION OF THE BUDGETARY
SUPPORT FOR GOVERNMENT
CORPORATIONS UNDER THE
DEPARTMENT OF AGRICULTURE
objection, the budgetary support for government
corporations under the budget of the Department of
Agriculture, namely, the National Dairy Authority,
National Food Authority, National Irrigation Authority,
Philippine Coconut Authority, Philippine Crop
622
Insurance Corporation and the Philippine Rice
Research Institute, was deemed submitted for the
suspended,
It was 12: II p.m.
At 12: 13 p.m, the session was resumed.
CREDIT INFORMATION CORPORATION
objection, the budget of the Credit Information
Corporation was deemed submitted for the Body's
consideration.
OF THE PHILIPPINE CENTER
FOR ECONOMIC DEVELOPMENT
objection, the budget of the Philippine Center for
Economic Development was deemed submitted for
the Body's consideration.
OF THE SOUTHERN PHILIPPINES
DEVELOPMENT AUTHORITY
objection, the budget of the Southern Philippines
Development Authority was deemed submitted for
the Body's consideration.
ANTI-MONEY LAUNDERING COUNCIL
objection, the budget of the Anti-Money Laundering
Counci I was deemed submitted for the Body's
consideration.
CLIMATE CHANGE COMMISSION
There being no reservation for interpellation,
upon motion of Senator Drilon, there being no
objection, the budget of the Climate Change
Commission was deemed submitted for the Body's
consideration.
DANGEROUS DRUGS BOARD
objection, the budget of the Dangerous Drugs Board
GAMES AND AMUSEMENT BOARD
objection, the budget of the Games and Amusement
Board was deemed submitted for the Body's
consideration.
MINDANAO DEVELOPMENT AUTHORITY
There being no reservation for interpellation, upon
motion of Senator Drilon, there being no objection,
the budget of the Mindanao Development Authority
OF THE GOVERNANCE COMMISSION
FOR GOVERNMENT-OWNED
AND CONTROLLED CORPORATIONS
objection, the budget of the Governance Commission
for Government-Owned and Controlled Corporations
was deemed submitted for the Body's considelation.
NATIONAL ANTI-POVERTY COMMISSION
the budget of the National Anti-Poverty Commission
OF THE NATIONAL COMMISSION
ON MUSLIM FILIPINOS
r
TIIURSDAY. NOVEMBER 17.2011
objection, the budget of the National Commission on
Muslim Filipinos was deemed submitted for the
OF THE NATIONAl_ INTELLIGENCE
COORDINATING AGENCY
motion of Senator Drilon, there being no objection, the
budget of the National Intelligence Coordinating Agency
NATIONAL SECURITY COUNCIL
objectioll, the budget of the National Security Council
OF THE PASIG RIVER
REHABILITATION COMMISSION
budget of the Pasig River Rehabilitation Commission
PHILIPPINE COMMISSION ON WOMEN
the budget of the Philippine Commission on Women
PHILIPPINE RACING COMMISSION
the budget of the Philippine Racing Commission was
OF THE PRESIDENTIAL COMMISSION
FOR THE URBAN POOR
motion of Senator Dri lon, there being no objection, the
623
budget of the Presidential Commission for the Urban
Poor was deemed submitted for the Body's consideration.
OF THE PHILIPPINE COMMUNICATION
DEVELOPMENT AND STRATEGIC
PLANNING OFFICE
objection, the budget ofthe Philippine Communication
Development and Strategic Planning Office was
OF THE PRESIDENTIAL
LEGISLATIVE LIAISON OFFICE
budget of the Presidential Legislative Liaison Office
PRESIDENTIAL MANAGEMENT STAFF
the budget of the Presidential Management Staff
COMMISSION ON FILIPINO OVERSEAS
the budget of the Commission on Filipino Overseas
COMMISSION ON FILIPINO LANGUAGE
the budget of the Commission on Filipino Language
OF THE DEVELOPMENT COUNCIL
OF THE PHILIPPINES
r
624
budget ofthe Development Council of the Philippines
was deemed submitted for the Body's consideration,
OF THE HOUSING AND LAND USE
REGULATORY BOARD
the budget of the Housing and Land Use Regulatory
Board was deemed submitted for the Body's
consideration.
HOUSING AND URBAN DEVELOPMENT
COORDINATING COUNCIL
motion of Senatol' Drilon, there being no objection,
the budget of the Housing and Urban Development
Coordinating Council was deemed submitted for the
MOVIE AND TELEVISION REVIEW AND
CLASSIFICATION BOARD
the budget of the Movie and Television Review and
Classification Board was deemed submitted for the
ON INDIGENOUS PEOPLE
the budget of the National Commission on Indigenous
People was deemed submitted for the Body's
consideration.
suspended.
11 was 12:18 p.m.
ON CULTURE AND THE ARTS
motion of Senator Dri Ion, there being no objection,
the budget of the National Commission on Culture
and the Arts was deemed submitted for the Body's
consideration.
OF THE NATIONAL HISTORICAL
COMMISSION OF THE PHILIPPINES
the budget of the National Historical Commission of
the Philippines was deemed submitted for the Body's
consideration.
NATIONAL LIBRARY OF THE PHILIPPINES
the budget of the National Library of the Philippines
OF THE NATIONAL ARCHIVES
OF THE PHILIPPINES
objection, the budget of the National Archives of the
Philippines was deemed submitted for the Body's
consideration.
OF THE OPTICAL MEDIA BOARD
objection, the budget of the Optical Media Board
PHILIPPINE SPORTS COMMISSION
the budget of the Philippine Sports Commission was
THURSfJA Y, NOVEMBER 17.2011
CULTURAL CENTER OF THE PHILIPPINES
motiol1 of Senator Orilon, there being no objection,
the budget of the Cultural Center of the Philippines
SUBMISSION OJi' THE BUDGET
OF THE DEVELOPMENT ACADEMY
OF THE PHILIPPINES
motion of Senator Orilon, there being no objection, the
budget of the Development Academy of the Philippines
HOME GUARANTY CORPORATION
the budget of the Home Guaranty Commission was
OF THE NATIONAL HOME MORTGAGE
FINANCE TlON
motion of Senator Drilon, there being no
the budget of the National Home Mortgage Finance
Corporation was deemed submitted for the Body's
consideration.
NATIONAL HOUSING AUTHORITY
upon motion of Senator Orilon, there being no
the budget of the National Housing Authority
U pan motion of Senator Sotto, the session was
suspended until three 0 'clock in the afternoon of the
same clay.
II was 12:21 p.m.
At 3:27 p.m" the session was resumed with the
Senate President Pro Tempore presiding,
625
DEPARTMENT OF AGRARIAN REFORM
Upon resumption, Senator Recto, Vice Chairman
of the Committee on Finance, presented the budget
of the Department of Agrarian Reform.
Upon motion of Senator Satta, the session was
suspended,
II was 3:28 p.m.
Upon resumption, Senator Sotto manifested that
Senator Legarda would no longer interpellate on the
budget of the Oepal1ment of Agrarian Reform,
DEPARTMENT OF AGRARIAN REFORM
There being no other reservation to interpellate,
upon motion of Senator Satta, there being no objection,
the budget of the Department of Agrarian Reform
and its attached agencies was deemed submitted for
the Body's consideration,
U pan motion of Senator Sotto, the session was
suspended,
It was 3:33 p.m.
DEPARTMENT OF TOURISM
Upon resumption, Senator Recto presented the
budget of the Department of Tourism.
Asked by Senator Satta on the specific marketing
programs of the Department of Tourism (DOT) for
the international and domestic market which are
626
funded in its 2012 budget, Senator Recto replied that
in 2012 the DOT has P466 million for marketing and
promotions broken down as follows:
South Korea
Japan
China
North America
entire Asia Pacific
Europe
India
Middle East
P70 million
P62 million
P45 million
P95 million
PI03 million
P54.8 million
PI9 million
P15.7 million
Additionally, he said that the DOT would also
allocate funds for the Internet for marketing purposes
and a specific amount for the country's participation
in an exposition in South Korea next year.
On whether the DOT has new advertising slogans,
Senator Recto stated that during the Committee
hearing on its budget, the Department promised to
come out with the slogans before the end of the
year. He stated that the advertising agencies would
make their presentations by Monday next week.
Asked how the DOT's advertising and promo-
tional budget for China compares with its allocation
for other countries, Senator Recto replied that it is
less than 10% of the P466 mill ion allocation. He
surmised that the adjustment in the promotional budget
came as a result of the country's new state of
relations with China. However, he disclosed thatthe
DOT was working with private companies such as
Resorts World Genting and Belle Resources to put
up casinos in 2012 and 2013 which are expected to
be major attractions for Chinese tourists. He pointed
out that Genting Malaysia attracts 20 million visitors
every year and that number is a far cry from the
3.5 million visitors - including balikbayans - which
come to the Philippines during the same period.
Senator Sotto believed that rather than utilizing
its budget to sell the country to Europe or NOllh
America, the DOT ought to focus its efforts on
aggressively promoting the Philippines to China
considering that about 100 million Chinese tourists
travel to different parts of the world every year and
if the Philippines tapped only 10% of that number or
10 milian, it can forget other foreign tourists. He
noted that based on the mid-year arrival statistics for
20 I I, the top destinations of 32 million Chinese
tourists were Asian countries: Hong Kong - 12.7
THURSDAY, NOVEMBER 17.2011
million, Macau - 7.5 million, Japan - 920,000,
Thailand - 834,000, Taiwan - 829,000, and
Singapore - 757,000.
For his part, Senator Recto noted that Malaysia,
with 28 millions visitors, draws in the most tourists in
the region, followed by Thailand with IS million.
However, Senator Sotto noted that Malaysia was not
included in the top destination list of Chinese tourists.
He agreed to the suggestion that the DOT
concentrate on promoting the Philippines to China.
He pointed out that the United States and Europe
were experiencing economic problems unlike China
which registered the fastest growth rate in the
region. He believed that the new casinos would draw
in Chinese visitors to the Philippines.
Replying to further queries, Senator Recto believed
that the DOT ought to realign its promotional budget
from Europe to augment the P45 million allocation
for China.
Senator Sotto expressed hope that the DOT
would update the Members on the results of its
promotional programs for Chinese tourists.
Senator Sotto asked whether the DOT was
preparing a program to increase local and foreign
tourist arrivals in the Palawan Underground River,
which was recently recognized as one of the new
Seven Wonders of the World. In reply, Senator Recto
stated that in anticipation of increased tourist arrivals
in Palawan, the DOT was working with the Puerto
Princesa city government, the DOTC and the DPWH
to enhance infrastructure. As a matter of fact, he
said that the proposed DOTC budget included a P1.2
billion allocation for the airport in Puerto Princesa.
Asked whether there is truth to reports that
some photographers had been prohibited from taking
pictures in Intramuros, Manila Bay, Luneta Park,
Ayala Avenue and other tourist spots, Senator Recto
replied in the negative. However, he explained that
professional photographers ought to obtain the
permission of local government authorities before
taking pictures in tourist locations.
suspended.
It was 3:57 p.m.
'r
THIIRSDAY. NOYI'MBER 17.2011
DEPARTMENT OF TOURISM
of the Department of Tourism and its attached
agencies, namely, Intramuros Administration, National
Parks and Development Committee, and the Tourism
Promotions Board was deemed submitted for the
suspended.
II was 3:58 lUll.
OFFICE OF THE PRESIDENTIAL ADVISER
ON THE PEACE PROCESS
Senator Dri Ion presented the budget of the Office
of the Presidential Adviser on the Peace Process
(OPAPP).
Senator Drilon stated that P569.639 million has
been allocated to the OPAPP, a portion of which is
for the Pamana project.
Senator Drilon recalled that as he earlier
manifested in his sponsorship speech, upon the
suggestion of Senate President Emile during the
Committee hearings, the Pamana Funds of the Ortice
of the Presidential Adviser on the Peace Process
(OPAPP), DAR, DILG and DSWD were con-
solidated into one fund called the Pamana Fund, now
a separate item in the 2012 GAB - Senate version.
By virtue of the transfer, he said that the budget of
the OPAPP was reduced to P240,296,000.
INQUIRY OF SENATOR SOTTO
Senator Sotto informed the Body that only Senator
Escudero had reservation to interpellate on the
627
OPAPP budget but he assumed that the latter had
already brought up his concerns with Senator Drilon.
Askd if Senator Escudero would still interpellate,
Senator Drilon replied that he had no information
about it as he disclosed that what they discussed was
the objection of the senator to the administrative cost
of P 138,300,000 in implementing the Pam ana Fund
to which the Committee agreed. He said that the
item was removed subsequently as the Committee
agreed that OPAPP is only a monitoring agency and
not an implementing agency, therefore, it should not
implement the program.
suspended the session ..
It was 4: 09 p. m.
Senator Drilon stated that the OPAPP has been
unfairly criticized about the P5 million supposedly
given to the MILF leadership, and in the interest of
fairness, he presented the following time lines which
transpired relative to the issue:
February 7, 2006
The Government, represented by panel
Chair Silvestre C. Afable, Jr., and the MILF.
under panel Chair Mohager Iqbal, signed a
Joint Statement agreeing in principle to
establish the Bangsamoro Leadership and
Management Institute (BMLI) in Cotabato
City as a capacity-building center for
emerging leaders and professionals. Part of
the statement reads as follows:
"Both parties reaffirmed the need to
intensify capacity building programs with
the assistance and support of the inter-
national community and donor institution."
May 4,2006
Both Afable and Iqbal signed another Joint
Statement, paragraph 6 of which reads as
follows:
"The panels committed to move forward
the establishment of the Bangsamoro
Leadership and Management Institute (BLMI)
which is envisioned as an agent of change in
628
the social and political environment of the
Bangsamoro people";
April 21, 2010
Another Joint Statement was signed,
this time by Ambassador Rafael Seguis for
the Philippines and Iqbal for the MILF, in the
presence of Datuk Othman Bin Abrazak
reiterating the support for the BLMI;
November 28, 2007
Sec. Rodolfo Garcia, then member of
the ORP panel, in a memo which Exec.
Secretary Eduardo Ermita received on
December 3, 2007, requested for funding
assistance to start the BLMI; paragraph 4 of
the memo reads as follows:
"In view of the past agreements
to establish the BLMI and to be able
to positively report the matter during
the up-coming round of negotiations,
may we, therefore, request funding
assistance, amounting to P5,156,000.00
to jump-strut the BLMI and pave the
way for this establishment and the
subsequent operation in Cotabato
City covering a one-year operation."
Senator Drilon said that it was by virtue of the
agreements that the Aquino Administration delivered
P5 million to the BLMI, a duly registered SEC
organization. He revealed that the P5 million check,
dated August 19, 20 I I, is still intact in Metro Bank
account with a balance of P4,996,575, and was not
used for any other purposes, much less to buy guns
to shoot Filipino soldiers.
said that the public perception was that the reason
why the government gave P5 million to the Bangsa
Moro Leadership and Management Institute (BLMI)
was for them to buy ammunitions and kill soldiers.
OFFICE OF THE PRESIDENTIAL ADVISER
ON THE PEACE PROCESS
There being no further interpellation, upon motion
of Senator Sotto, the budget of the Office of the
Presidential Adviser on the Peace Process was
PAMANA FUND
Senator Drilon presented the budget of PI, 764,300
for the Payapa at Masaganang Pamayanan
(PAMANA). He stated that the Pamana Fund would
be implemented by the DAR (P 16,500,000); D1LG
(P958); and DSWD (P789,800,000). He explained
that the consolidation of the fund was made upon the
request of Senate President Enrile.
OF THE PAMANA FUND
objection, the budget of the Pamana Fund was
U pan motion of Senator Drilon, the session was
suspended.
It was 4:29 p.m.
ADDITIONAL REFERENCE OF BUSINESS
The Deputy Secretary for Legislation, Atty. Edwin
B. Bellen, read the following matters and the Chair
made the corresponding referrals:
BILL ON FIRST READING
Senate Bill No. 30]0, entitled
AN ACT ESTABLISHING A STUDENT
ASSISTANCE PROGRAM SUPPORTED
BY BANKING AND GOVERNMENT
FINANCIAL INSTITUTIONS, AND
FOR OTHER PURPOSES
To the Committees on Edncation, Arts and
Cnlture; Banks, Financial Institntions and
Cnrrencies; and Ways and Means
RESOLUTIONS
RESOLUTION DIRECTING THE
SENA TE COMMITTEE ON TRADE
AND COMMERCE TO CONDUCT
JII' r
TIIURSD;\Y. NOVEMBER 17.2011
AN ASSESSMENT, IN AID OF
LEGISLATION, ON THE STATE OF
PYROTECHNICS INDUSTRY IN
THE COUNTRY AND THE IMPLE-
MENTATION OF REPUBLIC ACT
NO. 7183 OTHERWISE KNOWN AS
"AN ACT REGULATING THE SALE,
MANUFACTURE, DISTRIBUTION
AND USE OF FIRECRACKERS AND
OTHER PYROTECHNIC DEVICES,"
WITH THE END IN VIEW OF
PROTECTING THE PUBLIC FROM
UNSAFE AND SUBSTANDARD
PRODUCTS WHICH ENDANGERS
LIVES AND PROPERTIES
To the Committees on Public Order and
Dangerous Drugs; and Trade and Commerce
RESOLUTION URGING THE COMMITIEE
ON TRADE AND COMMERCE TO
CONDUCT AN INQUIRY, IN AID
OF LEGISLATION, IN ORDER TO
ASSESS THE ADEQUATENESS OF
THE CURRENT LAWS AND
REGULATIONS GOVERNING THE
SALE, DISTRIBUTION, MANUFAC-
TURE AND IMPORTATION OF
CHRISTMAS PRODUCTS, PARTI-
CULARLY CHRISTMAS LIGHTS,
WHICH ARE SOLD ON THE LOCAL
MARKET AND THE IMPLEMENT-
ATION THEREOF, TO PROTECT
AND PREVENT HARM ON THE
BUYING PUBLIC
Introduced by Senator Vi liar
To the Com mittee 011 Tmde alld Commerce
RESOLUTION DIRECTING THE SENATE
COMMITTEES ON ACCOUNT-
ABILITY OF PUBLIC OFFICERS
AND INVESTIGATIONS; AND
WAYS AND MEANS TO INQUIRE
AND INVESTIGATE, IN AID OF
LEGISLATION, GOVERNMENT'S
BORROWING PROCESS IN
RELATION TO THE ISSUANCE OF
POVERTY ERADICATION AND
ALLEVIATION CERTIFICATES
(PEACe) BONDS, WITH THE END
IN VIEW OF DETERMINING WHO
ARE THE ACCOUNTABLE PUBLIC
OFFICIALS AND PERSONS AND
ENACTING REMEDIAL LEGISLATION
Introduced by Senator Ejercito Estrada
629
To the Committees on Acconntability of
Pu blic Officers and Investigations; and Finauce
COMMITTEE REPORT
Committee Report No. 80, prepared and submitted
jointly by the Committees on Banks, Financial
Institutions and Currencies; Justice and Human
Rights; and Public Order and Dangerous Drugs,
on Senate Bill No. 3009 with Senators Osmefia
III, Lacson, Defensor Santiago, Villar, Guingona
III, Escudero and Honasan II as authors t h e r e o t ~
entitled
AN ACT TO FURTHER STRENGTHEN
THE ANTI-MONEY LAUNDERING
LAW, AMENDING FOR THE
PURPOSE SECTIONS 10 AND 11 OF
REPUBLIC ACT NO. 9160, OTHER-
WISE KNOWN AS THE "ANTI-
MONEY LAUNDERING ACT OF
2001," AS AMENDED, AND FOR
OTHER PURPOSES,
recommending its approval in substitution of
Senate Bill Nos. 2484 and 2783 taking into
consideration Proposed Senate Resolution
Nos. 82 and 461.
Sponsors: Senators Osmefia III and Guingona III
To the Calendar for Ordinary Bllsilless
DEPARTMENT OF PUBLIC
WORKS AND HIGHWAYS
Department of Public Works and Highways, an
agency that is mandated to plan, design, construct
and maintain infrastructure particularly the national
highways; manage the flood control and water
630
resources development system and other public
works in accordance with national development
objectives; and ensure the safety of all infrastructure
facilities and guarantee that public works and
highways are of the highest efficiency and quality.
He stated that the Committee on Finance has
recommended a budget of PI 09,633,405,000, and
he informed the Body that there were changes in
the GAB compared to the NEP but these were
requested by the DBM, in view of the errors
discovered after the NEP was crafted.
Senator Legarda expressed support for the
DPWH budget especially the portion which funds the
flood control programs. She inquired into the efforts
being undertaken by Secretary Singson, who was
recently appointed by President Aquino as head of
the Water Resources Management Council, which
is an activation of a council that was a product of a
very old law expanding the National Water Resources
Board (NWRB) that supposedly manages all water
resources in the country under the DENR. She
expressed the need to coordinate the efforts of all
government agencies which are geared towards water
resources management.
Senator Legarda stated that the Philippines as an
archipelago has so much water that it poses a threat
when it causes floods; but, there are times when
water becomes so scarce like during E1 Nino that it
causes drought. She stated that an interagency task
force composed of several agencies had been put up
to improve water management and that the NIA, the
DPWH and other agencies were allotted money to
put up rain water collection facilities to make sure
that water resources are not put to waste.
Asked how the task force would coordinate all
the agencies that manage water and its program on
flood contro I, Senator Dri Ion rep lied that before the
creation of the task force, about 38 agencies were
involved in managing water resources with each one
not knowing what the other was doing. He stated
that President Aquino created the task force with
Secretary Singson as its head to coordinate all the
agencies concerned with water management so as to
have uniformity in policies on irrigation, domestic use,
hydropower and flood management. He said that the
task force has submitted to the President an Integrated
Water Resource Management Approach and the
River Basin Approach.
Senator Legarda noted that it took a long time to
create the task force but that she welcomed it
because she believed government efforts should be
coordinated. She expressed hope that instead of
thinking of policies, the task force would actually
take quick and decisive action before a crisis strikes.
As regards the budget for flood control, Senator
Drilon stated that the allocation would still be with
the DPWH. He explained that the task force is not
legally mandated to reorganize the agencies but it will
coordinate with the offices involved in water
management. However, he stated that it would need
a mandate from the President to whip the agencies
in line as there is a tendency among them to protect
their turf and budget. He said that when the President
created the task force, he gave Secretary Singson
full authority to properly manage water resources
and coordinate the activities of the 38 agencies
involved in water management.
Senator Legarda believed that the flood control
program would be for naught if it is simply focused
on flood control in downstream communities when, in
fact, water flows from upstream communities.
Asked what the DPWH has done to address this
matter, Senator Drilon informed that Body that the
NIA and the DENR have a convergence program to
address upstream problems. He stated that in a
discussion with Secretary Singson, he learned that it
would be better to have upstream catch basins than
flood control canals that simply discharge water into
the open sea.
Senator Legarda pointed out one of the reasons
why there is flooding is that urban settlements and
fishponds have overtaken waterways and that it is
imperative to relocate thousands of families to clear
the waterways.
As to where the DPWH would relocate the
displaced families, Senator Drilon stated that the
Supreme Court has issued a writ of mandamus
directing the DPWH Secretary to clear the waterways,
and that PIO billion has been allocated in the 2012
budget for the relocation of displaced families. He
said that an inventory of the waterways in Central
Luzon has just been completed.
Senator Drilon narrated that there were 3,500
informal settlers living along the 30-kilometer Iloilo
River that his office, the local government and the
, r
National Housing Authority were forced to relocate.
He added that they also had to close and relocate
shipbuilding facilities located right in the river that
were discharging pollutants, and fish pens that pO'ovide
livelihood to informal settlers were also removed. He
said that informal settlers, shipbuilding facilities and
fishpens have killed the Iloilo River and that clearing
waterways is a very complex operation that needs
funding and political will.
Senator Legarda lauded the efforts of Senator
DO'ilon in saving the Iloilo River. She expressed hope
that rivers all over the country would be dredged and
cleared of informal settlers who, she hoped, would be
provided with adequate livelihood and housing
elsewhere. She reiterated that it is not just a matter of
clearing the river but also clearing the upstream as well.
Senator Lcgarda warned that what happened in
Central Luzon when the Pampanga River overflowed
last Octobeo' 2011 could happen next year and the
years to come. She stated that the flooding in
Candaba and Angat caused losses in lives and more
than PI2 billion damages to crops and properties.
She asserted that if waterways remained clogged or
converted for commercial purposes, and the massive
deforestation in the Sierra Madre continues with the
resulting soil erosion, the same problem will happen
again and again. Senator Drilon disclosed that PS.9
billion has been allotted for flood control, putting up
seawall, building drainage projects; securing right-of-
way and clearing operations.
Still on the same matter, Senator Legarda stated
that the MMDA is in charge of cleaning esteros and
canals and the flood control program. She said that
with the little resources that the MMDA has, the
DPWH is helping with the flood control in the
Camanava area. Citing Espana street in Manila, she
said that MMDA Chair Tolentino reported that it did
not flood in spite of heavy rains because MMDA
removed three Olympic-size pool of solid wastes
from drainages and canals. She said that she was
looking forward to the close coordination between
the DPWH and the MMDA on a massive Linis
Canal Program before the rainy season comes in
May 2012. Senator Driton confirmed that there is
close coordination between the DPWH and MMDA
which meet on a regular basis.
Senator Legarda recalled that in a hearing last
year, Secretary Singson mentioned that the Rain
Wateo' Act (RA 6716) was already being implemented,
631
and that he has put up retarding basins to serve as
an underground water catchment which is being
done by the private sector but not fully implemented
by the government.
Asked if the retarding basin project could be
institutionalized in urban areas around the country,
Senator Drilon replied in the affirmative. He stated
that the DPWH has a P200 million budget allotted
for water supply retarding basins, a model of which
will be implemented in Imus River in Cavite.
Senator Legarda urged the DPWH to push the
concept and to continue implementing the Rain Water
Act. She said that the DPWH and the DepEd can
collaborate to make sure that all classrooms have
water catchments basins.
On a final note, Senator Legarda recalled that
during the past hearings, the Secretary informed the
Committee about the continuing retrofitting of public
infrastructure like bridges, government hospitals,
buildings, etc., and in the process, he identified
bridges, one being Ayala Bridge, that are most likely
to be badly damaged in the event of a 7.0 magnitude
eaothquake. She stated that a World Bank study
showed that hundreds of thousands would be affected
along the West Valley fault should an earthquake of
the same magnitude hit Metro Manila. Senator Drilol1
stated that the 2012 allocation is for the retrofitting of
15 bridges in Metro Manila and that it does not cover
government hospitals.
Senator Legarda stated that only the DPWH has
the capacity al1d techn ical capability to assess the
structural integrity of government hospitals and public
schools. She suggested that the Department include
them in the retrofitting projects. Senator Drilon replied
that the DPWH can only assess the structural fitness
of government buildings as it did when the Senate
requested to have the Film Center evaluated for
change of venue. He said that the Department would
have to give the funding back to the agency.
Senator Legarda asked what makes the 2012
DPWH budget any different from the previous budget
to assure the Members that it is a climate-resilient
budget. She stated that according to the UN, at least
I % of GDP should go to Disaster Risk Reduction
(DRR) structures. She suggested that the DRR
investment be computed to determine if it abides by
the I % of GOP minimum requirement for disaster
risk reduction.
632
Responding thereto. Senator Drilon stated that
the GAB carries a disaster-related rehabilitation
project with an allocation of P550 million, However.
he asserted that more than anything else. it is
confidence in the DPWH leadership that would carry
the nation through in all the projects, in accordance
with the objectives for which they established,
Senator Legarda expressed SUppOlt to DPWH
Secretary Singson and everyone in the department
who share the vision for a holistic flood control
program that will take into consideration the needs of
downstream and upstream communities as well as
the socio-economic livelihood of the people affected
by the floods, She disclosed that in a talk with
Secretary Singson, the latter informed her that he
would take this matter into serious consideration as
head of the inter-agency water resources and that he
would eventually appoint someone to the Executive
department, probably someone from PAGASA who
can collate all the data from the 38 agencies and take
a decisive action before a crisis strikes so that people
downstream are not affected,
Senator Drilon agreed, stating that it is about
time for such coordination to take place because
there has been a lot of finger-pointing in the past.
He stressed that it was about time an official I ike
Secretary Singson took responsibility for the matter.
He added that the PAGASA, a member of the inter-
agency committee or council, is not the focal agency
or authority on the issue,
At the outset, Senator Lacson stated that his
interpellation on the DPWH budget will focus on its
evolution from the time of its preparation, deliberation,
implementation and accountability,
Senator Lacson remarked that the budget of the
DPWH is like a tale of two journeys, the first one an
international flight, which is a comparative review of
the DPWH budget as proposed in the NEP versus
the actual GAA and its implementation,
To illustrate his point, Senator Laeson presented
the following figures:
20fl Nhl' !-IO/l,\<: j'('/'.I/O!! S!fllale 1,(,/,,1/11/1 2011 (;AA
1'1008 U PI0081l PI0081l 1'1008 B
2011! N/:/' f-{ Ii 0767
P96.607.120,OOO B
1'117,257,544,0008
Sellate Ve/'lwn R A 1)Y7() (;AA
1'113,OJO,544,000 B
1'126,930,988,000 B
20(/9 NU' HO!l.\(f V<!(:<'1rJ11 Senale VI'I:I{{}II 2!)fJl) GAA
1'1123 B 1'120.5 B 1'19.8 B
200N NI:'I'
P867 B
HOllIe //enIlJII ,,'el1aleVe/'llO/1 200N (,AA
P907 8 1'947 B
20 I 0 DPWH Programs and Projects General Summary
Office of the Secretary for General Adminis-
tration and Support Operations and Operations
including locally-funded and foreign-assisted
projects - P126.9 B.
Senator Lacson acknowledged that he was aware
that the preparation of the 2010 national budget was
the handiwork of the Arroyo administration but it
was in the same period that the Aquino administration
assumed office.
Comparing the budgets of the DPWH since
2008, Senator Lacson cited the constant increases
from the NEP up to the GAA. However, he noted
that in the 2011 budget, the amounts were maintained
and he commended Rep, Joseph "Jun" Abaya and
Senator Drilon for warding off attempts by the other
legislators to make adjustments to it. He hoped
that the 2012 DPWH budget of P109.633 B would
remain intact.
Senator Drilon replied that the Committee
reported out exactly the same amount in the GAB
and the NEP, taking into account the errata submitted
by the DBM.
Moving on to what he called the domestic fl ights,
Senator Laeson stated that this is a series of items
contained in the budget and how they evolved into
something else until their implementation.
Senator Lacson clarified that he would focus on
the 20 I 0 budget because after all, the appropriations
and obligations in the 2012 NEP were based on the
2010 GAA.
For his part, Senator Drilon noted that the 2010
GAA contained a lot of congressional insertions and
therefore he had reservations about the validity of a
comparison between the 2010, 2011 and 2012 budgets.
Senator Lacson adverted to the following items
in the 2010 budget under General Admin and Support,
Support Operations and Operations:
C. Construction and Rehabilitation Infra
Facilities, routine maintenance of national
roads and bridges - P2 B
'r
D. Preventive Maintenance of National
Roads and Bridges - P2.9 B
Asked by Senator Lacson whether these
allocations are lumpsum, Senator Drilon confirmed
that there is an allocation of P2 billion appearing on
page 715 of the 20 I 0 OAA under DPWH for routine
maintenance of national roads and bridges and while
its appears to be a lumpsum, there are documents
which indicate the allocation was based on the length
of the national road.
On whether the allocation has been fully
utilized, Senator Drilon replied that it was, and
because it was inadequate, it was augmented by
the MVUC.
Asked how much was added by the MVUC to
the P2 billion item, Senator Drilon said that subject
to verification, P3 billion was augmented, for a total
of P5 billion for routine maintenance of national
roads and bridges. He confirmed that it was obligated
but even assuming there were some unobligated
amounts, he said that by the end of 20 II, they could
no longer be utilized.
Senator Lacson asked the Finance Committee
for a copy of the breakdown of the appropriations so
far obligated. Senator Drilon said that the list will be
submitted at a later time.
Senator Dri Ion assured Senate Lacson that
there would be no more lumpsums in the 2012
budget He added that in six months or eight months'
time, the Senate would be looking again at the 2013
budget and that an activated Oversight Committee
011 Public Expenditures would look into the matter
on a regular basis. He agreed that the 20 I 0 OAA
was very much relevant in the current year budget,
saying there is a wealth of experience on how it was
abused. He recalled that in his sponsorship speech,
he mentioned about the inclusion in the OAB- Senate
version of a policy disallowing lumpsums and that
the Committee did what it should to minimize or
avoid it
Senator Lacson noted that by admission, not all
of the P5 billion for the routine maintenance of
national roads and bridges had been fully obligated.
Senator Drilon admitted that not the entire amount
has been obligated. However, he explained that it has
a two-year validity; the DPWH has until December
3 I, 20 I I to obligate the items in the 20 I 0 OAk
633
Senator Lacson explained that he was interested
in dissecting every item of the budget because of
leakages that are always present in every year of
project implementation and that legislators should
focus on this matter because public monies were
being misspent.
Moving on to another matter, Senator Lacson
stated that under the 20 I 0 budget was an item for
urgent national arterial and secondary road illld bridges,
a specific amount of which was decongestion. In
particular, he cited the following:
Construction/Improvement/Concreting!
Widening!Rehabilitation of NAIA
Expressway and other major roads
in Metro Manila - P956,950,OOO.
Asked if the amount is a lumpsum, Senator
Drilon replied that supporting documents for the item
would indicate that it is not a lumpsum because there
are specific items where the budget would be assigned.
As regards Item H, widening of Manila, North
Road including Traffic Management - Bulacan-
Pampanga section and Tarlac Province, Senator
Lacson observed that the item for traffic decongestion
was intended for Metro Manila, and asked why are
the provinces of Bulacan, Pampanga and Tarlac
were included in it
Senator Drilon said that he could not immediately
respond to the specific question since he was not in
the Senate when that budget was crafted. He asked
that he be given time to look into the matter.
Senator Lacson asked why there is a line budget
item pertaining to provinces or areas outside Metro
Manila such as Bulacan, Pampanga and Tarlac, all
under the item "Metro Manila."
Upon the motion of Senator Drilon, the session
was suspended.
II was 5:28 p.m.
Upon resumption, Senator Drilon enumerated the
following allocations in the 20 I 0 DPWH budget:
, r
634
B. PROJECT (s)
I. Locally-Funded Project (s)
a. National Arterial and P66,172,861,000
Secondary National/
Local Roads and Bridges
I. Urgent National 31,574,136,000
Arterial and
Secondary Roads
and Bridges
a. Traffic Decongestion 8,824,651,000
I. Metro Manila 5,742,951,000
xxx
h. Widening/Concreting
of McArthur Highway
(Manila North Road)
including Traffic
Management
2,160,720,000
I. Meycauayan (Bulacan) 1,472,785,000
to Mabalacat (Pampanga),
Intermittent Sections
2. Tarlac Province 687,935,000
Senator Dri Ion stated that it is a traffic deconges-
tion project, therefore, to decongest the traffic in
Metro Manila, the Manila North Road needs to be
widened and improved. He pointed out that the
budget for traffic decongestion is P8.8 billion, P5.7
billion of which is in Metro Manila and P2.1 billion
for the widening and concreting of McArthur
Highway, Manila Road.
Asked on the meaning of HDM4, Senator Drilon
replied that it is the Highway Development
Management Program version 4.
Senator Laeson pointed out that under
Rehabilitation of Damages or Damaged National
Roads from HDM4 is the item "Nationwide" with a
lump-sum appropriation of P 1.3 77 billion. He asked
how this was obi igated since it consists of all the
regions in country. Senator Drilon clarified that the
"Nationwide" allocation of PI ,377, 153,000 is not part
of Region XIII which has a separate item of
P249,528,000. Further, he stated that the HDM4
categorizes the condition of national roads. He said
that the appropriation for "Nationwide" is necessary
because events that will take place during the budget
year which will atfect the condition of the national
road network cannot be exactly predicted. He gave
assurance that the DPWH Secretary has promised
to look into the matter and provide the available data.
Senator Lacson said that he understood the need
for some buffer amount to augment the other items
since it pertains to Rehabilitation of Damages or
Damaged National Roads from HDM4 but he needed
information on how the budget for the item "Nation-
wide" was spent. Senator Drilon stated that he
would look into the pertinent records and submit his
response and the necessary documents on Monday.
suspended.
II was 5:43 p.m.
Upon resumption, Senator Satta expressed the
desire of Senator Lacson to continue with his
interpellation at a later time.
INTERPELLATION
At the outset, Senator Cayetano (A) asked how
the laws regarding right-of-way are implemented, as
he recalled that his father, former Senator Rene
Cayetano, authored the law that when one deposits
the amount for the zonal value, the judge is supposed
to order the DPWH to take possession and use the
projects. He stated that despite the clarity of the law,
some judges have different interpretations. The reason
it is in the courts for litigation, he said, is that the
owner does not agree that the value given to him is
the fair value, for instance, if the land's zonal value
is PI,OOO but he wants P3,000. He noted likewise
that some of the judges sit on the case or do not
release the case. Asked whether the DPWH is
experiencing such instances all throughout the regions
and, if so, what it is doing to address the problem,
Senator Drilon replied that these are not isolated
cases and that they happen all over the country. As
a remedy, he said that the Secretary has written the
court administrator requesting that the Supreme Court
issue the appropriate circular calling the attention of
the lower court judges of the provision of the law
which would allow the DPWH and public works
projects to take possession once the amount indicated
in the zonal value is deposited in the court.
Senator Cayetano (A) said that he was raising
the issue because the DPWH has always been
'(7
blamed for project delays, He disclosed that there
are, in fact, two laws: first, when the amount is
deposited for the zonal value, the judge is supposed
to allow the taking of the possession or entry;
second, the judges are not allowed to issue TROs.
Senator Cayetano (A) stated that he would raise
the matter again during the deliberations on the
budget of the Judiciary. He requested a copy of the
letter of the Secretary to the Court Administrator to
be able to make the proper representation not to
dispute about the implementation of the law but to
remind the judges that the intent of the law was to
speed up all of the public works projects.
Asked whether the mandate of Republic Act
No. 6685 that in providing work, contractors accord
pl'iority to socially and financially disadvantaged
residents of the LGU where DPWH project is being
implemented, Senator Drilon affirmed that when
contracts are implemented, 50% of the unskilled
labor is soul'ced from the locality where the project
is located. He said that the DPWH is monitol'ing the
implementation of said law.
Senator Cayetano (A) said that he has heard of
certain areas in the United States wherein workers
of contractors of government contracts are paid
double, knowing that these are lucrative contracts.
He believed that it is time that Filipinos appreciated
the effort of Secretary Singson for lowering the
contracts of public works projects ali over the
country, even as some eyebrows have been raised
and much to the consternation of other contractors.
He expressed certainty that the DPWH is proud
of such feat, particularly of the political will of the
Secretary, as he expressed hope that the latter,
without increasing the contract prize, could get more
money into the pockets of the laborers rather than
the contractors making most of the profits.
Senator Cayetano (A) likewise noticed the
existence of contractors who do not have either the
equipment or the capital to win the bid for public
works contracts. He asked if the DPWH could study
the idea of establishing a construction cooperative for
small and simple projects such as pathways, basketball
courts, waiting sheds, or even drainage which do not
require the expertise of an architect or a supervising
engineer. He noted that in Europe, the estate tax and
progressive income tax have become effective
mechanisms in transferl'ing wealth, but in the case of
the Philippines, wealth is still concentrated among the
635
rich. He opined that the real problem is how to
generate more jobs to put money in people's pockets.
He said that for projects amounting to P I million and
below, the contractors could instead rent or borrow
equipment instead of buying them, which concept is
being studied by the City of Taguig. He said that the
good thing about cooperatives is that their finances
are open so that corruption can be minimized,
especially since the contracts are for simple projects
ranging from P500,000 to P2 million. In answer,
Senator Drilon gave assurance that the DPWH
Secretary wou Id study the matter.
On another point, Senator Cayetano (A) asked
whether the Ondoy-related projects that were found
flawed and subsequently cancelled were already
being undertaken by others that were found above
board. In reply, Senator Drilon stated that some of
the projects were already completed, while others
were still underway. He added that because of the
reform measures that Were undertaken, a good portion
of the Ondoy funds was saved for the implementation
of new projects.
In response to a further query, Senator Drilon
said that P5 billion out of PII billion of the Ondoy
funds went to the DPWH.
Senator Cayetano (A) pointed out that every
time special allocations are made in times of calamities,
local officials such as mayors, governors as well as
barangay chairmen would lament that they did not
receive the funds. He noted that Marikina, Taytay,
Taguig, et cetera were directly hit by Typhoon Ondoy.
and even as he commended the DPWH Secretary
for being a reformist and transparent, he stressed
that the people should know where the funds went.
In reply, Senator Drilon said that the information is
available in the DPWH website and that Senator
Cayetano (A) would be furnished with a hard copy.
But Senator Cayetano (A) insisted that under
the agreement, the National Coordinating Council
was supposed to set up a special website solely for
Ondoy funds,
At this juncture, Senator Cayetano (A) asked to
be given a written update on the funds of the PPP.
He stated that there is a major project in Taguig City
that would affect the proposed C-6 in southern
Metro Manila. He said that the road dike west of
Manggahan Floodway is being called the C-6 but the
real C-6 is supposed to be an eight-lane road, with
636
four lanes on each side. He said that a Korean
consultant was hired to make the alignment and he
wanted to make sure that the consultant conferred
with the LLDA and the LGUs concerned, noting that
this was not done in 1998 when DPWH constructed
the west part of Manggahan. He said that the
DPWH refused to spend another P4 billion to move
the dike towards the lake which could have saved
I, I 00 hectares of land. Right now, he said, the price
of land a kilometer away from the dike is valued at
P30,000 per square meter and land two kilometers
away, P II 0,000. For this reason, he sought an assur-
ance that the alignment for the C-6 project would be
a product not only of a foreign consultant but also of
the ROC of Metro Manila, the MMDA, the LLDA
and the LGUs around the Laguna Lake. In response,
Senator Dri Ion gave assurance that the endorsements
of the LGUs would be secured accordingly.
At this point, Senator Cayetano (P) adverted to
the piece of land in the City of Taguig that the
President granted to the DPWH. He said that he had
been working on this project with the DPWH
leadership but he also wanted the other people of the
DPWH to see that there can be creativity and value-
building in the use of the property. He said that the
DPWH has often becn perceived to be in the top
five or top ten most corrupt agencies in the country
and he knows that engineers in the private sector get
much more pay than government engineers. He
believed that if government cannot raise the salaries
of its personnel, it should at least increase their
benefits. He stated that after the land was granted
to the DPWH, its officials sought to coordinate with
him and local government to explore the possibility of
creating value for the agency's housing project instead
of the usual run of the mill low-cost housing.
At this juncture, Senator Cayetano (A) gave a
visual presentation showing an area located in front
of Camp Bagong Diwa that used to be a storage for
equipment for Regions IV -A or IV -B. He explained
that the left side of the property was also owned by
the City and was given to a city college through an
executive order. He said that the land surrounding
the area is cheap because it is government-owned.
He noted that during the past administration, the
DPWH initially planned to get the services of a con-
tractor to build houses with an average cut of about
60 to 120 square meters each; however, the govern-
ment cannot expect to collect much taxes from the
property since the houses were worth less and there
is not enough space for parking or sports facilities.
------
Senator Cayetano (A) said that it was for these
considerations that he conferred with the DPWH
leadership and asked an urban planner to draw up a
plan wherein the front portion, about 500,000 square
meters, was allotted for a commercial block that
could generate money to sustain development. He
stated that the lots were divided in rows to
accommodate a swimming pool, a club house, a
condominium, an executive management office, and
a parking lot at the basement. He then presented a
series of slides showing how the area looked like
with the condominiums and the commercial spaces.
He also pointed out that the location of the area is
right beside the Bicutan Interchange which has an
access to C-5 and a ready access to the future C-6.
He said that the final decision is up to the
DPWH Secretary as well as the property developers.
He explained that he only wanted to show the
difference between simply giving out land and creating
more value from land. He said that the Pag-IBIG
already has funds for the project and that it is open
to talks on how to make housing affordable to the
DPWH personnel. He added that he would take up
the matter in private with the DPWH Secretary as
he expressed hope the latter would continue to
support the project.
Senator Cayetao (A) observed that the DPWH
owns many lots in different regions and builds projects
for the DOTC and the NHA. He said that if the
DPWH can make a model housing program for its
employees, it could benefit government employees all
over the country,
(Continuation)
Senator Lacson pointed out that in 2002 and
2003 GAAs, there were entries in the lump-sum
appropriations in the amount of P956.950 million for
the NAIA Expressway and other major roads in
Metro Manila, a portion of which was used to pay
security agencies, salaries and RATA. He clarified
that he was not blaming the present DPWH for
the irregularities, but he said that the matter should
be looked into.
In response, Senator Drilon said that he has gone
through the budget of the national government for the
past several years and he agreed that the practice
was improper. He said that he was surprised because
it was very apparent that the past administration had
THliRSDAY, NOVEMBER 17, 2011
no respect at all for the General Appropriations Act
in terms of the execution of the budget. He revealed
that there were actually worse cases in the imple-
mentation of the budget. He assured Senator Lacson
that the present DPWH leadership and the Aquino
administration do not indulge in these illegal practices,
Senator Lacson said that he has heard good
things about Secretary Singson and that he agrees to
Senator Drilon's observation, But he reiterated his
aversion to lump-sum appropriations, noting that from
2002 to 2010, a total of P 124.1 billion was appropriated
in lumpsum for various infrastructure and local
projects, another P60.3 billion for nationwide projects,
and another appropriation for leadership funds. At
this point, he gave a powerpoint presentation which
showed a handwritten footnote of former President
Arroyo and a letter from Joaquin Lagonera to then
DPWH Acting Secretary Bayani Fernando that said:
"May I respectfully transmit the attached
handwritten note of the President dated March
3 I, 2003 and based on the March 10, 2003 letter
of Angeles City Mayor Carmela Lazatin which is
quoted as follows: OK, DPWH from bridge fund
otherwise leadership fund."
Senator Drilon affirmed that the leadership funds
are no longer in the 20 II GAA and 2012 GAB.
As regards the lump-sum appropriations which
amounted to 1'33.4 billion in 20 I 0, Senator Lacson
disclosed that the DPWH Secretary has assured
him that the President already ordered that the
release of the remaining P20 billion be stopped. But
Senator Drilon clarified that about PI 0 billion was
released before July 1, 20 I 0, and afterwards, the
DPWH Secretary stopped further releases.
Regard ing double appropriations, Senator Lacson
pointed out that in 2010 GAA, there were 52 items
for the construction/improvement of roads in some
26 areas that amounted to Pl.8 billion, but some of
which they intended to fund either did not exist or
were still unpaved.
Senator Drilon commented that whether the funds
are double appropriations or lumpsums, if the
implementor is a crook, graft would be committed.
Further, Senator Lacson revealed that in 2005,
there were 114 line items that amounted to 1'26.7
billion, supposedly for projects costing PIOO million
and above, but some of them were realigned. In this
637
regard, he said that he got a copy of the letter of
DPWH Secretary Ebdane dated April 21, 2005, to
DBM Secretary requesting the realignment of funds
to locally and foreign assisted projects, one being the
Subic-Clark-Tarlac Expressway (SCTEX). Since the
BCDA volunteered to fund the SCTEX, he questioned
why no one tried to correct the entry in the 2005
GAA for the same project to prevent double funding.
He stated that the real purpose of the realignment
was not to fund the SCTEX project but other items.
He explained that he had made these observations
to encourage the DPWH people to follow the lead
of the President and their Secretary to reform the
Department and not allow these bad practices to
happen again.
Senator Drilon believed that if the leadership of
any agency is minded to commit graft, no amount of
restrictions and safeguards in the GAA would prevent
him/her from doing it given that there is so much
executive power over the disbursement and execution
of the budget. However, he pointed out that the moral
standard of the present Administration is something
the people can be proud of unlike the past Adminis-
tration, who wantonly disregarded budget rules.
He commended the Aquino Administration and the
DPWH leadership for taking it upon themselves not
to repeat the malpractices and corruption of the past.
QUESTIONS OF
SENATOR DEFENSOR SANTIAGO
Preliminarily, Senator Drilon expressed apprecia-
tion to Senator Defensor Santiago, who was unable
to come, for sending in her written questions as it
would facilitate the debates on the 2012 GAB.
Thereafter, Senator Sotto posed the following
questions of Senator Defensor Santiago to the Sponsor:
I) What is the status of the road-user's tax?;
2) What was the balance of the fund when Pres-
ident Aquino assumed office on July I, 20 I O?;
3) How much has been collected since then up to
the 3 I" of October 2011; and
4) How much has been obligated as of the October
31,2011.?
Senator Drilon replied that for the period 2001 to
2010, a total of P70,393,043,752.36 was collected
under the MUVC item and based on the celtifica-
tion of the National Treasury, out of this amount
638
PS9,00 I ,641 ,070 was disbursed, leaving a balance of
approximately PI \,300,000,000 billion as of October
2010, and if the actual MVUC collection from January
to August 2011 of P7,36S,474,087.84 were added,
the releases amounting to P2,926,63 1.08 and pending
commitments of P3,403,210 were deducted,
PI2,400,03S,762.20 would be the unobligated balance.
Que.>titm: What was the basis for the
allocation of this road user's tax? Is there a
difference from the way the allocation process
was being done during the time of the previous
administration and the allocation process of the
Aquino Administration? That is the reason why
we asked how much has been collected from July
2010 to August. Is it the same process and what
is the basis for this allocation?
Senator Drilon explained that the DPWH used a
different process from that of the past administration.
He cited reports that the previous administration did
not have a sound criteria for approving road projects
and often based its selection on political affiliation; on
the other hand, the current administration not only
based its selection on preventive maintenance of
national roads but makes the effort to equalize these
allocations among the different congressional districts.
Questio/!: Can we say that the allocations
process is now based on existing roads and
implied scheduled maintenance work and not by
congressional districts?
Senator Drilon stressed that the DPWH tries to
provide equal allocation of funds for preventive
maintenance for every congressional district.
At this juncture, Senator Sotto noted that Senator
Defensor Santiago doubted if it would be possible for
the DPWH to be equitable in the allocation considering
that one district might have more old roads than
another. Senator Drilon clarified that it is not possible
to be truly equitable in the allocation of road board
projects not only because there are gaps in the vehicles
used and the state of the roads but also because road
conditions differ province by province and region by
region. As such, he said that localities where roads
easily deteriorate due to constant use would certainly
receive more funding assistance. However, he
emphasized that there is an equitable allocation in the
present practice and policy of the board.
Questio/!: Is the allocation of the road users
tax posted in the DPWH website?
THURSDAY, NOVEMBER 17.2011
Senator Drilon replied that the updated allocations
are posted in the official website of the Road Board.
Question: Does the Department already
have a program for the road maintenance in 2012
and can it be made available to members of
Congress or the general public?
Senator Drilon replied in the affirmative.
Questio/!: Who is responsible for monitor-
ing the identification, allocation and utilization of
the fund? If NGOs, who gets to choose the
NGOs - the NGO board? Are these NGOs the
types who take advantage of their connection
with the Administration to receive special accom-
modation? For example, which NGO is monitoring
the use of the fund in the province of Tarlac or
Quezon or Pampanga?
Senator Drilon stated that various agencies
implement different kinds of funds. For instance, he
mentioned Fund-lSI, a special road support of the
DPWH; while Fund-152 which was being imple-
mented by the DlLG; and Fund-IS3 on road safety
which is under the DPWH while the DOTC has a
fund for special vehicle pollution control. He said that
NGOs such as Balllay Lansanga/! and Transparency
International monitor the DPWI-\'s implementation of
the programs and that the public can monitor the
utilization of the funds in Transparency International's
official website.
Question: Do you agree with the proposal
that under the One Fund concept, all taxes, fees
and charges should be remitted to the Treasury
and that they should be dispersed only with the
expressed authorization by Congress? Should
the road user's fund then not be expressly
included in the President's annual budget which
is submitted to Congress for authorization?
Senator Drilon believed that while such a policy
direction can be pursued, the law ought to be amended
considering that RA 8794 expressly delegates this
power to the Road User's Tax Board. As a matter
of policy, he said that the delegation of the power to
appropriate as contained in RA 8794 should be
reviewed. He believed that there are various other
laws wherein Congress delegated the right to
appropriate public funds to other agencies such as
GOCCs and SUCs.
Question: Who are the members of the Road
Users' Tax Board?
, r
TllLJRSDi\ Y, NOVEMIlER 17,20 II
In answer, Senator Drilon identified the private
sector representatives in the Board:
Col. Rodolfo de Ocampo
- nominated by the Truckers' Association;
Atty. Joselito Manalo
- nominated by the Bus Operators
Association; and
Rolando Evangelista
- nominated by the Pasang Masda
For his part, Senator Satta noted that the members
were nominated by NGOs.
OF THE DEPARTMENT OF PUBLIC
WORKS AND HIGHWAYS
of Senator Satta, there being no objection, the budget
of the Department of Public Works and Highways
Upon motion of Senator DI'ilon, the session was
suspended.
II was 6:58 p.m.
DEPARTMENT OF NATIONAL DEFENSE
Department of National Defense.
MANFESTATION OF SENATOR DRILON
Senator Drilon stated that PI 06,880,220,000 is
appropriated for the Department of National Defense
(DND) in the 2012 GAB to protect the country's
national boundaries and territories. He revealed that
the Committee neither touched nor revised the budget
submission of the DND because it acknowledged the
fiscal burden on the DND as a result of the retirement
benefits and pensions of war veterans which comprise
P34 billion or 32% of its total budget. Compared this,
he said, to the grossly inadequate allocation of P5
billion for the modernization program. He cautioned
639
that in the next five years, the allocation for the
pension of war veterans would become bigger than
the regular salary of soldiers in active duty, thus, the
need for the Aquino Administration to address the
problem immediately.
At this juncture, the Senale Presidenl Pro
Tempore Ejercito Estrada relinquished the Chair
to Senator Legarda.
INTERPELLATION
Senator Cayetano (P) observed that the DN D is
a field dominated by men but it also has women
equally worthy and able who have to balance work
life and family life aside from concerns at the
workplaces.
Asked on the projects and initiatives under the
DND-Gender and Development (GAD) program
which is allocated P2 million in 2012, Senator Drilon
enumerated the following:
Conduct GAD symposium for senior leaders;
Conduct gender sensitivity awareness programs;
Attending the summer international course on
GAD;
Facilitation of health and welfare activities;
Conduct of DND-wide performance audit;
Orientation seminar on gender mainstreaming
and the Magna Carta for Women;
Development of GAD related materials;
Establishment of a child-minding center; and,
Establishment of a GAD resource center and
health card.
Senator Cayetano (P) asked that she be furnished
with a copy of the programs and be assigned a point
person with whom she can work to help in the
implementation of the programs. Also, she
recommended that the DND put up a breastfeeding
center. Because of the size of the DND, she also
urged some of its officers to get masteral courses so
that they can serve as in-house experts for the
Department rather than outside consultants. Senator
Drilon replied that the DND Secretary has tasked
Dr. Sta Ana to coordinate with Senator Cayetano
(P) on the GAD initiatives.
640
At the outset, Senator Sotto expressed full support
for the budget of the DND, He took note of the
allocation of P32 billion for pensions of veterans
which represents 32% of the total DND budget as
compared to the P5 billion allocation for the AFP
Modernization Program,
Asked how many AFP pensioners there were,
Senator Drilon replied that there were approximately
350,000 pensioners, 247,000 of whom are veterans
and widows,
Asked how many pensioners, who are over 100
years old and above, still receive their pay, Senator
Drilon gave the following breakdown: age 100, 24;
age 101, 14; age 102,9; age 103,3; 104,2; and age
110, I. He said that he will not be surprised if some
pensioners marry their caretakers because of the
survivorship pension which the spouse will receive
when the pensioner dies,
On the concern that the government is spending
more for these pensioners than what it is spending
for the DND, Senator Drilon stated that this was
the reason why he sounded the alarm, the matter
being highlighted for the first time during the
budget debate, He informed the Body that he has
received a written report on what could be done in
order to address the problem, However, he believed
that the government should have the political will to
solve the problem.
As to the other PY AO pensioners, Senator
Drilon said that there are 64,067 AFP retirees with
an average of 60 years old and 48,093 survivorship
pensioners or spouses of deceased pensioners who
receive an average monthly pension of PI2,265,00.
Asked why these pensioners receive double
retirement benefits, from the PY AO and the AFP as
well, Senator Drilon stated that they receive from the
PY AO old-age pension amounting P5,000 for those
who reach age 65 and this continues even if they are
100 years old.
Senator Sotto recommended that the DND
scrutinize the issues being brought out in its budget,
and that it should gear its goals towards supporting
soldiers who are currently in the service by granting
them bigger salaries and benefits in terms of education
and health progmms,
INTERPELLATION
Senator Ejercito Estrada asked if the AFP has
instituted or implemented reforms regarding its budget
so as not to repeat the old practice ofthe pasalubong
or pabaon system that was discovered during the
investigation on the AFP budget scam early this
year. Senator Drilon recalled that in one of the Blue
Ribbon Committee hearings, one session was devoted
to hear the AFP chief of staff describe the new policies
the new leadership adopted so that the pabaon
system will no longer be repeated, He informed the
Body that the DND has submitted an 18-point action
plan involving logistics, personnel and financial
management aspects of its operations. He expressed
confidence in the present AFP Chief of Staff, General
Eduardo Oban, Jr., that he would sincerely implement
reforms in view of the fact that the pabaon system
has caused embarrassment to and demoralization
among the officers and men of AFP. Likewise, he
expressed certainty that the DND secretary down to
the last soldier of the AFP will not allow these
corrupt practices to destroy their institution.
Senator Drilon pointed out that the 2012 AFP
budget has consciously veered away from lump-sum
appropriations which gave the opportunity for the
pabaon system, explaining that the Committee on
Finance removed the special provisions granting the
DND and the AFP to propose realignment in their
budgets. He explained that the operating units of the
AFP down to the level of company units will be
allocated a definite amount of MOOE which will be
published in the AFP website. He added that all
funds will no longer be centralized in the general
headquarters but will be distributed directly to major
services. He stated out that the pabaon system was
made possible due to the discretion given to the AFP
chief of staff whose office holds the centralized
disbursement. He said that instead of issuing cash
advances, purchase cards wi II be used in 2012, the
pilot-testing of which will be undertaken early next
year. To further minimize the opportunity for conver-
sions, he stated that the budgets for unfilled positions
was placed in the Miscellaneous Personnel Benefits
Fund (MPBF), which can only be used upon the hiring
of personnel corresponding to the budgeted items.
Senator Ejercito Estrada sought assurance that
the reforms started by General Oban wi II be pursued
by his successors after his retirement on December
13, 20 II. Senator Drilon stated that the reforms have
THURSDAY. NOVEMBER 17,2011
been institutionalized and appropriate directives and
policies have been issued to be followed by his suc-
cessors. He expressed confidence that these reforms
will be continued for the good of the organization.
In closing, Senator Ejercito Estrada commended
the Defense Secretary together with the AFP Chief
of Staff for doing a good job.
Noting that the National Disaster Risk Reduction
Management Council (NDRRMC) is in charge of
strategies on preparedness, rehabilitation and
reconstruction in times of crisis, the Chair asked
whether the DND has coordinated its effolls with
the NDRMMC to make sure that there is just one
entity that will prepare and respond during times of
crisis such as typhoons. In the past, the Chair said
that problems came about because of lack of
coordination, and a point agency that will engage in
quick decisive action such as the release of water
from dams, update on pre-emptive release of water
and dam protocols, and giving of advice to LGUs.
Asked if there is a budget for the OCD as a
secretariat of the NDRRMC. Senator Drilon replied
that there is a P530-billion budget for operations
under the Quick Response Fund, which is a standby
fund for relief and recovery programs in order that
the situation and living conditions of the people in
communities or areas stricken by disasters, calamities,
epidemics or complex emergencies may be nonnalized
as quickly as possible.
In reply to fUllher query, Senator Drilon said that
the Quick Response Fund for Central Luzon which
was allocated for the DSWD, has been disbursed.
He stated that he would submit to the Chair a
complete report on the Quick Response Fund
allocation at the soonest possible time.
On whether there is a standby fund for the pre-
disaster preparedness programs of the NDRMMC
and OCD, Senator Drilon informed the Body that the
NDRMMC Fund can also be utilized for disaster risk
reduction or mitigation and Pall of this fund is the Quick
Response Fund. He affirmed that the funding shall
cover preparedness, pre-disaster and post-disaster.
The Chair requested the undersecretary who is
in charge of this funding and the OCD to submit a
report on how the budget was disbursed.
641
Senator Drilon gave assurance that the DND
would comply with the request.
Taking advantage of the presence of the AFP
hierarchy, the Chair stated that during the elections
in 2004, 2007 and 2010, there was a black propaganda
that circulated, completely baseless and untrue, that
she authored a bill seeking to take away the vacation
pay, benefits and privileges of men and women in
uniform in the military as well as in the police. The
Chair stressed that no senator or congressman in
his/her right mind would file a bill to take away the
privileges of the hardworking, discipl ined and
competent men and women in uniform,
As r e g a ~ d s the AFP's Personal Services, the Chair
observed that the AFP reported savings as follows:
Year
2008
2009
2010
Savings
P 5,621,781.00
8,008,686.00
64,066,609.76
Asked if the AFP could provide the projected
savings for 2011 and if the same could be converted
into additional benefits for its personnel, Senator
Drilon stated that the savings from PS in 2012 will be
placed in the Miscellaneous Personnel Benefits Fund
(MPBF) which represents the budget for unfilled
positions in the AFP. He recalled that during the
investigation of the Blue Ribbon Committee, it was
discovered that the source of the "pabaon" came
from Personal Services. He stated that there has
never been an accurate count of the troops' strength
so the budget has always been accepted and the PS
given leeway. He said that what the Committee did
in the 2012 GAB is to put in the MPBF the portion
of the PS pertaining to unfilled positions that can
only be drawn upon submission of the list of positions
for actual hiring. He said that there would still be
savings but not of any significant amount and it will
be used in case circumstances which were not
anticipated arise. He added that the savings from
2008 to 2010, as cited, were accurate which was
why the Committee suspected that they were the
source of indiscretion committed by the previous
leadership in the AFP. He informed the Body that
the MPBF has been allotted P907,398,000 in 2012
for 4,605 unfilled unifonned positions.
Asked if the savings for 2010 and 2011 could be
given to uniformed personnel, Senator Drilon replied
that there are no savings for 2011 because the DBM
released only 80% of the AFP's budget.
642
INTERPELLATION
At the outset, Senator Cayetano (A) expressed
condolences to the AFP for losing soldiers in an
ambush last month and in previous years' encounters.
He inquired into how the families of the fallen
soldiers were doing.
Senator Cayetano (A) stated that there is no
choice but to follow the Salary Standardization Law
with regard to military pay but he inquired if there
are benefits that can be institutionalized by an
executive order instead of a law. Senator Drilon
stated that as a matter of policy, whatever benefits
the DND wants to institutionalize require budgetary
allocations and must be presented as part of its
budget.
Senator Cayetano (A) pointed out that the Senate
follows the Salary Standardization Law but he
supposed that the Senate and other government
agencies are more creative in giving benefits. Saying
that the Senate was trying to equalize benefits for
everyone, he inquired if it is possible for a military
officer or enlisted personnel, who is either injured or
dies in the line of duty, to receive, other than the
death benefits, his/her pay as if he/she were alive
until the age of 56 years.
Asked on the number of casualties the previous
years, Senator Dri Ion stated that in 20 I 0, 100 were
killed in action and in 20 II, 113.
Senator Cayetano (A) opined that ISO casualties
a year would not make an impact on the budget if the
policy would be to treat someone killed in action as
if he/she is alive; and even promote him/her so that
the family to get his/her pay. He stated
that it is ironic they are called heroes when they die
in the line of duty but their families are left with
nothing. He said that the life of the man in uniform
. is very difficult; it is bad enough that a member of
the family is in military/police service, but much,
much worse if a mother or father dies while on duty.
Senator Drilon stated that the spouse of the soldier/
police is entitled to a survivorship pension equivalent
to 50% of base pay and 50% of longevity pay.
But Senator Cayetano (A) pointed out that families
would only get halfofwhat they are entitled to in the
event their loved ones die in the service of country.
He asked whether the AFP and the DND can study
the possibility of given full pension and benefits.
Senator Drilon replied in the affirmative.
As regards the retirement age, Senator Drilon
replied that the mandatory age is 56 years old in the
military.
Senator Cayetano (A) presumed that if life begins
at 40, military personnel would be retiring at 16 years
old. But he noted that presently, people aged 65, 75
and 80 are still productive. He said that the government
invests so much in the military, yet after 56, they do
not have a choice but to retire. He disclosed that in
the U.S., there are several programs that integrate
retired military personnel into civilian life and according
to a study, the best elementary school teachers are
enlisted personnel. He said that towards the last
three years of their life in the military, the personnel
undergo retraining programs and there are already
agreements where they would be employed. In the
case of retired Filipino soldiers, he said that those
from the engineering brigade could be employed by
the DPWH or DOTC until they reach 65, the
retirement age. In response, Senator Drilon stated
that there is a continuing study and there are a lot
of factors to consider. He explained that it is not as
simple as raising the retirement age because it would
affect the career path of junior officers who look
forward to taking over the leadership once the senior
officers retire. He stated that the Department was
conscious of the need to review all the systems.
Senator Cayetano (A) recalled that he had been
proposing the integration since 2001, when he was
still in the House of Representatives. He narrated
that he saw a recent cable network program entitled
"Helmets to Hard Hats" that featured the integration
of the military men after they got home from the
first Iraq War when there was already a recession in
America. He stated that they were not treated like
heroes, they were out of jobs and their families were
hard up. He said that some foundations took it upon
themselves to retrain the former soldiers in
construction and arranged with developers to hire
them.
Senator Cayetano (A) stated that in the
Philippines, retired soldiers get employed in the security
industry but the opportunities are limited. He
expressed hope that the leadership of the DND and
the AFP would report to Congress in the next budget
hearing on integration programs for retiring personnel
that can be adopted.
'0
TIIURSDAY, NOVEMBER 17.2011
On another matter, asked if there is a budget for
recreational facilities, Senator Drilon replied that
there are five existing golf courses in military camps
for use of officers and retired officers.
Senator Cayetano (A) recalled that when Camp
John Hay was still under U,S, control, it had a
bowling alley, mini-golf course, and three chapels for
different denominations and that the families of the
U,S, servicemen were living inside the camp, but
the situation is different in Filipino military camps
because families of soldiers have to call their loved
ones just to spend time together. He believed that
R & R is one way of increasing the morale of
soldiers, He stated that military camps should have
facilities like badminton and basketball COUlts, mini-
golf courses or bowling alleys that are exclusive
for servicemen and their families. He remembered
a TV report a few years ago that the military was
building a resort in Boracay and the slant of the news
was "Baki! sa Boracay 7" He be lieved, however,
that the military deserve to have a private resort in
Boracay because they are the ones who face the
enemy and they should not be deprived of some
luxllly.
On whether there is a budget for R & R, Senator
Drilon replied that the personnel are given a
transportation allowance for R & R.
Senator Cayetano (A) asserted that the soldiers
would rather spend their R & R inside the camp
with their loved ones because their budget for
R & R is just too small. Senator Drilon stated that
the situation is dictated by the limited resources
of the military,
Senator Drilon acknowledged that recreational
facilities are impOitant for the morale of soldiers but
he pointed out that they have to compete with the
other needs of the armed services given the limited
budget. He said that the AFP leadership looks at the
priorities, for example, the funding for the AFP
Modernization and the payment of pensions of
veterans. Perhaps in the future, he said, when there
is more liscal space in the budget of the AFP,
recreational facilities can be provided for men and
women in uniform.
Senator Cayetano (A) acknowledged that there
is limited liscal space but he noted that if government,
for instance, allocates PI,OOO each for the R & R
of 100,000 members of the AFP, that would be
643
equivalent to PIOO million or if the soldiers are given
PS,OOO each, that would be psoo million, He believed
that building the recreational facilities inside the
camps would be more convenient for soldiers who
can also save on transportation fare. He said that he
does not have studies to support his position but he
believed that the DND leadership could attest that
even with the most modern equipment, even with the
most disciplined military, soldiers are still people and
it is necessary to treat them humanely, He argued
that soldiers who are able to see their family regularly,
who know their family is secure, who have time for
R & R, for arts and culture, are a better fighting
force than those who are starved of family, and arts
and culture,
Given its present budget, Senator Cayetano (A)
proposed that the AFP just be given a meager
amount for one or two camps and perhaps, some
LGU or senator or congressman can pitch in and
have the project duplicated in other parts of the
country.
Responding thereto, Senator Drilon said that the
Committee will find it difficult to realign portions of
the budget for recreational facilities given the very
limited fiscal space and the many needs of the AFP.
He said that perhaps for the 2013 budget, the
Committee could look at the proposal again.
Senator Cayetano (A) said that he was not trying
to put the Senate on the spot by making it commit to
realign the AFP budget with its limited budget space;
rather, he brought up the idea to convince the
leadership that maybe PIO million here or PIOO
million there that was supposed to be used for
another purpose can be put to better use to boost the
morale of the 100,000 men and women in uniform.
Acknowledging the lack of budget for uniforms, pay
and arms and ammunition, he argued that with
planning, the project for one good country club in one
of the camps could be started,
Moving on to another matter, Senator Cayetano
(A) recalled that during the hearings on the pabaon,
one of the reasons given why the military commanders
in the field needed money was that hospitals do not
admit injured soldiers without any deposit He pointed
out that in terms of equipment there is a world of
difference between government hospitals like V.
Luna General Hospital, Veterans Memorial Hospital
and the Fort Bonifacio hospital, on the one hand, and
top private hospitals, on the other hand,
?r
644
Asked if there is an allocation for additional
equipment for government military hospitals, and
whether they have MRI or a CT scan machine,
Senator Dri Ion repl ied that the Veterans Hospital has
a MRI machine but not V. Luna and the Fort
Bonifacio hospitals.
Senator Cayetano (A) observed that other govern-
ment hospitals like Lung Center of the Philippines,
Philippine Heart Center, the National Kidney Institute,
among others, have already gone semi-private and
have modern and state-of-the ali equipment, that is
why some patients would prefer going there than to
Makati Medical or st. Luke's Hospital. He suggested
that perhaps more money could be put into govern-
ment military hospitals so that even if the State
cannot increase the pay of. soldiers, they and their
families would have an assurance they have some
place to go in case something happened to them.
As to the memoranda of agreements between
private hospitals and the AFP or DND that private
hospitals shall not ask for deposits from members of
the military who seek treatment, Senator Drilon
replied that soldiers, especially those hurt in combat,
who needed hospitalization would be immediately
attended to in private hospitals.
Senator Cayetano (A) said that he was happy to
hear that because during the committee hearings, he
received complaints from some veterans that private
hospitals refused to treat them without a deposit.
Asked if there is an insurance policy for members
of the military and for how much a member is
insured for, Senator Drilon replied that there is a
group insurance for the military under the AFP
Mutual Benefit Association, Inc.
As regal'ds the death benefit, Senator Drilon said
that it is about P200,OOO to P300,OOO, depending on
the ran k of the deceased.
Senator Cayetano (A) recalled meeting a U.S.
general during an event in Taguig City who told
him that the U.S government recently increased the
insurance benefits of its military personnel from
US$200,OOO to US$400,OOO per person. He said that
according to the U.S. general, it would be cheaper
for the government to give insurance, and the bigger
the group to be insured, the cheaper the premiums.
He suggested that this is something that the GSIS
would perhaps be willing to do. He reasoned that a
P500,OOO or a million insurance for a soldier would
be less burdensome to the government and it would,
at the same time, allow him/her access to better
health case.
On another matter, Senator Cayetano (A)
confirmed that the City of Taguig and the DND and
PV AO have come up with an agreement as regards
the Libingan ng mga Bayani. He revealed that
there has been a continuing controversy about the
cemetery in the City of Taguig because for years,
the military has failed to develop the property and
some of its retired members were living in the
premises. He stated that the city government came
up with the computation that even in the next 100
years, it would be impossible to till up the whole
cemetelY. However, he disclosed, an agreement was
recently made between the parties concerned and
urban planners on what would be best for everyone.
Senator Drilon said that he was informed that a
committee had been formed with the City of Taguig
and the AFP precisely to look for ways and means
to arrive at a win-win situation for all concerned. He
said that the AFP and the DND were awaiting the
nominee of the City of Taguig to the committee.
Senator Cayetano stated that he wanted the matter
on record because like in any battle or war, there are
people who are out to destroy the negotiations and
who refuse to find a win-win situation for everyone.
DEPARTMENT OF NATIONAL DEFENSE
There being no other interpellations, upon motion
of Senator Honasan, there being no objection, the
budget of the Department of National Defense and
its attached agencies, namely, the DND Proper
Office, Government Arsenal, National Defense
College of the Philippines, the Office of the Civil
Defense, the Philippines Veterans Office, the Veterans
Memorial Medical Center, the Armed Forces of the
Philippines, Philippine Army, Philippine Air Force,
Philippine Navy and the General Headquarters, was
Upon motion of Senator I-Ionasan, the session
was suspended.
It was 8:20 p.m.
; r
At 8:28 p.m" the session was resumed.
DEPARTMENT OF SOCIAL
WELFARE AND DEVELOPMENT
Department of Social Welfare and Development
(DSWD) and its attached agencies.
Senator Drilon stated that the GAB-House version
allocated a budget of P49,348,88 billion for the
DSWD while the Committee recommended a budget
of P48,762, 175 billion. He explained that while there
appears to be a reduction in the DSWD budget,
this was more apparent than real because what
the Committee did was to move to a single fund, the
allocation for the Pam ana program which the
Depaltment itself would be implementing. In fact, he
said that the budget of the DSWD was even increased
if the Body would consider that a portion of the
Pamana fund that pertained to the Office of the
Presidential Adviser on the Peace Process (OPAPP)
was transferred (0 the DSWD.
Senator Drilon stated that the centerpiece
program of the budget remains to be the 4Ps or the
conditional cash transfer which is budgeted at P39
billion. He explained that the beneficiaries will be
increased by 700,000 next year from the current
2.3 billion beneficiaries as of the end of the year.
He emphasized that the beneficiaries will be chosen
on the basis of the National Household Targeting
System Poverty Reduction list which is a list of those
in the lowest bracket in the economic sector.
Senator Drilon pointed out that one of the
amendments that the Committee introduced was to
reduce the operating cost or administrative cost of
the conditional cash transfer program by about P800
million, and transfer this as additional benefits for
additional cash grants to 61,000 families.
In closing, Senator Drilon urged the Body to
support the budget of the DS WD given (he track
record of the program so far.
MANIFESTATION OF THE CHAIR
The Chair stated that she will no longer interpellate
on the budget of the DSWD as she expressed full
645
support for the DSWD budget especially with her
confidence in the integrity, hard work and discipline
of Secretary Soliman.
QUESTIONS
On behalf of Senator Defensor Santiago, Senator
Honasan read the following questions regarding House
Bill No. 5023, to which Senator Drilon responded
accordingly:
Question No. I: As of July 31, 20 II, of the
P21.2 billion appropriated for the Pantawid
Pamilyang Pilipino Program or the 4Ps, the total
obligations incurred was P7.9 billion, This leads
P 13.3 billion unobligated or a utilization rate of
37.2%. If DSWD was doing its job efficiently,
utilization rate should be around 58%. Please
explain the big divergence between plan and actual
spending. By the way, does obligation mean that
funds were actually disbursed and received by
the beneficiaries or is there a difference between
obligation and actual disbursement.
Senator Drilon replied that as of August 2011,
the actual disbursement amounted to 69% and there
is a difference between obligation and disbursement
since the program calls for disbursement every
two months. He explained that the actual receipt
by the beneficiary wi II be on the th ird week of the
month when funds are released so that the DSWD
personnel can check compliance with the conditions
for the grant.
Question No.2: How many were the
intended beneficiaries under the 4Ps program
this year? How many have actually received
benefits as of the end of October 20 II? Are their
names available in the DSWD website?
Senator Drilon stated that the names are available
in the DSWD database and the Secretary has provided
the information to the other Members of the Body
who have requested for it. He said that a copy of the
names can be likewise submitted to the office of
Senator Defensor Santiago, should she require it. On
the number of beneficiaries, he said that from January
to August 2011, a total of2,024, 135 households have
received cash grants.
Question No.3: Who is responsible for
distributing the cash to beneficiaries, regular
staff of the DSWD or contractual workers or
646
institutions? And if the process is being out-
sourced, has the contract undergone competitive
bidding?
Senator Dri Ion stated'that the disbursements are
made through the Landbank which is a government
bank. He explained that the money does not pass
through the hands of any personnel of the DSWD
because the beneficiaries are issued A TM cards;
but if the cards are not yet available, the Landbank
shall conduct over-the-counter payments and
if there is no Landbank branch in the municipality
or if it is not accessible to the beneficiaries, rural
banks or cooperatives shall disburse the money.
He said that the beneficiaries may go to couriers and
money transfer outlets but only in extreme cases
where there is no Landbank, rural bank or cooperative
in the area.
Questioll No.4: Who is responsible for
monitoring the performance of the conditional
cash transfer program, regular staff of DSWD or
other institutions? If the latter, how are they
chosen? Were they chosen through competitive
bidding?
Senator Drilon stated that there are various
levels of monitoring that are being done: I) The
DepEd shall monitor compliance with the requirement
that the child attends a certain number of days in a
month so that the conditional cash grant will continue;
2) The DOH's rural health units are the network
through which the requirements of visitation for
mothers are imposed; 3) The DSWD, at the municipal
level, shall monitor and ensure that the beneficiaries
are really qualified (0 receive the cash grants; and
4) The LOUs and the civil society organizations.
Senator Drilon informed the Body that by next year,
a quarterly review of the disbursements through the
Oversight Committee on Public Expenditures would
be done.
Question No.5: How many will be the
intended beneficiaries under the CCT program
next fiscal year and how much will be the total
appropriations for 2013, 2014. 2015 and 2016?
Senator Dri Ion stated that by next year, an
additional 700,000 beneficiaries will be included in the
program, therefore, by the end of next year, there
should be about three million registered beneficiaries
in the program. He said that the budget for the CCT
program for next year is P39 billion but the budget
for 2013 to 2016 have not yet been determined.
THURSDAY. NOVEMBER 17. 2011
Questioll No.6: If loans were not available
from the World Bank and the Asian Develop-
ment Bank (ADB), would the government
undertake this program on such a large scale?
What are the terms of the loans, interest rates,
commitment fee, and the number of years to pay
in a grace period?
Senator Drilon stated that there are foreign loans
extended by the World Bank and ADB to support
the program, but the loans would only cover about
600,000 households and the remaining 2.4 million
households for 2012 would be supported by the
national coffers. He added that the concessional
loans that the World Bank and ADB have extended
to the government has a 10-year grace period, 25
years to pay at I % interest.
Questioll No.7. Cannot the Government of
the Philippines finance this program without
borrowing money from international financial
institutions?
Senator Drilon said that at present, only 600,000
of the total beneficiaries would be fully funded from
borrowings and the balance of 2.4 million beneficiaries
for 2012 would be fully funded by the national
budget. He affirmed that the national budget could
absorb the 2.4 million beneficiaries and stay within
the planned program deficit under the Medium Term
Development Plan.
Questioll No.8. Does the Aquino adminis-
tration have an exit plan, and up to what year will
this program continue?
Replying in the affirmative, Senator Drilon said
that beneficiaries of the program are expected to
graduate from the program after five years, thus, an
exit program would be sustained and would provide
the beneficiaries sustainable livelihood after two years
of the five-year program.
Questioll No.9. Is there any solid evidence
that as a result of the CCT program. dropout
rates in elementary education have declined?
Who did the study. if any?
Senator Drilon confirmed that the DSWD has
engaged the services of the SWS which validated the
decrease in dropout rates. Likewise, he said that in
his personal discussions with congressmen, they
expressed the need for funds for additional school
buildings because in their areas where CCT is being
implemented, the dropout rate has dropped.
Queslioll No. /0. Is there evidence that as a
result of the CCT program more children are
getting medical attention from government's
medical facilities including health units? Who is
keeping track of this inlormation?
Senator Drilon said that an SWS survey relative
thereto ind icated that there was a high awareness of
the conditionalities imposed on pregnant women, on
children between zero and five years old, and on
chi Idren of school age between six to 14 years old.
He said that conscious of the need to show results
out of the substantial budget on CCT, the Committee
has required the DSWD to engage the services of
survey companies to be able to get an accurate data
as to the reduction in the dropout rates as well as on
the pre-natal checkups. He said that the Committee
would report to the Body the results of the surveys
conducted by reputable survey companies to find out
whether or not the program is achieving the purposes
for which it was established.
Asked by Senator Lacson if there is a continu-
ing effort to revalidate the issue on household
beneliciaries, Senator Drilon replied in the affirm-
ative, as he pointed out that it is, in fact, the first
item in fulfilling the program's conditionalities. He
explained that the funds are made available every
two months but the actual receipt is on the third
week of the month in order that the DSWD's field
personnel would have time to revalidate compliance
with the conditions. The screening of the actual
beneficiaries, he said, was done even before they
were chosen, and a mechanism is in place to verify
the entitlements. He revealed that about 165,172
households, or 5% of the total number of program
beneficiaries, were delisted as a result of such
delisting process.
Asked if there are some more households deemed
unqualified beneficiaries but still remain in the program,
Senator Drilon said that while the list of beneficiaries
is not 100% accurate, there is a high degree of
confidence that they are, in general, legitimate
beneficiaries.
Senator Lacson said that based on a recent
repOlt from COA, the contents of which he was not
at liberty to divulge, some of the beneficiaries that
were reported to be deemed unqualified are still
presently in the list, particularly a household which
647
lists, among its assets, the following: TV set, VTR,
VHS, VCD, DVD, sal a set, telephone, and cell phone.
Senator Drilon said that the DSWD has already
acted on the report and has delisted the unqualified
beneficiaries. Senator Lacson, insisted, however,
that the same COA report claimed that said
beneficiaries were still in the current list. He clarified
that he was not casting aspersion on the competence
of the Secretary, but that he merely wanted to point
out the fact to help in the effort to continuously
monitor and validate the household beneficiaries.
INTERPELLATION
Asked by Senator Ejercito Estrada if indeed the
purpose of CCT is to reduce poverty, Senator Drilon
replied that the goal is to keep children in school and
to keep them healthy. However, he said that while
the program is a human investment program for
children that in the process would also alleviate
poverty, it is not principally designed as a poverty
alleviation program but as a scheme to reduce school
dropout rates and child mortality so that the nation's
goals as a society could be met. Pointing out the
alarming dropout rates, he said that for every 100
who enter grade I, only about 14 would finish college
and 7 would finish vocational school.
If indeed one of the program's purposes is to
alleviate poverty, Senator Ejercito Estrada asked
why the SWS survey from September 4 to 7 showed
that 52%, or lOA million families rated themselves
poor, up from 49%, or 9.8 million families, in March
and June of this year. Senator Drilon pointed out
that the results of the surveys were sentiments of
the respondents for the particular period when
the survey was taken, particularly on the question
which asked whether they consider themselves
poor. He cautioned against taking the surveys in
isolation, as he noted that on the same survey
conducted by the SWS, the question "Do you expect
a change in the quality of your life in the next
12 months?" was meant to be answered only by
beneficiaries of the 4Ps and 37% of the 4Ps
households expected a change in their quality of life
and only 9% said it would be worse.
Moreover, Senator Drilon disclosed that in the
self-dated poverty threshold of the beneficiaries of
the 4Ps program and the nonAPs beneficiaries in the
entire Philippines as of September II, only 20%
were beneficiaries of the 4Ps. Thus, he said that he
648
finds no basis to judge based on the self-rated
responses of the respondents, since 80% of them are
non-4Ps households,
On the goal of the Aquino government to reduce
the country's poverty incidence from 33% to only
16.6% in 2016 through CCT, Senator Drilon reiterated
that the alleviation of poverty is the function and the
object of the entire government and the 4Ps is not
the sole program to achieve it. He said that the
budget of the Department of Agriculture, which is
bigger, is also designed to alleviate poverty in the
country. He emphasized that the 4Ps program is not
per se a poverty alleviation program but principally
an investment in human resources.
Asked whether the DA expects a decline in
the number of poor people upon the approval of
the 2012 budget, Senator Drilon admitted that the
allocation for the 4Ps is insutlicient to improve the
general poveliy situation of the country, reiterating
that everything is designed to alleviate poverty -
the entire budget of government; the various laws
that encourage investments from the private sector;
and the policy to push the country as a location
for BPO.
On the number of beneficiaries under the CCT
program for the current year, Senator Drilon said
that program targeted 2.3 million households for 2011
and an additional 700,000 for 2012 so that by the end
of said year, the number of beneficiaries would reach
three mi Ilion.
In answer to fUliher queries, Senator Drilon said
that the program was fully implemented in 2008 and
that studies were being made to assess its impact,
He disclosed that those who were enrolled in 2008
are expected to graduate from the five-year program
in 2013. Since the program is primarily an investment
in human resources through education, he said that
the DSWD was required to conduct surveys, through
the SWS, to determine whether the dropout rate
went down and whether the children's health improved
as a result of the program. He noted that the
appraisal conducted by the SWS and the UP National
College of Public Administration and Governance
(UP-NCPAG) concluded that the CCT is principally
for human resource development through health and
education assistance; it does not aim to totally eradicate
poverty but is actually a bridge program toward
poverty alleviation.
Senator Ejercito Estrada noted that the program
started during the time of the Arroyo Administration
and he assumed it must have been successful,
otherwise, the Aquino Administration would not
have adopted it. Senator Drilon stated that it was
fonner Sec. Esperanza Cabral, with the support of
professional DSWD staff, who launched the program
that was patterned after Brazil's Bulsa Pamilya and
Mexico's Oportunidades.
Asked on the outcome of the programs in Brazil
and Mexico, Senator Drilon disclosed that in Brazil,
it brought down hunger and poverty incidence to a
single digit. He said that articles on the Brazilian
success were available for perusal.
Asked whether the program is expected to
bring the same results for the country, Senator Drilon
expressed confidence it wou Id succeed through
the efforts of the very professional staff of the
DSWD.
Asked to provide the complete data of bene-
ficiaries specifically in San Juan, Senator Drilon said
that there were a total of 427 household beneficiaries
among 18 barangays in San Juan with a total
disbursement of P2 million.
Senator Ejercito Estrada pointed out that there
were 21 barangays in San Juan, and he asked
why there were no beneficiaries from the three
barangays. Senator Drilon replied that the benefi-
ciaries were based on a listing under the National
Household Targeting System for Poverty Reduction
(NHTSPR) which has set a threshold income of
P4,000, and it was possible that there were no
qualified beneficiaries from the three barangays that
included Greenhills.
Asked on the role of the LGUs in choosing
the beneficiaries, Senator Drilon said that it was
primarily the NHTSPR which was utilized and once
the beneficiaries were chosen, the LGUs were
consulted and informed as part of the validation
process.
At this juncture, Senator Lacson noted that as
the term "household beneficiaries" suggests, the
homeless are automatically disqualified from the
program. In response, Senator Drilon said that for
street families, there is a separate CCT program and
a housing program and once they have provided a
specific address, they can enroll in the CCT.
THLJRSDA Y. NOVEMBER 17. 2011
Senator Lacson noted that the primary reason
why the homeless cannot be qualified as beneficiaries
is that they have no permanent address. He hoped
that a system could be devised to include the homeless
poorest of the poor. Senator Drilon thanked Senator
Lacson for pointing out that the homeless were not
included in the listing of the NHTSPR, although he
believed that there is a separate program for them.
Senator Lacson asked how the homeless cou Id
be identified and how the program could be extended
to them. In response, Senator Drilon cited the
ongoing Rapid Appraisal Program which, to date,
already identified 600 to 800 families were already
identified in Metro Manila, 126 of whom are Badjaos.
At this point, Senator Ejercito Estrada asked if
the Committee could foresee other problems, aside
from budgetary constraints, that could hinder the
success of the program. Senator Drilon said that
DSWD is constantly aware that there are unqualified
families who would exert every effort to join the
plogram. He said that one of the aspects of the
program is strengthening it to make sure that only
those who al'e qualified can avail of the benefits. He
also adverted to the distance that has to be traveled
to reach the beneficiaries as another continuing
challenge to the DSWD considering that they were
chosen on the basis of income and not on the basis
of their location. He said that there are instances
when it costs more to bring the cash to the
beneficiaries, especially those who reside in far-flung
areas where there is no available transportation, like
in the case of those in Sarangani, Davao Del Sur as
well as in Mapun and Turtle Island. He disclosed
that the money was remitted to these beneficiaries
through Globe Telecom's GCash facility which entails
additional expense for the government.
In answer to a further query, Senator Drilon said
that the government pays Globe Telecom P75 for
every transaction once every two months.
DEPARTMENT OF SOCIAL WELFARE AND
DEVELOPMENT AND ITS ATTACHED
AGENCIES
of the Department of Social Welfare and
Development and its attached agencies was deemed
649
suspended.
It was 9:25 p.m.
DEPARTMENT OF ENVIRONMENT
AND NATURAL RESOURCES
Upon resumption, Senator Drilon presented the
budget ofthe Department of Environment and Natural
Resources.
Senator Drilon stated that the Committee
recommended a budget of PI6,790,860 billion for the
Department of Environment and Natural Resources
(DENR) which was the same as in the GAB-House
version.
INTERPELLATION
OF SENATOR GUINGONA
At the onset, Senator Guingona noted that there
was a difference between the House version and
Senate version of the GAB in the sense that there is
an automatic appropriation in the latter for the
Integrated Protected Areas Fund (\PAF). However,
he pointed out that out of the 68 IPAs, only 12 have
been able to access their funds even though most of
them were earning enough for the improvement of
their respective areas, because the past administration
vetoed the provision on automatic appropriation for
the funds. He asked Senator Dri Ion to give his
commitment that he would do his utmost to retain the
automatic appropriation for the IPAF in the bicameral
conference committee. Senator Drilon did.
At the onset, the Chair (Senator Legarda) stated
that it has always been very supportive of the
DENR, however, there had been contradictory
statements from the Aquino Administration and DENR
officials on the issue of mining exemptions from the
total log ban in Executive Order 23.
The Chair recalled that according to newspaper
reports, the mining industry was exempted from said
650
order which declared a moratorium on the cutting
and harvesting of timber in the natural and residual
forests; however, the officials of the Bureau of
Mines and Geophysical Sciences were quoted at a
mining conference in Baguio City as saying that the
Aquino Administration had exempted the industry
from the ban provided it participates in the National
Greening Program (NGP), The Chair requested a
clarification, saying it does not make sense to allow
mining companies to cut trees and replace them by
planting trees which takes decades to grow.
Senator Dri Ion exp lained that the log ban does
not apply to the mining industry when they clear the
area of trees that belong to the State. He stated
that the ban contemplates logging activities conducted
for private commercial profit.
On whether the statement of the President that
the mining industry is exempted from the log ban is
simply a reiteration of the present policy, Senator
Drilon replied that the exemption provided for in
EO 23 has nothing to do with the logging business. It
is unfortunate, he said, that trees have to be cut to
fultill the intent of the operations. Nonetheless, he
stated that the mining companies are required to
replace every tree cut with at least 100 indigenous
seedlings. He said that the cut trees are then turned
over to the DENR which donate them to the DepEd
for its school building program.
With mining as a major source of investment
revenues for the present and previous administrations,
the Chair expressed great concern over increased
logging activities as the government tries to attract
more investments in mining whose concessionaires
are automatically exempted from the log ban. Senator
Drilon clarified that mining finns are required to plant
at least 100 indigenous seedlings for every tree cut
which they should maintain for at least three years.
Moreover, he said that there are about 30 million
hectares in the entire country and the ecological
footprint of the mining industry was not as significant
in terms of the logging ban. However, he believed
that the Aquino Administration had considered all
factors before deciding on the matter which was
done for the greater national interest.
Although it appreciated Senator Drilon's decision
to prioritize Social Contract No.5, the Chair observed
that with the EO in place, it would be futile since the
exemption would only encourage more mining
operations. It acknowledged that the mining industry
indeed leaves a limited ecological footprint, but it
pointed out that its activities still adversely impact
the environment considering that the Philippines has
less than 800,000 hectares of forest cover. It said
that the chair of the task force on water management
believed he would not be effective in his position
without the cooperation of the DENR and the DA.
In fact, it said that according to Secretary Singson,
the flooding was caused not so much by the release
of water from the dams, the lack of updated protocol
or the presence of informal settlers in the waterways,
but more so by the siltation of rivers and soil erosion
resulting from deforestation.
The Chair added that Secretary Singson himself
not only underscored the urgency of having the
denuded mountains of Sierra Madre reforested or of
putting a stop to the illegal activities of loggers and
poachers but also expressed concern over the fact
that government continues to promote extractive
activities. Senator Drilon gave assurance that the
Chair's concerns on the mining industry's exemption
from the logging ban would be relayed by the DENR
Secretary to the Office of the President.
On another matter, the Chair expressed support
for the allocation for the NOP but emphasized that
paoties involved in extractive industries must plant
trees but they must not be exempted from the logging
ban. It said that decades-old trees were being
sacrificed for newly planted ones that would take
decades to grow. It also asked whether the NOP
was being implemented in coordination with the
DPWH and the NIA particularly since the DENR
Secretary himself believed that such a costly
program and close coordination among the concerned
agencies would be futile if there is no careful planning
as to where to plant the seedlings. Moreover, it
asked if mapping has been done on denuded,
deforested areas and soil-erosion prone areas that silt
waterways. Senator Drilon replied that the DENR
has undertaken mapping of these areas and the data
were available.
The Chair said that the DENR Secretary knew
about the desecration of national parks and watersheds
which have caused the loss of livelihood and death.
It appreciated the fact that there is an allocation for
the delineation of forest limits to preserve Mt. Pulag
which has been desecrated and was an example of
how people have disregarded their natural resources.
Relative thereto, it asked whether the NGP includes
planting and reforestation of natural and national
, r
parks. Senator Drilon said that reforestation and
replanting activities were major components of
the NGP.
On another matter, the Chair pointed out that an
Integrated Watershed Protection and Management
System was also integral to the livelihood of
downstream communities as tlooding will persist
unless the upstream is well-managed. Senator Drilon
explained that the President had done away with the
proposed PI8 billion dredging operation of Laguna de
Bay in the absence of a program to address the
upstream situation where the denudation has caused
soil erosion and siltation.
For its part, the Chair believed that the
convergence of the DENR, DA and the DPWH was
vital in saving the environment. Relative thereto, it
asked whether the DENR's 2012 budget would
allow the people and the communities to be more
responsive to extreme weather events. Senator Drilon
replied that the fact that one-fifth of the DENR's
budget was being appropriated for the NGP makes it
ditferent from the previous years. The Chair expressed
its intention to closely monitor the program.
Apart from a P76 million allocation for marine
biodiversity, the Chair noled that the DENR also
loaned P505 million from the Asian Development
Bank for a similar purpose. It asked whether the
ADB fund will be used for the coral triangle initiative
which aims to build coral reefs in the Visayan seas.
Senator Orilon replied in the affirmative as he
explained that the money would be used for the coral
reef rehabilitation and conservation program and
would include the following activities:
Social mobilization;
Conduct of orientation training;
Site identification;
Suitability assessment;
Site preparation;
Coral stock identification and sourcing;
Conduct of actual reef rehabilitation and
conservation; and
Monitoring of coral reefs rehabilitated and
conserved
The Chair surmised that the DENR has mapped
areas which are rich in marine I'esources but would
651
also closely monitor illegal fishing activities therein.
It asked whether the OENR was implementing
the project with the assistances of NGOs and POs,
Senator Orilon stated that it would be undertaken
in collaboration with the Bureau of Fisheries and
Aquatic Resources and the local government units
concerned.
To the observation that the program could
generate jobs for the youth, LGUs and POs, Senator
Drilon agreed.
The Chair asked on the allocation for RA 9003
through the Solid Waste Management Council
(SWMC). It said that an allocation has been set
aside for the SWMC in response to the perennial
complaints of LGUs about the absence of a solid
waste management program even though 20% of
them are able to implement the same. It believed
that the OENR ought to implement the 10-year-old
law as improper waste management is the cause of
disease outbreaks and tlooding. In reaction, Senator
Orilon said that the DENR has set aside P84 million
for the solid waste management program as he
stressed that the law's implementation was principally
the responsibility of the local government units.
Upon further query, Senator Orilon said that the
BFAR would assist the LGUs in creating their
Material Recovery Facilities (MRFs) by providing
seed capital to initiate the long-delayed implementation
of the program.
Asked whether the DENR has completed its
geohazard maps, Senator Orilon explained that Maps
I: I ,000 which are for the entire country have been
completed while work was continuing to finish Maps
1: 10,000 which would be more useful to local
governments.
On another matter, the Chair expressed concern
over how the National Power Corporation and the
National Water Resources Board have been blaming
each other over the recent pre-emptive release of
water from dams that caused the nation Pl2 billion
in damages to livelihood and properties. Senator
Drilon gave assurance that the DENR was closely
coordinating with the NWRB.
QUESTIONS
At this point, Senator Honasan posed the
following questions of Senator Defensor Santiago on
652
the DENR budget to which Senator Drilon responded
accordingly:
Questioll No I: What is the Department's
unobligated allotment in 20 I O?
Senator Dri Ion stated that under the National
Expenditure Program, the unobligated allotment in
the 20 I 0 budget for the Office of the DENR Secretary
was PI,691,671,000 while in 2011, PI,145,020,000
was obligated, leaving a balance of P383,865,OOO as
of October 3 I, 20 II, representing 75% utilization.
Questioll No.2: What are the major reasons
for the delay? To what extent is the delay in the
obligation and implementation of this project, a
reflection of your Department's low, absorptive
capacity as alleged by the Department of Budget
and Management? What concrete measures
have been adopted by the DEN R authority in
order to expedite the obligation and implement-
ation of this project? Is it reasonable to assume
that the programs and projects that were author-
ized in 20 I 0 and have remained unimplemented
to date are law implemented projects of the
government? Senator Honosan stated to provide
the Senator a list of these programs and projects
and their expected outputs.
Senator Drilon gave assurance that a list of the
projects would be made available as he explained
that the bulk of the funding was for a two-year
cadastral survey which was delayed because
of questions on the bidding, thus, it could not be
awarded. But he revealed that there was an
accelerated program in 20 II which resulted in the
obligation of about P 1.4 million, leaving a balance
ofP380 million.
Questioll No.3: What is the Department's
reaction to the reported call for the abolition of
the DENR, and the establishment of the National
Environment Protection Agency in its place?
Senator Drilon believed that there was no basis
for the call to abolish the DENR as he stressed the
very critical role it is playing in society and the
governance of natural resources.
Questioll No.4: In the 20 I 0 Annual Audit
Report of the Commission on Audit, the auditor
rendered an advance opinion on the fairness
on the presentation of the financial statements
of the DENR due to accounting errors and
deficiencies. What steps were taken by the
Department to comply with the COA recommend-
ations on the following items?
A) Undocumented assets in the amount of
P662.446 million;
B) Unrecorded receivables from the sale of
three residential lots in the amount of
P5S.IIS million;
C) Unliquidated for one year to three years
expended fund transfers in the amount of
PI 12.772 million;
D) Unrecorded deliveries of various software,
licenses and office supplies in the amount of
P89 million; and,
E) Undocumented liability accounts in the
amount of P64.388 million.
Senator Drilon explained that the aforementioned
COA findings pertain to the previous years' erroneous
bookkeeping. He revealed, however, that the current
DENR leadership has an action agenda to address
the findings, for instance, conducting a quarterly
monitoring of compliance with the consolidated annual
audit report requirement, implementing 13 recommend-
ations in 2009 and another 25 in 20 II. As regards
findings on undocumented accounts from the old
government auditing system to the new one, he
admitted that the DENR had a hard time reconstituting
them because the accounting stockroom was flooded
and destroyed by a typhoon. As part of the action
plan, he said that the DENR also monitored each
region to address the audit findings. He explained
that the bulk of unliquidated fund transfers to the
national government agencies and the LGUs were
under Fund 1.0 I; and out of the P 154.5 million P II 0
million was already liquidated, leaving a balance of
P44 million. He also clarified that the three-year
unliquidated and uncollected advances by officers
and employees amounting to P8.155 million represents
a portion of the intelligence funds and that the
liquidation documents on P7.5 million had credit
notice dated August 15, 20 II.
Questioll No.5: For the Office of the
Secretary, below are significant observations of
the COA. Please give us an update on the status
of these big items.
A. The success implementation of the Upland
Development Program whose total allotment
in 20 I 0 was P630.596 million; the community-
based forestry management program, whose
total amount in 2010 of P 17 .S3 which could
not be determined because of the failure to
conduct monitoring and overall program
and project evaluation;
B. Five regions could have generated addi-
tional income in the estimated amount of
P47,09 had collection of foreshore lease and
revocable permit applications and rental fees
from foreshore occupants been intensified;
C Low-fund utilization rate for 4 foreign-
assisted special projects.
suspended,
It was 10:19 p.m.
At 10:20 p,m., the session was resumed,
Senator Drilon said that the Upland Development
Program is an assistance program to the affected
upland community in the form of livelihood and
employment opportunities, He said that the Office
of the Secretary was looking for ways to better
measure and report the development of the program.
Questioll No, 6: (For the Environmental
Management Bureau) According to news
reports, the DENR Secretary and the MMDA
Chair, Francis Tolentino, have recommended
to revisit incineration as a garbage solution.
Is this true? If yes, what was the basis for the
recommendation? The Clean Air Act which the
Environmental Management Bureau is mandated
to implement recognizes the problems with
incineration. The DENR should have been the
first to oppose this move in order to protect our
people and the environment from the dioxins,
furins, heavy metals and other toxic by-products
of incineration. Further, under the Ecological
Solid Waste Management Act, another environ-
mental law which the EMB is mandated
to implement, waste can be converted to badly
needed resources, so burning waste is
supposedly tantamount to burning money, It
also reportedly worsens climate change because
virgin materials require more energy to process.
Senator Drilon stated that the law prohibits
incinerators which emit toxic poisonous fumes even
though the Supreme Court ruled that incinerators that
do not emit toxic and poisonous fumes are not
653
covered by the ban, thus, there is an available option
to the DENR which it is not taking, anyway.
Questioll No.7: (For the Mines and
Geo-sciences Bureau) Is it true that the DENR
will be lifting the ban on mining applications
and reconsidering even those that have been
rejected?
Senator Drilon replied that the mining policy is
being reviewed by the Office of the President.
Questioll No.8: According to news reports,
the DEN R Secretary has recommended that areas
where mining companies are operating be turned
into mineral reserves so that the government can
collect a higher percentage of the company's
income. What was the basis for this recommend-
ation?
Senator Dri Ion stated that in the revised
Implementing Rules and Regulations (IRRs) of the
Mining Act, mining companies located within the
declared mineral reservations will pay 5% royalties
and 5% gross income. He said that the declaration
of a mining reservation enables government to collect
higher taxes, otherwise, it can collect only 2% excise
tax. It is to the advantage of the government to
declare such areas as mineral reservations, he said.
Questioll No.9: (For the National Mapping
and Resource Information Authority-NAMRIA)
In the 20 I 0 COA report, the auditor made the
following observations: Several deficiencies
regarding the execution of the contract in the
amount of P79.96 million entered into between
NAMRIA and Philtech Instrumentalities, Inc.
such as:
a. Mobilization cost of P4.216 million was not
deducted from the progress billings;
b. Liquidation damages of P7.996 million
were not imposed on delayed completion of
16 active geodetic stations; and
c. Mobilization fees and six progress billings in
the amount of PI 1.244 million and PI3 million
were paid without the signature of the officer
in charge, accounting unit. Please update us
on the status of this item.
Senator DriJon stated that management has complied
by submitting copies of vouchers where mobilization
fees were applied. As regards the imposition of
liquidated damages in the amount of P7.996 billion,
he said that no liquidated damages can be assessed
because the contract for 16 active geodetic stations
was cancelled and only six were continued.
654
On the third finding to ensure that no disbursement
voucher shall be approved or prepared without the
signature of the OIC accounting unit, Senator Drilon
said that it had been complied with.
Questio/l No. 10: (For the National Water
Resources Board) In a 20 I 0 policy paper entitled,
"Tightening Water Regulation," which forms
part of the water series of Forensic Solutions
headed by Secretary Alberto Agra. the group
said that the country's water problem is actually
ironic because the country has enough fresh-
water resources, rainfall, surface water and
groundwater to meet the requirements of the
country's ever-increasing popUlation and rapid
urbanization and industrialization,
The paper also noted that although the
National Water Resources Board is designated
under the Water Code of the Philippines as chief
overseer of water resources management in the
country, the NWRB actually shares if not
competes, for its ostensibly all-encompassing
mandate with more than 30 other government
offices and corporations that all deal with either
water supply, irrigation, hydropower, flood
control, water management or water-related
concerns in accordance with their respective
mandates.
It added: Worse, NWRB sutTers underfund-
ing from the national government which limits
its ability to hire experts, obtain complete data
from planning and management, and to regularly
mon itor water resources and water-resource
activities at the local and national levels.
Forensic Solutions reportedly said these
30-plus agencies and corporations include the
Local Water Utilities Administration, National
Economic and Development Authority, Depart-
ment of Public Works and Highways, Depart-
ment of Agriculture, Department of Environment
and Natural Resources, Department of Health,
Department of Interior and Local Government,
National Il'I'igation Administration, Laguna Lake
Development Authority, and National Power
Corporation.
To abate further water supply shortage, the
group said: Measures must be taken short of an
overhaul of the current water regulatory system.
The NWRB as the apex regulatory body must be
strengthened to perform its mandate of managing
water resources. Coordination among agencies
involved in water regulation must be emphasized,
and the functions of each, streamlined."
Has the DENR considered the study
conducted by th is group?
THURSDAY, NOVEMBER 17. 2011
Senator Honasan stated that in her questionnaire,
Senator Defensor Santiago may direct the DENR
and the NWRB to draft a bill incorporating the
recommendations of the 2010 study conducted by
Forensic Solutions.
In response, Senator Drilon stated that those
observations were well taken, and that they were
among the reasons why the President issued
Executive Order No. 62 which, in effect, created a
super body, an Inter-Agency Committee on the
Water Sector headed by the DPWH Secretary
as lead convenor, to consolidate and coordinate
all the agencies involved in water resources
management.
Senator Drilon expressed confidence that with
the issuance of the executive order, all concerns
wou Id be addressed in detail. He requested the
Members, however, to await and allow the Council
to establish an overall plan which may include
necessary legislation, as suggested in the study.
As regards the directive, Senator Drilon urged
that the Counci I be allowed to have an overall and
general review of the situation first.
Questio/l No. II: (For the Palawan Council
for Sustainable Development Staff) The Puerto
Princesa Subterranean River National Park was
recently named in the new Seven Wonders of
Nature provisional list. What is the major
hindrance encountered in its campaign?
Senator Drilon replied that the DENR Secretary
was the campaign manager and because of his
efforts, the underground river was included as one
of the new Seven Wonders of Nature. He stated
that even if there were obstacles, the Department
Secretary was able to overcome them.
Questio/l No. 12: The new Seven Wonders
of Nature contest is now reportedly embroiled
in a controversy involving millions of dollars
in allegedly "surprise" fees. Maldives and
Indonesia withdrew their respective entries from
the contest and accused organizers of forcing
them to pay surprise fees of up to US$500,OOO
or P21.6 million, the United Kingdom's The
Guardian reported. Are you aware of these
surprise fees?
Senator Drilon said that DENR was aware of
the controversy but was not involved in it.
TlIlJRSDAY & FRIDAY. NOVEMBER 17 & 18.2011
DEPARTMENT OF ENVIRONMENT
There being no other reservation for inter-
pellation, upon motion of Senator Honasan, there
being no objection, the budget of the Department
of Environment and Natural Resources and its
attached agencies, namely, the Office of the Secretary,
Environment Management Bureau, Mines and Geo-
sciences Bureau, National Mapping and Resource
Information Authority, National Water Resources
Board, and Palawan Council for Sustainable Develop-
ment Staff, was deemed submitted for the Body's
consideration.
Senator D,i Ion mentioned that there were two
agency budgets left in the agenda, those of the
Comelec and the PDEA. In view of the lateness of
the hour, he asked that said budgets be taken up
when the session resumes in the morning of the
next day.
Upon motion of Senator Honasan, there being
no objection, the Body suspended consideration of
the bill.
Upon motion of Senator Honasan, there being no
objection, the Chair declared the session suspended
until ten 0' clock in the morning of Friday, November
18, 20 II.
[t was j(UIl p. n1.
At 10:16 a.m., Friday, November 18,2011, the
session was resumed with Senato, Honasan presiding.
(Continuation)
o]ejection, the Body resumed consideration, on Second
Reading, of House Bill No. 5023 (Committee Report
No.79), entitled
AN ACT APPROPRIATING FUNDS FOR
THOUSAND AND TWELVE, AND
FOR OTHER PURPOSES.
655
Senator Sotto stated that the pari iamentary status
was the period of interpellations.
MORNING AGENDA
Senator Sotto stated that the Body would consider
the budgets of the following departments and their
attached agencies:
Congress of the Philippines;
Philippine Drug Enforcement Agency;
Commission on Elections;
Office of the President;
Office of the Vice President;
The Judiciary;
Civil Service Commission;
Commission on Audit;
Office of the Ombudsman;
Commission on Human Rights;
Autonomous Region in Muslim Mindanao; and
Department of Science and Technology.
Sponsor of the measure.
CONGRESS OF THE PHILIPPINES
Congress of the Philippines, which has a total alloca-
tion of P8,961 ,450,000.
Respecting the fiscal autonomy of constitu-
tionally created agencies, he said that the Committee
transferred P281.7 million from the Miscellaneous
Personnel Benefits Fund (MPBF) to the Congress
of the Philippines, and apart from this significant
change, it accepted the budget proposed by the
Executive department under the NEP and the GAA.
656
Preliminarily, Senator Sotto said that congressional
committees are the anchor points in the exercise of
the legislature's lawmaking and oversight powers,
He noted that the Senate has 38 committees and
34 oversight committees that conduct vital functions
in policy formulation activities, and he believed that
the secretariat staff in these committees should be
strengthened to ensure that the Senate's performance
meets the expectations of the people,
He pointed out that committee secretariats in the
best congresses and parliaments in other countries
were fully staffed un like the Senate which has 27
committee secretaries and only 23 support staff.
Moreover, he noted that the Philippine House of
Representatives not only has about five to seven
secretariat personnel providing support services to
every committee, but also has a separate Committee
Affairs Department which is headed by a deputy
secretary, He pointed out that strengthening the
secretariat staff would ensure a better flow of
information between committees and the Senate to
government departments and instrumentalities,
Senator Sotto explained that the committee
secretariat staff coordinate all committee activities
and ensure that the committee chair and its members
have the needed support, Further, he observed that
the lack of manpower in the secretariat has prompted
the senators to call on their own staff to discharge
functions that are supposedly to be performed by the
committee support group, He said that strengthen-
ing the committee secretariat would require a total
funding of P137,65 million in the next three years:
Phase I: P50.5 million for implementation
in 2012;
Phase II: P50') million for implementation
in 2013; and
Phase III: P36,8 million for implementation
in 2014,
Senator Sotto said that upon implementation of
Phase I, each committee secretary would already
have at least two staff helping him/her: with one
techn ical person and one clerical staff. He stated
that the lack of manpower of the committee secretariat
was evident from the fact that the 23 pcople assisting
the Senate committees were also performing other
functions,
FRIDAY, NOVEMBER 18,2011
In closing, he proposed to offer an amendment to
the budget that could fund the strengthening of the
committee support system,
Senator Drilon clarified that the MPBF, which
was funded for unfilled positions, was returned to
Congress since there were funds available for the
purpose, As such, he said that Senator Sotto's
proposal can be taken under serious consideration,
Senator Sotto said that he understood Senator Drilon's
position particularly as the report on the outcome of
the workshop has only been released the previous
week, He said that he would provide Senator Drilon
with a copy of the study and the proposals,
CONGRESS OF THE PHILIPPINES
There being no further interpellation, upon
motion of Senator Sotto, there being no objection,
the budget of the Congress of the Philippines,
which includes the Senate, Senate Electoral
Tribunal, Commission on Appointments, House of
Representatives, and House Electoral Tribunal, was
deemed submitted for the Body's consideration,
OFFICE OF THE VICE PRESIDENT
Senator Orilon presented the budget of the Office
of the V ice President
He explained that the NEP and the GAA
allocated P40 I ,786,000 that would cover the increase
for the second tranche implementation of the salary
adjustments mandated under EO 900 and MOOE
in the amount of PIll ,570,000, as well as a Capital
Outlay of PIOO,OOO for the Vice President's
POAF for infrastructure projects, He said that the
remaining P5,7 million would be used to purchase
motor vehicles that would replace the existing
vehicles in the OVP, He also pointed out that
subsidies and donations accounted for the increase
in the MOOE along with the integration of another
portion of the President's POAF amounting to
P99.5 million,
OFFICE OF THE VICE PRESIDENT
upon motion of Senator Sotto, there being no objec-
tion, the budget of the Office of the Vice President
was deemed submitted for the Body's consideration,
THE JUDICIARY, THE SUPREME COURT,
LOWER COURTS, THE PRESIDENTIAL
ELECTORAL TRIBUNAL,
SANDIGANBAYAN, COURT OF APPEALS,
AND THE COURT OF TAX APPEALS
Senator Drilon presented the budgets of the
Judiciary, Supreme COUli, lower courts, Presidential
Electoral Tribunal, Sandiganbayan, Court of Appeals
and Court of Tax Appeals.
He explained that his committee recommended
PIS,078,891,000 billion allocation for the Judiciary.
However, he noted that the Miscellaneous Personnel
Benefit Fund (MPBF) has been the subject of debate
between the Judiciary and the Executive branch
in view of the proposal to transfer a portion of
the Judiciary's budget into the fund to cover the
appropriation for unfilled positions.
Regarding the fiscal autonomy of the Judiciary,
Senator Drilon said that his Committee concurred
with the amendment of the House of Representatives
which reduced the MPBF by PS,02S,000,000 allocated
to the unfilled and new positions in the constitutional
agencies and added the corresponding amounts to
the budgets of these constitutional offices. As a
result, he said that the Committee's proposed budget
for the Judiciary was increased by P2,093,000,000
which would then be allocated to the Supreme
Couti, lower courts, Court of Tax Appeals and the
Sandiganbayan. To address the issue on savings,
he said, the Oftlce of the President proposed that
the budget for unfi lied positions be placed in
the MPBF.
Senator Drilon stated that Supreme Court
Administrator Midas Marquez has reported that
there are 106 unorganized courts which are funded
annually. These, he said, include SO regional trial
courts, 13 metropolitan trial cOUlts, 26 municipal trial
courts in cities, one municipal circuit trial court and
IS shari'ah circuit courts.
Senator Drilon said that according to the Court
Administrator, the total savings from funded but
unorganized courts is P440.6 million, which was
one of the reasons why there was the issue
between the Office of the President and the Judiciary
because there are organized courts which have
vacancies as well as in other branches of the
judiciary reaching an estimated total of S,SOO
vacancies.
657
ACKNOWLEDGMENT
OF THE PRESENCE OF GUESTS
At this juncture, Senator Drilon acknowledged the
presence in the gallery of representatives from the
Judiciary, namely, Supreme Court Associate Justice
Diosdado Peralta; Presiding Justice Andres Reyes of
the Court of Appeals; Court Administrator Midas
Marquez and the heads of the other Judicial branches.
SUBMISSION OF THE BUDGETS OF THE
JUDICIARY, THE SUPREME COURT, LOWER
COURTS, PRESIDENTIAL ELECTORAL
TRIBUNAL, SANDIGANBAYAN, COURT OF
APPEALS AND COURT OF TAX APPEALS
the budgets of the Judiciary, the Supreme Court of
the Philippines and the lower courts, Presidential
Electoral Tribunal, Sandiganbayan, Court of Appeals
and Court of Tax Appeals were deemed submitted
suspended.
It was 10:37 a.m.
OFFICE OF THE PRESIDENT
Senator Drilon presented for consideration the
budget of the Office ofthe President and its attached
agencies.
Senator Drilon informed the Body that the NEP
allocated P2,69S,422,000 for the Office of the Pres-
ident, which the House of Representatives reduced
by P 100 million, particularly on the Confidential and
Intelligence Expenses which was decreased from
P600 million to PSOO million and transferred to the
Department of National Defense (DND).
suspended.
If was 10:41 a.m.
658
Upon resumption, Senator Drilon revealed that
the Office of the President was not informed of the
budget cut which, he said, was a departure from the
inter-Chamber courtesy practiced by both Houses. In
this particular case, he assumed that there was
consultation between the House of Representatives
and the Office of the President as far as the
reduction of the Confidential and Intelligence Funds
and the transfer of reduction to the DND. Never-
theless, he said that he would still recommend the
approval of the budget of the Office of the President
as contained in the 2012 GAB with the coila/ilia that
the Senate panel would bring up the issue on the
budgetalY cut during the bicameral conference.
OFFICE OF THE PRESIDENT AND ITS
ATTACHED AGENCIES
the budget of the Office of the President and its
attached agencies was deemed submitted for the
suspended.
It was 10:45 a.l11.
CIVIL SERVICE COMMISSION AND THE
CAREER EXECUTIVE SERVICE BOARD
Senator Dri Ion presented for consideration the
budget of the Civil Service Commission (CSC) and
the Career Executive Service Board.
He stated that the 2012 GAB reflects a budget
of P728,000,89I for the Civil Service Commission
or an increase by PI22,000,836 by virtue of the
decision of the House of Representatives to cut the
Miscellaneous Personnel Benefits Fund (MPBF) and
transfer the corresponding amount to the CSC in
recognition of the constitutionally mandated fiscal
autonomy ofthc agency, and to cover the funding for
FRIDAY. NOVEMBER 18,2011
unfilled positions which were previously placed under
the MPBF. He said that the Committee on Finance
was endorsing this amendment to the GAB.
CIVIL SERVICE COMMISSION AND
CAREER EXECUTIVE SERVICE BOARD
the budgets of the Civil Service Commission and the
Career Executive Service Board were deemed
suspended.
It was 10:53 a.m.
COMMISSION ON AUDIT
Senator Drilon presented for consideration the
budget of the Commission on Audit, which reflects an
allocation of P6,634,000,662 for 20 12 under the GAB.
Senator Drilon said that there is a positive
variance between the GAB and NEP: the GAB
increased the budget allocation of the COA by
PI,851,076,000 as a consequence of the transfer
of the amount from the MBPF to the COA which
corresponds to the budget for unfilled positions. He
stated that the Senate Finance Committee supported
the amendment of the House of Representatives
which recognized the fiscal autonomy of constitutional
bodies such as the Commission on Audit, and
included a special provision that there should be a
report on the utilization of this fund to be submitted
to the Office of the President, and both Houses of
Congress for purposes of transparency.
OF THE COMMISSION ON AUDIT
the budget of the Commission on Audit was deemed
FRIDAY, NOVEMBER IS, 2011
suspended.
II was 10:57 a.m.
At 10:59 a.m" the session was resumed.
OFFICE OF THE OMBUDSMAN
Senator Drilon presented the budget of the Office
of the Ombudsman, which has an allocation of
P 1,308, 746,000 under the GAB, reflecting an increase
of P567,793,000 compared to the NEP. He stated
that the increase represents the funding for unfilled
positions in the Office of the Ombudsman, which
was previously lumped under the MPBF. He said
that the Committee did not recommend any other
revision in the budget of the Office of the Ombudsman.
OF THE OFFICE OF THE OMBUDSMAN
the budget of the Office of the Ombudsman was
suspended.
II was 11:03 a.1I1.
COMMISSION ON HUMAN RIGHTS
Commission on Human Rights.
suspended.
It was 11:05 a.m.
659
Upon resumption, Senator Drilon stated that GAB
allocated P273, I 00,000 to the Commission on Human
Rights (CHR) which is PI million higher compared
to the appropriation under the NEP. He informed
the Body that the House of Representatives inserted
the PI 0 million to fund the investigation of all forms
of human rights violations involving civil and political
rights especially extrajudicial killings and enforced
disappearances as well as the implementation of
Republic Act No. 9745 (Anti-Torture Act of 2009).
He said that the Committee on Finance was not
inclined to adopt this amendment, but it is willing to
revised the proposal during the bicameral conference
committee. In the meantime, he submitted the
P263, I 00,000 budget for the Commission on Human
Rights for the Body's consideration.
COMMISSION ON HUMAN RIGHTS
There being no reservation for interpella-
tion, upon motion of Senator Sotto, there being no
objection, the budget of the Commission on Human
Rights was deemed submitted for the Body's
consideration,
suspended.
II was 11'10 a.m.
At II: 13 a.m., the session was resumed.
AUTONOMOUS REGION
IN MUSLIM MINDANAO
Autonomous Region in Muslim Mindanao amounting
to PI 1,616,764,000 which represents a cut of
PIOO,943,000 from the allocation that was provided
for under the GAB. He stated that of the PIOO,943,000
Special Purpose Fund under the General Administra-
tion and Support Services, P96, 94 3, 000 was supposed
to go to the ARMM governor, and P4 million to the
ARMM vice governor.
660
However, Senator Drilon reiterated that the
Committee was alarmed at the level of corruption
during the regime of former Governor Ampatuan. He
stated that in COA Special Audit Report No. 20 I 0-
05 for the ARMM-DPWH, payments to suppliers
and contractors amounting to PI, 123,000,000 were
considered spurious and in another instance,
deficiencies amounting to P363,400,000 were
discovered in the implementation of projects worth
P422,700,000 - these are just two of the many
findings of corruption during the term of Governor
Ampatuan.
Senator Drilon informed the Body that in view of
the level of corruption, the Committee was compelled
to I) provide that disbursements in the ARMM be
subject to pre-audit by COA because of the inade-
quate internal control; and 2) cut P96.9 million and
P4 million in discretionary expenses of the offices of
the governor and vice governor, respectively.
Asked by Senator Sotto how much was cut from
the ARMM budget, Senator Drilon stated that the
Committee cut PI 09,043,000 from the PII ,717,707,000
budget submission in the GAB-House version. He
said that except for thc Special Purpose Fund of the
ARMM governor and vice governor, none of the
other services were affected by the cut.
Initially, Senator Legarda observed that for many
years there have been many internally displaced
persons in Datu Piang, Maguindanao due to the
conflict, and she believed that it is the responsibility
of the OPAPP to address the problem of IDPs.
But she asked who would address the problem now
since the budget of the office has been realigned to
other agencies. Senator Drilon said that subject to
confirmation, it is now in the budget of the DSWD.
But Senator Legarda recalled that when asked
the same question about the IDPs, the response of the
DSWD officials was that there was no allocation from
the local government for that program. In reaction,
Senator Drilon stated that subject to confirmation,
the budget is under the Pamana Fund to be imple-
mented by the DSWO and not the ARMM.
As regards the Simuay River, Senator Lcgarda
observed that it always overflows because of
FRIDAY, NOVEMBER 18, 2011
siltation, waste, water lilies, et cetera. She stated
that while Cotabato City is not part of the ARMM,
the river affects many areas in the ARMM.
She said that the local government had sought
the help of the OPWH to dredge the river but no
assistance came.
On whether dredging projects are provided for in
the OPWH budget, Senator Drilon believed that such
activities fall under the item on flood control of the
OPWH, subject to confirmation.
Thereafter, Senator Legarda requested that more
definitive information be given and placed on record.
She stressed that the lOPs in Maguindanao and
other areas within the ARMM, the pollution of the
river system and the relocation of the people living
along the riverbanks are among her concerns.
OF THE AUTONOMOUS REGION
IN MUSLIM MINDANAO
of the Autonomous Region of Muslim Mindanao was
suspended.
It was 11:22 a.m.
COMMISSION ON ELECTIONS
Commission on Elections.
In presenting the budget of the Commission on
Elections (Comelec), Senator Drilon stated that no
less than the newly confirmed Comelec chair, Sixto
Brillantes, Commissioners Lim and Lagman were in
attendance for the deliberation on the Comelec budget
to which PI 0,026,978,000 is allotted in 2012.
Senator Drilon informed the Body that out of
respect for the fiscal autonomy of the Comelec, the
Committee did not make any revision in the GAB-
House version which is higher by PI62,341,000
compared to the NEP, He said that the increase
represents the budget for 547 unfilled positions in the
Comelec and it would be up to its discretion whether
or not to fill them.
Senator Sotto stated that Senator Cayetano (A)
has waived his reservation to interpellate on the
Comelec budget.
COMMISSION ON ELECTIONS
There being no interpellation, upon motion of
Senator Sotto, there being no objection, the budget of
the Commission on Elections was deemed submitted
suspended.
11 was 11:27 a.m.
DEPARTMENT OF SCIENCE
AND TECHNOLOGY AND ITS
ATTACHED AGENCIES
Department of Science and Technology.
In presenting the budget of the Department of
Science and Technology (DOST), Senator Angara
stated that the biggest creator of domestic jobs in the
country is the science and technology sector. He
cited the BPO industry which has created almost
600,000 well-paying jobs and has earned the country
almost US$9 billion. He projected that in four years'
time, those numbers would increase to 1.3 million
jobs and about US$22 to US$23 billion in earnings.
He said that just as S&T is the number one creator
of jobs, ICT or the internet sector is the biggest
creator of wealth in the world right now. He cited
Google, Microsoft, Yahoo! and the YouTube as main
products of the internet.
661
Senator Angara stressed that S&T is a very
important sector to the country and if the projects
and programs outlined by Sec. Mario Montejo would
materialize in 2012, the new DOST would be going
out for new technologies to create more jobs. He
said that the programs would be focused on strategic
areas where practical solutions are needed.
The new DOST, he informed the Body, would
inaugurate five innovation clusters focusing on key
technologies. He stated that it will be the first time
that the academe, universities, government, industry
and private sector would combine in a public-private
partnership venture that would put together Filipino
talents and resources and multiply their output through
international exchange.
He stated that if there is PIOO in R&D money,
it can be multiplied by PI ,000 through the system. He
explained that industry, government and academe
would come in and invest in R&D, and with the
cooperative framework, through the DOST, resources
would be pooled from universities, academe, and
public and private research institutions.
Senator Angara then proceeded to explain the
five experimental clusters being developed by the
DOST together with its scientists and university
people, to wit:
I. Algae research. He said that this technology
is already well-advanced in other countries
especially in the United States. [n particular, he
mentioned an outstanding company in Iowa that
produces algae for animal feed. He explained
that the potential of the technology would help
produce animal feed that would be used as energy
fuel or would provide energy as well as protein,
corn and soya at a lesser cost. He hoped that
this vanguard technology may help the country
in its drive fOJ' food security as it will bring down
the cost of food in the country. He enumerated
the following institutions that will be involved:
The Central Luzcn State University, UP Visayas,
University of Southern Mindanao, apart from
PCAARRD, the research institute of DOST and
DA which is quite keen on producing cost-
effective and affordable animal feed.
2. Food security drive. He said that this involves
precision farming and smart agriculture. He
explained that precision farming simply means
taking advantage of satellite imaging and remote
sensing to determine soil productivity, climate
662
change, onset of drought and flooding, and
quality of growing crops. He said that all these
have ail'eady been taken for granted by farmers
in the West but this is something new in the
country. He stated that the purveyor of training
in the country will be the following institutions:
Mariano Marcos State University in Batac, 1I0eos
Norte; Visayas State University in Baybay,
Leyte; Xavier University in Cagayan de Oro,
and Ateneo Observatory and University of San
Carlos in Cebu. However, he said that since
there is lack of synergy among these universities,
the industry and government, they are being
brought together by this cluster.
3. Disaster management and climate mitigation.
He stated that climate change has introduced an
unknown, unpredictable and devastating factor
into food production. He explained that producing
food in the Philippines is hard because of the
country's archipelagic nature as well as its
proneness to natural disasters like typhoon and
earthquake, among others. He said that this is
even more compounded by the unpredictable
changes being brought by climate change.
Senator Angam revealed that Taiwan, Japan,
Korea, Australia, New Zealand, and the U.S. (Hawaii),
are all willing to help the Philippines. In this regard,
he said that the government has started to construct
and build a center that will teach LGUs on how to
cope with disaster when it strikes, and how to protect
the schools, children and pupils in cases of disaster.
Senator Angara said that if the triple disaster that
hit Japan recently - tsunami, earthquake and nuclear
leak - would hit any other country, he was almost
positive that pal1icular country would disappear from
the face of the earth but not Japan, because for so
many hundreds of years of being hit by so many
disasters, they have learned how to be resilient and
how to prepare their citizenry and public officials
on how to cope with disasters. He said that Japan is
slowly rebuilding and recovering, and hoped that
the Philippines will be able to do the same in the
next 10 to 20 years. He said that there is one typical
disaster management center in Kobe which the
Japanese government set up in the Hyogo prefecture
as a result of the Kobe disaster in 1996. He
emphasized that the government does not have to
wait for a Kobe-type of disaster to hit the Philippines
because Typhoon Ondoy alone was already a warning
lesson to the country.
FRIDAY, NOVEMBER 18.2011
Senator Angara said that the initial members
of the consortium are Bicol University, Ateneo
Observatory, UP Diliman, PAGASA, PHIVOLCS,
and Aurora State University. He informed the Body
that foreign governments are willing to provide the
country with the equipment and training if there
are physical facilities to hold and conduct the
equipment and training.
4. Cloud-computing and software as a service.
He disclosed that the Filipinos will be trained in
cloud-computing in Cebu where Morphlabs is
located, which is a private company that has
already invested almost $5 million into the facility.
He said that the government can tap the UP
Visayas, UP Diliman, Mindanao State University
and University of San Carlos to partner with
Morphlabs so that the company can provide the
latest laboratory and funds to augment govern-
ment and university funding.
5. Mining technologies. Senator Angara stated
that the Philippines has not even explored
10% to 15% of its mining resources because of
the natural fear among communities, especially
those in the provinces, against mining since
there are irresponsible mining companies that
will destroy the environment, livelihood and even
lives of communities. He expressed the need
for the introduction of mining technologies that
will educate communities in the provinces that
mining can be a source of jobs, wealth and
progress and not just environmental degradation,
disease and sickness to their communities. He
informed the Body that new technologies have
introduced bioleaching that is harmless and
friendly to the environment as this is plant-
based. He said that the people and community
leaders should be trained on responsible mining
technologies at hand so that the people can now
benefit from the natural bounties that nature and
God has given the country.
Senator Angara said that in the end, the greatest
renewable resource in the Philippines is not so much
wind, sun or water but its people. He added that the
people are the nation's richest renewable resource
and this is the reason why it is important to
concentrate on education and training, and to bring in
new technologies wherever it can be found as it is
now easy to access technology through the power of
the internet. He believed that if the government can
lift the living standards of the people, they would opt
to stay in the country and enjoy the pleasure of the
r
FRIDAY. NOVEMIlER 18. 2011
company of their family and friends. He posited that
the biggest and the most active vehicle to realize that
dream, if done right, is the Department of Science
and Technology (DOST).
Senator Angara said that the government has
that unique opportunity to make the DOST not simply
a passive grant-giving and research manager but an
active agent of progress and development in the
country. He lamented that the Philippines is beating
only Cambodia and Timor Leste in the ranking
among Southeast Asian countries. He said that he
wanted to see the Philippines at least at par with
Thailand because it is the Filipino farmer who taught
the Thai farmer to plant rice in the Philippines and to
do genetic engineering in the country; Thailand's
economy is four times bigger than the Philippines and
the country spends P20 billion for rice impolled from
Thailand. He pointed out that because ofthe extensive
tlooding in Thailand, the Philippines will have to rely
on its own people, talent and ingenuity to survive
the highly competitive world.
He cautioned that if the country does not move
fast enough, Vietnam will overtake the Philippines in
two years time. He said that the Philippines should
be competitive so that the youth and the next
generation will not blame the current generation for
defaulting on that role and making them lose their
heritage.
Senator Legarda said she wanted to know about
PAGASA's climate data section archives of meteo-
rological data which has been storing weather-related
data gathered by the 75 field stations for more than
50 years and used mainly by PAGASA for its climate
change projection scenarios. She said that based on
her understanding, the data cannot measure seizure
temperature, surtace water or sea level rise but the
unit stores various impOllant data like rainfall, wind
speed, humidity, even strong weather disturbances.
Asked whether the data bank which collects all
these unprocessed data is actually utilized by
PAGASA, if this data management unit is shared
with other agencies of the government, and whether
the climate data bank and the climate data manage-
ment unit are adequately funded under the 2012
budget, Senator Angara replied in the affirmative,
saying that the data bank will be utilized for projection
from 2012 to 2050.
663
Senator Legarda observed that since the data
does not include surface temperature of the sea, this
may not include research which could be useful for
the DA and the BF AR for fish yield.
Senator Angara said that the meteorological buoy,
which measures the rise and fall of the ocean water
and temperature, would help fisherfolk too.
Noting that the monitoring of sea temperature
and level can already be done, Senator Legarda
asked if the information is readily available to tech-
nical, scientific and government agencies, including
the LGUs so that they can warn their constituents
in times of natural hazards. [n response, Senator
Angara explained that the information can be accessed
by technical people in some agencies as he stressed
that there is a need to put together some sort of
academy on disaster to spread knowledge about new
technologies in layman's term. He added that there
is a cluster precisely for that.
Senator Legarda stated that the DPWH, DA and
DENR are three of the most relevant agencies,
and she believed that the DOST is necessary in the
reactivation of the task force on water resources.
She stated that the incident in San Roque dam and
the tragedy in Central Luzon were caused by lack
of coordination among agencies that manage water,
irrigation and power generation. She relayed the
information given her by Secretary Singson that
there are 38 government agencies that manage water
including a unit in the DPWH with 240 personnel
that measures rainfall three times a day and keep the
data to themselves. She asked if the PAGASA unit
that handles the data bank has closely coordinated
with the DPWI-I rainfall unit.
Senator Angara stated that the problem about
water is not simply because of the antiquated protocols
on water re leases from dams but also the various
overlapping agencies with no central direction. He
said that precisely, there is a task force that would
coordinate all national, provincial and regional agencies
to rationalize water management. As regards rainfall,
he pointed out that most of it flows to the sea and is
not stored in water catchment areas which other
countries do. He pointed out that water is the source
of food and life, and the very limited fresh water
resource of the planet, which is only 3% of the total
water source, is the root cause ofthe problems about
water. He also noted that the flooding caused by
antiquated water protocol has to be looked into,
'r
664
which would be easier to do than reforming the
water structure which should be done immediately,
Senator Legarda agreed to the suggestion of
Secretaries Almendras and Singson that there must
be one among the 38 agencies that can act decisively
even before a crisis strikes, She recalled that the
heads of these agencies unanimously pointed to the
DOST since it has engineers and the scientific
knowhow to make that decision.
Senator Angara stated that the structure was still
being studied and the process was ongoing. He said
that the choice of lead agency and chief technical
adviser would be set aside for the meantime since
the main concern of NEDA, DPWH and DA is to
set up an advanced, progressive and proper structure
and thus remove the overlapping and expensive
mode of supplying water.
To the observation that the DOST was not
informed of its assignment in the task force, Senator
Angara clarified that the executive order enumerates
the division of labor among the departments, and for
its part, the DOST has been specifically tasked to
monitor rainfall and do flood forecasting.
As regards flood risk mapping, Senator Legarda
pointed out that the geohazard maps with I :SO,OOO
scale have been completed by the DENR, however,
the geohazard map with a I: 10,000 scale would be
more useful to some LGUs like Batangas and Iloilo.
She asked whether the DOST, which has the
capability to come up with a flood risk map, has
an allocation for it in its 2012 budget so that it can
assist the DENR in the geohazard mapping. Senator
Angara replied that Mindanao has been thoroughly
mapped for geographical hazards, as well as mining
and underground resources. However, he said that
Luzon and Visayas have not yet been mapped but
there was a standing offer, still in the proposal stage,
from the Japanese and Spanish governments to do it
in a I :S,OOO scale, which is much clearer. He lamented
that the country is quite slow in producing this kind
of planning despite the fact that several governments
are offering ODA.
MANIFESTATION OF SENATOR LACSON
Senator Lacson stated that it cannot be denied
that the DOST, a prime mover of the Philippine
economy, has a budget ofP2,027,3SS,000 in the 2012
GAB and an additional P60 million - PI 0 million for
the Committee on Research and Development for
algae research and commercialization and PSO million
for PAGASA for the establishment of the Aurora
Disaster Management Training Institute. He said
that after identifying additional sources of allocation
from the Special Purpose Fund (SPF), where the
different departments and agencies get their addi-
tional funding, he would propose to augment the
budget of DOST. This year, he mentioned that the
SPF has P232,498, ISO,OOO, including a P66.9 billion
Unprogrammed Fund. With such big allocation, he
urged the chair and vice chair to support his initiative.
To the observation of Senator Angara that
Senator Lacson has been waiving his PDAF in
favor of the DOST, Senator Lacson clarified that he
took P60 million from another agency and had it
transferred to the DOST. He explained that it was
upon his own initiative and he had manifested that
it be used for R&D.
On the five clusters reflecting the initiatives of the
Department of Science and Technology, specifically
food security, the Chair (Senator Honasan) said that
it found inspiration and encouragement in the statement
of Senator Angara that the most important renewable
resource is the people, for which reason, it wanted to
raise the issue of convergence.
The Chair recalled that the UN World Food
Program has identified Brazil as the country which
defeated poverty the fastest. It recalled that in 2003,
when Pres. Luiz Inacio Lula da Silva took office,
he declared that everyone in Brazil will eat three
meals a day, thereby launching the "Zero Hunger
Program": instead of food subsidies, Brazil invested
in a school feeding program and from 2003 to 20 II,
it has lifted 24 million Brazilians out of poverty even
when in 20 I 0, the total population of Brazil reached
190 million. The Chair added that the Brazilian
government required that one-third of the food being
fed to students of a certain locality be purchased
from farmers of said locality.
So as to protect and secure the most strategic
and important resource of the country - the next
generation, the Chair stated that they must be sheltered,
clothed, educated and fed to make them healthier,
smarter and competitive with their generation in
other counties. It also mentioned that the DOST has
a Food and Nutrition Research Institute.
FRIDAY. NOVEMBER 18. 2011
On the issue of convergence, the Chair stated
that the DOST must be strategically engaged in
protecting the children and asked what the direction
was being taken to do so.
As regards the announcement of Secretary
L1uistro that undernourishment among public school
children is being addressed by the DepEd with the
aim of improving the academic performance of
students as they experience difficulty paying attention
to lessons in class because of hunger, the Chair
asked if the Food and Nutrition Council Research
Institute (FNCRI) is engaged in any attempt to
imaginatively and innovatively address the problem
beyond the milk feeding programs and the nutritional
requirements. Senator Angara disclosed that there is
27%, or 27 out of 100, incidence of malnutrition in
Filipino children aged 0-5, the formative years of a
person when everything that is told to a child is
absorbed and assimilated by his brain, and half of
what he has learned during that period is what he will
carryon to adulthood. Given the fact that 27% of
children are malnourished, he said that it is no
surprise that 40% of these children, when they get to
Grade 1 up to Grade 3, already drop out of school
because they could not withstand the rigors of
schooling as malnutrition has devastated their body
and spirit.
For the 6-18 year old age group in school,
Senator Angara said that 30% are malnourished and
are either underweight or whose heights are stunted
compared to their Chinese, Malaysians, Singaporeans
and other Asian counterparts.
Senator Angara said that the role of the FNCRI
is to produce baby food. He recalled that when
he introduced the breastfeeding law in 1990, his
colleagues wondered in amusement why he was
interested in the subject. After explaining to them the
benefits of breastfeeding, he said that everybody
signed up as coauthor of the measure. He believed
that the breastfeeding law, the production of baby
food and his Oh My Gulay! (OMG) project go hand
in hand in fighting the silent hunger that is plaguing
the country, likewise stressing the need not merely
on a school-wide scale but on a national scale.
Citing a report by the Philippine Children's
Foundation Data that 100 Filipino children aged 0-5
die everyday, the Chair noted that the cause of death
is not only malnourishment but also malnutrition-
related causes. Affirming what he said were dismal
665
statistics, Senator Angara underscored the need
for convergence as the key to combating child
malnutrition.
OF THE DEPARTMENT OF SCIENCE
AND TECHNOLOGY AND ITS
ATTACHED AGENCIES
objection, the budget of the Department of Science
and Technology and its attached agencies, namely,
the Office of the Secretary, the Advanced Science
and Technology Institute, the Food and Nutrition
Council Research Institute, the Forest Products
Research and Development I nstitute, the Industrial
Technology Development Institute, the Industrial
Technology Development Institute, the Information
and Communications Technology Office, the Metals
Industry Research and Development Center, the
National Academy of Science and Technology, the
National Research Council of the Philippines, the
Philippine Atmospheric, Geophysical and Astronomical
Services Administration, the Philippine Council for
Agriculture, the Forestry and Natural Resources
Research and Development, the Philippine Council
for Aquatic and Marine Research and Development,
the Philippine Institute of Volcanology and Seismology,
the Philippine Nuclear Research Institute, the
Philippine Science High School, the Philippine Textile
Research Institute, the Science Education Institute,
the Science and Technology Information Institute,
the Technology and Promotion Institute, and the E-
Government Fund, were deemed submitted for the
Upon motion of Senator Satta, there being no
objection, the Chair suspended the session until three
o'clock in the afternoon.
II was 12:26 p.m.
At 3: II p.m., the session was resumed.
DEPARTMENT OF TRANSPORTATION
AND COMMUNICATIONS
Department of Transportation and Communications.
666
Asked by Senator Satta if the L TO receives
anything when a driver undergoes drug testing as a
requirement for the renewal ofhislher license, Senator
Recto replied in the negative.
Senator Satta stated that he and Senator Honasan
had filed a bill removing mandatory drug testing as a
requirement for the issuance of a driver's license.
He recalled that when he was chair of the Dangerous
Drugs Board, he found out from the records of the
Department of Health that from 2002 to 2009, only
0.06% tested positive out of the 24 million drivers
who took the test. He expressed doubts about the
accuracy of the result as he concluded that RA 9165
was not effective at all. For this reason, he proposed
that mandatory drug testing be conducted instead on
drivers who were involved in accidents.
Senator Recto said that according to the DOTC
secretary, he would execute the laws passed by
Congress. For himself, he asked to be made coauthor
of said measure.
Senator Sotto reasoned that removing the
requirement would save drivers P400 for a drug test
which is not effective at all.
Asked if the National Telecommunications
Commission (NTC) is under the DOTC, Senator
Recto replied that it is under the Office of the
President. However, he said that he would entertain
questions about the agency's budget.
Senator Sotto recalled that he suggested in the
last LEDAC meeting that a study be made on his
proposal to require the telecommunication companies
to register prepaid SIM cards, noting that the Philip-
pines is one of the very few countries in the world
which does not require it. He said that prepaid
SIM cards have been used in kidnapping, carnapping
as well as in bombing but the NTC cannot trace
their owners.
Senator Recto supported the proposal as he
added that SIM cards can also be cross-checked
based on the quantity sold and the tax payments
made. He said that it could turn out to be beneficial
to the Bureau of Internal Revenue.
Asked whether the NTC has done anything
about the abuse of prepaid SIM cards, Senator Recto
said that the NTC supports the position of Senator
Satta and it is continuously doing a study on the
matter.
Senator Sotto noted that the NTC had once
directed the telecommunication companies to register
their prepaid SIM cards but they were able to secure
a temporary restraining order (TRO) from the court
which was lifted this year.
Asked whether the NTC could enforce the
registration at this point, Senator Recto said that the
NTC is doing it in a prudent manner and its technical
working group is working with the House on a piece
of legislation.
On whether telecommunication compa11les are
against registration, Senator Recto said that the
private sector is expected to have some difficulty
doing it and naturally opposes it as it did in the past.
Senator Sotto narrated that he heard one of the
lawyers of a telecommunication company say that it
would be difficult to register prepaid cards which
were already in the market. However, he contested
the claim, saying that if the company can actually
monitor the SIM card load status, it is possible to
register the prepaid cards.
Upon motion of Senator Lacson, the session was
suspended.
II was 3:21 p.m.
At 3 :22 p.m" the session was resumed.
Preliminarily, Senator Lacson lauded Senator
Recto for his unconventional yet enlightening
sponsorship speech on the budgets of agencies under
his jurisdiction.
In his visual aid, Senator Lacson pointed out that
the national government expenditures is shown under
Section B of the Budget Expenditures and Sources
of Financing (BESF) which is divided into three
sections, namely, Personal Services by Agencies which
is a sub-special purpose funds with various line items;
'r
FRIDAY. NOVEMBER 18.2011
Maintenance and Other Operating Expenses (MOOE)
by departments which is also a sub-purpose fund
with various line items; and Capital Outlay (CO).
He explained that the national government
expenditures are usually presented in historical data
covering a three-year period: the actual data in
the prior year, the adjusted data for the current
appropriation, and the projected data for next year's
appropriation.
Focusing on the MOOE of the DOTC, Senator
Lacson asked why there were no actual data for
the year 2002, adjusted data for 2003, and projected
expenditure for 2004 for Personal Services, Senator
Recto assumed that the DOTC did not submit the
information to the DBM.
Thereafter, Senator Lacson presented the
projected expenditure and actual expense for the
following years:
l'MR PROJECTED ACTUAL
EXPENDITURE EXPENDITURE
2005 P514.2 million P940 million
2006 Pl.059 billion PI.5 billion
2007 P 1.20 billion P1.342 billion
2008 P1.5 billion ---------
2009 P 1.884 bill ion P1.898 billion
2010 P 1.269 billion Pl.462 billion
He noted that the same is being adopted for the
2012 BESF.
Under the item "rent," Senator Lacson said that
reduction in the figures in BESF for 2004 and 2006,
as well as for 2005 and 2007 appears normal but
minimal; however, the reduction in the BESF in 2006
was shocking because the projected expenditure was
P2J billion against the actual expenditure of Pl59
million as shown in the 2008 BESF.
Asked what happened considering that the rentals
are usually covered by lease contracts where amounts
are already fixed, Senator Recto said that the budget
in 2006 was actually a reenacted budget. He noted
that the same slide showed that the adjusted data
amounted to P1.56975 million as against the actual
expense ofP1.59529 million.
At this point, Senator Lacson asked for a detailed
explanation on the difference in having a reenacted
bUdget.
667
Senator Recto conceded that indeed, there was
a huge discrepancy between the projected budget
of P 1.59 billion for 2010 and the actual P5 billion.
However, he clarified that such discrepancies only
occur in instances when the agency operates under
a reenacted budget as had been the case for the
DOTC in 2006 and 2007. For instance, he noted that
in 2006, the Pl59 million projected rental budget of
the DOTC under MOOE ballooned to P5 billion. He
said that Secretary Roxas was not involved in the
implementation of the rental increases as the latter
was not yet in office at the time.
Senator Lacson underscored the importance of
having Congress review the agency's management
of previous budgets rather than focusing only on
current proposed appropriations. Relative thereto,
Senator Recto explained that the discrepancy was
due to the increase in the equity rental payments for
the MRT-3, which would be pegged at US$130
million in 2012.
As regards the observation that such situations
reflect poor planning on the part of the DOTC,
Senator Recto noted that equity rental payments for
MRT-3, which is a 25-year Build-Operate-Transfer
(BOT) project initiated in year 2000, comprised the
biggest item in the MOOE budget of the DOTe.
As such, he said that there would be certain years
when more payments are made on the project.
For instance, he said that these payments would rise
from US$130 million in 2013 to US$150 million in
2025 for a total of US$2.399 billion.
Asked why the projected P2.557 billion in 2008
was lowered to P1.63 billion, Senator Recto clarified
that equity rental payments do not follow normal
patterns. He said that the US$39,999,996 which was
paid in 2008, was a bigger amount since it compensated
for deficiencies in payments the previous years.
Noting that there should be more consistency
between projected and actual annual figures for
taxes, insurance premiums and other fees, Senator
Lacson sought an explanation for the discrepancies
in the figures for the following years:
DOTC BUDGET FOR TAXES, INSURANCE
PREMIUMS AND OTHER FEES
YEAR PROJECTED ACTUAL
2004 P32 million P76 million
2005 P29 million P256 million
2006 P29 million P 1.8 billion
.Y
r
068
2007
2008
2009
2010
P38 million
P200 million
PI65 million
PI42 million
P3, I billion
P2,7 billion
PL6 billion
P2 billion
Senator Recto explained that much of the discre-
pancy was also due to the importation of materials,
spare parts and equipment for the MRT-3 project
However, he expressed confidence that such situa-
tions would no longer happen under the leadership
of Secretary Roxas who was appointed to the
position last July,
Upon further queries, Senator Recto replied that
the amount of the budget that was paid for taxes,
insurance prem iums and other fees were not avai lable
at that moment but could be reflected in the records
of the Senate while figures for 20 I 0 should be in
the NEP,
On another matter, Senator Lacson asked on the
procedure implemented by the DOTC in insuring its
attached agencies, He noted that in the case of the
Cebu Port Authority (CPA) which has been insured
for P 117,712,500, the DOTC not only paid the GSIS
a facultative premium ofP504,892,000 as of January
20 I I but also paid Phil ippine National Reinsurance
Corporation (PHILNARE) the amount of P128,845
as legal commission for the latter's service of rein sur-
ing the CPA with the final insurer,
Senator Lacson sought clarification on whether
the GSIS owned a majority share of the PHILNARE,
which was created through a presidential decree of
former President Marcos in 1977, To save money on
commissions, he believed it would be better for the
DOTC to have GSIS as its final insurer.
Asked whether the PHILNARE actually receives
such commissions, Senator Recto replied that the
Senate Committee on Government Corporations and
Public Enterprises could make inquiries with the
GSIS regarding the matter.
Senator Lacson identified the directors of
PHILNARE and the shares owned by each one
as follows:
NRC director
Helen Dy
Robert Vergara
(GSIS general manager)
Roberto Crisol
Shares owned
100
1,000
1,000
Alfonso Salcedo Jr,
Gregorio Ty Yu
Jose Teodoro Limcaoco
DaniloGozo
Yvonne Yuchengco
100
1,000
100
1,000
100
Noting that most of the reinsurance for the
DOTC was being handled by Malayan Insurance,
Senator Lacson asked for the criteria being used in
the selection of final insurers, Senator Recto replied
that the Senate Committee on Government
Corporations and Public Enterprises could ask the
GSIS regarding its reinsurance policy,
Asked by Senator Osmefia whether Malayan
Insurance Company is the sister company of the
bank that did the PEACe bonds deal, Senator Recto
answered that it was the first time he became
aware of it
Asked by Senator Lacson about the government
policy on insuring its assets, properties and installations,
Senator Recto replied that all government's assets
are insured with the GSIS as he promised to look into
the policy on reinsuring,
On another matter, Senator Lacson bared that he
has received derogatory reports he received about
the qualifications of Atty, Teofilo Guadiz, the director
of Traffic Adjudication Service (T AS), who was
supposedly appointed L TO regional director for
NCR, In reaction, Senator Recto confirmed that the
same repOlis have reached the DOTC secretary
who would act properly on the matter.
Asked on the status of the ongoing study on how
to I itigate the case against Stradcom, Senator Recto
replied that Stradcom was still operating but it was
in a transition period because its contract will expire
on 2013 and both the DOTC and the L TO were
looking at the possible violation of the implementation
of the contract
Senator Lacson feared that the government might
have lost about P2 billion while the case was pending,
As to when the consession agreement started,
Senator Recto stated that the 10-year concession
agreement with Stradcom started in 1998 but was
extended by DOTC until 2013,
Asked who owns the data stored by Stradcom
when the contract expires, Senator Recto said that it
would remain with the L TO.
,r
On the reported threat of Stradcom that it would
take with it the data and the whole system once the
contract expires, Senator Recto said that the position
of the government is that it owns the data. Further,
he said that an administrative case had been filed
against Stradcom with the Office of the Secretary.
As to the effectiveness of the services offered
by Stradcom, Senator Recto explained that in general,
it is working but he acknowledged that just like
in other systems, there are glitches sometimes which
would be taken into consideration when L TO
considers bids in 2013.
To illustrate the glitches in the system, Senator
Lacson noted that plate number MAR-22 was issued
to two types of vehicle - an Isuzu Latero Wagon and
a Mitsubishi Pajero Wagon. He asked how it happened
when the system is supposed to be computerized and
technologically advanced. Senator Recto replied that
the L TO was resolving issues one at a time, for which
reason, it is reviewing the contract with Stradcom.
In the case of the issuance of the plate numbers for
two different types of vehicles, he said that the L TO
manually checks the data with the different L TO
offices and once it locates the other vehicle without
the data, it makes the proper correction.
On the observation that when Stradcom registers
an imported vehicle, it is supposed to charge only
once for a three-year period but actually charges per
year, Senator Recto clarified that in the past, the
registration was yearly but Stradcom revised it to three
years so that the government could collect revenues
in advance. But he agreed that lor Stradcom to collect
thrice for one transaction is a violation of the contract,
the reason it is facing an administrative case.
Upon motion of Senator Osmefia, the session
was suspended.
11 was 4:03 p.m.
Senator Honasan presiding.
On the matter of insurance payments, Senator
Osmeiia asked whether the GSIS has a monopoly
669
on all nonlife insurance on all properties owned
by government, including government-owned and
-controlled corporations (GOCC), and whether the
GSIS can dictate how much the premium should be,
Senator Recto answered in the affirmative.
Senator Osmefia observed that no insurance
company totally covers and takes the risk on the
properties that it insures, thus, it always reinsures in
order to spread the risk, for instance, with other big
companies like AIG and Marsh & McLennan. He
stated that for the last 50 years, the reinsurance
program of GSIS has been operationalized this way
whereby it retains only about 10% to 20% of the
original risk and spreads the remaining 80% of the
risk to reinsuring companies, several of which are
fly-by-night shell corporations registered in countries
that are virtual tax havens. For instance, he bared,
when a ship that belongs to PNOC Shipping &
Transport Corporation and insured by the GSIS sinks,
it files a claim with GSIS, the original insurer, but
the reinsurance company somewhere in the Virgin
Islands collapses itself, leaving GSIS holding the
bag. While the going is good, he said, the reinsurance
company collects all the premiums but when the
property is damaged by fire or any disaster, it puts
itself out of business.
As regards the Philippine National Reinsurance
Company (Philnare), another reinsurance company
of the GSIS that also does business with various
companies around the world, he said that there is a
need to subpoena its records, especially in light of the
report that GSIS owns 60% of its shares.
On another matter, Senator Osmefia inquired
about the construction of aerodomes in 2005 and
2006 to which he objected during the budget hearings.
He asked on the number of publicly constructed
aerodomes considering that every congressional
district was given P20 million to 30 million to set up
aerodomes without economic justification. Senator
Recto revealed that there were 86 aerodomes, 46 of
which were operational and have scheduled flights.
He gave assurance that the Committee would
provide a list.
On whether the other 40 aerodromes have any
chance of scheduling flights in the next five years or
if any service carriers have indicated willingness to
invest money and serve a particu lar aerodrome,
Senator Recto replied that there was none yet but
he assumed that if 10 million tourists coming 111,
670
a number of aerodromes would be viable, But he
admitted that at the moment, there were only 3 to
3,5 million tourists.
Citing the case of Indonesia, Senator Osmefia
stated that it has eight to 10 million tourists and
although this number is rising, they tend to visit one
place - Bali. He argued that there is therefore
no justification to put up an airport in a town 10
miles from Balikpapan or Banjarmasin or Manado
because people are still not going there. He stressed
that he was asking for the list of the 86 aerodromes
in the Philippines because they were built with public
monies and he presumed most of them are going
to be an absolute waste of funds now and in the
future, He noted that some existing aerodromes
have been expanded and many millions have been
spent for that purpose, yet there are still no service
flights due to lack of demand.
On whether the DOTC and the DOT undertake
economic feasibility studies, Senator Recto stated
that they do. However, he pointed out that some-
times, the politicians themselves want to have an
airport constructed in their district so they can
allocate a certain amount in the GAA for it. In this
case, he said, the mandate of the DOTC is just
to follow whatever is in the GAA.
Senator Osmefia stressed that the DOTC is
mandated to prepare and present a budget for approval
of the DBM and Malacafian, before it is presented
to Congress. He asserted that congressmen cannot
just demand that an airport be built in their districts
without any justification.
Asked if the DOTC even bothers to come up
with an economic justification for the construction,
extension, widening, upgrading or fencing of an
aerodrome, Senator Recto replied that it does. He
added that according to Secretary Roxas, the DOTC
intends to spend on airports that have traffic and
maintain the others that do not. The investments, he
said, would be toward airports that have commercial
operations. But he agreed with Senator Osmefia that
it is a waste of money to maintain aerodromes that
are not economically viable.
At this juncture, Senator Osmefta requested a
copy of the economic feasibility studies andjustifica-
tions for the constructed aerodromes, He stated that
he would like the Committee of Ways and Means
or the Committee on Public Services to conduct a
hearing to determine how public monies are being
spent. Senator Recto noted that those were valid
concerns and gave assurance that the DOTC wou Id
provide the information requested.
Moving on to another subject, Senator Osmefia
asked how many roll on-roll off (RORO) ports were
ordered from contractor Eiffel Matiere of France
and financed by BNP Pari bas. Senator Recto stated
that DOTC has PIO billion for 72 locations but
because the project was suspended nothing has
been built yet.
As to the number of RORO sites that are
feasible, Senator Recto said that only two out of the
72 RORO locations are economically viable, that the
value of the steel pilings is P2.6 billion; that the
payment for the other RORO projects was still being
discussed but there was no lawsuit yet; and that
BNP Pari bas, Eiffel Matiere's private funder, is fully
guaranteed by the French government.
Asked if there was public bidding for the
ROROs, Senator Recto stated that there was no
public bidding because the Official Development
Assistance (ODA) projects are government-to-
government; hence, public bidding is conducted
outside Philippine jurisdiction. He admitted, however,
that he was unaware if there had been a public
bidding elsewhere.
Asked why Eiffel Matiere was immediately
selected when there were other contractors, Senator
Recto said that he would have to ask the firm about
it. He emphasized that meanwhile, the DOTC was
focused on suspending the contract and preventing
further deliveries.
Senator Osmefia posited that for the sake of
future generations, Congress has to plug the loopholes
and ensure it would not happen again.
Moving on to another agency, Senator Osmena
observed that P66 billion worth of bridges were
ordered without bidding and most of them were
of no use.
Asked if the DOTC, the DPWH and the national
government were concerned about these continuing
scams that bilked Filipinos out of their money that
could have been used to build schools, Senator Recto
answered that the present Administration was likewise
concerned about these issues which is why the
;-r
contracts were suspended. He asserted that NEDA
shou Id look into the issue to ensure that the money
borrowed from ODA is for priority projects of the
Administration under the Medium-Term Philippine
Development Plan. He acknowledged, however,
that it was a supplier-driven credit which foreign
governments use to export to other countries.
Asked how supplier-driven projects constructed
by big manufacturers that never went through public
bidding can be prevented, Senator Recto believed
that the Legislative Executive Development Advisory
Council (LEDAC) should look into amending the
ODA law.
Senator Osmelia hoped that he can work with
the DOTC to ensure that th is type of scam is
prevented. However, he admitted that he has been
having difficulty in putting together NEDA documents
pertaining to the approval of bridges and ROROs.
Senator Recto gave assurance that he wou Id look
into it.
Proceeding to another matter, Senator Osmeiia
requested clarification on MRT bonds which have
a very complex financing structure. He stated that it
is almost impossible to explain to the public the
payout scheme which started at a very low base and
progressed at a very steep incline up to the end of
the 25-year period. He observed that there was a
buyout clause in the contract that set a particular
price which government has to pay in a paliicular
year. Further, he disclosed that it was impossible
to calculate the price on a straight line basis but
nonetheless, the contract was signed, sealed and
delivered. Senator Recto replied that he has not read
the contract but he was told there is a buyout clause
that can be exercised any time. He agreed with
Senator Osmelia that the contract was not a straight
line type of financing since there was a particular
price to be paid every year.
Senator Osmei'ia stated that the buyout price of
MRT bonds in 2008 was US$776 million. He asked
if it is the highest price the government would have
paid had it bought the MRT lock, stock and barrel.
Also, he mentioned that the bonds were traded at a
high discount because the government was not ser-
vicing the 15% implied interest on the bonds. Senator
Recto admitted that he was not fully aware of it.
Senator Osmei'ia further disclosed that since the
bondholders were not getting paid, there were voucher
671
funds as others picked up the bonds at great discounts.
Likewise, he bared that sometime in 2005 or 2006,
President Macapagal-Arroyo issued an executive
order instructing an inter-agency committee to study
the possibility of buying up the MRT bonds with a
view of a government takeover and refinancing.
When 70% or 80% of the bonds were collected, he
said, the bondholders told government they wanted a
higher price and so the Filipino people ended up paying
an enterprise value of US$I billion for the MRT.
Senator Osmelia stated that there were sti II
about 865 bonds not excluding the 17% held by three
local banks. He explained that if the bonds were
bought at more or less the same price plus another
US$137 million, the total amount of the bonds would
be US$I ,00 I ,000,000. Senator Recto countered that
the government has already paid for the 865 bonds
at 83% of their actual price.
But Senator Osmelia commented that if 17% of
the bonds were bought, it would have an enterprise
value of US$I billion which places the price of MRT
at about US$59 million per kilometer. However, he
believed that the actual cost of the MRT is US$40
million per kilometer, compared to both LRT 2 and MRT
which were built each at a cost of US$51 million per
kilometer. He inquired why government is paying
US$59 million per kilometer for a IS-year old MRT.
As regards the fare of MRT 3, Senator Osmefia
stated that it is PIS for three stops but there is a
proposal to increase it to P60 end-to-end. Senator
Recto denied there was such a proposal, saying that
the P 15 is end-to-end. He stated that although the
fare from end-to-end should be P60, government
thought it best to subsidize P45 and charge the
remaining PIS to the public. He said that if the
cost of maintenance and operating expenses were
to be covered by the fare, MRT has to charge the
public P20-P25.
But Senator Osmelia stated that based on the
LRT's 2011 Projected Operating Expense of PI.667
billion, not counting the equity rentals government
have to pay, the fare should be P 11.
Senator Recto clarified that the maintenance and
operating expenses are almost P2 bill ion, that is why
the Committee came up with PIS.
Senator Osmefia observed that the DOTC has
yet to buy the MRT from the Land Bank of the
672
Philippines (LBI') for an overpriced amount of
US$225 million, In the meantime, he said, the riding
public is burdened by the overprice. Since the MRT
was already recovering its operating expenses
from the passengers, he argued that they should
be paying only 1'50 which could go down if the
government would put the MRT in a legitimate
financing scheme.
Further, Senator Osmena averred that if
government decides to subsidize and charge the
public 1'35, it is still the people's money that pays
for the overpriced MRT. He recalled that in 2008,
Sec. Larry Mendoza refused to sign the contract
because it did not make sense to buyout the MRT
bonds for more than US$670 million ..
Senator Recto supposed that the Blue Ribbon
Committee and the Committee on Banks, Financial
Institutions and Currencies would tackle the issue
together in January 2012.
Senator Osmeila stated that the Committee has
learned many things in the hearings and studies
undertaken and would like to share its findings with
the Comm ittee on Ways and Means and the DOTC
which made a surprising stand in 2008. Since the
"Iongpals" was paid by LBI' and DBI', he asserted
that the DOTC was being made to buy it at 100% or
US$l billion. He posited that DBP did not want to
engage in peripheral business but it was holding the
bulk of the equity in the MRT 3 and it does not have
an exit strategy.
Senator Recto averred that government, through
the DOTC, already paid 15% to DBP and LBP.
Senator Osmel1a believed that the payments
were a waste of the people's money and that the
national government would be borrowing on a
25-year note.
suspended.
II was 4:39 p.m.
DEPARTMENT OF TRANSPORTATION
AND COMMUNICATIONS AND ITS
ATTACHED AGENCIES
of the Department of Transportation and Communica-
tions and its attached agencies, namely, Office of
the Secretary, Civil Aeronautics Board, Maritime
Industry Authority, the Office of Transport-ation
Cooperatives, Office of Transportation Security, Toll
Regulatory Board, National Telecommunication,
Commission and the Phi lippine Postal Corporation,
suspended
II was 4:42 p.m.
DEPARTMENT OF EDUCATION
Department of Education.
MANIFESTATION
OF SENATOR ANGARA
At the outset, Senator Angara stated that he
could not say he was pleased to present the budget
of the Department of Education (DedEd) because
it is a classic case of management of scarcity.
He recalled that he came to the Senate 22 years
ago, even then when the DepEd budget was discussed
and debated on the floor, the concentration was on
scarcity and not abundance - shortage of class-
rooms, textbooks, and teachers. Up to now, he said,
the country is still short on these items. He pointed
out that the challenge of managing 23 million
young people in the midst of scarcity is truly difficult
and he expressed pity to the person who managed
this huge institution. However, he opined that despite
the shortages and the suffering, managing the
Department is worth it because it is the place
where the nation is putting its trust in the future.
,r
He confirmed that the DepEd gets the largest
share of the national budget and that next year,
it will receive P238,766,000,000, But, he conveyed
the Education Secretary's wish during the committee
hearings that some of the shortages be bridged by
the end of 2012 because there are more challenges
facing the Department in terms of enhancing the
basic education system, He revealed that this year,
the Depaltment wi II be undergoing a top-to-bottom
review, introducing early childhood learning, mandatory
kindergalten, thereby adding two more years to basic
education, He said that it takes quite some patience
to work out, discuss and consult with all the
stakeholders and it also takes time and patience to
find the resources necessary to support reforms,
Senator Angara stated that this is the situation
at the DepEd and its officials were exerting a
mighty effort to introduce K-12, He said that at the
congressional level, the Early Childhood Act has
already been completed and was just awaiting
the almost ministerial automatic ratification of the
bicameral conference l'eport by both houses of
Congress, He added that the same process has
already been completed for the Kindergarten Act but
both Houses have yet to confront the K-12 issue
which is probably more complex and complicated
than the first two issues, But he expressed confidence
that by the time the DepEd shall have completed
its curriculum and program review by 2018, a full
basic education comparable to the rest of the world
can be offered to the Filipino youth,
suspended,
It was 5:02 1'.1/1,
Senator Legarda noted that there were only four
years left before 20 IS, the target year to achieve the
Millenium Development Goals (MDGs), Among the
many MDG commitments of the Philippines pertaining
to primary or elementary education, she asked if the
DepEd would have the budgetary support in 2012 to
enable the country to achieve the literacy goals set in
673
the MDGs or the capability to make a big turnaround
in four years' time considering the decline in enrolment
in elementary education from 2006 to 2007 and the
very minimal reversal in 2008,
Asked whether the Philippines by 20 IS would
have already achieved the MDG on universal primary
education, Senator Angara repl ied in the negative,
but he believed that by 2015, the Philippines would be
pretty close to achieving about 96% to 97% enrolment
Asked where the Philippines is right now in
terms of achieving the MDG goals for primary
education, Senator Angara replied that it is at 89,9%,
As to the changes in the curriculum the DepEd
has initiated and the kind of budgetary support it has
to speed up the process so that the Philippines can
achieve what its neighbors have tried to do, Senator
Angara remarked that for 2012, the budget of the
DepEd has jumped quite remarkably in absolute
amount of P22 billion, equivalent to almost 12%
which is quite a respectable increase considering
the bigger base of the budget of the DepEd in 20 I 1.
However, he lamented that judging by international
standards like those of UNESCO, the Philippines
falls far short of the benchmark of 6% of G DP
because the country's allocation is only 2, I % of
GDP, He said that it may still be lower compared to
the country's neighbors, He explained that it is not
the most ideal of figures but that is what the small
national income can afford,
On the quality of education and literacy, Senator
Legarda stated that initiatives to upgrade the quality
of education delivered to Filipino children must be
strongly supported given the fact that achievement
test results have been generally low and uneven
across regions, particularly at the secondary level.
To illustrate, she said that according to the 2008
Functional Literacy Education and Mass Media Survey,
about 20% of Filipinos who completed elementary
education and 10% of Filipinos who reached high
school were not functionally literate, She asked how
the budget would address the seemingly deteriorat-
ing quality of education and what steps were being
undertaken to ensure that an adequate number of
qualified and motivated teachers are given continuous
professional development.
Senator Angara stated that in the regional context,
the country's growth in literacy is second to Thailand,
which is the highest in the region, However, he
)1-" ~
674
admitted that the country's functional literacy, or
the ability to follow instructions, is low and those
who cannot read and follow instructions are as
good as i II iterate,
Relative to the budget, Senator Angara noted
that historically, the per head spending of the
Philippines on education is probably the lowest in
the region, and that political will is needed for educa-
tion to get the highest allocation, among other things
that are beyond the control of the Department, the
administrators and the people, so the politicians might
have to do more to help the education sector,
Senator Legarda asked if it was a matter of
resources as she pointed out that even with an
increase in the allocation for education, there was
nothing more to be done since resources were
limited, Senator Angara said that apart from having
resources, a sense of priority is also necessary, He
added that more resources could be allocated for
education but this was not being done,
Senator Legarda stated that schools in disaster-
prone areas, especially in the countryside, are among
the most vulnerable, so the destruction of schools,
learning centers, community-organized day care
centers and facilities, modules and instructional
materials by disasters, natural or man-made, and the
disruption of classes have a negative impact on
the quality of education being delivered to school
children, She disclosed that the UNICEF has come
out with a report on children's vulnerability to climate
change and disaster impact in East Asia and the
Pacific where the Philippines was specifically cited,
Apparently, she said, based on interviews, Filipino
children were affected not only by floods, typhoons
and other natural hazards, but also by the conversion
of their schools into evacuation centers, She asked
what kind of intervention was being done by the
DepEd to ensure that quality education and learning
are not constantly being threatened by disasters and
whether there is coordination among agencies of
government to limit the vulnerability of children,
In answer, Senator Angara mentioned the DepEd
special program, Hazard Resilient School Building,
currently being implemented in Regions III, IV -B and
V, He explained that while these school buildings
might not survive all types of disasters, they will
protect school children and double as evacuation
centers, Given the unpredictability of weather and
climate change, he believed that this is how school
building construction ought to be done in the future,
Senator Legarda asked if the geohazard maps
and flood risk maps were being used to address the
problem in classroom shortage, Senator Angara
explained that the geohazard maps are being utilized
in the construction of hazard-resilient school buildings,
However, he noted that the geohazard mapping is
still incomplete; only Mindanao is fully mapped while
the rest is still in the process of being mapped, He
added that over a period of five years, the DepEd
has tried to map and identify the school buildings,
almost 5,000 at the latest count, that are vulnerable
to hazards, He said that the next step would be to
vigorously pursue the construction of hazard resil ient
schools,
Senator Legarda recalled asking the DPWH to
assist the DepEd and the DOH in assessing the
structural integrity of school buildings and government
hospitals, She said that according to the DepEd, 588
out of the 685 schools inspected nationwide for
safety last year were found to have structural defects;
and that 869 schools built many decades ago were
still being used, She expressed concern that the
children might be in harm's way if the structural
integrity of the school buildings is not assessed
properly,
In reaction, Senator Angara pointed out that the
country's problem is more basic since it pertains
to shortages of classrooms, school buildings, desks,
et cetera, He said that the reconstruction of hazard-
prone school buildings, for instance, has not yet been
done since the shortages are yet to be filled,
Adverting to the UN ICEF report, Senator Legarda
reiterated that the Filipino children are among the
worst affected as they are exposed to climate change,
health risks, displacement, abuse and exploitation,
and education deprivation, She emphasized that climate
change is a real-time issue,
Senator Angara said that even before climate
change, the Philippines has been considered the
worst place for mothers and children because of high
maternal and infant Il,lortality rates, He lamented that
there is so much to attend to with so little time and
resources, He agreed that cI imate change adaptation
is very important, however, the basic needs of the
people and school system should be prioritized,
On improving the access of the indigenous peoples
(IPs) to education, Senator Legarda stated that the
DepEd has formulated a policy framework that aims
, r
to make the educational system truly inclusive and
respectful of learners, especially those belonging to
the minority groups. Senator Angara confirmed that
the policy framework is being pursued through several
methods like alternative delivery modes, accreditation
and equivalency program, special education and
madrasa for the Muslims.
Asked if that policy framework was being funded,
Senator Angara said that there is an allocation for
the policy framework for IPs, citing the amount of
P200 million available for the alternative delivery
mode programs and the Project E-Impact. He stated
that every aspect and level of the education
system, from pre-education, primary, secondary,
post-secondary, telliary, to graduate school, should
be looked into because the country is being left
beh ind by its Southeast Asian neighbors. He pointed
out that one additional year of education will create
opportunities for a person and it will add half a
percent to the country's GDP. He emphasized that
education gives a very high social and economic
return. He rued that the problem is so common yet
it is taken for granted. He noted that competitiveness
is also low as seen in the country's ranking in the
World Economic Form - 75 out of 144, the same
rank three or five years ago.
Senator Legarda asked how the country is doing
in terms of competitiveness, especially in English
linguistic skills, as she pointed out that China has
been very aggressive in teaching English when it
used to be very passive about it. She also asked if
there is a special language program. Senator Angara
said that with the introduction of Grades II and 12,
there is an opportunity to put communication arts in
Grade 12 as an elective. He underscored the
importance of reviewing the educational system to
improve and decongest the curriculum. He added
that Mathematics, Science and Communication should
also be improved in the primary curriculum.
Senator Legarda recalled sponsoring a measure
in 2003 which included ecology in primary education,
believing as she did that it would be instructional for
children whose parents work closely with nature.
Asked if it is being implemented by the DepEd,
Senator Angara said that it has been integrated in
Science and Social Studies. Senator Legarda pointed
out that the inclusion of the subject in the basic
education curriculum was meant to humanize the
issue of environment.
675
Senator Legarda noted that the Madrasah road
map, which DepEd created as embodied in
DepEdOrder No. 51 in 2004, identified various
objectives, including "to institutionalize Madrasah
education into the national education system to develop
consultation involving education stakeholders" and
"to undertake appropriate advocacy initiatives in
support of Madrasah education." Asked on the budget
for Madrasah education, Senator Angara said that
P300 million in the DepEd's budget for 2012 is the
counterpall budget of government to the AUSAlD
project not only for Madrasah schools in the ARMM
but also for the schooling of indigenous peoples.
Replying to further queries, Senator Angara said
that the budget to improve the competence of
elementary and high school public school teachers
could be found under the item "pre-service training"
for which P862 million for 2012 has been appropriated.
Senator Legarda aired the dilemma of majority
of the recipients of Metrobank's Outstanding
Teachers Award, in which she was among the
judges, of finding sponsors or government scholarships
for their postgraduate studies, as many of them could
not go past their masters degrees. Senator Angara
revealed that for 2012, a Faculty Development
Program under the CHED budget has been included,
particularly for the 3N Network which is a consortium
composed of 10 state normal schools. The program,
he explained, contains substantial amounts of money
for faculty training and development, in addition to
what the DepEd already provides for their own
training. He said that initially, 100 scholarship lots for
10 normal schools all over the country were made
available.
Since teachers are at the heart of education,
Senator Angara stressed the need for them to be
well equipped to deliver good education. He stated
that the current means towards this end is through
unconventional means whereby the individual teacher's
talent is enhanced with social ski lis, and they are
thought of organization and cooperation skills.
Senator Angara said that the DepEd, under the
leadership of Secretary Luistro, is of the belief that
to be able to teach subjects effectively, one does not
need to be formally educated as a teacher; for
instance, DPWH engineers could be tapped to teach
math subjects. He said that thinking out of the box
could address the lack of competent and qualified
teachers.
676
Senator Legarda said that Congress has been
trying to upgrade and improve the five-decade old
Magna Carta for Public School Teachers but
has not been successful in passing such a law.
She asked if there are efforts to address the
nonpayment of hazard pay, one of the issues that
crop up during pub I ic hearings. Senator Angara
replied that the DepEd budget contains a provision
for hazard pay in the amount of PI8S million,
although he admitted that it might not be able to
cover the entire backlog.
At this point, Senator Legarda again corrected
of what she lamented as an utterly false, baseless
and malicious information that is texted every elec-
tion campaign, the issue that she filed a bill to remove
the benefits of teachers, particularly their summer
pay. She believed that no person in his or her right
mind would do such a thing, as she disclosed that
she has, in fact, authored a bill for the Magna Carta
for Public School Teachers that aims to increase
their wages, salaries and benefits. She said that she
was glad that the DepEd family was around so that
when the issue crops up again during election time,
they would be able to address the issue accordingly.
Senator Angara expressed the belief that the
electorate is intelligent enough not to believe in such
false rumors as evidenced by Senator Legarda's
consistent topping of the polls. Senator Legarda said
that she just wanted to put the matter on record
being herself a product of Philippine education,
She said that she would not be where she is if not
for her very good teachers in the schools that she
attended and she would not want any teacher to feel
that there is any senator who is trying to deprive
them of any benefit that is due them, She reiterated
the nonexistence of such a bill that seeks to deprive
teachers of their benefits.
As regards teacher training program, Senator
Angara disclosed that the Philippine Normal University
is developing a teacher training module that is available
online which he hoped could be disseminated and
supported being the quickest and cost-effective way
of enhancing the capabilities of teachers.
Senator Legarda said that she would no longer
ask any questions on the budgets of the attached
agencies, although she expressed hope that the
budgets of the Philippine High School for the Arts
and the National Museum could be increased. She
announced that there would soon be a textile museum
within the National Museum.
On the assumption that the most important and
strategic resource of the nation are the children, the
Chair stated that while there is a temporary condition
of the lack of classrooms, teachers, books and other
teaching materials, it would be more than made up
and compensated by the fact that the government is
not lacking in vision and the required energies to
protect such strategic resource by making them
smarter, healthier, and more competitive so that they
could effectively compete with their contemporaries.
The Chair recalled that the 2005 budget of the
Department of Education provided for a Malusog
na Simula, Yaman ng Bansa feeding program
consisting of milk, eggs, coco pandesal, and vegetable-
based noodles, It said that the milk could be sourced
from a local dairy supplier or cooperative in localities
where such local suppliers or cooperatives are present
Further recalling the previous day's statement
of Secretary Luistro particularly on the proposal to
hit two birds with one stone in better addressing the
issue ofundemourishment among public school children
in the country "by expanding the feeding program to
15 provinces and a city within the school year" and
attempting "to improve the academic performance of
the students who are most vulnerable to dropouts,"
the Chair suggested instead the "hitting of three birds
with one stone." It stated that two birds would
constitute addressing undernourishment to improve
attendance in class, while three birds would constitute
undernourishment, education and sustainable poverty
alleviation which would reflect on the operationalization
of the convergence thrust of government.
Asked by the Chair on the status of the feeding
program, Senator Angara replied that P77 million has
been allocated for 20 II for school-based pure feeding
program targeting kindergarten and Grades I, II and
III pupils, ages five to nine years old. He said that
when other interventions such as nutrition education,
Gulayan sa Paaralan, and medical/dental/optical
services are added to the amount, the total amount
would be P130 million. He said that half of what is
being taught to a child between ages five to nine
would be remembered by him during adulthood,
his brain having such great capacity to absorb, is
malleable and easily taught. He said that it was
unfortunate that th is aspect was being neglected,
as evidenced by reports that almost 37% from ages
o to five are underweight and underheight.
'r
Senator Angara said that the number of incidence
is still not acceptable at 30% even if it is smaller,
percentage-wise. He lamented that at present, there
is a growing generation of stunted Filipino children,
both mentally and physically, as a consequence of
which, there is high dropout rate in Grades I to III,
and he attributed it primarily to the fact that most
of the children in Grade I are hungry and cannot
stand the rigors of the classroom while some are not
yet ready for school. Given these circumstances,
he believed that the budget allocation which included
medical, dental and optical services could be
considered puny.
He noted thaI another department with a huge
budget is the DSWD which has P2.8 billion for its
supplemental feeding program. Speaking of conver-
gence, he recalled that during the hearings, he
suggested that Ihe school feeding budgets of
DSWD and DepEd be pooled together, since both
are trying to respond to the same problem of
malnutrition. He lamented, however, that he has
just read a written response from the DepEd saying
that his proposal was not possible while the DSWD
explained that its feeding program is dedicated to
three and four year-old children. He maintained
that the age of the children should not matter since
they all need intervention. He stressed that the
segmentation ought to stop immediately to give way
to convergence and cooperation between the two
agencies. He said that in synergy, the country's
peso could go further.
Senator Angara said that he would reiterate his
suggestion to Sec. Dinky Soliman. He recalled that it
was he who pioneered the school feeding program in
1997 because he bel ieved in the importance of the
formative years of children. He said that the school
menu was based on the one scientifically formulated
by the Food and Nutrition Institute of the DOST as
well as the National Nutrition Council of the DA.
He stressed that the matter ought to be given priority
and that the concerns could be answered adequately
through the deployment of the huge pooled money of
almost P3 billion.
The Chair recalled that when Senator Legarda
asked whether the problem was just a question of
resources, Senator Angara clearly and categorically
replied that it was also a question of priorities.
Taking these into consideration, it said that the
assumption is that the care of the children, the most
precious and most strategic resources of the country,
677
shou Id be on the top of the national order of priorities
and shou Id serve as the measuring device for the
climate change advocacy of Senator Legarda, the
concern for the Filipino family, the pro-life advocacy
of the Majority Leader as well as Senator Angara's
aggressive approach towards education. It stressed
that the defining character should be to serve the
objective of protecting children at all cost, for the
present and for the future. Ironically, it said, the
timeline within which intervention is allowed
through nutrition is just one-half of the double edged-
situation. It pointed out that children are not just
malnourished; they are actually dying based on the
datum that malnutrition is killing 100 Filipino children
everyday. If that is how the government takes care
of its strategic resources, he said, the country has
serious problems.
Illustrating how convergence can be utilized to
help the parents of the children, like the farmers, the
Chair said that the DepEd can converge with the
Department of Agrarian Reform and the Department
of Agriculture by purchasing the food being used in
the school feeding program from the poorest farmers
and agrarian reform beneficiaries. It agreed with
Senator Angara that a clear sense of national priorities
should be developed.
The Chair commended Senator Angara for
being a certified statesman, proof of which was
his "Oh My Gulay" project which sounds simple
but actually hits the crux of the matter. It noted that
in the ancient world, heroism was not defined in
iconic terms but when ordinary people such as
parents, men and women, young or old, build for the
next generation.
Senator Angara thanked the Chair and said they
have no choice now but to decide on investing more
in education and training people especially in
preserving and conserving the most precious resource,
the children.
suspended.
11 was 6:01 p.m.
At 6:0 I p.m., the session was resumed.
678
OF THE DEPARTMENT OF EDUCATION
the budget of the Department of Education and its
attached agencies, namely, National Book
Development Board, National Council for Children's
Television, National Museum, Philippine High School
for the Arts, and DepEd Building Program, was
suspended.
It was 6: 03 p.l11.
DEPARTMENT OF TRADE AND INDUSTRY
Senator Angara presented the Budget of the
Department of Trade and Industry, including its
attached agencies, totalling P3,033,573,000. He
described the DTI as the designated driver for job
creation and the promotion of trade and investment.
Senator Angara said that the DTI's principal
thrusts for 2012 include industry development and
investment promotion, the development and promotion
services of micro, small and medium-sized enterprises,
and the promotion of international trade negotiations,
facilitation and promotion. He stated that the inter-
connected global economy ought to prompt the
government to exert more effort in attracting
investments, which comprise one-third of global
GDP, and trade, which makes up two-thirds of global
output. He lauded PEZA Secretary General Lilia de
Lima and Board of Investments Undersecretary
Cristino Panlilio for their efforts to generate more
trade and investments for the Philippines. However,
he pointed out that although the BOI had attracted
up to P337 billion in investments, exports in 2011
went down by 3% compared to the previous year.
Amid the economic challenges facing the world
particularly the serious economic downturn in the
European Union, United States and Japan, Senator
Angara expressed hope that the government would
take steps to stimulate the domestic economy and
interact more aggressively with more Asean neighbors.
He noted that the Philippines would have a sufficient
market if it strengthened free trade relations with
China. He expressed hope that the DTI would
ensure that the Philippines not only survives the
recession but also prospers in the long run.
Stating that she had authored the Micro, Small
and Medium-Sized Enterprises (MSME) Law which
was being implemented by the DTI, Senator Legarda
pointed out that the fact that more than 90% of the
economy was being run by MSMEs proved that the
sector was indeed an economic driver.
Senator Legarda explained that RA 9501
(amended MSME Law) provides more assistance to
entrepreneurs by requiring lending institutions to
allocate at least eight percent of their loan portfolio
to MSMEs; moreover, the law sought to provide
access to new technologies and regular entrepreneur-
ship training programs for workers along with a
comprehensive development plan (0 ensure viability
and growth of MSMEs in the country. She recalled
that Senator Angara also helped raise the ceiling
for qualification as a micro-enterprise to P3 million
from PI.5 million. In view of the importance of the
MSMEs, she hoped that the sector would be given a
budget for 2012 as it had not received any allocation
the previous year.
Asked how the MSME sector was doing and the
DTI's initiatives to further promote micro enterprises,
Senator Angara said that it was likely that there was
no budget for it.
Senator Legarda urged Senator Angara to find
ways to realign or increase the DTI budget for this
purpose. She suggested that the unprogrammed
Special Purpose Fund be realigned or that the
Committee include a budget for microenterprises
which include the I ikes of small sugar manufacturers,
cloth weavers, which are the drivers of the rural
economy and the engine of economic growth. Senator
Angara replied that P583.991 million is the allocation
for MSMEs in 2012 which would be used for training
and capacity-building as well as for providing equipment.
Asked about the Design Center of the Philippines,
Senator Angara replied that the proposed Design
Council Act would allow the DTI to enlarge the
scope and reach of the Design Center, which was
created to help small entrepreneurs have more
exposure to market their products through patlicipation
in trade fairs. This, he believed, would be of much
assistance to MSMEs particularly since creative
industries are the most prolific and productive in the
product and services sectors.
As regards the observation that design and
packaging were key elements to successful marketing,
Senator Angara said that the Design Center, which
had a P73 million allocation, was also finding ways to
improve the packaging of products and services of
MSMEs. He pointed out that the country has an
abundance of creative people who would greatly
benefit from government's assistance. Moreover, he
said that I 8% of the DTI' s total budget was set
aside for SMEs.
Asked whether the continuous application of the
MSME law would have the auto project under it,
Senator Angara replied that P67 million had been
allocated to it
Relative thereto, Senator Legarda expressed her
intention to enter into a more lengthy discussion on
MSMEs after the passage of the DTI budget She
said that she intended to meet with the head of the
Center for International Trade Expositions and
Missions (CITEM) to discuss the possibility of having
the DTI launch an Asean trade fair that is similar
to European trade fairs. She suggested that the
Philippines, through CITEM or the Philippine Trade
Training Center, organize an Asean trade fair like the
biannual Maison & Objet Trade Fair Paris which
showcases the best European products in furniture,
clothing, textile, handicraft, kitchen, bathroom design,
gifts and souvenirs. While having one Asean trade
fair rotating among member-nations might seem a
difficult undertaking, she expressed excitement over
holding such an event
She suggested that SMX MOA, the PTTC, the
World Trade Center and other areas be used as
exhibition centers where buyers and exporters from
the Philippines and other Asean neighbors can
converge and trade their products and indigenous
ailS and crafts.
Asked whether the DOT has an allocation for
such programs like an Asean Trade Fair, Senator
Drilon answered in the affirmative, adding that there
is allocation of P88 million for the biannual CITEM
exhibits as he welcomed the proposal of holding a
separate Asean Trade Fair.
679
Senator Legarda opined that the cooperation of
Asean countries must be solicited aside from the
different provinces that also have their own products
to showcase.
DEPARTMENT OF TRADE AND INDUSTRY
the budget of the Department of Trade and Industry
Judiciary and its attached agencies, namely, the
Office of the Secretary, Board of Investments,
Construction Industry Authority of the Philippines,
Construction Manpower Development Foundation,
Philippine Trade Exposition and Missions, Center for
International Trade Expositions and Missions, Cottage
Industry Technology Center and the Product
Development and Design Center of the Philippines,
suspended.
It was 6:33 p.m.
PHILIPPINE DRUG
ENFORCEMENT AGENCY
Philippine Drug Enforcement Agency (PDEA), which
has an allocation of P643, 241, 000 under the 2012
GAB and the same as what is contained in the NEP
for 2012. He said that the Committee on Finance has
not recommended any change in the budget proposal
for PDEA.
MANIFESTATION
OF SENATOR SOTTO
Senator Sotto manifested that Senate President
Enrile and Senator Cayetano (A) have withdrawn
their reservation to interpellate on the PDEA budget
He said that Senate President Enrile would submit
an amendment to the PDEA budget on Monday,
November 21,201 L
680
OF THE PHILIPPINE DRUG
ENFORCEMENT AGENCY
objection, the budget of the Philippine Drug
Enforcement Agency was deemed submitted for the
suspended the session,
11 was 7:38 p,m,
OTHER EXECUTIVE OFFICES
Senator Drilon presented the budgets of the
Other Executive Offices, namely, the Authority of
the Freeport Area of Bataan, Cagayan Economic
Zone Authority and Zamboanga City Special
Economic Zone Authority,
Upon motion of Senator Dri Ion, the session was
suspended,
It was 7:38 p,m,
Upon resumption, Senator Drilon stated that PI 00
million is allocated to the Authority of the Freeport
Area of Bataan in the 2012 National Expenditure
Program which is similar to the appropriation under
the GAB. He said that the Committee on Finance did
not introduce changes in the budget and adopted the
GAB-House version,
Asked by Senator Osmefia whether the Authority
of the Freeport Area of Bataan submitted its financial
statement for 2010, Senator Drilon replied in the
affirmative, as he clarified that the PI OO-million
allocation for Capital Outlay is equity contribution,
He said that the AFAB chairman and administrator
is Deogracias G,P, Custodio,
As regards the PIOO million, Senator Drilon
confirmed that it can be booked as capital outlay,
subsidy, or equity contribution,
On the suggestion to standardize the entry in the
books of the various freeports, Senator Drilon explained
that it is all uniform since in the budgeting books,
equity contribution is classified as capital outlay,
Senator Osmefia observed that the Authority of
the Freeport Area of Bataan reported P323 million
from January to June 2012 and another P342 million
from July to December 20 II, Senator Drilon
explained that from January to June 20 I 0, it was
under the Bataan Export Zone Authority and from
July to December 2011, it was under the Authority of
the Freeport Area of Bataan,
Asked how many locators raised the P666 million
revenue, Senator Drilon replied that there were 41
locators in aIL
As regards the advantages of converting the
BEPZ into a free port, Senator Drilon explained that
as a freeport, it would no longer be under the
authority of PEZA, and in terms of return on
investment for the community, the advantage is that
more locators are attracted to the free port, He
added that 15 new locators moved in s'ince its
conversion into a freeport, But Senator Osmefia
commented that the number was not very impressive,
Asked if there was economic loss to the
government with the conversion of BEPZ into a free
port, Senator Drilon said that the conversion made no
difference in tax incentives, importation, et cetera,
Asked why government has to contribute PIOO
million to the free port every year and how long it
would last, Senator Drilon replied that under the
charter, the national government is supposed to
contribute an equity of PIOO million in the next five
years, On the use of PIOO million, he presumed
that it can be utilized for operations; capital outlay;
maintenance and operating expense, but basically, he
said, it is being used for capital outlay or capital
expenditures as it allows the free port to sustain its
operations on the basis of revenues generated, He
added that the equity that government would infuse
is basically used for capital expenditures (CAPEX),
FRIDAY, NOVEMBER 18, 20 II
He further explained that the PIOO million will be
used for road networks, renovation of buildings, road
improvements, landfill solid waste management project,
security fence, power substation, et cetera.
Senator Osmefia observed that the operating loss
of Bataan reached P94,422,000 in 20 I 0; in 20 II, its
projected loss is P92,547,000; and in 2012,
P78,797,000,
Senator Orilon replied that the losses were
attributed to the depreciation of the old buildings,
But he gave the assurance that its cash flow statement
is positive,
On whether the government set targets for the
various free ports, Senator Drilon replied in the
negative, saying that the Governance Commission for
GCG would have been the logical body to set those
targets for the national government
Asked how much the government has invested
for the last 30 years or so in the Bataan Export
Processing Zone, Senator Drilon replied that the
Authority has to undertake the appraisal of the
present assets so that it can determine the value of
government investments.
Senator Osmefia then requested that the Authority
submit the total investment that the government
has made in the Bataan Export Processing Zone
and the Bataan Free Port to give the Senate a better
idea on how they performed over the past 30 years,
Senator Ori Ion agreed,
OF THE AUTHORITY OF THE
FREEPORT AREA OF BATAAN
of the Authority of the Freeport Area of Bataan was
CAGAYAN ECONOMIC ZONE AUTHORITY
Cagayan Economic Zone Authority.
Senator Orilon stated that the NEP allocated
P915,503,000 for the operations of the Cagayan
Export Zone Authority; P903,500,000 for the equity
and P 12,300,000 for maintenance and operating
expense, He stated that the both the House of
681
Representatives and the Senate did not propose any
amendments to the budget submitted by the Executive.
At the outset, Senator Osmefia requested that
the Body be provided a copy of the financial
statements of the CEZA, He observed that in 2010,
CEZA had an operating revenue ofPI35 million and
non-operating revenue of P21 million or a total of
PI56 million. He inquired as to where the non-
operating revenue was sourced, Responding thereto,
Senator Orilon stated that the non-operating revenue
came from interest income, miscellaneous income,
fines and other penalties, but the bulk of the operating
revenues came from franchising and licensing fees,
He stated that under the NEP, it is allotted
PI49,845,000.77 and the estimate for the current
year is P\38,746,090.
Senator Osmefia disclosed that the CEZA's
expenses were as follows:
Year
2010
2011
2012
Amount
P I 57 million
181 million (projected)
195 million (projected)
He noted that essentially, the CEZA is simply collect-
ing franchise fees and he asked why its expenses
were so high,
suspended,
It was 8:01 p,m.
At 8:04 p,m" the session was resumed.
Responding to the query, Senator Orilon stated
that the Maintenance and Operating Expenses of the
CEZA for the current year was P\03,520,000 for the
following major items:
Consultants, Contractual
and Other Services
(janitorial, security
and other professional
expenses) P28,6 million
682
Sports, Christmas,
Tourism and
Special Events
Other MOOE
Travel Expenses
Supplies and Materials
Rent
24.9 million
23.7 million
5.8 million
5.9 million
6.5 million
As to current expenses, Senator Drilon stated
that the total equity as of August 20 II was P3.44
billion; the net profit for 2011 is P4 million; while the
projected profit for 2012 is P4,S36,000. He added
that there is a total of P724.9 million operating
income since 2005 and he conceded that there is a
very low rate of return by standards in the private
sector and he challenged the CEZA to come up with
a more acceptable rate of return.
On whether the government can expect that
level of operations from CEZA in the next four
years, Senator Drilon believed that the management
realizes that P3.6 million return could stand a great
improvement. Together with Senator Osmefia, he
expressed hope that in the future, the CEZA would
show a better return on investment. He averred that
the first few years of operation would be capital
intensive but after being fully operational, a higher
return is expected.
Despite the lackluster performance, Senator
Drilon stated that the Committee gives credit to the
PS.6 billion capital investment generated by locators
within the zone as of August 20 I I. He said that
the capital investment has a positive effect on the
economy of Cagayan.
Senator Osmefia recalled that the Tampakan
Mining was supposed to be set up in South Cotabato
and is expected to generate investment amounting to
US$5 billion. He said that when asked about the
money to be spent in the country and outside in terms
of heavy equipment like bulldozers, trucks and
payloaders, the officials of the firm could not give a
response because actually 10%-15% of the US$5
billion is to be spent in Cotabato.
Asked how much of the PS.6 billion was spent
on the freeport itself and how much on imported
capital equipment, Senator Drilon explained that there
was no capital equipment imported, it was all invested
in the zone. He stated that the investments were in
hotels and buildings that house guests of the casinos.
He said that only the computers were imported.
Senator Osmei\a expressed hope that there would
be an oversight for all the freeports. He opined that
tighter monitoring of the investments of government
in freeports would bear more fruit.
CAGA Y AN ECONOMIC ZONE AUTHORITY
of Senator Drilon, there being no objection, the
budget of the Cagayan Economic Zone Authority
suspended.
It was 8: 14 p. m.
At S: 15 p.m., the session was resumed.
ZAMBOANGA CITY SPECIAL ECONOMIC
ZONE AUTHORITY
Zamboanga City Special Economic Zone Authority.
Senator Drilon stated that the budget being
presented by the Committee was the same budget
recommended in the GAB-House version which was
based exactly on the NEP, without any proposed
amendments.
Senator Drilon stated further that of the
P60, I 00,000 budget, there is PII million for capital
equity contribution and P49.1 million for MOOE.
Asked by Senator Osmei\a how much the
total government expenditures, equity contributions,
subsidies, infrastructure, et cetera in the Zamboanga
City Special Economic Zone Authority were, Senator
Drilon replied that the actual releases since 1997
amounted to P760,500,000.
Senator Osmena asked why it dropped when it
was almost PSI billion about five years ago. Senator
Drilon clarified that the amount being cited is the
)If" r
FR[DAY, NOVEMBER [8,201 [
approved equity under the GAA and not actual
releases, He said that the total appropriation from
1997 up to 2011 was P9S0,4SO,000 and under the
budget authority, P760,SOO,000 was actually released,
Asked if there would be a net loss of about PS9
million by the end of2011, Senator Orilon replied in
the affirmative, adding that the projection for 2012 is
almost the same amount, P59.6 million.
Senator Osmefia observed that the figures show
a one-sided balance sheet as he noted the operating
revenue of P5 million and the net profit of minus P59
million. He asked how far and how long government
would have to justify this kind of expenditure before
it realizes that it is a losing proposition, Senator Orilon
said that it would depend on the President whether
or not to approve further contributions and alloca-
tions for the Zamboanga City Special Economic
Zone Authority and certainly, he said, Congress is
empowered to make decisions on that issue.
Senator Osmefia recalled that in 1996, he voted
in favor of the Zamboanga City Special Economic
Zone Authority at the behest of Rep. Clara Lobregat
but as years went by, he saw nothing to justify the
continued expenditures on it. He lamented that of the
P60 million allocated to the Zamboanga City Special
Economic Zone Authority in 20 II, there was only a
contribution of P5 million in revenues and all went
down to losses. For his part, Senator Orilon admitted
that the expenditures cannot be justified and are
difficult to justifY. He said that the GOCC Governance
Council was precisely set up so that there will be a
specific agency in charge of GOCCs. He said that it
was unfortunate the Zamboanga City Special Economic
Zone Authority is under the Office of the President
and, therefore, it is like an independent body.
Senator Osmefia stated that the other day, he
raised a point on rehabilitating some of the Philippine
embassies abroad. He said that there was a capital
outlay ofP4 million for all Philippine embassies, some
of which are badly dilapidated. He asserted that an
additional PIOO million to P200 million allocation could
make them a little bit more presentable to diplomats.
As to how many locators there were in the
Zamboanga City Economic Zone Authority, not
counting the bowling alley, the sports club and the
hotel, Senator Orilon replied that there were 15
registered locators. He enumerated the business
activities of the locators, to wit: facilities operator;
683
manufacturing, processing of technically specified
natural rubber of microbial coco cellulose; trading
and reconditioning of used industrial and heavy
equipment/agricultural machines; utilities enterprise
(Globe Telecom); production of high value crops and
vegetables (Golden River Farm); fighting cock breed-
ing; production and processing of biofuels (Nipa
Tech Energy); seafood manufacturing and processing
(Seachamp International Export Co.); manufacturing
of pasteurized canned crab meat (Southgate Ace
Marine). He added that the rest of the r ocators were
engaged in leisure farming on 5-hectare leased
highland properties.
To the observation that these busillesses collect
about less than haifa million pesos a month, probably
mostly rental, Senator Ori Ion agreed.
Senator Osmefia further observed that govern-
ment spent P750 million to collect a rental of only
P5 million from the zone that has an operating loss of
P59 million or P4.5 million a month. He said that
Congress has to take care of this matter at the
proper time. He expressed disappointment that after
15 years, he sees no future for the zone. He believed
that there is a time for a corporation to cut losses and
put its money where it can make an economic return
for the benefit of the people.
Asked how many jobs have been created by the
Zamboanga City Special Economic Zone Authority,
Senator Orilon replied that there are no data as to the
number of jobs created for 20 II but he darified that
the various locators employed 326 workers in 2009
and 326 in 20 I O.
Senator Osmeiia assumed that most of the
laborers or workers were low-income laborers 01'
farmers. He computed that with P750 million and
400 workers, there is a capital investment of P2
million per job but if that amount was placed in a
bank instead, it would have earned P200,000. He
lamented that it was a waste of resources.
In closing, Senator Osmeiia stressed that the
Committee should seriously consider addressing the
matter because the government is desperately
scrounging for funds to finance its velY important
programs such as building schools, constmcting farm-
to-market roads as well as post-harvest facilities to
ensure food self-sufficiency and food security. He
said that a little savings here and there would
tremendously benefit even the people of Zamboanga.
684
ZAMBOANGA CITY SPECIAL ECONOMIC
ZONE AUTHORITY
of the Zamboanga City Special Economic Zone
Authority was deemed submitted for the Body's
consideration.
AURORA PACIFIC ECONOMIC ZONE
AND FREEPORT AUTHORITY
Aurora Pacific Economic Zone and Freeport
Authority .
Senator Drilon stated that in 20 II, P 145 million
was allocated to the Authority and that this was
increased by P187.5 million under the GAB-Senate
version, bringing the total to P332.5 million for 2012.
At the onset, Senator Osmefia recalled that he
requested about a dozen documents during the hearings
on the Aurora Pacific Economic Zone and Freeport
Authority (APECO) last October 3 and 12,20 II, and
only four had been submitted so far. He asked where
the other documents were, like the study to mitigate
the effects of liquefaction of the Casiguran Inter-
national Airport. In reply, Senator Drilon clarified
that said study was done by the Civil Aviation
Authority of the Philippines (CAAP) for the Casiguran
International Airport, adding that the APECO
management was not completely involved in its
preparation nor did it have access to it since the
Casiguran International Airport is outside the
jurisdiction of the APECO.
Upon further queries, Senator Drilon clarified
that the resource person present in the Chamber
cannot as yet identify the contact persons in CAAP
from whom the document can be sourced. However,
he said that the APECO has the liquefaction report
for the zone which was done by the DENR.
Senator Osmefia requested a copy of the
liquefaction report for the land within the APECO.
Also, he inquired about reports which allegedly prove
the participation of residents in areas affected by the
APECO project. Senator Drilon stated that according
to the APECO management, the Aurora Special
fRIDAY. NOVEMBER 18.2011
Economic Zone Authority (ASEZA) law is a refilled
bill, the original of which was filed by then
Congresswoman Bellafor Angara-Castillo in 1995;
and that as shown in the transcripts of the hearings,
Mayor Fidel Salamera was consulted, he testified
and he favorably endorsed the bill.
Further, Senator Drilon stated that Mayor
Salamera did convene a meeting with the Casiguran
municipal council and other leaders ofthe community
where the issue was discussed. Senator Osmefia
requested a copy of the minutes of said meeting.
Asked how much government has invested or
expended in the APECO and ASEZA, its predecessor,
Senator Drilon reported that from 2008, when the
operation was started, up to the current year, a total
of P578,050,000 was actually released out of an
authorization of P I ,654,800,000 under the GAAs. He
added that in 20 II, the actual release in the form of
notice cash allocation was P4 I ,250,000.
Senator Osmefia asked if an economic study
was made to show the viability of the free ports. He
explained that before a commercial venture is put up,
a study is normally done to determine the return on
investment and the economic return to the community.
He observed that sometimes, the return on investment
is not so important if it determined that the locals
would be benefitted by the project. He noted that the
World Bank and NEDA have a way of coming up
with their opinion on economic return.
Senator Drilon stated that before the NEDA
approves a project, an examination is done and the
economic rate of return is determined to justify
whether or not public funds will be expended for it.
In the case of export processing zone (EPZ)
authorities, he surmised that the study is one of the
documents the Committee asks for during the hearings
on the bills.
Senator Osmefia disclosed that the transcripts of
the hearings show that local officials and private
individuals who opposed the project as well as
indigenous peoples were not invited. He lamented
that it was a well-orchestrated hearing that resulted
in the expenditure of some P600 million of the
people's money. Like other free ports, he said that
he sees no future in the APECO and doubts if the
people would get back their money's worth. He
added that it cannot be justified to the Filipino people
why the capital was not spent elsewhere.
Asked what municipality has jurisdiction over the
APECO area, Senator Drilon stated it is Casiguran,
He confirmed that the five affected barangays of
Casiguran are Dibet, Esteves, San lldefonso, Cozo
and Culat.
On whether the Sanggunian of the LGUs
concerned passed an ordinance or resolution that
expressed concurrence in the project, Senator Drilon
recalled that in the hearings in 1997 when the
ASEZA Charter was first submitted, the municipal
councils of Baler and Casiguran, in addition to the
provincial board of Aurora, recommended the approval
of the measure with two amendments,
Since the APECO covered the entire 12,400
hectares of Bgy, San I1defonso, Senator Osmena
asked if any approval was obtained from the barangay
or frol11 the indigenous peoples, as required by law,
Senator Drilon answered in the negative,
As regards the members of the Board of APECO,
Senator Drilon enumerated the following:
I, The governor of the Province of Aurora;
2, The congressional representative of the
district covering the site of the APECO;
3, The president and the CEO of APECO;
4. The mayor of the Municipality ofCasiguran,
alternating every year with the mayors of
the Municipalities of Dinalungan and Dilasag
for a term of one year each;
5. One representative from the domestic
investors;
6. One representative from the foreign
investors;
7. One representative from the workers in the
APECO; and
8, Two prominent citizens of the country, one
of whom shall be a resident of Aurora,
Senator Dri Ion stated that the President of
APECO is Mr. Roberto Mathay and at present, the
Board has only five sitting members: the Governor,
the Congressman, Mayor Briones of the Municipality
of Dilasag, Ms, Harley Rose Daquioag from the
labor sector, and Mr, RobellO Mathay, He also
clarified that the Municipalities of Dinalungan and
Dilasag are separate from Casiguran.
685
Senator Drilon affirmed that Roberto Mathay
was initially appointed to the board as representative
ofthe local investors and was subsequently appointed
as president and CEO of APECO, He agreed that
a new representative for the local investors should
be appointed because Mr. Mathay already occupies
two seats as representative of the local investors
and as president and CEO,
Replying to further queries, Senator Drilon
affirmed that presently, there are only five members
appointed in the Board out of ten seats provided by
law, thus the absence of a majority with which to
conduct business. However, he said that in February
when the board still had enough members to constitute
a quorum, standing authorities were given to the
president and CEO of APECO to act on certain
matters,
As regards its budget, Senator Dri Ion said that
APECO is working on the basis of the authority
granted and approved by the DBM as manifested by
its inclusion in the National Expenditure Program.
With respect to locators, Senator Drilon said that
there is only one locator in APECO, a power
generation company called the Echo Market Solutions
that is building a biomass plant, with a start-up of
one-fourth megawatt and with the provision to
bui ld up to two megawatts. He said that the power
company's business model is to sell power to the
local utility, ORELCO, and not necessarily to locators
in the zone, He affirmed that the power plant is
located in Dinalungan which is outside of the zone,
but is planning to build a plant within the ecozone
which would generate one-fourth of a megawatt.
Senator Osmeila said that it puzzles him why a
power plant has to be located inside the zone and
identified as a locator when it could be located
anywhere, pointing out that it does not need tax
breaks and other benefits that a free port would
bestow upon it. Senator Drilon explained that the
power plant is located outside of the zone because of
issues of connectivity to the grid, but a plant will be
put up inside the zone to service the locators as the
zone is developed,
Asked if a power plant in Pagbilao, for instance,
that applies as a locator in APECO would entitle it
to the tax benefits under the zone, Senator Drilon
pointed out that the power company is availing of the
tax breaks and incentives under the Renewable
686
Energy Act. He affirmed that a locator, so long as
it is registered, does not have to be physically located
inside the zone to qualify for the incentives under the
Renewable Energy Act.
Replying to further queries, Senator Drilon said
that the power company is now owned by a Mr,
Pronove after Mr. Mathay, the company's founder,
divested his shares in the company even before he
became the president and CEO of APECO, He said
that the source of energy of the biomass plant, which
will start operation in February 2012, are forest
residues, coconut wastes and briquettes, and possibly
rice, to be sourced locally and capable of generating
y. megawatt
Asked how many days in a year the plant would
be able to produce power, Senator Drilon said that
the rated capacity is 365 days, Senator Osmefia
remarked that there is no such 365-day plant.
Senator Osmefia asked on the capacity factor or
the number of days in a year that the power plant
operates, as he pointed out that like coal plants, the
older ones will operate 10 months in a year and the
newer ones 11 months in a year because they need
one month to clean, maintain, repair and replace,
Senator Drilon said that the capacity factor would be
330 days out of365 days, Senator Osmena maintained
that such claim is impossible, He said that having
chaired the Committee on Energy, he had studied
and learned that biomass plants average about
seven months in the year if it is all locally sourced,
If the company imports some of its requirements
for feed stock, he said that they could operate for
eight months, and none of them could reach
12 months a year,
Asked how international the airport is, Senator
Drilon said that the airport is not under the jurisdiction
of APECO, While it is called an international airport,
he said that there are no international or domestic
regular flights operating there yet, only private aircraft,
At this point, Senator Drilon revealed that there
is a PI 00 million item in the budget to be used for the
extension of the runaway of Baler Airport, and not
for Casiguran International Airport, He bared that
similar to the latter, Baler Airport still does not have
any scheduled flights,
Senator Osmefia said that the DOTC has earlier
provided him a list of airports and aerodromes in the
country: ten (10) international airports, including Clark,
Mactan, NAIA, Subic, Puerto Princesa, Gen San,
Zamboanga, Davao, Kalibo and Laoag; 15 Principal
Class I airports; 18 Principal Class II airports; and 41
community airports which are used by general aviation
aircrafts such as private planes like King Airs and
Dorneys, and commercial planes, He said that he
could not find in the list Casiguran International
Airport even as he could confirm that there is a
runway there based on his trips to Casiguran in the
1960s,
Senator Drilon said that it is now incumbent upon
the management of APECO as a concerned corporate
citizen of Aurora to bring the matter to the attention
of the DOTC, Senator Osmefia said that the word
"international" could be removed for it to be called
simply as Casiguran Airport,
At this point, Senator Osmefia manifested his
desire to propose amendments to the budget of
APECO at the appropriate time,
Senator Drilon acceded to Senator Osmefia's
request to be furnished with a copy of the Industrial
Development Corporation (IDC) contract.
Senator Osmefia bared that IDC is owned by
Jojo Ong who used to be a member of the APECO
board, He said that the government has already paid
Mr, Ong a total of P85 mill ion for the purchase of
the IFMA rights, He added that the IFMA is
nonexistent since the free, prior and informed consent
of the indigenous people was not secured as required
by law, He also requested a copy of the contract for
the purchase of the land,
AURORA PACIFIC ECONOMIC ZONE AND
FREEPORT AUTHORITY
objection, the budget of the Aurora Pacific Economic
Zone and Freeport Authority was deemed submitted
for the Body's consideration,
suspended,
It was 9:18 p,m,
ALLOCATIONS FOR LOCAL
GOVERNMENT UNITS
Senator Drilon presented the Allocations for
Local Government Units.
Senator Drilon informed the Body that the
Allocations for Local Government Units (ALGU) in
the amount of P 18,303,490,000 as proposed in the
NEP was adopted in the House and Senate versions
of the 2012 GAB. He said that the allocations are
broken down as follows:
Special Share of LGUs
in the proceeds
of national taxes
Barangay Officials
Death Benefit Fund
Fianancial Subsidy to LGUs
MMDA
P 16,679,895
50 million
200 million
1,373,569,000
INTERPELLATION OF SENATOR MARCOS
At the outset, Senator Marcos noted that the
President made a promise to allocate 1'6.5 billion for
local government units (LGUs) to be called Local
Government Support Fund (LGSF) which the DBM
Secretary reiterated to the Committee. He asked,
however, where the allocation can be found in the
LGU budget, adding that it was not included in the
budgets of the DBM and the DILG. In response,
Senator Drilon said that it was actually released in
2011 and charged against the 2011 GAA. He also
contirmed (hat the LGSF would come from savings
or unprogrammed funds sourced from dividend
collections trom the GOCCs. He disclosed that as
Committee chair, he was responsible for collecting
1'9 billion from the P23.5 billion dividends paid
by GOCCs which was used for the LGSF in the
current year.
Asked whether the same can be reverted to the
general funds as savings, Senator Drilon recalled that
the 2011 NEP only allocated 1'5 billion for GOCC
dividends but the actual collection was 1'23 billion
plus. For this reason, he bared, the President
authorized the use of a portion of the unprogrammed
funds, taken from (he excess collections for dividends
of the GOCCs, to establish the LGSF. He admitted
687
that there was no specific item for the LGSF, but he
explained that it was so authorized in the GAA,
in broad language, that the unprogrammed fund
could be utilized to support such kind of national
priority item.
Senator Marcos said that the important point that
needs to be established is that the source of the 1'6.5
billion was clearly identified. He recalled that the
guidelines on the LGSF were not yet formulated
during the committee discussions.
Asked whether the guidelines were already
finalized so the LGU administrators would know
when and how to avail of the LGSF, Senator Drilon
said that DlLG-DBM Joint Circular No. 002, series
of 20 II, dated November 6, 20 II, on the guidelines
for the implementation and utilization of the LGSF,
had already been issued,
Senator Marcos further recalled that during the
committee discussion, it was understood that the
LGSF would be limited to infrastructure projects but
he noted that there were changes in the guidelines
with the inclusion of local economic enterprises that
are essentially self-sustaining and more profitable for
the LGUs to undertake. In response, Senator Drilon
said a small leeway was given in the use of the
LGSF,
Noting that paragraph 4 of the circular refers to
requirement and procedures, processing and release
of LGSF, Senator Marcos asked whether it essentially
deals with economic enterprises and does not seem
to apply to infrastructure projects. In reply, Senator
Drilon said that if it involves an infrastructure project,
the standard documentary requirement would be a
program of work, He agreed with Senator Marcos
that a program of work would suffice for a one-page
project proposal while in an economic enterprise it
would be more likely a feasibility study.
Another new element, Senator Marcos noted,
is electrification, although he believed this is part of
the Millenium Development Goals (MDGs), and he
noticed that the MDGs also include primary education,
kindergarten, reduction of child mortality, construction
of water supply, procurement of medical equipment
and construction of RHU s,
Asked whether the other MDGs are deemed
included even if not specifically mentioned in the
guidelines, Senator Drilon said that the purpose ofthe
688
circular was to limit the utilization of LGSF to the
three areas since the LGUs were already behind in
achieving these goals.
Senator Marcos noted that the Philippine Disaster
Risk Reduction Management Act already falls under
the MDG Disaster Preparedness and Alleviation Goal.
As regards the creation of the LGSF and
its management, Senator Drilon said that the
DILG would administer the money and it would be
released directly to the LGUs.
Senator Marcos noted that highly urbanized cities
were excluded from availment of the LGSF.
Senator Drilon stated that the DILG's role is to
review the LGU's proposal and approve it, after
which, the DBM remits the funds directly to the LGU.
As regards the requirement on acquiring the seal
of good housekeeping, Senator Drilon said that
1) there must be no adverse COA opinion in the
examination of the LGU's financial standing; and
2) the LGU's expenses must be posted on the
website, a requirement for transparency.
Senator Marcos asserted that the LGUs might
encounter problems with the COA criteria, noting
that some of them are actually unable to close their
books at the beginning of the year. Thus, he believed
that under this circumstance, the degree of violation
or the divergence f1'om the standard procedure must
be taken into account. Further, he assumed that if
the first requirement is to be strictly followed, velY
few LGUs will qualify to avail of the LGSF. He
manifested that at the proper time, he would introduce
an amendment to give the LGUs some leeway in this
regard. In reaction, Senator Drilon welcomed the
proposal but explained that the requirements are
spelled out in the joint circular of the DBM and
DILG, But he asked ifit is appropriate to incorporate
a special provision to govern disbursements for the
prior year, He informed the Body that as of the
beginning of November 2011, no adverse COA
findings had been relayed to the LGUs and that
during said month, over 847 LGUs that had adverse
records with COA qualified after submitting the
required explanation and documents to the Commis-
sion. In light of the concerns of Senator Marcos, he
proposed that COA wait some time after the deadline
to determine if, indeed, LGUs were finding it difficult
to comply with the reporting requirement after which,
he would join Senator Marcos in proposing some
degree of liberality.
Senator Marcos agreed that it is important for
the LGUs to close their books at the beginning of
the year as required by COA but he pointed out that
balancing the book or coping with accounting proce-
dures might not be the expertise of the LGU staff.
On another matter, Senator Marcos suggested
that fourth, fifth, and sixth class provinces be given
preferential treatment in the disbursement of the
LGSF because they are the most in need.
Asked whether the DBM has a mechanism to
reflect preferences in the disbursement of the funds,
Senator Drilon replied that the DBM secretary would
study the suggestion as the Department goes over
the proposals of the LGUs.
For his part, Senator Marcos offered to assist in
the implementation of the LGSF as he lauded its
inclusion in the 2011 GAA.
suspended.
It was 9: 44 p. m.
At 9:45 p.m" the session was resumed.
SUBMISSION OF THE ALLOCATIONS
FOR LOCAL GOVERNMENT UNITS
of Senator Sotto, there being no objection, the
Allocations for Local Government Units and its
component items, namely, Special Share of LGUs in
the Proceeds of National Taxes, Barangay Official
Death Benefit Fund, Financial Subsidy to Local
Government Units (and Metro Manila Authority)
suspended.
It was 9:45 p.m.
DEPARTMENT OF BUDGET
AND MANAGEMENT
Senator Dri Ion presented the budgets of the
Depaltment of Budget and Management (DBM).
Senator Drilon said that the National Expenditure
Program allocated P836.777 million for the DBM
which is the same proposal under the GAB-House
version. He said that the Committee did not propose
any changes.
Thereafter, Senator Drilon acknowledged the
presence in the gallery of DBM Sec. Florencio B.
Abad.
OF THE DEPARTMENT OF BUDGET
the budget of the Department of Budget and
Management and its attached agencies, namely,
the Office of the Secretary and the Government
Procurement Policy Board, was deemed submitted
SUBMISSION OF THE BUDGETARY
SUPPORT TO GOVERNMENT
CORPORATIONS
objection, the Budgetary Support to Government
Corporations was deemed submitted for the Body's
consideration.
FOR THE CALAMITY FUND
objection, the budget for the Calamity Fund was
FOR THE CONTINGENT FUND
689
objection, the budget of the Contingent Fund was
MISCELLANEOUS PERSONNEL
BENEFITS FUND
Senator Drilon presented the budget for the
Miscellaneous Personnel Benefits Fund (MBPF).
Senator Drilon explained that some adjustments
were made in the MBPF that was allocated
P 114,439,842,000 in the 2012 National Expenditure
Program and PI 09,461 ,996,000 in the GAB-House
version, or a reduction ofP4,977,846,000. This amount,
he explained, was realigned to various constitutional
agencies as a consequence ofthe policy recognizing
their fiscal autonomy and that their unfilled positions
require allocations. Further, he revealed that the
Committee decreased the allocation of P 180 million
in the GAB for unfilled positions in the AFP and
PNP. In closing, he urged the Body to approve the
PI 09,281,996,000 MBPF.
OF THE MISCELLANEOUS PERSONNEL
BENEFITS FUND
objection, the budget for the Miscellaneous Personnel
Benefits Fund was deemed submitted for the Body's
consideration.
FOR THE RETIREMENT BENEFITS FUND
objection, the budget for the Retirement Benefits
Fund in the amount of P34,437,891 ,000 was deemed
FOR THE PRIORITY DEVELOPMENT
ASSISTANCE FUND
objection, the budget for the Priority Development
Assistance Fund in the amount of P24,890,000,000
690
SUBMISSION OF THE BUDGET FOR THE
UNPROGRAMMED FUND
objection, the budget for the Unprogrammed Fund
in the amount of PI52,821,845,000 was deemed
TERMINATION OF THE PERIOD
OF INTERPELLATIONS
objection, the Body closed the period of interpellations
on House Bill No. 5023 (Committee Report No. 79),
the bill.
suspended.
II was 10:05 p.m.
FRIDAY, NOVEMBER 18.2011
REQUEST OF SENATOR DRILON
Senator Drilon requested the Members to submit
their amendments to the Committee on or before
the morning of Monday, November 21, 20 11, saying
that Dir. Yolly Doblon will wait for them. He also
requested an all-senator's caucus after the roll call
on Monday to discuss the amendments in the hope
that the budget would be approved on Second and
Third Readings on the same day.
ADJOURNMENT OF SESSION
objection, the Chair declared the session adjourned
until three o'clock in the afternoon of Monday,
November 21, 2011.
It was 10:08 p.m.
I hereby certify to the correctness of the
foregoing.
Approved on January 16,2012

2012 GAA Deliberation

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