SEnate Journal Feb. 7 2007

RElPUBLlC OF THE PHILIPPINES

S e n a t e Pasay City

U a1

SESSION NO. 64 Wednesday and Thursday

Febmary 7 & 8,2007

THIRTEENTH CONGRESS THIRD REGULAR SESSION

SESSION NO. 64 Wednesday and Thursday

February 7 & 8,2007

CALL TO ORDER

At 4:06 p.m., the Senate President, Hon. Mamiy Villar, called the session to order.

PRAYER

Sen. Alfredo S. Lim led the prayer, to wit:

Almighty God, our Heavenly Father whose love for humanity sets no boundaries:

Grant our people and leaders wisdom, courage and insight in this time of uncertainty, intrigues and fears;

Give to all who exercise authority the determination and discernment to defend the principle of freedom, love and justice to protect and safeguard the innocent;

Give them also clarity of vision to guide the nation into the path of justice, peace and lasting unity.

As this Congress is coming to adjournment, we fervently pray that the unity we shared through Your grace remains strongly bonded by belongingness, unaffected by the yoke of scorching power and pride.

Teach us also to constantly renounce what is not Yours, to scorn weahlesses and sins. Above all, grant us the grace to unselfishly extend assistance to those who come to solicit our help and give us the grace to see ow Lord, Jesus Christ, in them.

Amen.

ROLL CALL

Upon direction of the Chair, the Secretary of the Senate, Oscar G. Yahes, called the roll, to which the following senators responded

Arroyo, J. P. Flavier, J. M. Biazon, R. G. Lacson, P. M. Cayetano, C. P. S . Lim, A. S . Defensor Santiago, M. Magsaysay Jr., R. B. Drilon, F. M. Revilla Jr., R. B. Ejercito Estrada, J. Roxas, M. Ejercito Estrada, L. L. P. Villar, M. Enrile, J. P.

With 15 senators present, the Chair declared the presence of a quorum.

Senators Angara, Gordon, Lapid, Madrigal, Osmefia, Pangilinan, Pimentel and Recto arrived after the roll call.

DEFERMENT OF APPROVAL OF THE JOURNALS OF SESSION NOS. 61, 62 AND 63

Upon motion of Senator Cayetano, there being no objection, the Body deferred the consideration and approval of the Journals of Session No. 61 (January 31, 2007), Session No. 62 (February 5, 2007), and Session No. 63 (February 6, 2007).

REFERENCE OF BUSINESS

The Secretary of the Senate read the following matters and the Chair made the corresponding referrals:

COMMUNICATION

Letter from Assistant Governor and General Counsel Juan De Zufiiga Jr. of the Bangko Sentval ng Pilipinus. furnishing the Senate with certified copies of the following in compliance with Section 15(a) of Republic Act No. 7653 (The New Central Bank Act):

1. BSP Circular No. 553, series of 2006, dated 22 December 2006; (corrected copy) QE

1444 WEDNESDAY, FEBRUARY 7,2007

2. BSP Circular No. 558, series of 2007, dated 22 January 2007;

3. Memorandum No. M-2006-022, series of 2006, dated 24 November 2006; and

4. Memorandum No. M-2007-022, series of 2007, dated 23 January 2007.

To the Committee on Banks, Financial Institutions and Currencies

COMMITTEE REPORT

Committee Report No. 259, submitted by the Committee on Youth, Women and Family Relations, on Senate Bill No. 2588, introduced by Senator M.A. Madrigal, entitled

AN ACT PROHIBITING CHILD PORNO- GRAPHY, IMPOSING PENALTIES FOR THE COMMISSION THEREOF AND FOR OTHER PURPOSES,

recommending its approval without amendment.

Sponsor: Senator M.A. Madrigal

To the Calendar for Ordinary Business

ADDITIONAL REFERENCE OF BUSINESS

MESSAGES FROM THE HOUSE O F REPRESENTATIVES

Letters from the Secretary General of the House of Representatives, informing the Senate that on 5 February 2007, the House of Representatives concurred with the Senate amendments on the following House bills:

House Bill No. 5973, entitled

AN ACT CONVERTING THE MUNICI- PALITY OF BAYBAY IN THE PROVINCE OF LEYTE INTO A COMPONENT CITY TO BE KNOWN AS THE CITY OF BAYBAY;


AN ACT CONVERTING THE MUNICI- PALITY OF BORONGAN IN THE PROVINCE OF EASTERN SAMAR

INTO A COMPONENT CITY TO BE KNOWN AS THE CITY OF BORONGAN;


AN ACT CONVERTING THE MUNICI- PALITY OF CATBALOGAN IN THE PROVINCE OF SAMAR INTO A COMPONENT CITY TO BE KNOWN AS THE CITY OF CATBALOGAN;

and House Bill No. 5999, entitled

AN ACT CONVERTING THE MUNICI- PALITY OF TANDAG IN THE PROVINCE OF SURIGAO DEL SUR INTO A COMPONENT CITY TO BE KNOWN AS THE CITY OF TANDAG.

To the Archives

Letter from the Secretary General of the House of Representatives, informing the Senate that on 5 February 2007, the House of Represent- atives requested a conference and designated Representatives Dumarpa, Cari, Villar, Malanyaon and Barinaga, on the part of the Majority, and Representative Custodio, on the. part of the Minority, as its conferees to the Bicameral Conference Committee on the disagreeing provisions of House Bill No. 1214, entitled

AN ACT GRANTING OTHER PRMLFGES AND INCENTIVES TO PERSONS WITH DISABILITY, AMENDING FOR THE PURPOSE THE MAGNA CARTA FOR DISABLED PERSONS,

and Senate Bill No. 2580, entitled

AN ACT AMENDING REPUBLIC ACT NO. 7277, OTHERWISE KNOWN AS THE MAGNA CARTA FOR DISBALED PERSONS AND FOR OTHER PURPOSES

To the Committee on Rules

Letter from the Secretary General of the House of Representatives, informing the Senate that on#?-

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WEDNESDAY, FEBRUARY 7,2007 1445

5 February 2007, the House of Represent- atives requested a conference and designated Representatives Duinarpa, Cui , Malanyaon, and Barinaga, on the part of the Majority, and Representative Custodio, on the part of the Minority, as its conferees to the Bicameral Conference Committee on the disagreeing provisions of House Bill No. 4536, entitled

AN ACT PROVIDING FOR THE MAGNA CARTA FOR SOCIAL WORKERS AND SOCIAL WELFARE AND DEVELOPMENT WORKERS AND FOR OTHER PURPOSES,


AN ACT PROVIDING FOR A MAGNA CARTA FOR PUBLIC SOCIAL WORKERS.


COMMITTEE REPORTS

Conunittee Report No. 260, submitted by the Committee on Public Works, on House Bill No. 4458, introduced by Representative Ramiro, entitled

AN ACT RENAMING THE OZAMIZ CITY BY-PASS ROAD LOCATED IN OZAMIZ CITY AS CONGRESSMAN HILARION J. RAMIRO BY-PASS ROAD,


Sponsor: Senator Ramon “Bong” Revilla Jr.


Committee Report No. 261, submitted by the Committee on Public Works, on House Bill No. 642, introduced by Representative Puentevella, entitled

AN ACT RENAMING THE BACOLOD ~

MURCIA - SAN CARLOS ROAD (BACOLOD SECTION) IN THE CITY OF BACOLOD TO ROMEO G. GUANZON AVENUE,

recommending its approval without amendment

Sponsor: Senator Ramon “Bong” Revilla Jr


Committee Report No. 262, submitted jointly by the Committees on Public Works; and Finance, on House Bill No. 4115, introduced by Representative Dimaporo and Badelles, entitled

AN ACT CONVERTING THE ILIGAN - TAGOLOAN - BAL01 - PANTAO RAGAT ~ M U ” - TANGKAL - MAGSAYSAY ~ TUBOD - SALVADOR - SAPAD - N U ” G A N - SULTAN NAGA DIMAPORO ROAD WHICH PASSES THROUGH ILIGAN CITY AND THE PROVINCE OF LANA0 DEL NORTE INTO A NATIONAL ROAD,




SUSPENSION OF SESSION

Upon motion of Senator Cayetano, the session was suspended.

It was 4:13 p.m.

RESUMPTION OF SESSION

At 4:25 pm., the session was resumed.

PRESIDENTIAL CERTIFICATION

Upon direction of the Chair, Secretaly Yabes read the President’s certification as to the necessity of the immediate enactment of Senate Bill No. 2479, to wit:

September 20,2004

HON. JOSE C. DE VENECIA Speaker House of Representatives Quezon City

Dear Speaker De Venecia:

Pursuant to the provisions of Article VI, Section 26(2) of the 1987 Constitution, I herebyp-

I”


certify to the necessity of the immediate enactment of House Bill No. 2933, under Committee Report No. 26, entitled

AN ACT GRANTlNG A ONE-TIME AMNESTY ON ALL UNPAID NATIONAL INTERNAL REVENUE TAXES IMPOSED BY THE NATIONAL GOVERNMENT FOR TAXABLE YEAR 2003 AND PRIOR YEARS,

to meet the public emergency borne out of the urgent need to creatively mobilize revenue sources in the immediate term to fimd the government's economic and social programs, while over the long tenn. instill upon the general citizenry, particularly among the errant taxpayers. the value of civil responsibility by providing an option for them to make a truthful and faithful disclosure of their untaxed income or adjust their statement of assets and net worth in order to become integral part of the national tax base.

Best wishes.

Very truly yours,

(Sgd.) GLORIA M. ARROYO

CC: HON. FRANKLIN M. DRILQN Senate President Philippine Senate Pasay City

APPROVAL OF HOUSE BILL NO. 2933, AS AMENDED BY SENATE BILL NO. 2479, ON THIRD READING

In view of the presidential certification, upon motion of Senator Cayetano, there being no objection, the Body considered, on Third Reading, House Bill No. 2933, as amended by Senate Bill No. 2479.

Pursuant to Section 67, Rule XXIII of the Rules of the Senate, upon motion of Senator Cayetano, there being no objection, Secretary Yahes read only the title of the bill, to wit:

AN ACT GRANTING A ONE-TIME AMNESTY ON ALL UNPAID NATIONAL INTERNAL REVENUE TAXES IMPOSED BY THE NATIONAL GOVERNMENT FOR TAXABLE YEAR 2003 AND PRIOR YEARS.

Secretary Yabes called the roll for nominal voting.

RESULT OF THE VOTING

The result of the voting was as follows:

In .favor

Angara Biazon Cayetano Defensor Santiago Drilon Ejercito Estrada (J) Ejercito Estrada (L) Enrile Flavier

Gordon Lacson Lapid Lim Magsaysay Recto Revilla Roxas Villar

Against

None

Abstention

None

With 18 senators voting in favor, none against, and no abstention, the Chair declared House Bill No. 2933, as amended by Senate Bill No. 2479, approved on Third Reading.

ACKNOWLEDGMENT OF THE PRESENCE OF GUESTS

At this juncture, Senator Cayetano acknowl- edged the presence of the following members of the House of Representatives: Hon. Satur Ocampo, Hon. Constantiuo Jaraula, Hon. Rafael Nantes, and Hon. Jacinto Paras; officials of the University of the Philippines led by President Emer Roman, Vice President Marvic Leonen, Dean Ned Ecafies and Prof. Rafael Rodriguez; Dr. Victor Barrozo of Bukidnon; Mayor Cuyamano; and students from the De La Salk University.

PRIVILEGE SPEECH OF SENATOR EJERCITO ESTRADA (J)

Availing himself of the privilege hour, Senator Ejercito Estrada delivered the following speech

THE SENATE OF THE PEOPLE

Today, as we are about to conclude the Third and Final Regular Session of the 13Ih Congress, I rise again to pay tribute and express my deep appreciation and admiration to the illustrious and honorable Members of this august Body.

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On many occasions, especially during the past year, this Representation has been repeatedly approached by well-meaning constituents who unequivocally expressed their satisfaction and approval of the work and performance of this Chamber.

These are righteous and law-abiding citizens, not only from Metro Manila, hut from our provinces and regions. I met them during my visits for consultations or to honor speaking invitations from various civic, social and local government organizations.

These are concerned citizens who have expressed dismay and disappointment over many issues under this administration.

Many of these remain unanswered today even if both Chambers of Congress exerted much effort to investigate them and uncover the truth in the face of sinister efforts of systematic white- wash and orchestrated cover-ups.

They range from the investigation of such issues as the election fraud of 2004, the Garci scandal, the jueteng payolas, the fertilizer scam, the Diosdado Macapagal Boulevard anomaly, the Jose Pidal accounts, the Venable Contract, the summary dismissal or removal of local government officials, and many more, which today remain unresolved. And the scandals continue to accumulate.

They also include disturbing issues of the declaration of the state of emergency, the slate of rebellion, and the refusal of Cabinet members to appear before congressional investigations, the warrantless arrests, and the extrajudicial killings.

But in all these, this Chamber gained the admiration of many of our constituents for our unwavering conviction against the indecent and repulsive initiative to amend the Constitution posthaste under a Constituent Assembly.

Because this Senate said “No,” the Cha-cha railroad train has now been derailed, even if only for the time being.

During those shining moments in this Chamber, during those moments of conviction, during that celebration of dignity and honor, this Chamber set aside party loyalties and affiliations.

We voluntarily and willingly crossed party lines and alliances because there is a higher order of values that we collectively believed in.

For me, and I hope for our people too, it was a demonstration of the supreme act of statesmanship.

Sa mga akasyong iyon, walang adminis- trasyon, walang oposisyon. Lahat ay nagkaisa para ipaglaban ai ipagtanggol ang Saligang Batas at ang katotohanan. ang katarungan, at higit sa lohat, ang interes, kapakanan ai kinabukasan ng sambayanang Pilipino.

As we are about to close the 13Ih Congress, allow me to pay homage to a Chamber and its Members who, in many critical and difficult occasions, stood their ground in the face of threats and intimidation, in the face of the lure of greater power and influence, and the corrupted attraction of other blandishments offered by an anomalous and cruel regime.

If ever we met the expectations of our people, it is because we did not just work hard for it, but because we upheld and defended the majesty and sanctity of our convictions that are consistent and compatible with the sentiments of the real and genuine source of political power, our people.

With the Chamber’s kind indulgence, I pay tribute to our colleagues who now bow out, temporarily I hope, from this Chamber, hecause they chose to honor the term limits imposed by our Constitution.

I pay tribute to Sen. Franklin M. Drilon, who led this Chamber when I became a senator.

From Senator Drilon, I have come to have a better appreciation of leadership and the responsibilities attached to it. It was also under his able leadership and expert advice that I was able to principally author and sponsor my first law to he passed, Republic Act No. 9347, or the law strengthening and rationalizing the structure of the National Labor Relations Commission.

Senator Drilon has chosen to set aside alliances and allegiances in favor of the higher order of values. He has also given me a stirring lesson in statesmanship when, among others, he chose to abide by a gentleman’s agreement last year. I am certain that he does not end his rich and sterling career in public service here. I am convinced that he has just started.

I also pay tribute to Sen. Juan M. Flavier, who has taught me so much, and from whom, there is still much to learn.

I remember him providing comic relief and witty statements to relieve the tension during those tense and trying moments when we were deep in debate. He has this uncanny talent of making the serious business of lawmaking lively and amusing. P w

144X WEDNESDAY. FEBRUARY 7.2007

Senator Flavier stands tall here today, having enjoyed a long and illustrious career that was never tainted, never soiled, then and now, by any anomaly or any wrongdoing. He leaves the Senate today with an unforgettable legacy that will always he remembered. He has earned the label “Mr. Quorum” which is why I have been inspired and motivated to aim for perfect attendance.

I also salute Sen. Sergio Osmefia Ill who likewise leaves us an enduring legacy of probity, dedication, acumen and, most of all, an independent and perceptive mind. From Senator Osmeiia, I learned many things which he unselfishly shared with me.

Senator Osmeria is the fearless fiscalizer and, perhaps, the most hardworking senator, spend- ing late nights studying and analyzing critical hills and issues. He, perhaps, has the highest number of hills filed and enacted into law.

Kayo minsan sinabi ng aking ama, kung mayroon daw akong role model na dapat gayahin. ong parisan ko ay si Senator Osmeiia and 1 will never go wrong. And I have to take note of this fatherly advice.

And of course, there is also Sen. Ramon Magsaysay Jr. who leaves the Senate with an equally enduring legacy of integrity, independence and brilliance. He has served this Chamber with unwavering and uncompromising commitment.

To you, Mr. President, and to our colleagues who now seek reelection, we wish you the best in your campaign. We also hope that you will rejoin us in the next Congress.

Mr. Senate President, you are the “MI. Sipag at Tiyaga” of this Chamber, who rallied this Chamber to an unprecedented legislation performance in a span of one year. We are certain that you will conduct an honorable campaign that will not be tainted by cheating and scandals unlike you know who.

At the risk of being accused of campaigning early, I take this opportunity to honor our reelectionist colleagues.

Hindi naman ako nangangampanya, pero ang sinasahi ko lamang, magagaling ang mga laong ito na nakasama ko sa Senado. Huwag naman sanang masamohan ng mga magna- nakaw at mamamai~iy-tao ang susunod na Kongreso.

First, I express my deep admiration to you, Mr. President, for continuing and pursuing the brand and style of leadership of your predecessor. You provide today a principled

leadership that is demanded by these critical times.

Sen. Francis “Kiko” Pangilinan and I had never had any disagreement on any issue and he zealously did his job as Senate Majority Leader and chairman of the powerful Committee on Rules. While I have to do my duty as a member of the Opposition, Senator Pangilinan and 1 were able to work together productively.

I also pay tribute to our resident litigator in the Senate, Sen. Joker P. Arroyo. He trium- phantly represented the Senate as lead counsel in several cases before the Supreme Court, among them, the constitutionality of the Calibrated Preemptive Response, Executive Order No. 464, Proclamation No. 1017, and the Sigaw ng Bayan People’s Initiative.

Sen. Joker P. Arroyo is reputed to belong to the administration party. But on many occasions, I thought he was speaking for the Opposition when be frankly, and sometimes, brutally commented on certain issues involving anomalies in this government.

Sen. Edgardo J. Angara remains, in my estimation, not just among the brilliant, hut one of the sober minds in the Senate who has carved a reputation of hard work. From him, I have learned the values of doing your homework and many things. He is and will always he “Mr. Education” to all of us and we have benefited from his wisdom.

Likewise, Sen. Panfilo M. Lacson has brought with him a wealth of experience to the Senate and has used this as a member of the Opposition. He has served this Chamber well and we hope that he returns to the Senate to continue his work as a fiscalizer.

Sen. Ralph Recto has also given his best in this Chamber. He is the resident tax expert in the Senate and has worked hard to bring about a more responsive, equitable and less burdensome taxation policies for our people.

Sayang, kung mawawala si Senator Redo, mahahawasan ang magagandong lalaki rito.

And finally, I pay tribute and respect to my one and only mother, Sen. h i Ejercito Estrada, who chose not to exercise parental privilege and authority during the past three years of our being together in the Senate, the first time perhaps in our histoty when mother and son were members of the Philippine Senate.

Senator Loi never tried to influence me in my votes because I managed to influence her instead. She has given me plenty of advice. #=-

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WEDNESDAY. FEBRUARY 7,2007 1449

In the Senate, she is mother to us all because of her sober and sometimes noncon- frontational stance on various issues. She was colleague. seatmate, mother, adviser, counsel, and psychiatrist to me, not necessarily in that order.

And she worked zealously and dramatically on issues close to her heart, being the chair of the Committee on Youth, Women and Family Relations until she decided to yield this to Sen. Jamby Madrigal.

She has worked tirelessly and silently without fanfare, with no need for publicity and press releases because the mark of a true public servant is doing what needs to be done for the interest and welfare of the people without need of recognition or attention.

In the Senate, Senator Loi continued her commitment by sponsoring two landmark pieces of legislation. These are Republic Act No. 9208 or the Anti-Trafficking in Persons Act, and Republic Act No. 9262 or the Law Against Domestic Violence.

She has chosen to return to private life and pursue her social and civil works. We are still hoping she will change her mind because I will miss her very much.

She also says that part of this civic agenda is to take care of President Estrada and sene as a 24-hour duty guard and caregiver. Of course, that is another big agenda.

I also wish Sen. Alfred0 Lm and Sen. Lit0 Lapid the best should they choose to leave the Senate and campaign for another position. All of us know where we will be most effective and would be in a better position to serve our people better.

And to my colleagues who will remain with me until 2010, we will continue our crusade and campaign, not just for a better government, but for a better governance that will be credible, honest and will command the respect of our people at all times.

I take this opportunity to thank Sen. Miriam Defensor Santiago, Sen. Juan Ponce Enrile and Sen. Nene Pimentel for helping me and teaching me on difficult legal and other issues in the Senate. They have provided me with a sense of bearing in the Senate.

And certainly, I thank the rest of our colleagues today for a historic 13Ih Congress, the Senate of the people, the Senate that refused to be cowed, the Senate that stood its ground.

We must always remind ourselves that we are not the Senate of the administration, or of the opposition, or of any political party, or of any interest, or of any loyalty. We are the Senate of the people and we follow the people for we are only their servants. The people must reign supreme in our hearts and minds.

I am proud today to have been a part of this Chamber, and even prouder to have the privilege of working and learning from brilliant and, more importantly, principled minds.

As we are about to close this Congress today, we look to it as an occasion for the renewal of our commitment and dedication to public service, to a responsible government, to respoiisive governance and to a truly representative Congress that reflects the genuine will and sentiment of our people.



It was 4t45 p.m.


At 4:46 p.m., the session was resumed.

MANIFESTATION OF SENATOR LACSON

Senator Lacson said that aside from the clerical errors he had already pointed out to Senator Enrile, the use of the term “ex parte” on page 42, lines 4 to 9 of the January 31, 2007 version of the bill was not consistent with the rest of Section 33. Senator Enrile said that a clean copy reflecting the corrections has already been prepared for purposes of the Third Reading.

Senator Lacson asked whether Section 33 in the Third Reading copy has been corrected accordingly.


Upon motion of Senator Enrile, the session was suspended.

It was 4:49 p.m,


At 450 p.m., the session was resumed. 4-

1450 WEDNESDAY, FEBRUARY 7.2007

Senator Enrile stated that it was agreed that the applications to conduct wiretapping, surveillance and examination of bank accounts of suspected terrorists, persons charged with terrorism as well as proscribed organizations and their members would be ex parte but the term “exparte” shall he deleted in succeeding provisions.

PRESIDENTlAL CERTIFICATlON

Upon direction of the Chair, Secretary Yabes read the President’s certification as to the necessity of the immediate enactment of Senate Bill No. 2137, to wit:

MALACfiANG MANILA

October 12, 2005

HON. FRANKLIN M. DRILON Senate President Philippine Senate Pasay City

Dear Senate President Drilon:

Pursuant to the provisions of Article VI, Section 26(2) of the 1987 Constitution, I hereby oertify to the necessity of the immediate enactment of Senate Bill No. 2137, under Committee Report No. 34, entitled

AN ACT TO DETER AND PUNISH ACTS OF TERRORISM AND FOR OTHER PURPOSES,

to address the public emergency, heightened by the recent bombing incidents in the region and other parts of the world, consisting of the need to stamp out terrorism and its attendant activities by putting in place the necessary legal frame- work for the speedy prosecution of perpetrators.

Best wishes.

Very truly yours,

(SGD.) GLORIA ARROYO

CC: HON. JOSE C. DE VENECIA JR. Speaker House of Representatives Quezon City

APPROVAL OF SENATE BlLL NO. 2137 ON THIRD READING

In view of the presidential certification, upon motion of Senator Cayetano, there being no objection,

the Body considered, on Third Reading, Senate Bill No. 2137.

Pursuant to Section 67, Rule XXIII of the Rules of the Senate, upon motion of Senator Cayetano, there being no objection, Secretary Yabes read only the title of the bill, to wit:

AN ACT TO SECURE THE STATE AND PROTECT OUR PEOPLE FROM TERRORISM.

Secretaty Yabes called the roll for nominal voting.



In .favor

Biamn Cayetano Defensor Santiago Drilon Ejercito Estrada (J) Ejercito Estrada (L) Enrile Flavier

Against

Madrigal

Gordon Lacson Lapid Lim Magsaysay Pimentel Revilla Vila

Roxas

Abstention

None

With 16 senators voting in favor, two against, and no abstention, the Chair declared Senate Bill No. 2137 approved on Third Reading.

EXPLANATIONS OF VOTES

By Senator Biazon

Voting “yes” on the bill, Senator Biazon stated that the Senate has been in the frontline of defense against assults on the constitution and the people’s rights.

Happily, he noted, the frontline defenders had been bolstered by the Supreme Court, the last line of defense, when it struck down Executive Order No. 464, Calibrated Preemptive Response, Proclam- ation No. 1017, People’s Initiative, and the call for a 4-


Constitutional Assembly to effect amendments to the Constitution.

Even as he conceded that there is need for a law against terrorism which is a new threat to world order, Senator Biazon recalled that as he listened to the debates between Senator Enrile, the Sponsor of the bill, and Senator Pimentel, he was alarmed of the possibility that the administration could use the law to suppress and violate the people’s rights. The fact that there is no established definition of the term “terrorism,” he said he was glad that the Members debated extensively on what acts constitute the crime of terrorism, who are terrorists, and even the manner of handling persons suspected of or charged with the crime of terrorism. He expressed relief that the Body did not adopt the policies followed by the United States in detaining persons suspected of the crime of terrorism in holding centers such as the one in Guantanamo Bay.

He declared that he stands assured that if the Senate continues to be vigilant, the powers-that-be would not be abe to use the law for illicit purposes. He expressed hope that the justices of the Supreme Court would remain as a credible institution, the court of last resort for the people.

By Senator Madrigal

Explaining her negative vote, Senator Madrigal lamented that unlike the other Members who were given a few weeks to interpellate and amend the bill, she was not even given the courtesy and the chance to read the clean copy of the bill before proposing her own amendments. However, she conceded that it is a numbers game, on which matter she would not comment further.

Hereunder is the full text of Senator Madrigal’s explanation of vote:

Today is a dark day in Philippine human rights. This Chamber has voted a draconian measure which, I believe, will result in the trampling of our fundamental rights.

Last 5Ih of December 2006, I delivered a speech before the Eminent Jurists Panel of the International Commission on Jurists in Jakarta, Indonesia. The speech was titled “Legislating in Security Through State Tevorism.”

Last night, when the Senate voted on Second Reading on the anti-terrorism bill, which I called the terror bill, I was reminded again of the

major points which I raised in that speech, which I would like to read for the record today, in the context of the hill that was approved last night. I will read again parts of the speech.

Last 13Ih October 2006, The Philippine Daily Inquirer published an editorial. It was addressed not only to the public hut also to senators like ourselves who have been called upon to deliberate on a proposed anti-terrorism law. It said that such a law “should be of limited duration and subject to an annual review and reenactment by Congress, just as we would like to see a genuine sysfem f o r congressional oversight over the armed forces and the police discourage abuses. ”

The moderate appeal of that newspaper reflects the opinion of many millions of concerned Filipinos. In the name of fighting terrorism, we have seen human, civil and political rights set aside in order to confer upon govem- ance unprecedented powers over those who they view as their enemies. The government of MIS. Arroyo wants increased powers, too. The government of Mrs. Gloria Macapagal Arroyo is insisting on the passage of an oppres- sive anti-terrorism law. The proposed legislation would grant it vast powers over my fellow citizens. To the cautionay charge that such law might become another instrument of a far bigger terror and worse form of terror, that is, of state terrorism, President Arroyo and her Cabinet, and her allies in the legislature insist on denying it might ever he so.

But it will he so, because of the terrifying provisions of the law that are for all to see and read. According to the provisions of the proposed legislation, there is really no clear definition of who a terrorist is. There is only mere definition of acts of terrorism but terrorism has no definition and neither was a terrorist defined specifically in the law. A person may he labeled a terrorist by reason solely of what Gloria Macapagal Arroyo may think she is doing to defend what she believes she is right. Under our Constitution, the hill’s definition of “terrorism” is too broad and too sweeping, covering many crimes that are already punishable under existing laws. The proposed law blurs the distinction between real acts of f l

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terrorism and ordinary crimes. Worse, it can he interpreted to include all acts in pursuit of legitimate dissent. In a time of intense crisis and undisguised political repression, the law can and will be used to illegalize the legitimate activities of critics and opponents of the current administration.

What happened to the six parlia- mentarians and meinhers of the House of Representatives who were accused of participating in a rebellion against the current regime? A few months thereafter, five farmers collectively known as the “Tagaytay 5” were arrested and tortured without any warrant. They continue to be detained until now based on trumped-up charges of rebellion.

The vagueness of defining a “terrorist” is not limited to the Philip- pines alone. Since 1995, the United Nations has yet to come up with a clear definition of who a terrorist is.

Furthermore, the proposed legislation creates a new set of crimes. It grants a disturbing freedom of movement and discretion to the Philippine law enforcement officers and the military.

Under the present draft of the bill, Philippine police or any government law enforcement officer may engage in wiretapping. This may be done through an ex parte written application before the Court of Appeals and based only on reasonable grounds. The written application and the order of the court are declared as classified information.

Any legitimate exercise of one‘s right to appeal for the redress of griev- ances has the potential, under the proposed law, to be considered terrorism solely by reason of membership of a suspect in an organization, association or a group of persons labeled as terrorist group by the government.

Any Filipino or foreigner is liable to arrest and detention without judicial warrant of arrest for a period of three days. This provision, as pointed out by the International Commission of Jurists in their letters to the members of the Philippine Senate dated 3 November 2006, would violate Article XIX, paragraph (3) of the United Nations International Covenant on Civil and

WEDNESDAY, FEBRUARY 7.2007

Political Rights, of which we are a signatory, which requires that a person arrested be brought “promptly before a judicial authority.’’ Under international law, the term “promptly” does not exceed 48 hours even if national security concerns are involved.

Bank deposits, accounts and records may he examined through an ex parre written application by the police and law enforcement officers before the courts. The written application and order of the court allowing such examination are considered classified information.

The bill can cripple opposition businessmen and politicians with its provision that allows the examination (Sections 27 and 28) and the freezing (Sections 30 and 37) of bank accounts of persons charged or suspected of the crime of terrorism.

It is bad enough that DOJ Secretary Raul Gonzalez can charge with conspir- ing to terrorism selected members of the Makati Business Club, for example, and pave the way for the freezing of their accounts. It is worse if bank accounts of mere suspects can now be opened even without being charged in court.

This panoply of powers, the Execu- tive department argues, is a matter of life and death and, therefore, GMA must enjoy these powers. But as the editorial mentioned in the beginning, pointed out and I quote again: “We must bear in mind that the administration trying to panic Congress into passing this law is the same administration that proclaimed the February 2004 homh- ings of the Super Ferry 14 as a mere accident, Indeed, President Gloria Macapagal Arroyo said it was the work of ‘pranksters,’ She and other officials admitted only that it was what everyone thought it was - the country’s worst terrorist attack on October - only after she had claimed victory in the May 2004 elections. Yet, four weeks after the bombing, Redondo Cain Dellosa, alias Arnulfo Alvarado, had been captured by investigators and confessed he had planted the bomb where it would inflict the greatest number of casualties. The Abu Sayyaf claimed credit, but the government laughed it off until after the

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1441 WEDNESDAY. FEBRUARY I . 2007

elections. Even then, the President claimed the six have been caught while the two masterminds evaded apprehen- sion.”

On the social and political issues, my concerns on the anti-terrorism legislation are as follows:

In the hands of a repressive regime such as that of MIS. Gloria Macapagal Arroyo, the anti-terrorism bill will create a shadow crimina1,lusfice system that, in turn, will be used as an instrument of a greater terror perpetra- ted by people in power against their critics and political opponents.

I am deeply bothered by the incident that occurred in the raiding of the Good Shepherd Convent in the Philippine province of Butuan, and the statement made by the Armed Forces of the Philippines in the province of Bulacan that churches can be used as sites for conducting anti-insurgency campaigns.

Recently, the Armed Forces of the Philippines sent a chilling message to all human rights defenders when it called for the labeling of the reputable Amnesty International as persona non grafa in the Philippines.

e We are against the use of violence against civilians. But national security should not be used as an excuse to stifle the freedoms and human rights guaranteed by the Constitution. We agree with the position made by Amnesty International that “security and human rights are not alternatives; they go hand in hand. Respect for human rights is the route to security, not an obstacle to it. The route to security is through respect for human rights, not their violations.“

As the UN Secretary General Kofi Annan had stressed: “While we certainly need vigilance to prevent acts of terrorism, it will be self-defeating if we sacrifice other priorities such as human rights in the process.”

4

Worldwide, there is now a growing clamor for either the repeal or rnodifica- tion of existing terrorist laws.

In 2004, India, a country which has faced serious threats from terrorism and

other forms of political violence, took a significant step forward for human rights by repealing its anti-terrorism law. In India, the Prevention of Terror- ism Act of 2002 was repealed.

In Canada, a federal judge has struck out as unconstitutional the definition of “terrorist” based on his political and religious belief.

And most recently, according to a news report, U.S. Federal District Judge Audrey Collins, in a 2 1 November 2006 rnling, struck down as “unconstitution- ally vague” an executive order of President Bush allowing the latter to create a list of especially designated global terrorist groups.

The same rnling also enjoined the government of the United States from blocking the assets of two foreign groups - the Tamil Liberation Tigers of Sri Lanka and the Partiya Karkeren Knrdistan of Turkey, which were placed on the list.

This ruling is significant considering the fact that the Communist Party of the Philippines and the New People’s Army are also labeled and included in the list of the United States as foreign terrorist organizations and people therein as terrorists. This ruling only amplified the argument that the meaning of terrorism is often determined by context rather than by a logical explanation.

4 In a report on India’s Auti- Terrorism and Security Law, prepared by the Association of the Bar of the City of New York for the Committee on International Rights, it said that, “Attentiveness to this human rights concern is not simply a moral and legal alternative, but also a crucial strategic imperative.” As the Supreme Court of India has recognized, “terrorism often thrives where human rights are violated and the lack of hope for justice provides breeding grounds for terrorism.”

4 Present anti-terrorism legislations rely on the same institutions used in fighting other crimes - the police, the military, the prosecution and the Judiciary. More often than not, these same institutions have been tainted with doubts and their competency to protect human rights laws seriously

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undenined. If these institutions are used to confront the so-called menace of terrorism, intense pressure will only subject them to commit further abuses.

I am not alone in raising these concerns. In my visit to Europe last year, the International Commission on Jurists, the International Federation of Journalists, Amnesty International, and members of parliament have also expressed the same concerns regarding the Philippines' anti-terrorism bill.

Recently, the European Union Diplomatic Corps in the Philippines have also expressed their concerns regarding the possible human rights violations of the proposed anti-terrorism bill.

The issue on terrorism has been studied particularly well with respect to human rights. Present anti-terrorism legislations rely on tho same institutions used in fighting other crimes - the police, the military, the prosecution and the Judiciary.

We cannot overstate the problems being encountered in the Philippines because of the draconian measures being promulgated by the lackeys of President Gloria Macapagal Arroyo. To break this cycle of merely legislating offense without addressing the root problems of why terrorism exists, it is necessary to protect human rights and adopt a paradigm shift on how we view issues on security. Last night, I presented more than 150

amendments. Most of them were not accepted by the Sponsor of the measure. My amendments were substantial and were intended tn introduce the principles of human security to shift the focus on how we view national security. Human security refers to the security of individuals as opposed to national security which refers merely to the security of states. The key elements of my proposed amendments were:

Adopt as a state policy to value the dignity of every human person and grant full respect for human rights as the means for ensuring the security of its people. Towards this end, the State should adopt human security measures to protect the people from pervasive threats to their rights, safety and lives.

6 Such measures should have included conflict management and post- conflict peace-building, to addressing

the roots of conflict by building State capacity and promoting equitable economic development ~ that the state should further advance the protection and promotion of human rights, the rule of law, the culture of peace and peaceful resolution of conflicts by adopting interventions that are people-centered.

The amendments would have included: 1) a separate chapter devoted entirely to human rights such as recognition and equality before the law; the right to life; protection from torture, cruel and inhuman punishment (Until now, we have no law against forced disappearances and torture, and even the CHR commissioner has pointed this out to me and this is why she was very much worried by the proposed anti- terrorism bill); protection of the right to privacy and reputation; freedom of movement; freedom of thought, conscience and belief; peaceful assembly and freedom of expression; right to liberty and security of person; right to humane treatment when deprived of liberty; right to fair trial; compensation for wrongful conviction; right not to he punished more than once; right of ethnic, religious or linguistic groups; 2) Strengthening the Philippines' constitutional body, the CommiSsion on Human Rights, by giving it prosecutorial powers on human rights abuses and requiring it to adopt human security programs to address the root causes of conflict; and 3) The creation of an independent watchdog to monitor the implementation of the law.

What I find further appalling is the fact that the measure the Chamber has approved on Third Reading is also, perhaps, the product of the lobbying and intense pressure of the United States as part of its so-called war on terror. This, again, is a travesty of our sovereignty. We have allowed ourselves to become willing pawns in a war that many independent states are now starting to condemn We have given Gloria Macapagal Arroyo the tools to terrorize her own people.

Let us pray that God will watch over whatever happens now that the bill was passed on Third Reading and that may God put in the hands of the right people this dangerous tool and may He give those who are in danger of being oppressed by this law, should it pass, the strength, the courage and the grace to fight the darkness that will overshadow their lives.

By Senator Roxas

In explaining his negative vote, Senator Roxas said that he does not believe that the weakest

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link in the country’s battle against terrorism lies in not having an appropriate law to combat the crime. He stressed that the nation cannot defend its liberty by forsaking freedom nor could there he security if civil liberties are less secure. He noted that basic items for combating terrorism like information-sharing among government agencies as well as adequate equipment and training for forensics and law enforcement, which would contribute to greater success against the war on terrorism, are not in place.

Senator Roxas believed that the damage that the Anti-Terrorism Law could cause is worse than whatever meager or marginal contribution it would have. He said that while the battle is constant between the citizen’s civil liberties and the government’s right to protect and defend the State, it is important for government to always strike the appropriate balance. In this instance, he said that without having effectively addressed other issues such as training, equipment and all other elements necessary to combat terrorism, it is not correct to simply pass a law that curtails civil liberties in the hope that it would become an effective tool against terrorism.

By Senator Drilon

Senator Drilon said that while he voted affirmatively on the bill, he had some reservations on some provisions, particularly Section 26 (Restriction on Travel) because he believed that when the evidence of guilt is not strong in a capital offense and the person is granted bail, that person is free, pending final decision of the case and should not be subject to the restrictions provided in this particular section. Likewise, he observed that there appears to be something wrong in the wording of Section 29 because a suspect could he detained beyond three days even without a warrant when the same was approved by a human rights commissioner who is not a judge and possibly may not even he a lawyer.

However, Senator Drilon stated that Senator Enrile has graciously agreed to discuss these matters in the bicameral conference.

By Senator Pimentel

Senator Pimentel stated that his affirmative vote on the hill is conditional on the outcome of the bicameral conference committee.

Senator Pimentel noted that about 95% of the bill, as is now constituted, was the fruit of his

amendments together with Senators Drilon, Madrigal, Defensor Santiago and Lacson, the sum of which is to remove the sharpest teeth of the anti-terror bill that could bite the civil liberties of the people. Nonetheless, he said that there is much work to be done in the bicameral conference committee.



It wos 5:30 p.m


At 5:31 p.m., the session was resumed


Upon direction of the Chair, Secretary Yabes read the President’s certification as to the necessity of the immediate enactment of House Bill No. 5859, to wit:

MALACfiANG PALACE MANILA

February 6,2007

HON. MANUEL B. VILLAR JR Senate President Philippine Senate Pasay City

Dear Senate President:

Pursuant to the provisions of Article VI, Section 26(2) of the 1987 Constitution, I hereby certify to the necessity of the immediate enactment of House Bill No. 5859 under Committee Report No. 244, entitled

AN ACT PROVIDING FOR THE AF’PORnoNMENT OF THE LONE LEGISLATnrE DISTKICT OF THE CITY OF CAGAYAN DE ORO,

to address a public emergency arising from the urgent need to provide immediate and effective representation to the people of Cagayan de Or0 City in the face of phenomenal growth in its population, as well as to ensure speedy delivery of basic services to its inhabitants.

Best wishes.

Very tmly yours,

(SGD.) GLORIA M. ARROYO


cc. Hon. Jose C . De Venecia Jr. Speaker House of Representatives Quezon City

APPROVAL OF HOUSE BILL NO. 5859 ON THIRD READING

In view of the presidential certification, upon motion of Senator Cayetano, there being no objection, the Body considered, on Third Reading, House Bill No. 5859.

Pursuant to Section 67, Rule XXIII of the Rules of the Senate, upon motion of Senator Cayetano, there being no objection, Secretary Yabes read only the title of the bill, to wit:

AN ACT PROVIDING FOR THE APPORTIONMENT OF THE LONE LEGISLATIVE DISTRICT OF THE CITY OF CAGAYAN DE ORO.




In ,favor

Arroyo Cayetano Enrile Flavier Gordon Lapid Madrigal

Magsaysay Osmeiia Pangilinan Pimentel Roxas Villar

Against

None

Abstention

None

With 13 senators voting in favor, none against, and no abstention, the Chair declared House Bill No, 5859 approved on Third Reading.

INQUIRY OF SENATOR DRILON

Asked by Senator Drilon what public emergency was being sought to be addressed by the apportionment of the lone legislative district of Cagayan de

Oro, Senator Cayetano replied that it is the urgent need to provide immediate and effective representation to the people of Cagayan de Or0 in the face of the phenomenal growth of its population.


With the permission of the Body, the Chair suspended the session.

It wus 5:35 p.m,



CONFERENCE COMMITTEE REPORT ON SENATE BILL NO. 1745 AND HOUSE BILL NO. 3315

Upon motion of Senator Cayetano, there being no objection, the Body considered the Conference Committee Report on the disagreeing provisions of Senate Bill No. 1745, entitled

AN ACT PROVIDING FOR COMPENSA- TION TO THE VICTIMS OF HUMAN RIGHTS VIOLATIONS DURING THE REGIME OF FORMER PRESIDENT

ATION OF SAID VIOLATIONS, APPROPRIATlNG FUNDS THEREFOR AND FOR OTHER PURPOSES,

FERDINAND MARCOS, WCUMENT-

and House Bill No. 3315, entitled

AN ACT PROVIDING COMPENSATION TO VICTIMS OF HUMAN RIGHTS VIOLATIONS DURING THE MARCOS REGIME, DOCUMENTATION OF S A I D VIOLATIONS, APPROPRIATING FUNDS THEREFOR AND FOR OTHER PURPOSES.

The Chair recognized Senator Arroyo to sponsor the report.

SPONSORSHIP REMARKS OF SENATOR ARROYO

Senator Arroyo informed the Body that the bicameral conference committee had agreed that the P10 billion compensation package proposed in the Senate version shall prevail over the P8 billion f l

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WEDNESDAY. FEBRUARY 7.2007

package proposed in the House version; and to ensure the independence ofthe Board, which would d e t e m ~ e the qualifications of the victims and the amounts to be awarded to them, four of its members would come from the NGOs and one from the government.

Moreover, Senator Arroyo stated that the Board would have to finish its work within two years.

APPROVAL OF THE CONFERENCE COMMITTEE REPORT

Submitted to a vote and there being no objection, the Conference Committee Report on the disagreeing provisions of Senate Bill No. 1745 and House Bill No. 3315 was approved by the Body.

SPECIAL ORDERS

I .

2.

3.

4.

5.

6.

Upon motion of Senator Cayetano, there being no objection, the Body approved the transfer of the following from the Calendar for Ordinary Business to the Calendar for Special Orders:

Committee Report No. 250 on House Bill No. 5849;



Committee Report No. 253 on House Bill No. 5850; Committee Report No. 254 on House Bill No. 5855; and


RILLS ESTABLISHING MARINE RESEARCH AND BREEDING CENTERS

With the unanimous consent of the Body, upon motion of Senator Cayetano, the following hills were considered on Second Reading:

1. House Bill No. 5849 (Committee Report No. E O ) , entitled

AN ACT ESTABLISHING A MARINE FISHERIES LABORATORY IN THE MUNICIPALITY OF SAN JOSE, PROVINCE OF NORTHERN SAMAR, AND AUTHORIZING THE APPRO- P U T I O N OF FUNDS THEREFOR,

1457

2. House Bill No. 5840 (Committee Report No. 251), entitled

AN ACT TO ESTABLISH AQUATIC RESEARCH AND EXPERIMENTAL BREEDING STATIONS IN SUITABLE MUNICIPALITIES IN THE PROVINCE OF CAMARINES SUR FOR THE CULTURE, BREEDING AND PRO- PAGATION OF MUDFISH (“DALAG‘’), NATIVE HITO, GURAMI AND FRESHWATER SHRIMP, AND FOR OTHERPLRPOSES;


AN ACT TO ESTABLISH AN OYSTER AND MUSSEL FARM IN THE MUNICI- PALITY OF CALABANGA, PROVINCE OF CAMAKINES SUR, APPROPIUAT- ING FUNDS THEREFOR AND FOR OTHERPURPOSES;


AN ACT ESTABLISHING A MARINE RESEARCH AND BEEDING CENTER IN THE MUNICIPALITY OF BALER, PROVINCE OF AURORA, APPRO- PRIATING FUNDS THEREFOR AND FOR OTHERPURPOSES;


AN ACT ESTABLISHING FISHERY AND RESEARCH CENTERS IN EACH OF THE MUNICIPALITIES OF BASEY, CALBIGA, CATBALOGAN, DARAM, JIABONG, MARABUT, MOTIONG, PARANAS, PINABACDAO, SAN SEBASTIAN, STA. mA, TALALORA, VILLAREAL AND ZUMARRAGA, ALL IN THE PROVINCE OF SAMAR AND APPROPRIATING FUNDS THEREFOR and


AN ACT ESTABLISHING A MARINE RESEARCH AND BREEDING CENTER IN THE MUNICIPALITY OF ODIONGAN, PROVINCE OF ROMBLON, APPROPRIATING FUNDS THEREFOR AND FOR OTHER PURPOSES.

Pursuant to Section 67, Rule XXIII of the Rules of the Senate, with the permission of the Body, upon motion of Senator Cayetano, only the titles of the bills .@-

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1458

were read without prejudice to the insertion of their full texts into the Record of the Senate.

The Chair recognized Senator Magsaysay for the sponsorship.

SPONSORSHIP SPEECH OF SENATOR MAGSAYSAY

In his omnibus sponsorship, Senator Magsaysay stated that House Bill Nos. 5849, 5840, 5841, 5850, 5855, and 5852 are necessary components in the government’s drive to increase productive capacity in the aquaculture subsector which is envisioned to provide more than 50% of the country’s food requirements in the next 10 years. He cited the purpose of each bill:

+ House Bill No. 5840 would provide for the technology outreach program in the government’s thrust to provide freshwater fish, most especially varieties that ordinary Filipinos consume such as dalng, hito, gurnmi, freshwater shrimps and the like;

House Bill No. 5841 constitutes the other half of the aquaculture subsector as the focus is on marine species such as oysters, mussels, crabs and shrimps;

+ Since fish health is a vital issue in production, thus, the need for fish health laboratories, House Bill No. 5849 provides for the establishment of a marine fisheries laboratory in San Jose, Northern Samar;

To further develop aquaculture, House Bill No. 5850 seeks to establish a marine research and breeding center in the province of Aurora purposely to study the introduction and propagation of higher value fish species which could also be produced in the province;

In the same manner, House Bill No. 5852 recognizes the need to establish a marine research and breeding center in Romblon where marine aquaculture parks could be established; and

House Bill No. 5855 seeks to establish a fishery research and technology center in Jiabong, Samar that has the most number of marine culture parks, 12 since 2003. The creation of this center will address the need of fisherfolk as regard technology in growing various species,

+

+

+

+

WEDNESDAY, FEBRUARY 7,2007

especially the higher value ones which can be exported.

INTERPELLATION OF SENATOR BIAZON

Asked by Senator Biazon what agencies would be implementing the laws, Senator Magsaysay replied that it is the Bureau of Fjsherjes and Aquatic Resources under the Department of Agriculture.

Asked how much starting capital is required, Senator Magsaysay said that it is P2 million per center per year, which shall be sourced from the agricultural budget of 2007.



It was 5:47 p m .


At 5:47 p,m., the session was resumed

SUSPENSION OF THE RULES

Upon motion of Senator Cayetano, there being no objection, the Body suspended the Rules of the Senate to expedite the proceedings.

TERMINATION OF THE PERIOD OF INTERPELLATIONS

There being no further interpellations on any of the bills, upon motion of Senator Cayetano, there being no objection, the Body closed the period of interpellations and proceeded to the period of amendments.

TERMINATION OF THE PERIOD OF AMENDMENTS

There being no committee or individual amendment to any of the bills, upon motion of Senator Cayetano, there being no objection, the Body closed the period of amendments.

APPROVAL OF HOUSE BILL NOS. 5849, 5840, 5841, 5850, 5855 AND 5852 ON SECOND READING

Submitted to a vote, there being no objection, House Bill Nos. 5849, 5840, 5841, 5850,5855 and#‘

?


5852 was approved on Second Reading, one after the other.

SUSPENSION OF CONSIDERATION OF HOUSE RILL NOS. 5849, 5840, 5841, 5850, 5855 AND 5852

Upon motion of Senator Cayetano, there being no objection, the Body suspended consideration of the bills.



It was 5:49 p.m.



SPECIAL ORDER

Upon motion of Senator Cayetano, there being no objection, the Body approved the transfer of Committee Report No. 256 on House Bill No. 2454 from the Calendar for Ordinary Business to the Calendar for Special Orders.

COMMITTEE REPORT NO. 256 ON HOUSE BILL NO. 2454

Upon motion of Senator Cayetano, there being no objection, the Body considered, on Second Reading, House Bill No. 2454 (Committee Report No. 256), entitled

AN ACT GRANTING PHILIPPINE CITIZENSHIP TO MR. JOSE R. RODRIGUEZ.

Pursuant to Section 67, Rule XXIII of the Rules of the Senate, with the permission of the Body, upon motion of Senator Cayetano, 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 Enrile for the sponsorship.

SPONSORSHIP SPEECH OF SENATOR ENRILE

In sponsoring House Bill No. 2454, Senator Enrile delivered the following speech:

It is my pleasure to rise before this Chamber today to present and sponsor House Bill No 2454, entitled “An Act Granting Philippine Citizenship to Mr. Jose R. Rodriguez” filed under Committee Report No. 256.

In this time and age where the thrust of our citizens is to migrate to other countries, here is another foreign national who prefers to be a Filipino than to remain a national of his country of birth, As a foreigner, he must see what his forefathers saw in the Philippines, starting with Magellan - although he is a Portuguese, he represented the King and Queen of Spain. Our beautiful country is known throughout history as Pearl of the Orient Seas.

Jose R. Rodriguez is a Spanish national, who has been a permanent resident of the Philippines for more than a quarter of a century. He is married to a noted Filipina portrait artist, Lourdes Coching Rodriguez, with whom he has two children, Lara Maria and Jose Francisco, both surnamed Rodriguez. His children, both Filipino citizens, were schooled here in this country particularly at the Assumption College and at the Colegio de San Agustin.

Mr. Rodriguez is a writer and journalist by profession, He is a member of different journalists associations. He became president of the Foreign Correspondent Association of the Philip- pines (FOCAP) in 1992 and was elected president of the Manila Overseas Press Club (MOPC) in 1995. He is also a member of the International Press Institute, the Asian Journalists Association, the Association of the European Journalists, the APE, the Press Association of Madrid, and the National Press Club of the Philippines.

Pepe, as he is fondly hown, is also a contributor of opinions and writings to daily newspapers, such as the Manila Bulletin and the Philippine Star. He published three books, two of which are about the Philippines: Chronicas, a volume of his random recollections of his days as a journalist which our famous and noted Nick Joaquin describes as “delightful, delicious, de luxe, lovely, a love letter at last from dear old Spain”; and Philippine First Ladies Portraits, a book which celebrates the lives of Philippines’ first ladies. He did not include Philippine frst gentlemen as there was none yet at that time.

Mr. Rodriguez said that the hooks were for him “a way of thankkg the people of these paradise islands, the Philippines, who embraced him as one of their own from the very moment he arrived in 1977. Imagine coming to this country during martial law. His other book is entitled#- Twelve Poets of Guadalupe, Madrid 1972.

r


Highly educated, MI. Rodriguez has a PhD and Master of Arts in Business Administration at Newport University in the United States of America. He also holds a Bachelor of Science Degree in Agriculture, Technical Engineering from the University of Madrid. He has also been conferred a degree of Doctor of Humanities, honoris cuusu by the Pnmantnsnn rig Lungsod ng Muyniln.

As if his educational attainments are not impressive enough, Mr. Rodriguez is also multi- lingual. Aside from Spanish, he is fluent in English, Portuguese and French, as I was not mistaken in referring to Magellan. And he is very knowledgeable of our Filipino language. In fact, I asked him during the committee hearing if he knows some of our dialects or understand our dialect, and he said “yes.”

MI. Rodriguez conducted himself in a proper and irreproachable manner during his entire stay in the Philippines. He is a law-abiding citizen and per information of the Bureau of Immigration, he does not have any record that goes against what we consider to be a man of rectitude, and he is especially not among those included in any blacklisting by our govenunent.

MI. Jose “Pepe” R. Rodriguez frequently interacts socially with Filipino citizens. He has learned and embraced the customs, traditions and ideals of Filipinos.

In fact, in 2004, Pres. Gloria Macapagal Arroyo conferred the Order of Sikatuna, Rank of Lakan, on MI. Rodriguez for his efforts in renewing and advancing ties between Spain and the Philippines during his 25 years stay in this country.

In his acceptance speech, Mr. Rodriguez said that for someone who has spent the best years of his life in fhis country, he confessed that at the very moment, he felt that he is, he was, and will be a Filipino.

1 could go on and on and enumerate the long list of achievements of this person who calls our country his home and who considers this country his home.

However, I find it sufficient to say that with Mr. Jose Rodriguez’s achievements, qualities and qualification and love of country as reflected in his works, this man is a welcome addition to the Philippines as one of its citizens.

With this, I urge this Chamber to pass this bill into law and grant Philippine citizenship to Mr. Jose Rodriguez.

REMARK OF SENATOR ARROYO

Senator Arroyo expressed support for the bill granting Filipino citizenship to Mr. Rodriguez who, he said, is a very good Filipino.

REMARKS OF SENATOR BIAZON

Senator Biazon stated that he often met Pepe Rodriguez in social gatherings and in the golf course. He said that he would like to be associated with Senator Arroyo’s remarks.

COAUTHORS

Upon motion of Senator Enrile, there being no objection, Senators Angara, Cayetano, Biazon, Arroyo, Ejercito Estrada (J), Lacson, Magsaysay, Flavier, Lim, Gordon, Recto and Villar were made coauthors of the bill.

INTERPELLATION OF SENATOR ANGARA

Asked by Senator Angara if MI. Rodriguez is the head of the Institute de Cervantes and a long- time representative of the Spanish Press, ZPE, Senator Enrile replied in the affirmative.

Senator Angara stated that he was the proponent of the law creating the Philippine-Spanish Friendship Day which Don Rodriguez knows has brought the Spanish-Philippine relations closer again after it was interrupted by Hollywood 70 years ago. He said that the grant of citizenship to Mr. Rodriguez is really a Senate’s token of recognition of the services he has done for the country.


There being no further interpellations, upon motion of Senator Enrile, there being no objection, the Body closed the period of interpellations and proceeded to the period of amendments.


There being no committee or individual amendment, upon motion of Senator Enrile, there being no objection, the Body closed the period of amendments.

P A-


APPROVAL OF HOUSE BILL NO. 2454 ON SECOND READING

Submitted to a vote, there being no objection, House Bill No. 2454 was approved on Second Keading.



It was 6:04 p.m.



SUSPENSION OF CONSIDERATION OF HOUSE BILL NO. 2454

Upon motion of Senator Cayetano, there being no objection, the Body suspended consideration of the hill.



It was 6:06 p.m.



SUSPENSION OF THE RULES

Upon motion of Senator Cayetano, there being no objection, the Body suspended the Rules of the Senate to allow the consideration of four tourist zone hills at the same time.

TOURIST ZONE BILLS (Continuation)

Upon motion of Senator Cayetano, there being no objection, the Body resumed consideration, on Second Reading, of the following House bills:

1. House Bill No. 591 (Committee Report No. 233) , entitled

ANACTDECLARINGTHEATULAYAN ISLAND OF THE MUNICIPALITY OF

SAGRAY, PROVINCE OF CAMARINES SUR AS A TOURIST ZONE;


AN ACT DECLARING THE ISLAND- TOWNS OF BIRI, CAPUL, SAN ANTONIO AND SAN VICENTE, ALL IN THE PROVINCE OF NORTHERN SAMARAS ECO-TOURISM ZONES;


AN ACT DECLARlNG THE ISLANDS OF LAHUY, COTIVAS, GUINAHUAN, LUKSUHIN, MALIBAGAN AND MASAG, OFF THE NORTHEASTERN COAST OF THE MUNICIPALITY OF CARAMOAN, PROVINCE OF CAMARINES SUR AS TOURIST ZONES; and


AN ACT DECLARING THE PROVINCE OF BOHOL AS AN ECO-CULTURAL TOURISM ZONE

Senator Cayetano stated that the parliamentary status was the period of interpellations.

The Chair recognized Senator Gordon, Sponsor of the measure.


There being no interpellation on any of the bills, upon motion of Senator Cayetano, there being no objection, the Body closed the period of interpellations and proceeded to the period of committee amendments.



It was 6:08 p.m


At 6:08 p.m., the session was resumed. 4@'


PROPOSED COMMITTEE AMENDMENTS

Upon motion of Senator Cayetano there being no objection, the the Body approved the insertion into the Record of the Senate of the following Committee amendments to the House bills as contained in their respective Committee reports:

House Bill No. 591 (Committee Repor.t No. 233):

1. On page I , delete lines 1 to 2, and in lieu thereof, insert a new Section 1 which shall read as follows:

SECTION 1. THIS ACT HEREBY DECLARES THE ATULAYAN ISLAND OF THE MUNICIPALITY OF SAGNAY, PROVINCE OF CAMARINES SUR AS A NATIONAL TOURISM ZONE

On the same page, delete the entire Section 2, from line 3 up to line 9, and in lieu thereof, insert a new Section 2 which shall read as follows:

2.

SEC. 2. UNTII. COMPREHENSIVE LEGISLATION RATIONALIZING THE NATIONAL TOURISM PROGRAM IS ADOPTED, THE FOLLOWING PRINCIPLES SHALL GOVERN THE PLANNING, DEVELOPMENT, PROMOTION AND MANAGEMENTOF THIS TOURISM ZONE A) THE DEPARTMENT OF TOURISM

(DOT) AND ITS ATTACHED AGENCIES, AND THE PARTIDO DEVELOPMENT ADMINISTRATION (PDA) SHALL COOR!XNATE IN TIIE FORMULATION OF ATOURISM DEVELOPMENT PLAN FOR THE TOURISM UINE: PROPWED, THAT SAID PLAN IS CONSISTENT WITH, OR MAY BE INTEGRATED INTO, THE NATIONAL TOURISM MASTER PLAN OF THE DOT.

B) THE PLAN SHALL PROTECT AND ENHANCE THE NATURAL FEATURES AND CULTURAL HERITAGE OF THE TOURISM ZONE, WHILE PROVIDING SUSTAINABLE ECONOMIC OPPORTU- NITIES F O R m LOCAL COMMUNlTY.

C) THE PDA AND THE RELEVANT MUNICIPALITIES SHALL UTILIZE ITS POWERS PROVIDED UNDER R.A. 7820, AS AMENDED, AND THE LOCAL GOVERNMENT CODE, RES- PECTIVELY, TO IMPLEMENT AND ENFORCE THE TOURISM DEVELOP- MENT PLAN.

D) THE DOT AND ITS ATTACHED AGENCIES MAY PROVIDE NECES- SARY TECHNICAL ANTI FINANCIAL ASSISTANCE FOR THE DEVELOP- MENT OF TOURISM NFRASTRUC- TURE AND SKILLS DEVELOPMENT WHILE ENDEAVORING, WHEN PRACTICABLE, TO PROMOTE THE TOURISM ZONE BOTH KCALLY AND INTERNATIONALLY. THE DOT, PDA AND THE RELEVANT MUNICIPALITIES SHALL CREATE A FORUM BY WHICH THE PRIVATE SECTOR NONGOVERNMENT ORGAN- IZATIONS AND OTHER INTEREST GROUPS, CAN INTERACT WITH ONE ANOTHER AND THE GOVERNMENT TO CREATE AN ATMOSPHERE THAT SHALL ENCOURAGE INVESTMENT, AND THE DEVELOPMENT OF A CULTURE OF TOURISM,

E)

3. On page 2, delete Section 3 and renumber the succeeding sections accordingly; and On the same page, delete the entire Section 4 and Section 5, and in lieu thereof, insert the new sections as follows:

SEC. 3. THE DEPARTMENT OF TOURISM, IN CONSULTATION WITH THE PDA AND THE LOCAL GOVERNMENT

PRIATE RULES AND REGULXTONS, AND ENTER INTO AGREEMENTS TO IMPLEMENT THIS ACT.

4.

CONCERNED, SHALL ADOPT APPRO-

SEC. 4. THIS ACT SHALL TAKE EFFECT AFTER FIFTEEN (15) DAYS OF COMPLETION OF ITS PUBLICATION.

House Bill No. 786 (Cornmilfee Report No. 234)

1. On page 1, delete lines 1 to 5 , and in lieu thereof, insert a new Section which shall read as follows:

SECTION 1. THIS ACT HEREBY DECLARES TIE ISLAND-TOWNS OF BIRI, CAPUL, SAN ANTONIO AND SAN VICENTE IN THE PROVINCE OF NORTHERN SAMAR AS NATIONAL TOURISM ZONE,

Delete the entire Section 2, from page 1, line 6 up to page 2, line 5 and in lieu thereof, insert a new Section 2 which shall read as follows:

SEC. 2. UNTIL COMPREHENSIVE LEGISLATION RATIONALIZING THE

2.

P

WEDNESDAY. FEBRUARY 7,2007 1463

NATIONAL TOURISM PROGRAM IS ADOPTED, THE FOLLOWING PRINCIPLES SHALL GOVERN THE PLANNING, DEVELOPMENT, PROMOTION AND MANAGEMENT OF THIS TOURISM ZONE:

A) THE DEPARTMENI’ OF TOURISM (DOT) AND ITS ATTACHED AGENCIES, ANDTHEPROVINCL4LGOVERNMEM OF NORTHERN SAMAR SHALL COORDINATE IN THE FORMULATION OF A TOURISM DEVELOPMEW PIAN FORTHETOURISM ZONE: PROWDED, THAT SAID PLAN IS CONSISTENT WITH, OR MAY BE INTEGRATED INTO, THE NATIONAL TOURISM MASTER PLAN OF THE DOT.

B) THE PLAN SHALL PROTECT AND ENHANCE THE NATURAL FEATURES AND CULTURAL HERITAGE OF THE TOURISM ZONE. WHlLE PROVIDING

NITIES FORTHE LC€ALCOMMUNlTY.

C) THE RELEVANT LOCAL GOVERN- MENT SHALL UTILIZE ITS POWERS PROVIDED UNDER THE LOCAL GOVERNMENT CODE TO IMPLEMENT AND ENFORCE THE TOURISM DEVELOPMENT PLAN

D) THE DOT AND ITS ATTACHED AGENCIES MAY PROVIDE NECES- SARY TECHNICAL AND FINANCIAL ASSISTANCE FOR THE DEVELOP- MENT OF TOURISM INFRASTRUC- TUREANDSKILLsDEVELQPMJ2NTIN THE LOCAL GOVERNMENT WHILE ENDEAVORING, WHEN PRACTIC- ABLE, TO PROMOTE THE TOURISM ZONES BOTH LOCALLY AND INTERNATIONALLY.

THE DOT AND THE LOCAL GOVERN- MENT SHALL CREATE A FORUM BY WHICH THE PWATE SECTOR, NON- GOVERNMENTORGANIZATIONS AND OTHER INTEREST GROUPS, CAN INTERACT WITH ONE ANOTHER AND THE GOVERNMENT TO CREATE AN ATMOSPHERE THAT SHALL ENCOURAGEINVESTMENT.ANDTHE DEVELOPMENT OF A CULTURE OF TOURISM,

E)

F) THE LAND EMBRACED BY THE TOURlSM ZONE SHALL BE EXEMPT FROM THE COVERAGE OF THE COMPREHENSIVE AGRARIAN REFORM PROGRAM. AND SHALL BE

DETERMINED BY THE CONCERNED SANGGU”.;

3. On page 2, delete Section 3 and renumber the succeeding sections accordingly;

On the same page, delete the entire Section 4 and Section 5 , and in lieu thereof insert the new sections as follows:

4.

SEC. 3. THE DEPARTMENT OF TOURISM, IN CONSULTATION WITH THE LOCAL GOVERNMENT CONCERNED, SHALL ADOPT APPROPRIATE RULES AND REGULATIONS, AND ENTER INTO AGREE- MENTS TO IMPLEMENT THIS ACT, and


House Bill No. 574 (Committee Report No. 235)

On page 1, second line of the title, replace the word “Covitas” with COTIVAS after the word “Lahuy”;

On the same page, delete lines 1 to 3, and in lieu thereof, insert a new Section 1 which shall read as follows:

SECTION 1. THIS ACT HEREBY DECLARES THE ISLANDS OF LAHW, COTIVAS, GUINAHUAN, LUKSUHIN, MALIBAGAN AND MASAG, OFF THE NORTHEASTERN COAST OF THE MUNICIPALITY OF CARAMOAN, PROVINCE OF CAMARINES SUR AS NATIONAL TOURISM ZONES.;

Delete the entire Section 2, from page 1, line 4 up to page 2, line 2, and in lieu thereof, insert a new Section 2 which shall read as follows:

SEC. 2. UNTIL COMPREHENSIVE LEGISLATION RATIONALIZING THE NATIONAL TOURISM PROGRAM IS ADOPTED, THE FOLLQWING PRINCIPLES SHALLGOVERNTHEPLAN”G,DEVELOP- MENT, PROMOTION AND MANAGEMEN OF THESE TOURISM ZONE:

A. THE DEPARTMENT OF TOURISM OT) AND II3 ATTACHED AGENCES, AND THE PARTIDO DEVELOPMENT ADMINISTRATION (PDA) SHALL COORDINAE IN TIIE FORMUL4TION OF ATOURISM DEVELOPMENT PLAN FOR THE TOURISM ZONE: PROVIDED, THAT SAID PLAN IS CONSISTENT 4-


WITH, OR MAY BE INTEGRATED INTO, THE NATIONAL TOURISM MASTER PLAN OF THE DOT. THE PLAN SHALL PROTECT AND ENHANCE THE NATURAL FEATURES AND CULTURAL HERITAGE OF THE TOURISM ZONE, WHILE PROVID- ING SUSTAINABLE ECONOMIC OPPORTUNITIES FOR THE LOCAL c o m n .

C. THE PDA AND THE RELEVANT MUNICIPALITIES SHALL UTILIZE THEIR POWERS PROVIDED UNDER R.A. 7820, AS AMENDED, AND THE LOCAL GOVERNMENT CODE, RES- PECTIVELY, TO IMPLEMENT AND ENFORCE THE TOURISM DEVELOP- MENT PLAN.

B.

D. THE DOT AND ITS ATTACHED AGENCIES, MAY PROVIDE NECES- SARY TECHNICAL AND FINANCIAL ASSISTANCE FOR THE DEVELOP- ~ ..--.- -~ MENT OF TOURISM INFRASTRUC- TURE AND SKILLS DEVELOPMENT IN THE LOCAL GOVERNMENT WHILE ENDEAVORING, WHEN PRACTIC- ABLE, TO PROMOTE THE TOURISM ZONES BOTH LOCALLY AND INTERNATIONALLY.

E THE DOT, THE PDA, AND THE RELEVANT MUNICIPALITIES SHALL CREATE A FORUM BY WHICH THE PRIVATE SECTOR, NONGOVERN- MENT ORGANIZATIONS AND OTHER INTEREST GROUPS, CAN INTERACT WITH ONE ANOTHER AND THE GOVERNMENT TO CREATE AN ATMOSPHERE THAT SHALL ENCOURAGE I"T, AND THE DEVELOPMENT OF A CULTURE OF TOURISM.;

4.

5.

On page 2, delete Section 3 and renumber the succeeding sections accordingly; and

On the same page, delete the entire Section 4 and Section 5, and in lieu thereof, insert the new sections which shall read as follows:

SEC. 3. THE DEPARTMENT OF TOURISM, IN CONSULTATION WITH THE PDA SHALL ADOPT APPROPRIATE RULES AND REGULATIONS, AND ENTER INTO AGREEMENIS TO IMPLEMENT THIS ACT.


House Bill No. 2072 (Committee Report No. 236)

I. Delete Sections I , 2, 3,4,S and 6 and in lieu thereof, insert new Sections 1, 2, 3 and 4 which shall read as follows:

SECTION I . THIS ACT HEREBY DECLARES THE PROVlNCE OF BOHOL AS A NATIONAL TOURISM ZONE.

SEC. 2. UNTIL COMPREHENSIVE LEGISLATION RATIONALIZING THE NATIONAL TOURISM PROGRAM IS ADOPTED, THE FOLLOWING PRINCIPLES SHALL GOVERN THE PLANNING, DEVELOPMENT, PROMOTION AND MANAGEMENT OF THIS TOURISM ZONE:

A.

B.

C.

D.

THE DEPARTMENT OF TOURISM WT) AND ITS ATTACHED AGENCLES, AND THE PROVINCIAL GOVERN- MENT OF BOHOL AND THE CITY GOVERNMENT OF TAGBILARAN SHALL COORDINATE IN THE FORMULATION OF A TOURISM DEVELOPMENT PLAN FOR THE TOURISM ZONE: PROVIDED, THAT SAID PLAN IS CONSISTENT WITH, OR MAY BE INTEGRATED INTO, THE NATIONAL TOURISM MASTER PLAN OF THE DOT.

THE PLAN SHALL PROTECT AND ENHANCE THE NATURAL FEATURES AND CULTURAL HERITAGE OF THE TOURISM ZONE, WHILE PROVID- ING SUSTAINABLE ECONOMIC OPPORTUNITIES FOR THE LOCAL COMMUNITY. THE PROVINCIAL GOVERNMENT OF BOHOL AND THE CITY GOVERN- MENT OF TAGBILARAN SHALL UTILIZE ITS POWERS PROVIDED UNDER THE LOCAL GOVERNMENT CODE TO IMPLEMENT AND ENFORCE THE TOURISM DEVELOPMENT PLAN.

THE DOT AND ITS ATTACHED AGENCIES MAY PROVIDE NECES- SARY TECHNICAL AND FINANCIAL ASSISTANCE FOR THE DEVELOP- MENT OF TOURISM INFRASTRUC- TURE AND SKILLS DEVELOPMENT IN THE PROVINCE OF BOHOL WHILE ENDEAVORING, WHEN PRACTIC- ABLE, TO PROMOTE THE TOURISM ZONE BOTH LOCALLY AND INTERNATONALLY. e

P


E THE DOT, THE PROVINCIAL GOVERN MENT OF BOHOL AND THE CITY GOVERNMENT OF TAGBILARAN SHALL CREATE A FORUM BY WHICH THE PRIVATE SECTOR, NONGOVERNMENT ORGANIZA- TIONS AND OTHER INTEREST GROUPS, CAN INTERACT WITH ONE ANOTHER AND THE GOVERNMENT TO CREATE AN ATMOSPHERE THAT SHALL ENCOURAGE INVEST- MENT, AND THE DEVELOPMENT OF A CULTURE OF TOURISM,

SEC. 3. THE DEPARTMENT OF TOURISM, IN CONSULTATION WITH THE PROVINCIAL GOVERNMENT OF BOHOL AND THE CITY GOVERNMENT OF TAGBILARAN SHALL ADOPT APPRO- PRIATE RULES AND REGULATIONS, AND ENTER INTO AGREEMENTS TO IMPLE- MENT THIS ACT.


APPROVAL OF COMMITTEE AMENDMENTS

Upon motion of Senator Cayetano, there being no objection, the Body approved the committee amendments to House Bill No. 591; House Bill No. 786; House Bill No. 574; and House Bill No. 2072.

TERMINATION OF THE PERIOD OF COMMITTEE AMENDMENTS

Upon motion of Senator Cayetano, there being no objection, the Body closed the period of committee amendments and proceeded to the period of individual amendments.

TERMINATION OF THE PERIOD OF INDIVIDUAL AMENDMENTS

There being no individual amendment, upon motion of Senator Cayetano, there being no objection, the Body closed the period of individual amendments.

APPROVAL OF HOUSE BILL NOS. 591, 786, 574, AND 2072 ON SECOND READING

Submitted to vote, and there being no objection, House Bill Nos. 591, 786, 574 and 2072 were approved on Second Reading, one after the other.

SUSPENSION OF CONSIDERATION OF HOUSE BILL NOS. 591, 186, 574 AND 2072

Upon motion of Senator Cayetano, there being no objection, the Body suspended consideration of the hills.



It was 6:lO p.m.


At 6:17 p,m., the session was resumed.

COMMITTEE REPORT NO. 60 ON SENATE BILL NO. 2233

(Continuation)

Upon motion of Senator Cayetano, there being no objection, the Body resumed consideration, on Second Reading, of Senate Bill No. 2233 (Committee Report No. 60), entitled

AN ACT ESTABLISHING A PROVI- DENT PERSONAL SAVINGS PLAN, KNOWN AS THE PERSONAL EQUITY AND RETIREMENT ACCOUNT (“PERA”).

Senator Cayetano stated that the parliamentary status was the period of interpellations.

The Chair recognized Senator Angara, Sponsor of the measure, and Senator Enrile for his interpellation.

INTERPELLATION OF SENATOR ENRILE

Asked by Senator Enrile on the purpose and mechanics of the bill, Senator Angara explained that the Personal Equity Retirement Account (PERA) is a voluntary retirement scheme, supplementary and complementary to the existing retirement benefit that is mandatory, under the S S S for private employees, and GSIS for government employees.

Senator Angara said that under the PERA scheme, the Filipino taxpayers are enjoined to s e t K

1466 WEDNESDAY. FEBRUARY 7.2007

aside up to P50,OOO a year to a retirement fund which he could draw at age 55. He stated that among the attractions to setting aside part of the taxpayer’s income are: initial five percent (5%) credit by contributing the amount; assistance of a professional trust manager in investing; tax-free earnings of the fund; and tax-free privilege when he withdraws his savings upon reaching age 55 . Thus, he said, the taxpayer’s savings could grow exponentially over the period of his holding.

Senator Enrile asked why non-taxpayers, who might have the financial capability to join the fund, would be excluded from availing themselves of the voluntary pension scheme which is a form of capital mobilization as it could generate savings that could be utilized for investments to encourage the creation of new industries. Senator Angara agreed to expand the coverage as he pointed out that the measure would help expand the capital market which consists of the equities market and the bond market where, under the specific guidelines set forth in the bill, the savings accumulated under the voluntary fund are required to be exclusively invested, thus, opening up other avenues of financing to new industries that otherwise would have no opportunity to be financed, since 95% of the enterprises in the country are financed through banks.

Asked if working minors could be a member of the fund, Senator Angara said that if the minor is a working Filipino, then he is qualified and eligible to set up his own fund.

Senator Enrile asked why the measure should be limited to working Filipinos and exclude people who, for instance, earned money from games or contests rather than from gainful employment. Senator Angara clarified that the law intends to capture recurring and continuing sources of capital, and proceeds from one-time winning would not fit into the recurring income category.

As regards the inclusion of all types of income in the fund, Senator Angara said that the savings plans cannot cover a bequest or donation to a minor beneficiary who, in turn, would set up the fund.

Senator Enrile expressed the view that if the idea is to create a savings scheme to pool idle money in the hands of the population to build a capital pool to be used in creating jobs, there is no reason to deny participation in the plan to those with financial

capability. Senator Angara said that the Committee would be sympathetic to expanding the coverage by including even one-time non-recurrent winnings.

On whether ail individual member could still continue the scheme beyond the age of 55, Senator Angara replied that a member may opt to withdraw the savings in one-time lump sum provided he has stayed in the fund for at least five years or he could even continue the account and simply withdraw a fixed amount for emergency needs.

Asked what would happen to the initial contribution of a member who has failed to place the amount of P50,OOO within a year, Senator Angara replied that P50,OOO is the maximum amount that an individual could place in the fund in a year; a member may opt to place the money by installment or make a one-time placement of P50,OOO within the year, and another P50,OOO could be placed for the second year.

On whether a financially capable individual could open five simultaneous PERA accounts, Senator Angara replied that the member could do so provided that there is only one administrator for these accounts.

On whether a financially capable individual who owns five PERA accounts would be allowed to open five PERA accounts for each of hidher children, Senator Angara replied in the negative, saying that these are tax-free savings that would put a great drain on the National Treasury. However, he affirmed that a member would be allowed to open one account for himself and one each for his four children.

He clarified that the ceiling of five accounts is applicable to a couple regardless of the member’s income capacity. He said that the Committee had, in fact, a hard time convincing the Department of Finance to allow the savings plan.

On the assertion that the scheme would favor the rich over the poor, Senator Angara stated that the opportunity for a low-income individual to open even one account is benefit enough because he would be able to build up a retirement nest.

Senator Enrile agreed that in terms of retirement benefits, the PERA would be favorable to the members but from the point of view of the government, it would be more of a burden b e c a u s e p

WEDNESDAY. FEBRUARY 7.2007 1 A67

a rich person with P250,OOO could easily open five accounts, each of which would he entitled to 5% credit. Senator Angara explained that the five PERA accounts should total to P50,OOO.

As to the cash surrender value of the amount of P50,OOO which was placed by the member at the age of 20, Senator Angara replied that the value would he P50,OOO multiplied by 35 years plus the compounded interest.

As regards the rate of interest, Senator Angara explained that since the equities and bonds are considered good bonds, it could have a yield of 9% and if compounded for 35 years, it could build a very good retirement package for the future.

On the expected yearly rate of interest of the fund over the expected time, Senator Angara replied that the rule of thumb is that a money held for five years in the scheme could be doubled, making it very attractive for those who would retire at the age of 55 but could still pursue another profession.

Asked how the money would be returned to the owner, Senator Angara replied that the owner may choose to get it either lump sum or by way of pension annuity.

As to what would happen to the savings of an individual who dies before the five-year requirement, Senator Angara replied that the heirs could immediately withdraw the money, less the fees and other overhead expenses.

With respect to the administrator of the fund, Senator Angara stated that it could either he an independent trust company or an accredited account manager.

Asked whether the hill has safeguards to protect the contributor’s investments from irresponsible administrators or from losses and bankruptcy such as those experienced by some pre-need plans, Senator Angara explained that equities or bonds are all accredited and guaranteed by the issuer. Moreover, he said that unlike certain mutual funds which are invested with little transparency, there would be a listing of the shares and bonds acquired through the PERA by, for instance, the Central Bank, the Insurance Commission and the SEC. However, he did not discount the possibility that any of the

fund’s trustees, managers or administrators could go under.

Considering that the contributions are considered a deposit in an investment house or mutual fund, Senator Enrile suggested that the accounts be considered hank deposits insured with the Philippine Deposit Insurance Corporation (PDIC). Senator Angara clarified that the fund is not treated as a deposit; therefore, it cannot he covered by the PDIC.

On whether the PDIC system could be amended to include the PERA under its coverage, Senator Angara said that the matter would be studied after the PERA has been launched and has gained credibility and security.

As regards the 50% tax credit scheme, Senator Angara explained that the tax credit would he based on the amount of the investor’s contribution: for instance, a contributor with a P50,OOO investment would have a tax credit of P2,500 which he could apply against his income tax liability.

Senator Enrile pointed out that the scheme is only beneficial to people who have taxable income and are capable of investing P50,OOO surplus income hut not in the case of ordinary workers. Senator Angara said that while an ordinary worker might not he able to set aside the maximum P50,OOO investment, the bill aims to afford OFWs an excellent opportunity to set aside savings particularly since most of them are not covered by the SSS and are unable to save money since the hulk of their remittance goes to family needs. He said that individual, and small-and medium- size entrepreneurs also stand to benefit from the scheme by putting their excess income into a retirement fund.

As for the seemingly discriminatory nature of the hill considering that an individual who has invested P10,OOO cannot make use of the 5% tax credit as opposed to another who has put in P50,000, Senator Angara said that there is equality among individuals as far as taxes are concerned.


There being no further interpellation, upon motion of Senator Pangilinan, there being no objection, the Body closed the period of interpellations.w

P



Upon motion of Senator Pangilinan, the session was suspended.

It wns 7 4 1 p.m.


At 7:02 p.m., the session was resumed with Senate President Pro Tempore Flavier presiding.

COMMITTEE AMENDMENTS

As proposed by Senator Angara, there being no objection, the following Committee amendments were approved by the Body, one after the other:

1. On page 9, line 3, after the word“circulation,” insert the phrase PROVIDED, THAT THE TAX INCENTNES GRANTED HEXEWER SHALLTAKEEFFECTON la JANUARY 2009;

Senator Angara stated that the DOF had requested that there be a transition period because of the potential revenue loss as a result of the tax waivers and relief. He added that the DOF bas calculated that by 2008, the government could manage to balance the budget and afford the temporary revenue loss which shall later on be recouped by an expanded tax base and a more vigorous economy.

2. On the title of the bill, change “2005” to 2007


There being no other committee or individual amendment, upon niotion of Senator Pangilinan, there being no objection, the Body closed the period of committee amendments and proceeded to the period of individual amendments.


There being no individual amendment, upon motion of Senator Pangilinan, there being no objection, the Body closed the period of individual amendments.

APPROVAL OF SENATE BILL NO. 2233 ON SECOND READING

Submitted to a vote and there being no objection, Senate Bill No. 2233 was approved on Second Reading.



It wns 745 p.m



SUSPENSION OF CONSIDERATION OF SENATE BILL NO. 2233

Upon motion of Senator Pangilinan, there being no objection, the Body suspended consideration of the bill.


(Continuation)

Upon motion of Senator Pangilinan, there being no objection, the Body resumed consideration, on Second Reading, of Senate Bill No. 2138 (Committee Report No. 35), entitled

AN ACT DECLARING A NATIONAL POLICY FOR TOURISM AS THE

MENT, EMPLOYMENT, GROWTH AND NATIONAL DEVELOPMENT, R E O R G A ” G THE DEPARTMENT OF TOURISM AND ITS ATTACHED AGENCIES TO EFFECTIVELY AND EFFICIENTLY IMPLEMENT THAT POLICY, PROVIDING NECESSARY INCENTIVES FOR INVESTMENT AND APPROPRIATING FUNDS THEREFOR.

PRIMARY ENGINE OF INVEST-

Senator Pangilinan stated that the parliamentary status was the period of individual amendments.

Thereupon, the Chair recognized Senator Gordon, Sponsor of the measure, and Senator Drilon for his amendments.



It was 7:06 p.m. P




REQUEST OF SENATOR PIMENTEL

Senator Pimentel requested that the Members be provided with copies of the January 22, 2007 version of the bill, which shall he used as working draft.


Upon motion of Senator Drilon, the session was suspended.

It was 7:09 p.m.


At 7: 17 pm., the session was resumed.

DRILON AMENDMENTS

As proposed by Senator Drilon and accepted by the Sponsor, there being no objection, the Body approved the following amendments, one after the other:

1. On page 13, delete lines 15 to 17, and in lieu thereof, insert the following: THE DUTY FREE PHILIPPINES CORPORATION AND THE OPERATION OF THE DUTY-FREE STORES AND SHOPS SHALL ALWAYS REMAlN IN GOVERNMENT CONTROL AND SHALL NOT BE BIDDED OUT TO PRIVATE PARTIES.;

On the same page, line 18, before the word “Such,” insert the following: EXCEPT AS PROVIDED FOR IN REPUBLIC ACT NO. 6768, AS AMENDED (AN ACT INSTI- TUTING A BALIKBAYAN PROGRAM), SUCH MERCHANDISE, GOODS AND ARTICLES SHALL BE SOLD ONLY TO DEPARTING PERSONS FOR THEIR CONSUMPTION ABROAD,

On the same page, lines 22 and 23, delete the phrase “foreign tourists for consumption within a tourism zone, or to,” and on line 24, after the period (.), delete the rest of the paragraph up to line 27;

On page 14, delete the comma (,) on line 19 and the subsequent phrase up to line 21; and

2.

3.

4.

Asked by Senator Drilon whether the sales of locally manufactured merchandise to the duty-free shops are VAT-free, Senator Recto replied that every domestic sale is subject to VAT.

5.

He said that he does not think that any significant inventory of the Duty Free Philippines would he locally manufactured merchandise and this would only pose difficulties to revenue collection efforts.


On the same page, delete lines 22 and 23

Upon motion of Senator Gordon, the session was suspended.

It was 7:27 p.m.



Upon query, Senator Gordon stated that the book value of the PTA assets is PI2 billion. He disclosed that the PTA is basically a losing proposition because practically all its assets are losing, except the Tagaytay People’s Park which is being rented from Tagaytay government and makes P17 million, and Club Intramuros which makes P1.4 million from its golf course. He cited the following losses: Balicasag Island Dive Resorts, P2.9 million; Banawe Youth Hostel, P4.4 million; Boracay Water Sewerage System, P7.9 million; Cebu Complex, P2.7 million; The Gardens of Eco-Malasag, P2.7 million; Hilaga, P10.7 million; McArthur Beach Resort, P3.6 million; Mt. Data, P1.9 million, which was eventually closed down; and San Fabian PTA Beach Resort, P3.1 million. He stated that the Zamhoanga complex, which the government tried to lease out to the Koreans, is losing P3.8 million. He concluded that the total losses amount to P25,078,000.

Asked on the full amount of the travel taxes net of proceeds for the National Commission on Culture and the Atts, Senator Gordon replied that it is about P1.35 billion; however, he noted that this provision is a caveat because of an agreement between ASEAN countries to remove the restrictions on travel taxes.

Adverting to Section 51(d), Senator Drilon noted that 50% of the net income of Duty Free Philippines, in lieu of its statutory remittance to the government under Republic Act No. 7656, shall be placed in a

v


special Tourism Promotion and Development Fund. Asked on the estimated amount for the Fund, Senator Gordon replied that it is about P325 million since Duty Free Philippines has been making P650 million yearly. With regard to Section 5(e), he said that it is approximately P260 million or 25% of Pagcor's net income of P1.1 billion. But Senator Drilon pointed out that the 25% of the P1.25 billion, supposedly the net income of PAGCOR, is about P3 billion.



It was 7.36 p.m.



Senator Gordon informed the Body that he was trying to get a copy of the Department of Finance memorandum stating that the 25% is net of what Pagcor gives to other agencies. He said that he would furnish Senator Drilon with a copy of the document.

Asked how much the 25% of the net income of international airports and seaports would be, Senator Gordon replied that NAIA earned about P870 million in 2004; Mactan-Cebu International Airport Authority, P700 million; and Diosdado Macapagal International Airport, P170 million. Senator Drilon observed that under the provisions, the Fund could reach between P4 billion and P8 billion depending on how the Pagcor income is determined, as well as the income from the international airports. Senator Gordon agreed, adding that translated into dollars, it is about $166 million, 45% of which should go to promotions and marketing.

Senator Drilon commended Senator Gordon for allocating said amounts for marketing and promotions because, apparently, the PTA appropriation is like a little pork barrel of the tourism secretary.

At this juncture, Senator Gordon informed the Body that ofthe P12.5 billion government share from Pagcor in 2006, the net income was P1.6 billion upon which the 25% or P400 million share was computed, and said amount would go to the Tourism Promotion and Development Fund, 45% of which, in turn, would go to the tourism promotions and marketing.

Senator Drilon posited that two funds are sought to be created - the Tourism Promotion and Development Trust, under Section 50, and the Tourism Promotion and Development Fund, under Section 51, that would consist of the investment earnings from the Trust; travel taxes, PI .35 billion; an appropriation from the General Appropriations Act, P0.5 million; 50% of the net income from the Duty Free Philippines; 25% of the net income of Pagcor; and 25% of the net income from international airpofi and seaports. The various revenues, he added, would amount to P4 billion.

As regards the DOT allocation from the PTA's income, Senator Gordon stated that the PTA has not given anything to the department which is a departure from the original intent of the PTA, the concept of which is sought to be changed.

Senator Drilon noted that whenever the Committee on Finance looks at the DOT budget, it looks at less than one-half of a budget because more than the other half goes to the PTA.

Senator Gordon stated that the PTA's earning is actually used as the pork barrel of previous presidents to build everything from basketball courts to parks but not to develop tourism. The P4 billion, he said, is small compared to the tourism budget of Singapore, Malaysia or Hong Kong.

On whether there are models of tourism economic zones that could be looked into, Senator Gordon stated that Subic and Clark could be used as examples. However, Senator Drilon stated that Subic and Clark are enclosed manufacturing hubs. He agreed that they are really PEZAs of tourism that would enjoy the incentives under Section 76 of the proposed Act.

Asked if it would be possible for Ayala Avenue to qualify as a TEZ under Section 53, Senator Gordon replied that in theory, Ayala could apply to be part of the incentives program under the TEZA which is categorized into: 1) the greenfield areas - those that have not been developed; have strategic locations like Palawan Islands or Bohol to catalyze socioeconomic development in neighboring communi- ties; and 2) the brownfield areas - those that are developed but need infusion of investments like Roxas Boulevard and Chinatown.

On whether the TEZA would issue permits and licenses for the regulation of commercial activities +c


within the Binondo or Chinatown TEZ, Senator Gordon stated that it would be within the jurisdiction of the local government units, unless it is a greenfield area which is totally new. However, Senator Drilon pointed out that under Section 58, the TEZA has the sole and exclusive jurisdiction to issue permits and licenses, among others, within the zone.



It was 7 : s p.”


At 8:OO p.m., the session was resumed.

Senator Gordon stated that Section 56 states that, “Except as herein provided, the local government units which comprise, overlap, embrace, or include a zone in their territorial jurisdictions, shall retain their basic autonomy and identity in accordance with Republic Act No. 7160, otherwise known as the Local Government Code of 1991.” He said that the same provision applies to all PEZAs.

Senator Drilon pointed out that the exception is in the mandate of the TEZA in Section 58 which also states, “Supervisory jurisdiction over all tourism entaprises outside the zones shall be shared between the local government units and the department under Subchapter 11-C of this Act.” He opined that the term “supervisory jurisdiction” is vague, suggesting the need to delineate the jurisdiction between LGUs and TEZA. He added that Subchapter 11-C has no relation to Section 58. Senator Gordon clarified that it should read Subchapter 11-E.

Upon query, Senator Gordon affirmed that investments in tourism enterprises outside of the TEZ would be supervised by BO1 or PEZA, but the DOT should be informed about the construction of new hotels.

Senator Drilon said that DOT should be notified, but it is the LGUs that approve applications to put up hotels.

As proposed by Senator Drilon and accepted by the Sponsor, there being no objection, the Body approved the following amendments:

1. On page 27, delete the words “and approval” on lines 30 and 31;

Asked if an agricultural land could be made part of a zone and exempted from CARL, Senator Gordon replied that, precisely, the measure provides the adoption of the necessary rules and regulations so that the TEZA, in coordinatjon with the DAR, could implement the provision on lines 25 to 30 of page 26.

Senator Drilon suggested the recrafting of said lines to clearly reflect the intent of the provision so that the authority to convert an agricultural land identified by the TEZA could he transferred from the DAR to the TEZA. Senator Gordon agreed to the suggestion.

Senator Drilon said that the moment the Act declares the land exempt from the coverage of the CARL, no rule or regulation could change it. He asked the technical staff to also clarify the mandate of the TEZA vis-A-vis the powers of the local government, particularly in relation to Section 58.

Adverting to Section 63(c), Senator Drilon asked if the loans contracted by the TEZA would carry a government guaranty for repayment. Senator Gordon said that it is possible under such terms and conditions prescribed by law, rules and regulations, and upon recommendation of the DOF.

On whether the TEZA would issue franchises to transportation companies operating in the zone, Senator Gordon replied that the bill contemplates a greenfield area, an island, for instance, that has no power system, so the TEZA would have to put up a power plant, as the Maldives has done on its islands.

Senator Drilon pointed out that the powers granted under the bill are so broad and without limit that some unscrupulous TEZA head could invoke them and require all public utilities to secure their franchises from the zone authority. Senator Gordon gave assurance that the technical staff would make the necessary clarifications in the bill.

Asked if a locator in a TEZ need not be a tourism enterprise, Senator Gordon replied in the negative, stating that the locator would not be entitled to the incentives granted by the zone authority. To the observation that there is no provision in the bill to this effect, Senator Gordon said 4-


that it would be included in the RR. Senator Drilon argued, however, that rules and regulations cannot go beyond the language of the law, otherwise, nothing would stop the rule-makers from interpreting the law in accordance with what they think is the policy of Congress.

2. On page 33, line 28, between the words “registered” and “enterprises,” insert the word TOURISM

On page 30, line 2, change “Section 77” to SECTION 16.

3.

As regards the powers of the TEZA, unless the provision is very critical, Senator Drilon proposed the deletion of the power of the TEZA to demolish houses as provided for in Section 64(f).

Senator Gordon explained that said power was lifted from the PEZA law and was really meant to give as much leeway to the TEZA to operate on a clean slate. He said that this shall address the problem brought about by houses built along the seashores and canals, and houses, buildings and structures constructed without the necessary permit. He added that the demolition would he subject to expropriation procedures so as not to violate the rights of the owners.

Asked what kind of permit the owners of the buildings in a Binondo TEZ would have to secure, Senator Gordon said that he would ask the technical committee to craft a better provision. Nonetheless, he stated that the intention is to enable the local government units to grant incentives to developers to redevelop certain areas, keeping in mind the U S . models.

4. On page 3 1, line 20, delete the words starting with the article “The” up to the period (.) on line 24.

Senator Drilon explained that under the Rules of Court, only the Secretary of Justice and the judge in the appropriate cases exercise the power to grant immunity from prosecution to any person whose testimony is necessary. Senator Gordon explained that the PEZA law also has the same provision and the only reason it was included in the bill is to enable the TEZA to expose and curb smuggling and other venalities within the zone.

On Section 69 (Administration of Zones), Senator Drilon asked whether the zone operator is

envisioned only as a corporate entity to administer the tax incentives for the importation of goods and services. Senator Gordon clarified that it would be totally administered by the TEZA and not by the zone operator.

Senator Drilon pointed out that Section 75 provides that the TEZA shall have the sole and exclusive jurisdiction to grant the incentives and administer the same through the zone operators. He expressed concern that the zone operator could be a private corporation with administering powers, which could not be held liable for graft. Senator Gordon said that the provision would be deleted to ensure that the TEZA would be the only one to provide the incentives.

With respect to Section 73 (Civil Dispute Resolution), Senator Drilon inquired whether one of two conflicting registered enterprises in the zone could go to court and ask for a temporary restraining order to prevent any damage. Senator Gordon said that the idea is for the conflicting parties, particularly tourists, to go into mediation proceedings immediately. He stated that he would ask the technical staff to clarify the provision further.

Asked whether Section 74 (Labor Dispute Resolution) intends to remove the function of the Department of Labor and Employment (DOLE) to resolve disputes as far as the companies in the zones are concerned, Senator Gordon replied in the negative, saying that mediation offices are encouraged to coordinate with the DOLE. He said that the objective is to fast-track the establishment of enterprises and make them more competitive, and ensure industrial peace in the zones to make them more attractive to investors.

On whether the imposition of a strike ban on employees within five years from the registration of the enterprise could stand constitutional scrutiny, Senator Gordon replied that according to Father Bemas, in his book, “the right to strike was first recognized as statutory authority in 1953 with the enactment of the Industrial Peace Act of 1953” but it is qualified by the phrase ‘in accordance with law’ “x x x the constitutional provision does not invalidate the existing laws on the snhject and does not prohibit the enactment of reasonable laws which might diminish the right to strike ....” However, he expressed willingness to accept an amendment to remove said provision.

I“ 4P


5.

Senator Gordon asked whether the provision on the creation of special labor dispute resolution offices could be retained. Senator Drilon pointed out that the National Conciliation and Mediation Board (NCMB) under the DOLE has a nationwide network. He believed that creating such offices within the zones would duplicate the functions of the NCMB and further bloat the bureaucracy. Senator Gordon recalled that the labor dispute offices that were set up in the SBMA worked very well and hardly encountered problems.

6.

On pages 32 and 33, delete Section 74;

On page 33, line 9, after the word “provided” and the period (,), delete the rest of the sentence;

To the observation that under Section 76(b), the new enterprise shall only he imposed a 3% tax on its gross income, Senator Gordon stated that according to the McKenzie study, i t takes six years for a tourism enterprise like a hotel to make money and that the incentives would attract new investments in the tourism industry.

Senator Drilon stated that a 12-year tax holiday for hotels and transport companies is justified because of the magnitude of the investments hut not for enterprises that the tourism secretary may identify which could he convention organizers or tourist estate management services. In reaction, Senator Gordon admitted that the Committee tried to he liberal, hence, it included small- and medium-enterprises involved in hotel, shipping and air travel, among others, so as to encourage local and foreign investments in places like Palawan or Bohol. He recalled that Malaysia could not compete with China in the area of manufacturing, so it poured money into tourism promotion and incentives and offered new destinations like Lankawi.

Saying that he agreed with the thrust of the provision, Senator Drilon cautioned, however, that the incentives should he availed of by the well- intentioned tourism investors and not by pseudo- tourism enterprises. He stated that he would leave the issue of the validity of the length of the tax holiday to the experts in the field.

Asked whether the DOF has vetted the implica- tion of the provision on revenue collection, Senator Gordon replied that the DOF has never supported incentives, not even those proposed in the hill. He

argued that the incentives would open new opportunities and the zone administrator is there precisely to ensure that the enterprises follow the procedures. He added that there is also a congressional oversight committee to report any malfeasance or misfeasance to Congress.

Asked whether the PAL or Cebu Pacific office in a Binondo TEZ that imports equipment for the expansion of the airline could avail of the tax holiday for twelve years, Senator Gordon stated that these airlines have their own privileges under their charters. He believed that an airline could buy a new aircraft and avail of the incentive. He stated that PAL, for instance, should he able reclaim the incentives it once enjoyed when it was run by the government.

To the observation that not even an enterprise in the PEZA enjoys 3% tax on gross income, Senator Gordon stated that he would he amenable to a sunset provision that after six years, the 3% tax shall he increased to 5%, the same tax a PEZA enterprise pays. He stated that the incentive could widen the tax base as new enterprises would he set up employing more people.

As regards another incentive, Senator Drilon argued that the accelerated depreciation provision is not needed in a gross income tax regime. Senator Gordon pointed out that the incentives were put in the bill to attract investors in the tourism industry.



It was 9.95 p.m





SECOND ADDITIONAL REFERENCE OF BUSINESS

The Secretary of the Senate read the following matters and the Chair made the corresponding referrals: r -F-


MESSAGE OF THE PRESIDENT OF THE PHILIPPINES

Letter of Her Excellency, President Gloria Macapagal Arroyo, dated 6 February 2007, certifying to the necessity of the immediate enactment of House Bill No. 5859, entitled

AN ACT PROVIDING FOR THE APPORTIONMENT OF THE LONE LEGISLATIVE DISTRICT OF THE CITY OF CAGAYAN DE ORO,

to address a public emergency arising from the urgent need to provide immediate and effective representation to the people of Cagayan de Or0 City in the face of phenomenal growth in its population, as well as to ensure speedy delivery of basic services to its inhabitants, pursuant to the provisions of Article VI, Section 26(2) of the 1987 Constitution.


MESSAGE FROM THE HOUSE OF REPRESENTATIVES

Letter from the Secretary General of the House of Representatives, informing the Senate that on February 6, 2007, the House of Representatives approved the Bicameral Conference Committee Report on the disagreeing provisions of House Bill No. 5956, entitled

AN ACT TO STRENGTHEN THE OFFICE OF THE SOLICITOR GENERAL BY EXPANDING AND STREAMLINING ITS BUREAUCRACY, UPGRADING EMPLOYEE SKILLS AND AUGMENT- ING BENEFITS AND APPROPRIAT- ING FUNDS THEREFOR AND FOR OTHER PURPOSES,


AN ACT TO STRENGTHEN THE OFFICE OF THE SOLICITOR GENERAL BY EXPANDING AND STREAMLINING ITS BUREAUCRACY, UPGRADING EMPLOYEE SKILLS AND AUGMENT- ING BENEFITS, AND APPROPRIAT- ING FUNDS THEREFOR AND FOR OTHER PURPOSES.

To the Archives

COMMUNICATION

Letter from Executive Secretary Eduardo R . Ermita of the Office of the President of the Philippines, transmitting to the Senate the letter of Her Excellency, President Gloria Macapagal Arroyo, dated 6 February 2007, addressed to Speaker Jose C. De Venecia Jr. of the House of Representatives, certifying to the necessity of the immediate enactment of House Bill No. 6073, entitled

AN ACT GOVERNING THE ESTAB- LISHMENT, OPERATION A N D REGULATION OF LENDING COMPANIES,

pursuant to the provisions of Article VI, Section 26(2) of the 1987 Constitution.


THIRD ADDITIONAL REFERENCE OF BUSINESS

RESOLUTION

Proposed Senate Resolution No. 618, entitled

RESOLUTION DIRECTING THE SENATE COMMITTEE ON FINANCE T O CONDUCT AN INQUIRY, IN AID

PROMISE AGREEMENT ENTERED INTO BY THE PHILIPPINE NATIONAL CONSTRUCTION CORPORATION (PNCC) WITH RADSTOCK SECURI- TIES LIMITED, FOR THE PURPOSE OF PROVIDING REMEDIAL LEGIS- LATION AND POLICY PARAMETERS ON COMTROMEE AGREEMENTS TO PROTECT GOVERNMENT ASSETS AND ENSURE THE JUDICIOUS USE OF GOVERNMENT FUNDS

OF LEGISLATION, INTO THE COM-

Introduced by Senator Drilon

To the Committee on Finance

COMMITTEE REPORTS

Committee Report No. 263, submitted jointly by the Committees on Public Information and Mass Media; &-

P

WEDNESDAY, FEBRUARY 7, zoo7 1475

and Justice and Human Rights, on Senate Bill No. 1120, introduced by Senator Pimentel Jr., entitled

AN ACT GRANTING THE RIGHT OF REPLY AND PROVIDING PENAL- TIES FOR VIOLATION THEREOF,




Committee Report No. 264, submitted by the Committee on Local Government, on House Bill No. 6029, introduced by Representative De Guzman, entitled

AN ACT CREATING A BARANGAY TO BE KNOWN AS BARANGAY FORTUNE IN THE CITY OF MARIKINA, METRO MANILA,


Sponsor: Senator Lim


Committee Report No. 265, submitted by the Committee on Local Government, on House Bill No. 6028, introduced by Representative De Guzmau, entitled

AN ACT CREATING A BARANGAY TO BE KNOWN AS BARANGAY TUMANA IN THE CITY OF MARIKJNA, METRO MANILA,




Committee Report No. 266, submitted by the Committee on Local Government, on House Bill No. 6024, introduced by Representative Paras, entitled

AN ACT CONVERTING THE MUNICI- PALITY OF GUIHULNGAN IN THE PROVINCE OF NEGROS ORIENTAL

INTO A COMPONENT CITY T O BE KNOWN AS THE CITY O F GUIHULNGAN,

recommending its approval with amendments.



Committee Report No. 267, submitted by the Committee on Local Government, on House Bill No. 6023, introduced by Representative Almario, entitled

AN ACT CONVERTING THE MUNICI- PALITY OF MATI IN THE PROVINCE OF DAVAO ORIENTAL INTO A COMPONENT CITY TO BE KNOWN AS THE CITY OF MATI,

recommending its approval with amendments



Committee Report No. 268, submitted jointly by the Committees on Health and Demography; and Finance, on House Bill No. 1352, introduced by Representatives De Guzman and Magsaysay (E), entitled

AN ACT INCREASING THE BED CAPACITY OF THE AMANG RODRIGUEZ MEMORIAL MEDICAL CENTER FROM ONE HUNDRED FIFTY (150) TO THREE HUNDRED (300) BEDS AND APPROPRIATING FUNDS THEREFOR,


Sponsor: Senator Cornpailera Pia S. Cayetano


FOURTH ADDITIONAL REFERENCE OF BUSINESS

COMMITTEE REPORT

Committee Report No. 269, submitted jointly by the Committees on Education, Arts and Culture&-

P


(Subcommittee on Basic and Higher Education and Culture); and Finance, on House Bill No. 5977, introduced by Representative Nantes, et G I . , entitled

AN ACT CONVERTING THE SOUTHERN LUZON POLYTECHNIC COLLEGE IN THE MUNICIPALITY OF LUCBAN, PROVINCE OF QUEZON, ITS UNITS AND SATELLITE

ITIES OF SAMPALOC, INFANTA, POLLLO, TAGKAWAYAN, ALABAT AND TIAONG, AND THE LUCENA DUAL-TECH LlVELIHOOD AND TRAINING CENTER IN THE CITY OF LUCENA, ALL IN THE PROVINCE OF QUEZON, INTO A STATE UNIVERSITY TO BE KNOWN AS THE SOUTHERN LUZON STATE UNIVERSITY (SLSU) AND APPRO- PRIATING FUNDS THEREFOR,

CAMPUSES IN THE MUNICIPAL-


Sponsor: Senator Recto


FIFTH ADDITIONAL REFERENCE OF BUSINESS

MESSAGES OF THE PRESIDENT OF THE PHILIPPINES

Letters of Her Excellency, President Gloria Macapagal Arroyo, dated 7 February 2007, certifying to the necessity of the immediate enactment of the following Senate bills, pursuant to the provisions of Article VI, Section 26 (2) of the 1987 Constitution:

Senate Bill No. 2012, entitled

AN ACT REQUIRING MANDATORY IMMUNIZATION SERVICES AGAINST HEPATITIS-B FOR INFANTS, AMENDING FOR THE PURPOSE PRESIDENTIAL DECREE NO. 996, AS AMENDED, AND APPROPRIAT- ING FUNDS THEREFOR,

to address a public emergency arising from the necessity to safeguard the health of the

incoming generation against the killer-disease Hepatitis-B by mandating the immunization of all newborn infants immediately within twenty-four (24) hours after birth but not later than seven days, consistent with the constitutional mandate of enhancing the health and well-being of our people;

Senate Bill No. 2233, entitled

AN ACT ESTABLISHING A PROVI- DENT PERSONAL SAVINGS PLAN, KNOWN AS THE PERSONAL EQUITY AND RETIREMENT ACCOUNT (PERA),

to address the urgent need to promote our people’s welfare by providing them opportunities to save for old age, as well as to mobilize savings that can possibly contribute to capital formation;


AN ACT PROVIDING FOR THE CONTROL AND ELIMINATION OF RABIES, PRESCRIBING PENAL- TIES FOR VIOLATION THEREOF AND APPROPRIATING FUNDS THEREFOR,

to address a public emergency arising from the urgent need to control, prevent the spread of, and eradicate human and animal rabies, which is the cause of death of several hundreds of Filipinos each year and unnecessarily pose fear and threat to the health and safety of our people.


MESSAGE FROM THE HOUSE OF REPRESENTATIVES

Letter from the Secretary General of the House of Representatives, informing the Senate that on 7 February 2007, the House of Representatives passed Senate Bill No. 2586, entitled

AN ACT AMENDING SECTIONS 2 AND 3 OF REPUBLIC ACT NO. 2239, AND FOR OTHER PURPOSES

To the ArchivesA,

r”

WEDNESDAY. FEBRUARY 7.2007 1477



MALAC~~ANGPALACE MANlLA

February 7,2007

HON. MANUELB. VlLLAR JR. Senate President Philippine Senate Pasay City


Pursuant to the provisions of Article VI, Section 26(2) of the 19x7 Constitution, I hereby certify to the necessity of the immediate enactment of Senate Bill No. 2233, under Committee Report No. 60, entitled

AN ACT ESTABLISHING A PROVI- DENT PERSONAL SAVINGS PLAN, KNOWN AS THE PERSONAL EQUITY AND RETIREMENT ACCOUNT (“PEW).

to address the urgent need to promote our people’s welfare by providing them opportunities to save for old age, as well as to mobilize savings that can possibly contribute to capital formation.

Best wishes.

Very truly yours,


cc. Hon. Jose C. De Venecia Jr Speaker House of Representatives Quezon City

APPROVAL OF SENATE BILL NO. 2233 ON THIRD READING

In view of the presidential certification, upon motion of Senator Pangilinan, there being no objection, the Body considered, on Third Reading, Senate Bill No. 2233.

Pursuant to Section 67, Rule XXlII of the Rules of the Senate, upon motion of Senator Pangilinan, there being no objection, Secretary Yabes read only the title of the bill, to wit:

AN ACT ESTABLISHING A PROVIDENT PERSONAL SAVINGS PLAN, KNOWN AS THE PERSONAL EQUITY AND RETIREMENT ACCOUNT (“PEW).

Secretary Yabes called the roll for nominal voting



In favor Angara Lacson Biazon Madrigal Cayetano Magsaysay Drilon Osmeiia Ejercito Estrada (J) Pangilinan Enrile Roxas Flavier V i l W Gordon

Against

Arroyo Recto

Abstention

None

With 15 senators voting in favor, two against, and no abstention, the Chair declared Senate Bill No. 2233 approved on Third Reading.

SIXTH ADDITIONAL 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 Her Excellency, President Gloria Macapagal Arroyo, dated 7 February 2007, certifying to the necessity of the immediate enactment of Senate Bill No. 2597, entitled

AN ACT AMENDING REPUBLIC ACT NO. 9280 OTHERWISE KNOWN AS THE CUSTOMS BROKERS ACT OF 2004, AND FOR OTHER PURPOSES,

to address the urgent need to correct the unintended consequence of the enactment of the Customs Brokers of 2004 that tends to impede rather than facilitate the smooth and rapid flow ad”


of commerce into the country including various legal issues raised in court. The passage of this amendment will remove the ambiguities in the implementation of RA 9280, consistent with international standards and world’s best customs practices,



COMMUNICATION

Letter from Executive Secretary Ednardo R. Ermita of the Office of the President of the Philippines, transmitting to the Senate the letter of Her Excellency, President Gloria Macapagal Arroyo, dated 7 February 2007, addressed to Speaker Jose C. De Venecia of the House of Representatives, certifying to the necessity of the immediate enactment of House Bill No. 6036, entitled

AN ACT AMENDING SECTIONS 2 AND 3 OF REPUBLIC ACT NO. 2239, OTHERWISE KNOWN AS “AN ACT AUTHORIZING THE PRESIDENT OF THE PHILIPPINES TO SELL A CERTAIN PARCEL OF LAND OF THE PRIVATE DOMAIN OF THE NATIONAL GOVERNMENT TO THE RAMON MAGSAYSAY AWARD FOUNDATION,” AND FOR OTHER PURPOSES,


To the Archives



MALACARANG PALACE MANILA

February 7,2007

HON. MANUEL B. VILLAR JR. Senate President Philippine Senate Pasay City

Dear Senate President: Pursuant to the provisions of Article VI,

Section 26(2) of the 1987 Constitution, I hereby

certify to the necessity of the immediate enactment of Senate Bill No. 2597, under Committee Report No. 257, entitled

AN ACT AMENDING REPUBLIC ACT NO. 9280 OTHERWISE KNOWN AS THE CUSTOMS BROKERS ACT OF 2004, AND FOR OTHER PURPOSES,

to address the urgent need to correct the unintended consequence of the enactment of the Customs Brokers Act of 2004 that tends to impede rather than facilitate the smooth and rapid flow of commerce into the country including various legal issues raised in court. The passage of this amendments will remove the ambiguities in the implementation of RA 9280, consistent with international standards and worlds best customs practices.

Best wishes.

Very truly yours,


cc. Hon. Jose C. De Venecia Jr. Speaker House of Representatives Quezon City



Pursuant to Section 67, Rule XXIII of the Rules of the Senate, upon motion of Senator Pangilinan, there being no objection, Secretary Yabes read only the title of the bill, to wit:

AN ACT AMENDING REPUBLIC ACT NO. 9280 OTHERWISE KNOWN AS THE CUSTOMS BROKERS ACT OF 2004, AND FOR OTHER PURPOSES.



The rcsult of the voting was as follows:

WEDNESDAY. FEBRUARY 7,2007 1 A74

In ,favor

Angara Arroyo Biazon Cayetano Drilon Ejercito Estrada (J.) Enrile Flavier Gordon

Lacson Madrigal Magsaysay Osmeiia Pangi l in Pimentel Recto Roxas Villar

Against

None

Abstention

None

With 18 senators voting in favor, none against, and no abstention, the Chair declared Senate Bill No. 2597 approved on Third Reading.



It was 9:20 p.m.




(Continuation)

Upon motion of Senator Pangilinan, there being no objection, the Body resumed consideration, on Second Reading, of Senate Bill No. 2137 (Committee Report No. 3 9 , entitled

AN ACT DECLARING A NATIONAL POLICY FOR TOURISM AS THE PRIMARY ENGINE OF INVEST- MENT, EMPLOYMENT, GROWTH AND NATIONAL DEVELOPMENT, REORGANIZING THE DEPART- MENT OF TOURISM AND ITS ATTACHED AGENCIES TO EFFECT- IVELY AND EFFICIENTLY IMPLE- MENT THAT POLICY, PROVIDING

NECESSARY INCENTIVES FOR INVESTMENT AND APPROPRIAT- ING FUNDS THEREFOR.

Senator Pangilinan stated that the parliamentary status was the period of individual amendments.

Thereupon, the Chair recognized Senator Gordon, Sponsor of the measure, and Senator Drilon for his amendments.

DRILON AMENDMENTS (continuation)

Adverting to page 34, Senator Drilon asked whether tourism enterprises in the zone would he exempt from all taxes and customs duties. Senator Gordon replied in the affirmative.

On page 35, Senator Drilon noted that under Section 76(d)(2), tourism enterprises in the zone could claim tax credit for all national taxes paid on locally sourced goods and services directly or indirectly used by the registered enterprise for services rendered within the zone. Asked how this process would operate, Senator Gordon explained that the enterprise is entitled to a rebate on its input tax when it buys locally made products.

As regards the social responsibility incentive in Section 76(e), Senator Gordon clarified that it is a tax deduction.

As proposed by Senator Drilon and accepted by the Sponsor, there being no objection, the Body approved the following amendments:

1. On page 35, line 6 , replace the word “credit” with DEDUCTION;

On the same page, line 13, between the words “registered” and “enterprises,” insert the word TOURISM.

2.

Asked by Senator Drilon whether the term “liberalized civil aviation environment” on line 36 of page 36 means an “open sky policy,” Senator Gordon replied in the negative. To illustrate the meaning of the term, he cited Clark Field, Subic and other areas that allow foreign flights on a chartered basis. He added that the government has adopted this policy to service areas where the country’s airlines do not want to fly.+-


3. On page 38, reword lines 21 to 28 (Section 82), as follows:

SEC. 82. PEACE AND ORDER. -THE PHILIPPINE NATIONAL POLICE SHALL ESTABLISH ATOURLSMSECURlTY FORCE

ORDER WlT" AREAS OF HIGH TOURISM TRAFFIC. THE DEPARTMENT SHALL

THE FORCE IN CULTURAL SENSITIVITY LANGUAGE AND RELEVANT LAWS.;

On page 39, line 18, after the word "law," insert a period (.) and delete the rest of the sentence;

To ASSIST IN MAINTAINMG PEACE AND

MSUE rm r u r m G OF MEMBERS OF

4.

Adverting to Section 89, Senator Drilon noted that with the approval ofthe DOT, even an enterprise outside the zone shall be entitled to avail of any economic incentive enumerated in the said section as well as tax holiday; and new and expanding tourism- registered enterprises shall also enjoy exemption from duties and national taxes on the importation of foreign-made transportation and accompanying spare parts. Senator Gordon clarified that the matter is being cleared with the BOI. He added that the incentives would hopefully bring these enterprises up to speed.

On whether the Philippine Airlines and other airlines could import spare parts of airplanes tax-free under the provision, Senator Gordon stated that PAL already enjoy these privileges but other airlines do not, hence, the intention is to give them the same privileges to encourage inter-island travel and enhance business.

As regards the estimated loss in revenue, Senator Gordon stated that the finance secretary believes there is none because the revenue is non-existent. However, he contended that tourism growth could generate opportunity revenues.

Senator Drilon noted that Shangri-La would be entitled to income tax holiday should it have a significant expansion. Senator Gordon agreed, stressing that hotels should improvehpgrade from time to time to keep pace with the uptrend in the industry. He believed that giving the new operators a chance to come in could increase the competition and, in the process, create more jobs.

INQUIRIES OF SENATOR BIAZON

Senator Biazon asked if Section 64(f) would be implemented without the benefit of a judicial

proceeding. Senator Gordon replied that the provision has been deleted at the instance of Senator Drilon.

On whether lines 25 to 30 of Section 55, on the exemption of lands identified as part of a zone from the coverage of the Urban Development and Housing Program Act of 1992 and the Comprehensive Agrarian Reform Law would remain, Senator Gordon explained that the Committee was in the process of crafting the appropriate language. Senator Biazon said that he would just wait for therevised provision.

At this point, Senator Gordon said that the Com- mittee would present its amendments incorporating the concerns of Senators Drilon and Biazon.



It was 9:44 p.m.






Upon direction of the Chair, the Deputy Secretary for Legislation read the President's certification as to the necessity of the enactment of Senate Bill No. 2541, to wit:

MALACAIW~G PALACE MANILA

February 7,2007

HON. MANUEL 8. VILLAR JR. Senate President Philippine Senate Pasay City


Pursuant to the provisions of Article VI, Section 26 (2) of the 1987 Constitution, I hereby certify to the necessity of the immediate enactment of Senate Bill No. 2541, under committee Report No. 196, entitled 4-

WEDNESDAY, FEBRUARY 7,2007

AN ACT PROVIDING FOR THE CONTROL AND ELIMINATION OF RABIES, PRESCRIBING PENAL- TIES FOR VIOLATION THEREOF AM) APPROPRIATING FUNDS TFEREFOR

to address a public emergency arising from the urgent need to control, prevent, the spread of, and eradicate human and animal rabies, which is the cause of death of several hundreds of Filipinos each year and unnecessarily pose fear and threat to the health and safety of our people.

Best wishes. Very truly yours,

GLORIA MACAPAGAL ARROYO

CC: HON. JOSE C. DE VENECIA JR Speaker House of Representatives Quezon City



Pursuant to Section 67, Rule XXIII of the Rules of the Senate, upon motion of Senator Pangilinan, there being no objection, Deputy Secretary Reyes read only the title of the bill, to wit:

AN ACT PROVIDING FOR THE CONTROL AND ELIMINATION OF RABIES, PRESCRIBING PENALTIES FOR VIOLATION THEREOF AND APPROPRIATING FUNDS THEREFOR.

Deputy Secretary Reyes called the roll for nominal voting.



In ,favor Angara Arroyo Biazon Cayetano Drilon Ejercito Estrada (J) Enrile Flavier Gordon

Lacson Magsaysay Osmetia Pangilinan Pimentel Recto Roxas Villar

Against

Madrigal

Abstention

None

With 17 senators voting in favor, one against, and no abstention, the Chair declared Senate Bill No. 2541 approved on Third Reading.


(Continuation)

Upon motion of Senator Pangilinan, there being no objection, the Body resumed consideration, on Second Reading, of House Bill No. 3409 (Committee Report No. 209), entitled:

AN ACT FURTHER AMENDING PRESIDENTIAL DECREE NO. 1869 OTHERWISE KNOWN AS PAGCOR CHARTER.

Senator Pangilinan stated that the parliamentary status was the period of interpellations.

Thereupon, the Chair recognized Senator Arroyo, Sponsor of the measure, and Senator Lacson for his interpellation.

INTERPELLATION OF SENATOR LACSON

Asked by Senator Lacson when the Pagcor franchise would expire, Senator Arroyo replied that it is on July 2008.

Asked if the projects or agencies mentioned in PD 1869 still exist, Senator Arroyo stated that they have been rendered functus officio given the fact that the original franchise has undergone various amendments through the presidential decrees issued by President Marcos. He explained that PD 1869 created a corporation and granted it a franchise, and the decree itself is the Articles of Incorporation.

As to the subsequent decrees that amended PD 1869, Senator Arroyo cited Presidential Decree Nos. 1067, 1067-B,1067-C, 1399 and 1632 which relate to the franchise and powers of the Pagcor. qaP

r"


As to how the Pagcor distributes i ts earnings, Senator Arroyo stated that 5% goes to the BIR as franchise tax and, in turn, the balance is distributed as follows:

50% goes to the National Treasury;

A fixed amount for the city hosting the Pagcor casinos;

5% of the balance after the franchise tax and the national government’s mandated income share to the Philippine Sports Commission;

P400 million a year or P2 billion in five years for the Early Childhood Care and Development Program;

PI00 million initial funding to the Sports Incentives and Benefits Act;

P300 million or P10 million a month to the Gasoline Station Training and Loan Fund;

P250 million for the Pagcor’s remittance to the President’s Social Fund to implement the National Museum Act of 1998;

P5 million from the National Treasuly share to support the Comprehensive Dangerous Drugs Act of 2002;

P30 million to the Children’s TV Act of 1997;

P300 million to the Batangay Micro- Business Enterprises Development Fund;

P14.72 billion to the Philippine Seafarer’s One-Stop Processing Center under Presidential Administrative Order No. 56;

P1% of the net cash income to the Board of Claims under the Department of Justice to compensate victims of wrongful prosecution; and

The remaining balance is remitted to the President’s Social Fund for the priority projects of the Office of the President.

He supposed that whatever is left is used as Pagcor’s capital expense.

Asked if Pagcor has sources of income other than the casinos, Senator Arroyo replied that other sources of income as of December 31, 2005 were:

bingo operations, in-house P105 million; bingo operations, franchises, P1.374 billion; management fees, PI83 million; hotel operations, P564 million; gasoline service operations, PI .I 64 billion; entertain- ment, P2.166 million; and others P7.668 million. He added that Pagcor also has dividend income of P942 million.


Upon motion of Senator Arroyo, the session was suspended.

It was 9.57 p .m


At 9:58 p.m,, the session was resumed.



It was 9:S9 p .m


At 9 5 9 p,m,, the session was resumed.

As regards the operation of the arcades, Senator Arroyo stated that 40% is on a lease agreement with private investors.

T o the observation that Pagcor under Section 1 l(1) of PD 1869 can enter into management contracts provided that the aggregate fees shall not exceed 10% of the gross income, Senator Arroyo explained that Section 1 l(1) means that the aggregate fees of leased operations must not exceed 10% of the gross income of Pagcor and in the lease agreement, with respect to the operation of the arcades, Pagcor gets a 60% share.

Asked why Pagcor entered into a management agreement instead of running the arcade itself, Senator Arroyo replied that apparently, Pagcor sub- leases certain machines because it is very difficult to update them. He said that the machines and other gambling paraphernalia are very expensive; and it is the lessee who buys the equipment and other supplies. The 60-40 deal of Pagcor, he added, was purely a business decision and it is risk-free to the government 4-

WEDNESDAY, FEBRUARY 7.2007 1483

because Pagcor does not shell out a single centavo. Moreover, he stated that the lease contracts have exit clauses in case a court finds the contract disadvantageous to the government. He stated that the lease agreement has been approved by Pagcor’s own Corporate Legal Services Department, the Office of the Government Corporate Counsel, the Commission on Audit and the Department of Justice.

Asked if Pagcor has enough capital to finance the purchase of slot machines, Senator Arroyo replied that it does.

Senator Arroyo recalled that indeed, during the hearings, the Pagcor people had testified that it would be easier for them to lease and get 60% instead of wracking their brains over changing their gambling paraphernalia every now and then.

Adverting to Section 13 of PD 1869, Senator Lacson said that he could not see any reason why imported vessels and/or accessory ferry boats that have contractual arrangements with Pagcor would be exempted from paying the mandatory fees and taxes. Senator Arroyo stated that the bills of Senators Enrile, Ejercito Estrada (J) and Lapid seek- ing to overhaul the entire Pagcor operations might address the concern which is under the purview of the Comuttees on G o v m e n t Corpomtions and Public Enterprises; and Games, Amusement and Sports. He said that the jurisdiction of the Committee on Public Services is simply on the grant of the franchise.

Senator Lacson believed that the grant of franchise to Pagcor and the bill calling for the extension of such franchise could not be dissociated because it would be worthless to extend a franchise based on a defective and outdated law. Considering that House Bill No. 3409 itself seeks to further amend the Pagcor charter, he wondered why other amendments could not be introduced in the bill so that all the obsolete provisions of the law could be removed. Senator Arroyo reiterated that the Committee on Public Services has no jurisdiction on bills involving taxes.

Asked if the Committee would adopt House Bill No. 3409 without amendment, Senator Arroyo replied that while the Committee originally intended to adopt it without amendment, Pagcor has called the Committee’s attention to reconsider restoring the provision to operate Internet gambling which the House removed.

Asked if he would accept amendments to restore the provision that the House removed, Senator Arroyo said that he would, if it is within the Committee’s jurisdiction.

INTERPELLATION OF SENATOR ANGARA

Replying to the queries of Senator Angara, Senator Arroyo affirmed that Pagcor earns about P25 billion a year and its revenues are expected to continue to rise. He said that in 2002, Pagcor earned from the SEC the distinction of being the most profitable corporation in the Philippines with P20.21 billion in earning; for 2003, despite the SARS scare, it kept. its shortfall to a minimum, posting an earning of P19.43 billion; for 2004 and 2005, it earned an income of P24.87 billion and P23.24 billion, respectively, and P23.200 billion as of November 30, 2006.

In reply to further queries, Senator Arroyo believed that the Committee on Public Services cannot change the wording of a franchise written almost 25 years ago, the same way that a corporation that wishes to amend its charter should go to SEC and file an amended Articles of Incorporation.

Senator Angara argued that if there is a bill, for instance, to amend the Napocor charter, the Committee on Government Corporations and Public Enterprises should hear and incorporate all the proposed amendments of members, if found worth- while. Likewise, he said that the power of a franchise committee embraces all the ancillary issues involved in the franchise. In fact, he said, he would like to introduce an amendment to the allotment provision so that more money could go to social services like education, health and preservation of the national heritage. He said that he had cleared this up with the Pagcor chair who welcomed the proposal by remark- ing that it would make a better Pagcor. He said that he could not understand why such matter is beyond the jurisdiction of the committee as he was not ask- ing for the revamp of the entire charter. Senator Arroyo replied that Pagcor is giving the monies to 12 beneficiaries not because the Pagcor franchise was amended but because of separate independent laws that were introduced mandating that a certain amount be taken from Pagcor.

Senator Angara said that these are minimal amounts, except for the share of the Philippine Sports Commission which is 5%. Pointing out that the bulk of the income is given out as discretionary@


funds, he underscored the need for the proper and transparent distribution of the monies raised from non-tax revenues. Senator Arroyo said that anyone could introduce a bill mandating that a certain percentage of the net income of Pagcor be given to a particular project or agency.

Senator Angara believed that specifying the allotment at this point is integral to the very nature of the franchise; thus, insisting that the Committee is merely a franchise committee is a narrow reading of the law and is a waste of valuable time. Senator Arroyo pointed out that Rule IX of the Rules ofthe Senale provides that the jurisdiction of the Committee on Government Corporations and Public Enterprises covers all questions affecting government corporations, including all amendments to their charters; on the other hand, the jurisdiction of the Committee on Public Services is to grant or amend legislative franchises.

Senator Angara argued that to insist tliat the sole responsibility of the Committee on Public Services is to extend a franchise is a very narrow reading of its authority and very destructive of the committee system wherein a committee discusses and considers all the issues, including minor ones, affecting the subject matter. He said that subdividing the work on one franchise hill between several committees like the Committee on Government Corporations and Public Enterprises for the amendments, Committee on Ways and Means for the tax component, and the Committee on Finance for the appropriations would never enable the Senate to pass a bill. But Senator Arroyo insisted that this is the way the committee system works in the Senate.

MOTION TO RECOMMIT THE BILL

Thereupon, Senator Angara moved to recommit the bill.

Senator Arroyo stated that only the House of Representatives initiates franchise hills, as provided for in the Constitution. He wondered whether the House would agree to all the amendments being proposed by Senator Angara.

Noting that the Senate has overhauled the general appropriations hill, Senator Angara reasoned that it cannot be argued that the Members CaMOt amend a franchise which to him is contrary to Senate practice, the Rules and common sense. If Senator Arroyo was

not prepared to consider amendments which the Pagcor itself accepted, he said that nothing remains to be done except to recommit the bill.

Senator Arroyo noted that House Bill No. 3409 consists of two pages which could increase to four pages if he agreed to the amendments of Senator Angara which he argued the House would never accept. He maintained that the function of the Senate with respect to franchise bills is to concur, disagree or modify. He emphasized that this was the rule followed by past committee chairs.

Senator Angara reasoned that the amendment he was proposing is for public interest and no one would object to the use of the the gaming proceeds to improve public schools and hospitals and to conserve the national heritage. He maintained that as the records would show, the Senate had amended franchise bills in the past.

However, Senator Arroyo contended that Bs committee chair for the past six years, the Body has never amended articles of incorporation. But Senator Angara disagreed. He appealed to the Rules of the Senate, arguing that a committee should not simply limit its function to extending a franchise.

Senator Arroyo stated that precisely, the proce- dure has been to refer a hill to a primary, secondary and tertiary committees.

Senator Angara argued that it is the responsibility of the primary committee to consider amendments that affect the subject matter of a hill. In view of the difference in opinions, he said that it would he better to recommit the hill so that all aspects could be considered.

Senator Arroyo recalled that the bill of Senator Enrile was referred primarily to the Committee on Government Corporations and Public Enterprises while that of Senator Ejercito Estrada [J) was referred primarily to the Committee on Games, Amusements and Sports with the Committee on Public Services as the secondary committee. He noted that the Pagcor bill was passed by the House during the Twelfth Congress but the Senate did not take it up for about two years. He recounted that the House transmitted the franchise bill in June 2005 but Pagcor only completed the documentation requirements in July 2006. He bared that in October 2006, he was told that Pagcor’s franchise would expire in April&-

P


2008 which fact made it difficult for Pagcor to deal with banks, creditors and partners. It is for this reason, he said, that he had to attend to it immediately especially in the light of the heightened competition among neighboring countries in the gambling industry which is now a rich source of revenue. He stressed that Pagcor could not deal with its creditor banks and foreign partners unless its franchise was renewed for another 25 years.

Senator Angara noted that as early as October last year, all the documentary requirements had been fulfilled by Pagcor but it was only now that the Committee presented the report. He agreed that with the franchise renewal, investors and creditors should be pleased but he would rather please the Filipinos more. He proposed to improve the Pagcor charter by allocating a portion of its proceeds to social services which, he believed, would be an improvement and an invitation to foreigners to come in and expand their operations.

Senator Arroyo reiterated that he did not want to intrude into the jurisdiction of the other committees. He moved that the Body take a vote on the motion.


With the permission of the Body, the Chair suspended the session.

it was 10:37 p.m.



INQUIRY OF SENATOR ROXAS

Asked by Senator Roxas whether the Chair has ruled on the motion of Senator Angara, Senator Arroyo stated that he and Senator Angara have agreed that the amendments to he proposed would not conflict with their respective positions.



It was 11:12 p.m.



REMARKS OF SENATOR ROXAS

Senator Roxas informed the Body that Senator Arroyo has stood firm in his belief that the Committee on Public Sewices has a limited scope as far as amendments to franchises are concerned to which he disagreed. Effectively, he said, the Body could agree to the extension of the Pagcor franchise or not agree to extend it; and the other recourse is to leave the task of amending specific provisions of the franchise to another committee.

He stated that he would have wanted to introduce an amendment segregating the function of regulating gaming from the activity of engaging in gaming, both of which are presently reposed in Pagcor. He asserted that this is not good governance because the regulator, in effect, regulates its own activities, hence, there is no system of checks and balance.

He disclosed that the other amendments that he would have wanted to propose pertain to the sale of the ownership of Pagcor, after a certain period, to the public either through a public offering or the entry of strategic partners so that government could reduce its participation in gaming; and the allocation of the income of Pagcor.

Given the position of the Committee chair, Senator Roxas stated that it would be useless to interpellate on the bill much less to propose amendments beyond the scope determined by the Chair. Lest he be constrained to interpellate on the bill extensively to better understand it, he hoped that the Committee chair has heard his views.

In closing, Senator Roxas manifested that he would vote against the bill.



it was 11:19 p.m,


4a- At 11 :22 p.m., the session was resumed.


PARLIAMENTARY INQUIRY OF SENATOR LACSON

Noting that it was already 11:21 in the evening, Senator Lacson inquired whether the bills passed on Second Reading last Monday, February 5 , could be passed on Third Reading after the stroke of twelve midnight when the three-day rule shall have been complied with. The Chair replied in the affirmative, as it confirmed that the Members need not come the next day for that purpose.

Senator Pangilinan stated that if the Members passed other bills on Second Reading after twelve midnight, they might have to come back on Friday for the Third Reading.

SUSPENSION OF CONSIDERATION OF HOUSE BILL NO. 3409


BILLS CREATING ADDITIONAL BRANCHES OF TRIAL COURTS

(Continuation)

With the unanimous consent of the Body, upon motion of Senator Pangilinan, consideration, on Second Reading, of the following bills was resumed:


AN ACT CREATING TWO ADDITIONAL BRANCHES OF THE MUNICIPAL TRIAL COURTS IN CITIES (MTCC) IN THE CITY OF SAN JOSE DEL MONTE, PROVINCE OF BULACAN, AMENDING FOR THE PURPOSE SECTION 129, OTHERWISE KNOWN AS THE JUDICIARY REORGANIZ- ATION ACT OF 1980, AS AMENDED, AND APPROPRIATING FUNDS ?FIEREFOR;


AN ACT CREATING AN ADDITIONAL BRANCH OF THE MUNICIPAL TRIAL COURT IN THE MUNICIPALITY OF DAET, PROVINCE OF CAMARINES NORTE, AMENDING FOR THE PURPOSE SECTION 30 OF BATAS

PAMBANSA BILANG 129, OTHER- WISE KNOWN AS THE JUDICIARY REORGANIZATION ACT OF 1980, AS AMENDED, AND APPROPRIATING FUNDS THEREFOR

3. House Bill No. 1308 (Committee Report No. 1291, entitled

AN ACT ESTABLISHING AN ADDITIONAL BRANCH OF THE REGIONAL TRIAL COURT IN THE PROVINCE OF ZAMBOANGA SIBUGAY TO BE STATIONED AT THE MUNICIPALITY OF IMELDA, AMENDING FOR THE PURPOSE SECTION 14, PARAGRAPH (J) OF BATAS PAMBANSA BLG. 129,

JUDICIARY REORGANIZATION ACT OF 1980, AS AMENDED, AND APPRO- PRIATING FUNDS THEREFOR and

OTHERWISE KNOWN AS rm


AN ACT CREATING AN ADDITIONAL BRANCH OF THE REGIONAL TRIAL COURT IN THE PROVINCE OF LANA0 DEL SUR TO BE STATIONED AT THE MUNICIPALITY OF WAO, AMENDING FOR THE PURPOSE SECTION 14, PARAGRAPH (M) OF BATAS PAMBANSA B E . 129, OTHERWISE KNOWN AS THE JUDICIARY REORGANIZATION ACT OF 1980, AS AMENDED, AND APPROPRIATING FUNDS THEREFOR.

Senator Pangilinan stated that the parliamentary status of each bill was the period of interpellations.


There being no interpellation on any of the bills, upon motion of Senator Pangilinan, there being no objection, the Body closed the period of interpellations and proceeded to the period of amendments.


There being no committee or individual amendment to any of the bills, upon motion of Senator Pangilinan, there being no objection, the Body closed the period of amendments. " r


APPROVAL OF HOUSE BILL NOS. 5117, 5116, 1308 AND 4393 ON SECOND READING

Submitted to a vote, there being no objection, House Bill Nos. 5117, 5116, 1308 and 4393 were approved on Second Reading, one after the other.

SUSPENSION OF CONSIDERATION OF HOUSE BILL NOS. 5117, 5116, 1308 AND 4393

Upon motion of Senator Pangilinan, there being no objection, the Body suspended consideration of the bills.

COMMITTEE REPORT NO. 258

Upon motion of Senator Pangilinan, there being no objection, the Body considered Committee Report No. 258 re: PRIVILEGE SPEECH OF SENATOR DRILON AND THE INTERPELLATIONS THEREON, DELIVERED ON JANUARY 22,2007, ENTITLED “A SEASON OF SHAME”; PRIVILEGE SPEECH OF SENATOR ALFRED0 S. LIM DELIVERED ON JANUARY 22, 2007, ENTITLED “WHAT ARE WE IN POWER FOR?” AND P.S. RES. NO. 609.

With the permission of the Body, only the subject matter of the committee report was read without prejudice to the insertion of its full text into the Record of the Senate.

APPROVAL OF COMMITTEE REPORT NO. 258

Upon motion of Senator Pangilinan, there being no objection, Committee Report No. 258 was approved by the Body.


(Continuation)

Upon motion of Senator Pangilinan, there being no objection, the Body resumed consideration, on Second Reading, of House Bill No. 3409, entitled:

AN ACT FURTHER AMENDING PRESIDENTIAL DECREE NO. 1869, OTHERWISE KNOWN AS PAGCOR CHARTER.

Senator Pangilinan stated that the parliamentary status was still the period of interpellations.

Thereupon the Chair recognized Senator Arroyo, Sponsor of the measure, and Senator Gordon for his interpellation.

INTERPELLATION OF SENATOR GORDON

Asked by Senator Gordon why jai-alai, internet and other forms of gambling were not included in the scope of Pagcor operations, Senator Arroyo replied that it was the House that removed them and Senator Angara would introduce an amendment to restore internet gambling.


There being no further interpellation, upon motion of Senator Pangilinan, there being no objection, the Body closed the period of interpellations and proceeded to the period of committee amendments.


There being no committee amendment, upon motion of Senator Pangilinan, there being no objection, the Body closed the period of committee amendments and proceeded to the period of individual amendments.

ANGARA AMENDMENT

On page 1, line 12, as proposed by Senator Angara and accepted by the Sponsor, there being no objection, the Body approved the replacement of the word “maintain” with the word LICENSE.

ANGARA-GORDON AMENDMENT

On page 2, line 1, as jointly proposed by Senators Angara and Gordon, there being no objection, the Body approved the deletion of the phrase “AND INTERNET GAMBLING.”

PROPOSED AMENDMENT OF SENATOR ENRILE

On page 2, line 3, after the word “Philippines,” Senator Enrile proposed to replace the colon (:) with a period (.) and to delete the proviso starting with the word “PROVIDED’ on line 3, up to the period (.) on line 6.

P 4-


Senator Recto wondered whether the proposed amendment would, in effect, authorize Pagcor to operate casinos in any area even without the consent of the local governments. Senator Enrile replied in the affirmative as he explained that the proposal aims to only maintain the status quo.

Asked by Senator Enrile whether such authorization is contained in the Local Government Code, Senator Arroyo replied that if it were so, then there would be no need to amend the Pagcor charter. He pointed out that the Pagcor seeks the permission of the concerned LGU only as a matter of courtesy.

For his part, Senator Enrile believed that the requirement for Pagcor to secure a permit from the LGUs should remain in the Local Government Code and not to be included in the Pagcor charter.


Upon motion of Senator Recto, the session was suspended.

It was 11:37 p m .


At 11 :37 p.m., the session was resumed,

Upon resumption, Senator Enrile withdrew his proposed amendment.

As proposed by Senator Enrile and accepted by the Sponsor, there being no objection, the Body approved the following amendments, one after the other:

1. On page 2, between lines 13 and 14, insert a new paragraph to read as follows:

THE AUTHORITY AND POWER OF PAGCOR TO AUTHORIZE, LICENSE, AND REGULATE GAMES OF CHANCE, GAMES OF CARDS, AND GAMES OF NUMBERS SHALL NOT EXTEND TO. (1) GAMES OF CHANCE AUTHORIZED, LICENSED, AND REGULATED OR TO BE AUTHORIZED, LICENSED AND REGULATELI BY, IN AND UNDER EXISTING FRANCHISES OROTHER REGULATORY BODIES; (2) GAMES OF CHANCE, GAMES OFCARDS AND GAMES OF NUMBERS AUTHORIZED, LICENSED,

REGULATED BY, IN AND UNDER SPECIAL LAWS SUCH AS REPUBLIC ACT NO. 7922; AND (3) GAMES OF CHANCE, GAMES OF CARDS, AND GAMES OF NUMBERS LIKE COCKFIGH’IlNG, AUTHORIZED, UCENSED AND REGULATED BY LOCAL GOVERN- MENT UNITS. THE CONDUCT OF SUCH GAMES OF CHANCE, GAMES OF CARDS AND GAMES OF W E R S COVERED BY EXISTING FRANCHISES, REGULATORY BODIES OR SPECIAL LAWS TO THE EXTENT OF THE JURISDICTION AND POWERS GRANTED UNDER SUCH FRANCHISES AND SPECIAL LAWS, SHALL BE OUTSIDE THE LICENSING AUTHORITY AND REGULATORY POWERS OF PAGCOR,

On page 2, Section 1, add a new subsection (2), to amend Section 3(h) of the Pagcor Charter on Corporate Powers as contained in P.D. No. 1869 as follows:

2.

a. On the first line, after the word “make” and the comma (,), insert the word CONCLUDE and a comma (,);

b. On the second line, after the word “kind,” insert the phrase AND NATURE;



It was 11:43 P.M.



c. Delete lines 3 to 6 beginning with the word “pertaining” and ending with the word “corporation,” and in lien thereof, insert the following: WHICH ARE NECESSARY, APPROPRIATE, PROPER OR INCWENTAL TO ANY BUSINESS OR PURPOSE OF PAGCOR, INCLUDING BUT NOT LIMITED TO INVESTMENT AGREEMENTS, JOINT VENTURE AGREEMNB, MANAGEMENT AGREEMENTS, AGENCY AGREEMENTS, WHETHER AS PRINCIPAL OR AS AN AGENT, MANPOWER SUPPLY AGREE- MENTS, OR ANY OTHER SIMILAR AGREEMENTS OR ARRANGEMENTS WITH ANY PERSON, FIRM, ASSOCIATION OR

P CORPORATION.&

WEDNESDAY, FEBRUARY 7.2007 1489


There being no other individual amendment, upon motion of Senator Pangilinan, there being no objection, the Body closed the period of individual amendments.

APPROVAL OF HOUSE BILL NO. 3409 ON SECOND READING

Submitted to a vote, and with the majority voting in favor, House Bill No. 3409 was approved on Second Reading.

INQUIRIES OF SENATOR ROXAS

Asked by Senator Roxas on the differences between the amendments that had been accepted by Senator Arroyo and those being proposed by the other Members on the allocation of Pagcor earnings, Senator Arroyo stated that beforehand, he had informed Senator Enrile that he would reject proposed amendments that have to do with allocation. He clarified that the amendments he had accepted would exclude card games from Pagcor jurisdiction and expand the agreements that Pagcor could enter into.

As regards the document that was the subject of the amendments, Senator Arroyo explained that the amendments were to PD 1869 which refers both to the Articles of Incorporation and the franchise authority of the Pagcor.

Senator Roxas noted that the initial representation of Senator Arroyo was that the power of the Committee was only with respect to what was submitted by the House of Representatives and to the extension of the franchise, and so he thought that PD 1869 and subsequent presidential decrees that have to do with the charter of Pagcor were beyond the Committee’s mandate. He asked what the Committee can and cannot do relative to the matter.

At this point, Senator Enrile stated that his amendments dealt with the establishment of the jurisdiction of Pagcor as a licensor and its operational powers. He said that the Committee could not divorce the franchise of Pagcor from its corporate power because they govern the franchise. Since Pagcor is authorized to operate and license gambling operations under its franchise, he said that it is germane and relevant to amend the power of Pagcor to enter into contracts as an operator.

On whether there is a difference in treatment or interpretation between the amendments that were submitted and accepted, and the questions he had posed earlier, Senator Enrile replied that before he introduced his amendments, he showed them to Senator Arroyo and asked whether those are germane to the House bill being amended.

Senator Roxas stated that based on the conver- sation he bad with Senator Arroyo, he concluded that the amendments he was contemplating were not consistent with Senator Arroyo’s interpretation and so he decided not to pursue them. He clarified that he was only interested to know the difference in the treatment of those proposals.

Senator Arroyo explained that PD 1869 consists roughly of two parts: First, the creation of Pagcor consisting of Sections 2 to 9 which refer to the corporate powers and the organization of Pagcor instead of the Articles of Incorporation filed with the SEC: Section 2, the Creation ofPhilippine Amuse- ment and Gaming Corporation, which states the corporate powers, the state policy, and the reason for creating Pagcor; Section 4 is the authorized capital stock that would be owned by the government; Section 5 refers to the government investment; Section 6, the Board of Directors; Section 7, Powers, Functions and Duties of the Board of Directors; Section 8, Registration; and Section 9, Regulatory Power; and second is the grant of the franchise consisting of Section 10, Nature and Term of Franchise; Section 11, Scope of Franchise; Section 12, Special Condition of Franchise; Section 13, Exemptions, and subsection 3, Dividend Income; and Section 14, Other Conditions and the Corporation’s activities. Moreover, he said that Title 4 refers to government audit; Title 6, exemption from Civil Sewice Law, and Title 7, Transitory Provisions.

Senator Arroyo stated that the Committee’s jurisdiction, as far as PD 1869 is concerned, refers only to Title 4, Grant of Fratichise and Related Activities, as well as Sections 10 to 14. He said that the Committee accepted Senator Enrile’s proposed amendments because they refer to Title IV.


Upon direction of the Chair, Secretary Yabes read the President’s certification as to the necessity of the immediate enactment of House Bill No. 3409, to wit: F


MALACAfuANG PALACE MANILA

February 6,2007

HON. MANUELB. VlLLAR JR. Senate President Philippine Senate Pasay City


Pursuant to the provisions of Article VI, Section 26(2) of the 1987 Constitution, I hereby certify to the necessity of the immediate enactment of House Bill No. 3409, under Committee Report No. 209, entitled

AN ACT FURTHER AMENDING PRESIDENTIAL DECREE NO. 1869, OTHERWISE KNOWN AS PAGCOR CHARTER,

to address public emergency arising from the urgent need to extend PAGCORs corporate existence to ensure continuity of its critical programs and projects geared towards uplifting the socio-economic plight of the less fortunate in Philippine society.

Best wishes.

Very truly yours,


cc: Hon. JOSE C. DE VENECIA JR. Speaker House of Representatives Quezon City

APPROVAL OF HOUSE BILL NO. 3409 ON THIRD READING

In view of the Presidential certification, upon motion of Senator Pangilinan, there being no objection, the Body considered, on Third Reading, House Bill No. 3409.

Pursuant to Section 67, Rule XXIII of the Rules of the Senate, upon motion of Senator Pangilinan, there being no objection, Secretary Yabes read only the title of the bill, to wit:

AN ACT FURTHER AMENDING PRESIDENTIAL DECREE NO. 1869, OTHERWISE KNOWN AS PAGCOR CHARTER.




In .favor

Angara Gordon Arroyo Magsaysay Cayetano Pangilinan Ejercito Estrada (J) Recto Enrile Villar Flavier

Against

Roxas

Abstention

None

With 11 senators voting in favor, one against, and no abstention, the Chair declared House Bill No. 3409 approved on Third Reading.


(Continuation)

Upon motion of Senator Pangilinan, there being no objection, the Body resumed consideration, on Second Reading, of Senate Bill No. 1837 (Committee Report No. 3). entitled

AN ACT EXTENDING THE UTILIZ- ATION PERIOD OF THE AGRI- CULTURAL COMPETITIVENES FUND, AMENDING FOR THIS PURPOSE SECTION 8 OF REPUEILIC ACT NO. 8178, ENTITLED “AN ACT REPLACING QUANTITATIVE IMPORT RESTRICTIONS ON A G R I C U L m PRODUCTS, EXCEPT RICE, WITH

CULTURAL COMPETITIVENESS FUND:’ AND FOR OTHER PURPOSES.

Senator Pangilinan stated that the parliamentary

TARIFFS, CREATING THE AGRI-

status was still the period of interpellations.

Thereupon, the Chair recognized Senator Magsaysay, Sponsor of the measure, and Senator Osmefia for his interpellation.

.rc”

THURSDAY. FEBRUARY 8,2007 1491

INTERPELLATION OF SENATOR OSMERA

Preliminarily, Senator Osmeiia asked on the total collection in Fund 183 or the account number that he helped obtain from the Bureau of Treasuty for all the collections in minimum access volume (MAV) importations.


Upon motion of Senator Magsaysay, the session was suspended.

It was 12:07 a.m.


At 12:07 a.m., the session was resumed.

Senator Magsaysay replied that the total collection in Fund 183 of the ACEF as of January 15, 2007, was P5,819,135,810 and the available balance to date was P2,817,683,441. Upon huther queries, heaffirmed that the grand total for approved ACEF projects was over P3 billion, including the recently approved 27 projects amounting to P233 million; total loans granted was roughly P2.206 billion; total loan receivables as of the third quarter of 2006 was P184,134,000; and the total loan payment per the latest report of the Landbank as of the third quarter of 2006 was roughly P50 million.

Noting that there was only a 28% payback, Senator Osmefia explained that the reason he objected to the extension of the ACEF was that it did not comply with the AFMA which provides that the Fund shall be used for small farmers and fisherfolk, farm-to-market roads, infrastmcture, value-added facilities, and the like; instead, the Fund was utilized to lend money to medium-agricultural enterprises without interest and collateral.

Senator Magsaysay stated that the ACEF has suspended the loan application processing for two years.

However, Senator Osmeiia pointed out the report of the Congressional Oversight Committee on Agriculture and Fisheries Modernization (COCAFM) indicating that 27 projects were recently approved amounting to P233 million, which is roughly PI0 million per project. Senator Magsaysay stated that

the Execom has authorized the agriculture secretary to approve loans of PI5 million and below.

Asked whether the intent of the ACEF is to assist small and medium entrepreneurs, and not the small farmers, Senator Magsaysay replied that the Fund aims to improve the post-harvest processing of these entrepreneurs to enable them to go into agribusiness as well. He said that the loan proceeds from the Quedan and Rural Credit Guarantee Corporation (Quedancor) shall be lent to the small farmers.

Senator Osmeiia stated that the small farmers are the ones who badly need credit and not those entrepreneurs who have banking connections, credit lines, and collaterals to offer. He expressed disappointment over the fact that legislators are not keeping their promise as enunciated in the various provisions of the Agricultural Tariffication Act and the Agricultural and Fisheries Modernization Act, which are supposed to help the small farmers. He said that at the proper time, he would introduce an amendment to allocate whatever remains of the Fund to the small farmers and laboratories in all agricultural centers, and for the loans to be administered through microfinance institutions particularly the People's Credit and Finance Corporation where no single applicant can borrow more than P150,000, consistent with the provisions of the Bangko Sentrd ng Pilipinas and other government agencies.


There being no further interpellation, upon motion of Senator Angara, there being no objection, the Body closed the period of interpellations and proceeded to the period of committee amendments.


There being no committee amendment, upon motion of Senator Osmeiia, there being no objection, the Body closed the period of committee amendments and proceeded to the period of individual amendments.

OSMERA AMENDMENTS

As proposed by Senator Osmeiia and accepted by the Sponsor, there being no abjection, the Body ,++

THURSDAY. FEBRUARY 8.2007 1492

approved the following amendmenls, one after the other:

1. On page I, after line 13, insert the sentence THEREAFTER, THE LAND BANK OF THE PHILIPPINES SHALL BE THE SOLE DEPOSITORY OF ACEF FUNDS;

On the same page, lines 15 and 16, delete the phrase "and earmarked by Congress";

On the same page, lines 14 and 15, delete the phrase "TO FINANCE MEDIUM TO LONG TERM CROPS AND OTHER SUCH PROJECTS AS MAY BE PRIORITIZED BY THE ACEF EXECUTIVE COMMITTEE,

On the same page, delete the provision starting on line 20 up to line 10 of page 2 and, in lieu thereof, insert the following:

(A) TWO HUNDRED MILLION PESOS (P200,000,000.00) IN A SPECIAL FUND DEPOSITED WITH THE LAND BANK OF THE PHILIPPINES FOR THE YOUNG FARMERS PROGRAM. SAID PROGRAM SHALL BE ADMINISTERED BY THE DEPARTMENT OF AGRICULTURE- NATIONAL AGRICULTURE AND FISHERIES COUNCIL (DA-NAFC).

2,

3.

4.

(B)ONEBILUONPEKB (Pl,W,W,W00) IN A NON-DIRECTED TRUST FUND DEPOSITED WITH AND MANAGED BY THE LAND BANK OF THE PHILIPPINES. THE INCOME FROM FLJND INVESTMENTS SHALL BE USED TO FUND SCHOLAR- SHIPS FOR NEEDY BUT DESERVING STUDENTS ENROLLED AT MEMBER INSTITUTIONS OF THE ASSOCIATION OF COLLEGES OF AGRICULTURE IN THE PHILIPPINES (ACAP). THE GRANTS SHALL NOT EXCEED FIFTEEN THOUSAND PESOS (Pl5,OOO.OO) PER SCHOLAR PER YEAR INCLUDING A ONE-TIME THESIS GRANT OF FIFTEEN THOUSAND PESOS (Pl5,OOO.OO) PER SCHOLAR WHO ARE SENIORS.

THE RULING BODY OF ACAP SHALL DETERMINE THE AMOUNT OF SCHOLAR- SHIP FUNDS ALLOCATED TO EACH MEMBER INSTITUTION.

(C) ONEBIUIONPESOS (Pl,W,W,W.CQ) IN A FUND DEPOSITED WITH AND MANAGED BY THE LAND BANK OF THE PHILIPPINES. THE FUND SHALL BE LENT TO MICROFINANCE INSTITUTIONS ACCREDITED BY THE PEOPLE'S CREDIT

AND FINANCE CORPORATION WHICH FINANCE INSTlTunONS SHALL ON-LEND TO SMALL FARMERS AND FISHERFOLK PROVIDED, THAT NO SINGLE LOAN OR SERIES OF LOANS TO A SINGLE BORROWER SHALL BE MORE THAN ONE HUNDRED FIFTY THOUSAND PESOS (PI 50,000.00).

(D) FOUR HUNDRED MILLION PESOS (P400,000,000.00) AS A ONE-TIME GRANT TO MEMBER SCHOOLS OF ACAP TO UPGRADE LABORATORY FACILITIES, PURCHASE LABORATORY EQUIPMENT, AGRICULTURAL EQUIP- MENT AND TO FUND RESEARCH AND DEVELOPMENT PROGRAMS AND PROJECTS IN AGRICULTURE, AQUA- CULTURE AND MARICULTURE. THE RULING BODY OF ACAP SHALL DETERMINE THE AMOUNT OF GRANT FOREACH MEMBERCOLLEGE.

(E) FOUR HUNDRED MILLION PESOS (P400,000,000.00) AS A ONE-TIME GRANT TO UPGRADE LABORATORY FAcILmES AND ANY0"EREQUIpMENT OR FACILITIES FOR RESEARCH AND DEVELOPMENT PROJECTS TO THE FOLLOWING: FIFTEEN (15) AGRI- CULTURAL COLLEGES IDENTIFIED BY THE PHILIPPINE COUNCIL FOR AGRI- CULTURE AND NATURAL RESOURCES RESEARCH AND DEVELOPMENT (PCARRD) AND THE DEPARTMENT OF AGRICULTURE-BUREAU OF AGRI- CULTURAL RESEARCH (DA-BAR) AS CENTERS OF EXCELLENCE IN AGRI- CULTURE AND FISHERIES:

1. BENGUET STATE UNIVERSITY (BSU),

2. MARIAN0 MARCOS STATE UNIVERSITY (MMSU),

3. ISABELA STATE UNIVERSITY (ISU),

4. CENTRAL LUZON STATE UNIVERSITY, (CLSU),

5. UNIVERSITY OF THE PHILIPPINES, LOS Ba_r;rOS (UPLB),

6. BICOL UNIVERSITY (BU),

7. UNIVERSITY OF THE PHILIPPINES IN THE VISAYAS (UPV),

8. NEGROS ORIENTAL STATE UNIVERSITY (NORSU),

LEYTE STATE UNIVERSITY (LSLJ), @ 9.

y"

THURSDAY, FEBRUARY 8,2007 1493

THEREAFTER, THE COMMISSION ON AUDIT SHALL CONDUCT AN ANNUAL AUDIT OF THE VARIOUS FUNDS UNDER THE ACEF INCLUDING THE GRANTS GIVEN AND REPORT ITS FINDINGS TO THE SUPERVISORY COUNCIL, COCAFM, COMMITTEE ON APPROPRIATIONS OF THE HOUSE OF REPRESENTATIVES, AND THE COMMITTEE ON FINANCE OF THE SENATE.;

6. On page 2, line 16, substitute the phrase “released to the official designated depository bank” with DEPOSITED WITH THE LAND BANK OF THE PHILIPPINES:

On the same page, line 18, substitute the phrase “The Department of Agriculture and the official depository bank” with THE SUPERVISORY COUNCIL AND THE LAND BANK OF THE PHILIPPINES; atid

On the same page, line 21, delete the phrase “The Department of Agriculture (DA) in consultation with all the concerned stakeholder groups in the agricultural and fisheries sectors and other agencies concerned, in coordination with the Congressional Oversight Committee on Agriculture and Fisheries Modernization (COCAFM),” and in lieu thereof, insert THE SUPERVISORY COUNCIL.

7.

8.

IO. WESTERN MINDANAO STATE UNIVERSITY (WMSU),

11. CENTRAL MMDANAO UNIVERSITY (CMU),

12. UNIVERSITY OF SOUTHEASTERN PHILIPPINES (USEP),

13. UNIVERSITY OF SOUTHERN MINDANAO (USM),

14. NORTHERN MWANAO STATE INSTITUTE OF SCIENCE AND TECHNOLOGY (NMSIST), AND

15. AURORA STATE COLLEGE OF TECHNOWGY (ASCOT).

THE PCARRD AND THE DA-BAR SHALL JOINTLY DETERMINE THE AMOUNT OF GRANT TO EACH INSTITUTION. THESE GRANTS SHALL BE IN ADDITION TO THE GRANTS THAT THE ABOVELISTED SCHOOLS WILL RECEIVE IN ACCORDANCE WITH SUBSECTION (D) HEREOF.

Insert a new Section 2, subject to style, to read

5.

SEC. 2. SUPERVISORY COUNCIL. -A SUPERVISORY COUNCIL COMPOSED OF THE SECRETARIES OF AGRICULTURE, OF THE COMMISSION ON HIGHER EDUCATION, OF THE DEPARTMENT OF SCIENCE AND TECHNOLOGY, OR THEIR REPRESENTATIVES WHO SHOULD HAVE THE RANK OF UNDERSECRETARY, A SENIOR VICE PRESIDENT OF THE LANDBANK, OF THE SMALL BUSINESS CORPORATION, AND THE COCHAIRS OF THE CONGRESSIONAL OVERSIGHT COMMITTEE ON AGFUCULTURE AND FISHERIES MODERNIZATION (COCAFM) SHALL OVERSEE THE IMPLEWATION OF THIS FUND AND COLLECT THE REPAYMENTS OF LOANS FROM ACEF BORROWERS AND DEPOSIT THE SAME WITH THE LANDBANK.

THE COMMISSION ON AUDIT SHALL IMMEDIATELY CONDUCT AN AUDIT OF THE ACEF FUND AND SUBMIT ITS REPORT TO THE SUPERVISORY COUNCIL, THE COCAFM AND THE COMMITTEE ON APPROPRIATIONS OF THE HOUSE OF REPRESENTATIVES AND THE COMMITTEE ON FINANCE OF THE SENATE WITHIN THREE MONTHS OF THE EFFECTIVITY OF THIS LAW.


There being no other individual amendment, upon motion of Senator Magsaysay, there being no objection, the Body closed the period of individual amendments.

APPROVAL OF SENATE BILL NO. 1831 ON SECOND READING

Submitted to a vote, there being no objection, Senate Bill No. 1837 was approved on Second Reading.

PRESIDENTIAL CERTlFlCATION

Upon direction of the Chair, the Deputy Secretaty for Legislation read the President’s certification as to the necessity of the enactment of Senate Bill No. 1837, to wit:& P

1494 THURSDAY, FEBRUARY 8.2007

MALACARANG PALACE MANILA

November 4,2004

HON. FRANKLIN M.DRILON Senate President Philippine Senate Pasay City


Pursuant to the provisions of Article VI, Section 26(2) of the 1987 Constitution, I hereby certify to the necessity of the immediate enactment of Senate Bill No. 1837, under Committee Report No. 3, entitled:

“AN ACT EXTENDING THE UTILIZ- ATION PERIOD OF THE AGRI- CULTURAL COMPETITIVENESS ENHANCEMENT FUND, AMEND- lNG FOR THIS PURPOSE SECTION 8 OF REPUBLIC ACT NO, 8178, ENTITLED “AN ACT REPLACING QUANITIATIWIMPORTRES’IlUG TIONS ON AGRICULTURAL PRODUCTS, EXCEPT RICE, WITH TARIFFS, CREATING THE AGRI- CULTURAL COMPETITIVENESS FUND” AND FOR OTHER PURPOSES:’

to address the urgent need of strengthening the intent of R.A. 8178 by extending the utilization period of the Agricultural Competitiveness Enhancement Fund (ACEF) from the mandated nine years to the proposed fifteen years to help provide farmers, fisherfolk and other agricultural workers access to other sources of funds for their enhancement activities.

Best wishes.

Very truly yours,

GLORIA MACAPAGAL-ARROYO

CC: HON. JOSE C. DE VENECIA, JR. Speaker House of Representatives Quezon City



Pursuant to Section 67, Rule XXIII of the Rules of the Senate, upon motion of Senator Pangilinan, there being no abjection, the Deputy Secretary for Legislation read only the title of the bill, to wit:

AN ACT EXTENDING THE UTILIZATION PERIOD OF THE AGRICULTURAL COMPETIVENESS ENHANCEMENT FUND, AMENDING FOR THIS PUR- POSE SECTION 8 OF REPUBLIC ACT NO. 8178, ENTITLED “AN ACT REPLACING Q U N l T A T I W IMPORT RESTRICTJONS ON AGRICULTURAL PRODUCTS, EXCEPT RICE, WITH TARIFFS, CREATING THE AGRI- CULTURAL COMPETITIVENESS FUND” AND FOR OTHER PURPOSES.

The Deputy Secretary for Legislation called the roll for nominal voting.



In favor

Angara Arroyo Biazon Cayetano Drilon Enrile Flavier Gordon Lacson

Madrigal Magsaysay Osmeila

Pimentel Recto Roxas Vila

Patlgilian

Against

None

Abstention

None

With 17 senators voting in favor, none against, and no abstention, the Chair declared Senate Bill No. 1837 approved on Third Reading.


Upon motion of Senator Recto, the session was suspended.

It was 12:35 a . m . p

THURSDAY, k L RUARY 8,2007 1495


At 12:35 a m , the session was resumed.

ADJOURNMENT OF SESSION

Upon motion of Senator Pangilinan, there being no objection, the Chair declared the session adjourned until Thursday, February 8, 2007.

It wus 12:36 a.m.

I hereby certify to the correctness of the foregoing.

OSCAR G . YABES

Approved on June 4, 2007

Documents

SEnate Journal Feb. 7 2007