Transcript of interview with Senator Mar Roxas on ANC's 'Dateline' (excerpts)

On the LEDAC priorities as discussed Tuesday, April 22:

MAR: In the LEDAC, the legislative agenda was discussed, and I'm happy to note that two bills that I have been pushing for and I have been author and sponsor for, have been adopted as priority measures. First of this is the Cheaper Medicines bill, which has been 95% concluded in the bicam, and hopefully by the end of this week, it will have been completed. We are in fact now circulating already a draft bicam committee report.

And the second, which I've been pushing for a long time, is the exemption for minimum wage earners from income tax. Basically we're saying, this is the minimum amount that one needs in order to make a living. So therefore government should not anymore take a portion of this. So I've been working on this for some time, and I'm happy that it's now part of the priority legislative agenda.

On the Medicines bill:

Q: Is the Medicines bill going to look more like your version or the House version?

MAR: It will be the bicameral conference committee version. I don't want to say that it's Senate version or House version. I think there were more items that were common.

Q: The contentious 'generics-only' provision has reportedly been removed.

MAR: I think that the President took the leadership on this issue, and we're thankful that she took a position on this. The difference of opinion notwithstanding, let's go with what we've agreed to so far, and maybe it's only 80% of the loaf, but 80% of a loaf is better than no loaf. We're thankful that all the members of the bicameral panel saw the wisdom in this and agreed to set aside the 'generics-only.'

Q: There is the contention that price regulation may have a negative effect.

MAR: There are pluses and minuses, but in this instance, the pluses outweigh the minuses. We are as a matter of principle for the market mechanism to work, and in fact that's enshrined in the statement of policy. That's why we're allowing parallel importation and strengthening the generics industry.

But when the market doesn't work, that's the reason government exists and government must step in. What we're saying is what is provided in other segments of the law, we are strengthening here and making a definite duty of the Secretary of Health. Public health issues must gain a pre-eminence in the hierarchy of concerns.

Q: Are the rules for price regulation clear for interpretation?

MAR: I think that they're spelled out and will be further detailed in the implementing rules and regulations. Clearly, anytime that there's price control, the Secretary of Health must outweigh the risk of having the product disappearing from the shelves, and making sure that the product is available at affordable costs, and that's why there's an accompanying provision of government use or compulsory licensing, so the government can say 'We are taking this for our own use for distribution, because there is an emergency or because it is part of our public health concern.

For example, diabetes. We have 8 million diabetics in the country, and another 12 million so-called 'pre-diabetics' who are likely candidates diabetes. That's 8 to 20 million people. If diabetes drugs are so out of reach that 20 million people, one-fourth of our population are ill, clearly that's something that we the government must step in to solve. Now if the market mechanism does not provide affordable medicines for this particular ailment, I think it's proper for government to step in. That's why we have government. Government must in fact step in.

Q: Will the government subsidize companies or will it set a price?

MAR: It will set a price, and at the same time it will have other mechanisms such as parallel importation and compulsory licensing and government use to make sure the product is available.

Q: Will parallel importation be done by the government or private sector.

MAR: It will be done by the private sector. But all of these must go through BFAD for the quality. We did not in anyway sacrifice the quality imperative. Everything must pass through BFAD, even if it is checked from the country of origin.

Q: How much will prices go, and when?

MAR: It's difficult to say, and I'm not one to promise something that's indeterminate. When you have price differentials as between foreign and domestic prices, competitive pressure will drive prices down. Whether it happens in a month or two, who knows. The point is, this is not a magic bullet. This is not a magic pill or magic medicine that abrakadabra, after this becomes law, prices will come down. But businessmen will see there are 20 million diabetics, and if the price differential between the Philippines and India is worth his while, he will certainly invest to bring it in, and that pressure will bring down prices. We have also put in a 'must-carry' provision, there is no discrimination, so that the pharmaceutical companies cannot tell drugstores not to carry the competing product.

On minimum wage exemption from income tax:

Q: What impact will this exemption be?

MAR: About P8 billion. In a P1-trillion budget, P8 billion is not even 1%. But if you think about it, 2 million people will be given relief, both actual relief in terms of pesos, and psychological relief, that at least the government is not taking a share of my hard-earned money. They'll still have to file a return so there's no reduction in the rolls, but now they will no longer have to pay a tax for it, and more importantly from a cash point of view, they will no longer have to be... 'kaltas'-ated. The 20% will no longer be deducted. That P8 billion retained by the workers is going to be spent, and once that is spent, a VAT on that will be collected, so it doesn't get lost.

On the rice situation:

Q: Won't the rice program, along with tax exemptions, bring back a fiscal crisis situation?

MAR: For the P44 billion being spent on the rice program, it's not clear whether this is new spending, or a repackaging of items in the DA and National Irrigation budget. Since they have not come back to us for new money, then it seems to me that's just a repackaging of what's already there, so that's not new spending. What is dangerous is if NFA losses are not recorded as part of this year's deficits. NFA has a sovereign guarantee, so it can go out and borrow on the full faith and credit of the government. It can lose money, in this case P10 per kilo, and that's about P20 billion for this year, with 2 million metric tons or 2 billion kilos imported. That will not be recognized in the national government's books until the NFA says it is defaulting on its loans and so the national government will bail them out, which will happen maybe next year. The more important thing is whatever money we have now in the DA budget, how are we spending it, and what is the prioritization? With this in mind, by next year, we will have made substantial inroads in solving the problem.

By the way the government has still not admitted that there is a problem. They say we have a price problem, not a rice supply problem. This is all just parsing words and being cute with the spin. The point is, for the average person who used to pay P20-P22 per kilo, he's now paying P28-P30 per kilo. He has a real problem, budget-wise and disposable income-wise.

Number two, this problem is not just with rice. All other sorts of commodities all across the spectrum have now come up in price for a variety of reasons, most of which we can not do anything about - global warming, more Chinese and Indians who can afford a second and third meal a day, speculation in the commodity market. The point is, for those foodstuffs that we have some measure of control over, we should be self-sufficient, and that requires focused spending and smart spending, so that in fact we can dig ourselves out of this hole that we've gotten into.

On the baselines bill:

Q: Was the baselines bill discussed in LEDAC?

MAR: It wasn't discussed. There was one quick statement, a request to defer it until some consensus could be built, and that was the last mention of that in yesterday's LEDAC. My sense is that it will come up by next week as a separate matter. In fact, I think they're planning to call a separate LEDAC but I don't know when that will be.