Press Release
November 26, 2008

Sen. Richard J. Gordon's Privilege Speech

Mr. President, I rise on a matter of personal privilege.

Today is the day when the Americans in Subic Bay, which they formerly held, struck down a foreign flag in our country for the last time. For the first time no foreign flags fly in our country, and that occurred on November 24, 1992.

I was in Subic Bay this morning together with the thousands of volunteers who accompanied us when we took over Subic Bay so that it could be converted into a Freeport. I just wanted to point out that, I think, we owe these volunteers that served in Subic Bay, the gratitude for having preserved the honor of our country. Nothing was stolen and at the same time have been able to move Subic into a new level of development. And I will file the necessary resolution after this, Mr. President.

I also rise, Mr. President, on a matter of collective privilege principally because up late, there have been noises in the Lower House that talks about calling for a Constituent Assembly, a Constituent Assembly that would occur before the elections of 2010. And having said that, Mr. President, it would appear that they are even positing a theory that we are going to vote jointly and not separately.

Mr. President that would be a travesty of the Constitution, because it is very clear in the Constitution that Congress is a bicameral body with two houses. Under Article VI, Congress is identified and defined as the legislative power being vested in two houses of Congress, which are the Lower House and the Upper House.

Going further in the Constitution, the Constitution has really delineated the times when Congress can vote jointly and must vote separately, although meeting jointly. The time when they can meet jointly, but vote separately is enshrined in the matter of, under Article VII, in the matter of the powers of the president when he declares Martial Law, and the Congress would like to reject Martial Law or the issuance of the writ of habeas corpus. And it provides there that Congress meets jointly and vote jointly. Now in the matter of a situation where the Congress meets in joint session but votes separately, that is the time when we have to declare an existence of a state of war. And this is provided for in Section23 of Article VI of the Constitution. And it's very clearly delineated there that Congress can meet jointly but vote separately on the matter of declaration of war. While the provision on Constitutional amendments is stated, it states that Congress can amend the Constitution by two-thirds vote when calling for Constitutional Convention or two-thirds vote when acting as a Constituent Assembly. That's already pointed out, Congress is composed of two bodies.

Having said that, Mr. President, I feel that we must counsel and admonish our friends in the Lower House that such a move would be disastrous to the country, especially during these difficult times of the world. Today there is a contagion happening in the whole world today, where the mightiest nations like the United States have practically been diminished. There is no in the United States right now, they have to conduct a bail out and this is creating a situation where credit is constricted and when credit is constricted there will be factories that will have to close down because they do not have the credit to continue their operation as GM, Chrysler and Ford are currently undergoing and at the same time that will result in the loss of jobs. The loss of jobs as well as the closing of these factories will result in diminishing productivity. We are a country that is exporting auto parts to Japan and the United States and this is why I feel that to call a Constituent Assembly right now is really a situation where I think this will be a shameless act as well as an untimely act.

I would like to say this, the economy slowed down significantly in the first half of this year. The gross domestic product, adjusted to inflation, grew only 4.6% in the first half of this year compared to 7.6% in the same period last year. The inflation rate, meanwhile, is still in double digit and very slow to decelerate. The growth slow down came about even before Japan, the second largest market for Philippine exports and now that these economies had entered a recession…this would only mean further weakening of the Philippine economy.

When the country stopped manufacturing products of semi-conductors for the (inaudible) global retrenchment of the information technology sector, the mess, real GDP of the Philippines grew only 1.8 percent. The real income of every Filipino decreased as a result. This time, all sectors in the US and Japan are retreating which can only mean further dampening of our economic growth, the operation will be impeded an the unemployment rate will rise. This is not to ignore the fact that England is also under the heel, Belgium, even China, even Russia are now under the heel of this contagion, Mr. President.

All these are bad news for Filipinos, they're actually poor, the truly disadvantaged members of our society are bound to swell and standards of living will deteriorate for everyone. We must do all we can therefore to mitigate these dire outcomes if not prevent them altogether.

Mr. President, calling for a constituent assembly today will be a step in the wrong direction and will be giving off stupid signals to our country. At the most fundamental level, what this means is the economy will require the undivided attention of the political leadership. It is not a time to be divided, it is a time to focus on the real problems of the nation. Constituent assembly will divide us, rather woefully.

In this regard, Mr. President, I propose two approaches:

1. a public sector employment program based on countryside industrialization; and

2. an enhanced social protection program.

First, Your Honor, the government must take a lead role in creating jobs. The private sector's ability for job creation has been weakened by the recession in the US and Japan and the looming slowdown in China, India and Europe. The government cannot just stand by the road as workers in large numbers lose jobs, according to National Statistics Office, 7.4% are unemployed in this country while 21% are underemployed, and find it nearly impossible to put food on the table. An SWS survey, conducted last June 27-30, 2008, revealed that 2.9 million Filipino families or 14.5 million Filipinos are experiencing involuntary hunger or hunger due to lack of food.. Even more telling is that those experiencing severe hunger increased to 4.2 percent, equivalent to 760,000 families in June.

With problems in unemployment and underemployment, Filipino families find it hard to seek health and medical care. The IBON Foundation reported that 73.38% of families are having difficulties in paying for medicine and treatment.

The problem spawned by unemployment and underemployment does not end with hunger and lack of health and medical care. It also affects children's education since most families will have difficulties in sending their children to school. According to Department of Education September 8, 2008 Factsheet, National dropout rate in elementary is 5.99% while 7.45% in highschool. This means that, for every 100 children who enter grade 1, only 68 will reach grade 6, only 48 will finish high school and only 17 will enter college.

There is a proven way for the government to engage in job creation and stimulate the entire economy. This is by increasing its spending for infrastructure, particularly, in the countryside. Economists have a word for it - PUMPPRIMING. Secondary and farm-to-market roads, for instance, are labor-intensive. The potentials for job creation are immense. And here is where this country and the government should try to accelerate development by taking advantage of the infrastructure that is being built. For example, The 94 kilometer Subic-Clark-Tarlac Expressway, which opened this year, has generated more than 3,400 jobs at its peak level by hiring site workers, heavy equipment operators, engineers, SCTEx-PMO staff and other construction-related professions.

These road projects integrate rural agricultural areas to the urban centers resulting in increased incomes for farmers and fisher folks. As rural and urban markets get integrated, the private sector is encouraged to invest and locate in the countryside.

We are seeing this kind development occurring days in CALABARZON and Central Luzon. There is no reason why they cannot be replicated in other parts of the country.

For example, if you look at the SCTEX program, you will find that it comprises three airports and two seaports and are separated by high-speed highways. And beside these high-speed highways, vast lands that are empty. This is great opportunity now to invite investors to come down to our country and utilize these lands so they could be attractive to foreign investors because they would have access to three airports and two seaports and in the process find very, very great sourcing and opportunities (inaudible) on everybody because there will be less traffic to export their products and to import their raw materials by using this area.

Mr. President, In Mindanao, development is underway with the proposal for the creation of the Mindanao Economic Development Authority (MEDA) and the implementation of the Fruits of Hope Program, which we started in the Red Cross.

The creation of the MEDA will strengthen the existing Mindanao Economic Development Council (MEDCo) which was created on 19 March 1992 by virtue of Executive Order No. 512. The MEDA shall promote, coordinate, and facilitate the active and extensive participation of all sectors to effect the socio-economic development of Mindanao. It shall also act as an implementing agency for Mindanao-specific interregional and Mindanao-wide programs and projects, whenever necessary.

The continued implementation of the Fruits of Hope Program will connect the fruit producers of Sulu to palengkes and market vendors in the metropolis. The program will initially tap the products of Sulu, Basilan and Cotabato. But eventually will cover all areas of Mindanao that can benefit from direct links to the markets of Metro Manila.

These two programs are mere proposals, Mr. President. But we can formalize these so that our people will find opportunity and perhaps (inaudible) we'll find hope so that instead of carrying a weapon or firearm to kidnap other people or to go and join banditry or bandits or for that matter, go against the government, these people can find hope by making sure that when they plant, it can all be sold to Manila or to the adjoining areas, Mr. President.

I am happy to note that the US government is building an airport in Sulu. And I don't mind saying here, one of the amendments that I made in last year's budget was the ear that we construct an airport in Lanao which should reward the people of Cotabato, North Cotabato that has dramatically improved its economic condition coming down from a very, very lowly bottom 20 of the poor or the poverty affected provinces to become number 27 on the totem pole of developing provinces.

Moreover, investment in roads and other countryside infrastructure, render tourist spots more accessible. Tourism can be relied on to generate additional employment, especially, if the Department of Tourism (DOT) can put additional resources in active promotion and marketing. These new promotional efforts can be realized with the enactment of the Tourism Act of 2008 which would create the Tourism Economic Zone Authority (TEZA), the sole body responsible for the creation of tourism economic zones throughout the country. Among the areas where tourism economic zones will be set up are Bohol, Cebu, Naga and Davao.

Establishing tourism economic zones would pump prime development, create jobs, investments and dollars in the farthest regions of the country, and create model communities of sustainable development. These benefits are achieved through the implementation of the following incentives: (1) in a tourism zone, any developer or investor will deal directly and only with the TEZA; (2) new enterprises, or Greenfield tourism zones, are entitled to a six-year income tax holiday, which period may be extended depending on the completion of certain requisites; (3) every zone must follow a development plan; (4) the TEZA will have the resources to clear beaches, plant forests, rebuild and preserve historical sites, and create sustainable business opportunities for local communities and indigenous peoples.

Clearly, a public sector employment program anchored on investing and modernizing our country's infrastructure, especially, in the countryside is consistent with the short-tem concern of job creation, and long-term goals of poverty eradication and balanced regional industrialization.

Secondly, enhancing the government's social protection programs has taken on a new sense of urgency. We need to have a national response based on streamlining and strengthening all government institutions responsible for social insurance and line agencies in charge of social welfare.

The Social Security System (SSS) must think in terms of an employment insurance program, one that encourages private enterprises to retain workers not to lay them off. Unemployment insurance as practiced in many developed countries distorts incentives of both workers and firms to forge new job-worker matches at the soonest time possible and must be avoided.

An employment insurance program works much like previous programs where the government pays part of the cost of hiring and training young unskilled workers on the job. The Technical Education and Skills Development Authority (TESDA) can work out the details of such programs in partnership with private firms.

At the same time, we can expect no less from the Government Service Insurance System (GSIS). The GSIS must refocus its benefit programs towards assisting its members in a meaningful way, whether retirees or active members. Salary loans can be upgraded to cope with the rise in the inflation rate. It can reinstitute education loans for children of its members to help address an absent credit market for post-secondary education.

In terms of social welfare, we must support the conditional cash transfer program of the Department for Social work and Development (DSWD). By making cash support to families conditional on putting children of school age in school and parents availing of maternal and child health care, this program is aligned with our goal in the long run to increase the country's human capital and skilled manpower base.

We should not be throwing money away without making conditions on the people who receive them such as making their children go to school in return for the largesse of the government.

But the government must take care of the supply side. It must solve the perennial shortages in school buildings and health and medical clinics. According to DepEd's 2009 Budget proposal, there is an estimated requirement of 7,087 new classrooms for elementary and secondary and an additional 2,667 new classrooms for pre-school levels in almost 43,000 public schools nationwide. Actually, 42,917, which is the actual number of public schools). In this regard I urge this body to enact the bill that I have sponsored on a Health and Education Acceleration Program. I pray that the new leadership will give due priority to this measure in order to bail out our public school pupils, 88% of the total enrolment are in Public Schools or 17,430,666 public school pupils, from the pitiful state of our educational and health care program.

Why is it that we allow our children to go, especially in the urban areas like Dasmarinas and Caloocan, to go to school in a classroom of 100 pupils, Mr. President? How can the teacher get to the student? In fact, the figure of 7,087, you really need 40,000, because the 7,087 talks about a three-tiered class. There are two sets of classes, morning and afternoon, and in more cases there are also third classes. In other words, three classes. And our teachers, their salary today is an average of P12,000. Ang kanilang social backbone when it comes to borrowing loans is "LONDON"—Loan dito, Loan doon. Kaya hindi nila nakukuha ang pera na kanilang sinusweldo sapagkat gipit na gipit sila sa nagpapautang ng pera sa kanila. And that is why we should really pay attention in schools as a way upon which we can generate other resources. If we can, for example, get the telcos to cut out from the two billion text messages a day, 200 million pesos na lang a day, we'll have P73 billion, and from that we can speed up the construction of 40,000 classrooms, pump prime the economy, I think you will run out of carpenters, I think you will run out of yero and pako, and all that because that will certainly pump prime the economy. And when you have 40,000 classrooms, you can even charge not just P600,000 but P1 million per classroom, including computers in the classrooms, including toilets where is an absence of toilets, the national ratio is 151 students to one toilet bowl.

So much so that all these can help pump prime the economy and improve our social infrastructure, and put out the necessary investments that will create a very bright future for the very poor in our country.

There are two programs—public sector employment and enhancing social protection—that I am proposing. We cannot afford to have runaway deficits in the national government budget as we adopt these twin programs. As we begin deliberations on the proposed P1.4-trillion national budget, it behooves every senator to look at the large and persistent budget deficits amounting to P62.3 billion as of October as compared to P41.5 billion last year, which if left unchecked would continue to raise interest rates, dampen investment, and unduly raise the cost of public debt servicing. For 2009, the government will be allotting P700.6 billion to pare debts next year. Hence, we must continue to guard against rising interest rates.

Mr. President, this humble representation proposes that we scrutinize every spending item in the national government budget and cut those that are not socially efficient. Let us examine deficit-ridden government corporations like the National Food Authority (NFA) and excise their socially wasteful programs and projects.

The NFA's delayed implementation of family access cards that would limit the sale of government-subsidized rice to poor families allowed rich families to take advantage of the government's subsidy program and has cost the government billions of pesos.

Mantakin nyo, Mr. President, yung mga bigas na ibebenta para sa mga mahihirap, ay ginamit pa ng mga mayayaman at nilamangan pa ang mga mahihirap, at lumaki pa ang utang natin.

A World Bank study revealed that 40 percent of funds intended for the Philippine government's rice subsidy and food-for-school programs did not reach the poor.

The study found that in 2006 only 31 percent of all the NFA rice went to the poorest sectors while as much as 41 percent ended up in non-poor households. The top two richest income groups consumed some 16 percent of the NFA rice.

This is a travesty, Mr. President. The study said "design weaknesses, mis-targeting, and significant leakage to the non-poor" in the subsidy programs have compromised the efforts of the government to protect the poor through social protection schemes. It estimated that the cost of the subsidy program could possibly be as high as P60.9 billion in 2008.

Mr. President, let us wake up to this reality because we cannot be apathetic to this situation.

The NFA, being a corporation, must mimic a private corporation. It cannot claim that it was created to lose money. This is irresponsibility at its highest level. Instead, the NFA must rise to the challenge of providing a public good without wasting taxpayers' money.

At the same time, having been the Chairman of the Committee on Government Corporations, I believe that we must think in terms of having a merged social security system focused principally on the retirement benefits and pension funds of its members. At the very least, such an institutional reform will reduce the cost of running the system and making it responsive to the needs of the membership.

Tignan po natin. Pwede kaya ipagsama ang SSS at GSIS para mas mabawasan ang gastos sa mga empleyado nyang mga korporasyon na yan at para lalong masisilip natin kung ang patakbo nyan ay nasa tama sapagkat isa na lang ang sisilipin natin. Siguro it's time to look into that and try to find out if whether in fact we can merge these corporations..

Furthermore, the government must in the interim strengthen oversight functions over the SSS and GSIS to make sure that they do not incur huge losses in their investment activities. (According to the SSS, it has no overseas investments. Its investments, which amount to P216.9 billion, are all in the local market. In 2007, the GSIS declared a net income of P40.6 billion. Its total Global Investment Program portfolio is estimated at P26.54 billion.) It is unfortunate that not even the Department of Finance (DOF) is represented in the boards of both the SSS and the GSIS. This arrangement is untenable and could lead to the recurrence of financial crises in these institutions in the future. (The GSIS has 1.3 million active members; the SSS has 27 million members.)

Mr. President, I propose a burden-sharing scheme. We can do no less in these trying times. Let us look at all lump-sum items in the national government budget for all branches of government and be prepared to cut them.

This way, hindi na tayo pwedeng bolahin ng mga Bolante. Because yung mga lump sum na yan hindi natin nahahagip ay ikinakalat at ipinamamahagi at talagang napakalaking mga kurakot ang ginagawa ng mga yan.

In addition, let us have a genuine partnership with local government units by doing grant-matching programs with their Internal Revenue Allotments. Much of the benefits from national government assistance to LGUs are captured by the latter's jurisdictions. It is right that the LGUs share in the cost of delivering those benefits.

For other infrastructure programs and other public investments that have cost-recovery features, we must adopt public-private partnerships. The possibilities for partnering with the private sector, which encompasses business, civil society, and volunteer organizations, are huge and promising. I have seen these partnerships thrive with my experience as chairman of the Philippine National Red Cross. I assure you, Mr. President, that the potentials for delivering remarkable outcomes from these partnerships are indeed great.

We can then responsibly reallocate all of these spending cuts in the budget to the public sector employment and enhanced social protection programs that I am proposing.

Meanwhile, the DSWD must accelerate the preparation and implementation of its national targeting scheme. A system of identifying truly deserving beneficiaries in delivering government programs is crucial to avoid leakages. In addition, the DSWD must have a mechanism for exiting from the program. In other words, the program must not encourage welfare dependency.

Times are going to be hard. The Senate must lead the national response in dealing with our economic problems. In this regard, it is highly irresponsible, if not insane, to think of amending the Constitution through a Constituent Assembly at this juncture.

Over the weekend, I had the chance to talk with my good friend, the Speaker of the House, Prospero Nograles. I used to call him Pros-PERU when we were in the Ateneo when we were staying in the dorm together. We have created a friendship. At times he would come to Olongapo and stay in our home and spend his weekends there. But in spite of this friendship I told him in no uncertain terms, I was warning him that he was creating a very serious situation if he persists in allowing his members to coming out with a Constituent Assembly without including the Senate at a time when we are supposed to be preparing the ramparts against this tsunami-like cord of economic contagion or financial crisis that are about to hit us.

And therefore, Mr. President, I repeat that admonition today, such an exercise is divisive, ill-timed, and wasteful. The Constitution has not even been shown to be the root cause of our weak capacity to modernize and transform our economy and society. Even for the sake of argument, there would be no immediate investments in the next two years of any serious proportion because there is no credit availability for many of this investment firms. A ConAss will not make the economy more resilient. It will not equip it with a newfound ability to thwart the decline in employment and income.

Mr. President, this august chamber must resist the Charter Change initiated by some of our colleagues in the House of Representatives. It would be better for them to abandon their plan, lest they stand to face the public wrath. I strongly warn our colleagues in the Lower House, as I warned their Speaker, not to disregard the Senate in their attempt to railroad Charter change. They cannot by-pass the Senate and they will not succeed in doing so. If they truly represent the people and feel their sentiments, they should not tinker with our Constitution at all. Much less, we will not allow the Senate's voice - and vote - on the matter of Charter Change be diminished or laid aside. WE SHALL NEVER YIELD.

Mr. President, I have already said that Article XVII, Section 1 of the 1987 Constitution provides that any amendment to - or revision of - the Constitution may be proposed by Congress upon a vote of three-fourths of all its members.

I have already pointed out the instances when Congress can vote jointly and separately. I think that is clear enough..

Changing the Constitution at this time is not only divisive and ill-timed, but also incendiary when our people are hard-pressed with the skyrocketing prices of commodities and the deleterious effects of the global financial crisis upon them.

Now is not the time to change the 1987 Constitution. We should instead focus our energies and attention on the problems confronting us, especially on the impact of the global financial crisis. We cannot remain divided at this time as a nation and as a people.

This representation, Your Honor, strongly proposes that the issue of introducing any amendments to or revisions of the Constitution should be an election issue among our national candidates so that the move to change it only will occur after May 2010. That way we can have a wiser election, where people go out in the campaign, and when they campaign they can tell the people, in effect asking permission to amend the Charter, what position they would take, so that when they are elected, people would know whether they want the terms to be extended, or for that matter, whether the president should be given a second term, formally.

Mr. President, it is important that we have this wise election and at the same time, I would like also to caution everybody that indeed, time is running out on automated election. The Commission on Elections has brought down the value from P21 billion to P13 billion. I believe that we can still bring it down by imaginative legislation such as early elections so that we can have less machines that have the capacity to count the votes more in a longer time allotted for the voter for the elections to transpire.

Mr.President, we just had a vendor fair recently, sponsored by International Federation for Election Reform. I was made very hopeful that, indeed, this can happen.

The upshot is this, Mr. President: (1) Responsible and vigorous public sector employment and enhanced social protection programs stand a good chance of overcoming the adverse effects of the looming global recession spawned by the financial crisis in the United States; (2) The ConAss is an irresponsible act. The country needs it like it needs a hole in the head. I beg to move that The Senate must resist this initiative; (3) Ensuring clean, orderly, honest, and credible elections in 2010 is non-negotiable.

I will end by citing where I began, Mr. President.

Sixteen years ago, 8,000 volunteers went into Subic Bay believing in their future. They were not divided, they were focused on protecting and preserving the facilities left by the Americans, so that they will prosper.

Today, Mr. President, there are 87,000 people employed in Subic Bay. They make ships. Not just small ships, but big ships. They make computer parts, they make computers, in fact. And they make everything. And certainly by focusing on this, we have proven that the Filipino can find his future in our own native Filipinas.

This is my plea today, it is my hope that we can, in fact, focus on the proper things in life for our country so that we could provide life for our people.

And to make the long story short, Mr. President, I would like to challenge this Senate to live up to the expectation that this is indeed Senatus Populi Filipinae.

Mr. President, thank you all very much.

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