Press Release
July 15, 2010

Transcript Kapihan sa Senado with Sen. Serge Osmeña


OSMEÑA: As far as I know, as far as the news gets to me or is told to me, mukhang it's still up in the air but I believe Kiko is the frontrunner and has the best chance of making it. I am not at liberty to name (those who signed) because they themselves, some of those who signed, did not want it divulged and it would not be fair to break confidences. I signed and I am willing to divulge it but there are two or three who signed but said "Huwag mo muna ilabas yan." I have to respect that. More of less (11 votes).


OSMEÑA: I don't know. First, your speculation is based on a wrong assumption already. Johnny will never go with Villar. So, it's not a matter of numbers as far as we know. So JPE has four (votes), so what? Sabihin natin 9 votes but what I was saying earlier, he's not gonna get it from Villar. He, himself said so. I cannot go with Villar. But of course, you can speculate there is five here, there is ten here, anybody can play that game but that doesn't make sense to me because even Sen. Enrile said he could never align himself with Villar. Is there a probability that no one will get 13 votes by Jan. 26? Yes. Well, the Senate can come together in consensus and nominate a presiding officer, in other words an Acting Senate President, until someone would have gathered enough numbers to be elected President of the Senate.


OSMEÑA: I don't think since for a long time, the Senate could never be called a rubber stamp Senate. The sympathies might be with the President, the sympathies might be in favor of supporting priority programs of the President, even a so-called opposition Senate has always been sympathetic of any sitting President. It happened during the time of Ramos, during the time of Erap, during the time of Gloria. Pag maganda naman ang mga programa, hindi naman kami tututol yan. Alam mo naman, mga individual senators, individual-minded yan. It does not necessarily follow that because their tendencies are to support Noynoy, they will support him blindly. I guess the most intelligent answer to your question is that the Senate has alwaysproven itself to be quite independent.

ON E.O. 464

OSMEÑA: E.O. 464 is an executive order issued by Gloria Macapagal-Arroyo to prevent her cabinet from attending Senate inquiries. I was the campaign manager of Noynoy Aquino but I will not tolerate that. But let's call a spade a spade, Noynoy already said he is going to abolish that, he is going to revoke that executive order. It was issued by the President of the Republic and it can be revoked by any other sitting President. So, he said his staff is already studying how to revoke it.


OSMEÑA: No, before the opening the Senators have to come together to determine who they wish to nominate as Acting Senate President for purposes of ceremony, for purposes of merely presiding over the sessions. He will not have the full power of the Senate President for the simple reason that he did obtain 13 votes for the position. So, will it be automatically Senate President Enrile? No. The Senators can come together tomorrow and decide who will preside the Joint Session of Congress in order to listen to the State of the Nation Address of President Noynoy.


OSMEÑA: I respect the opinion of Pres. Erap, yes, I have heard criticisms along that line and perhaps Noynoy should have touched base with other people or other groups who might have had those concerns, but it's too late now. Unless President Noynoy will change his mind, its chief Justice Davide who will conduct inquiries of the Truth Commission.


OSMEÑA: I believe it will carry the powers of the Department of Justice. It will just be a derivative of the Department of Justice. The Truth Commission per se will not be able to fulfill each mandate because it doesn't have power of subpoena, the power to penalize you if you don't turn up for a hearing or investigation or you don't submit documents that they want you to submit. They will have to derive those powers from the Department of Justice. So it will just be like an attachment to the Department of Justice focusing on finding out the truth about several issues that hounded the past administration. The way I look at it, they will have to sit down first and determine what the Truth Commission is suppose to do, how far they can go, what sort of powers will have to be exercised by the Department of Justice in order that they will be able to have some muscle in requiring people to come forward to testify, enter the witness protection program and to require people under subpoena to give relevant documents that are necessary to pursue justice in this particular instance.


OSMEÑA: You can talk with anybody there's nothing wrong with that as long as it does not cover or interfere with any existing case that is pending before it, or an investigation. When you are a judge, you are not supposed to talk about anything that is pending in your Sala. That's the law. I am not saying it is followed strictly but that's the law.


OSMEÑA: The SET, that's not secret. That's what is making the rounds, I understand. You have to, if you are trying to gather signatures. Leaked? I don't think it was leaked. Maybe, who do they want to announce it to the press? There are three Supreme Court justices and six senators that sit as the Senate Electoral Tribunal. Hindi leaked iyon. But if it had been premature, na wala pang majority signature, yes, that would have been regarded as a leak. It's not on-going. It's already signed. It's finished. That particular decision to continue is finished and that is a natural subject that must be given to the public. Hindi naman pwedeng i-sikreto iyan. It will be leaked by either one or the other. It will be leaked by either Pimentel or Zubiri anyway. But the reasons why it was extended are in the decision itself. That was penned by oneof the two justices, Eddie Nachura. To me, that is not a leak, because it is a decision, and it has to be made public. You do not sign a decision and keep it private. Now, the reasons why they came up with that decision are also outlined in the decision itself. So kapag binasa ninyo iyan, you will see the arguments of the pro and you will also be able to read the arguments, reasoning of Justice Carpio, who was against the motion. But that is something that should have been brought to light and it was brought to light. I'm happy that people know about it. (Walang basis ang impression ni Sen. Zubiri na orchestrated?)I think that Sen. Zubiri was reacting to a veiled accusation of Koko Pimentel that it must be tied to the fight for the Senate presidency because how come Zubiri, Angara and Loren Legarda are part of that so-called Angara bloc? Iyon lang. Kasi pinalabas ni Angara nag anon, 'tingnan mo, magkasama nga sila.' So he is trying to question the fairness, the credibility of Angara and Legarda who signed the resolution in favor of the motion of Zubiri to open up the rest of the ballot boxes that were mentioned in the Zubiri counter-protest.


OSMEÑA: Can the government survive without raising taxes? Yes. Can it survive without borrowings? No, because you have to plug the loophole, P350 billion. So you either raise taxes or you borrow money.(So he will resort to borrowing?)That's exactly what has been going on. Remember this, it is impossible to plug a P350 billion loophole by not borrowing or not raising taxes. There is a third way, it's by selling assets. We don't have enough assets to sell. Binebenta nga yung Food Terminal Market, binebenta ngayon ang Malampaya share of the government. But you run out of goodies to sell. Therefore, you borrow. The P350 billion deficit is tolerable as long as it fall below 7 1/2, 6 1/2 percent of Gross Domestic Product. The very first concern we would have is that sasabihin ng mga ratings agencies--Moody's, Standard and Poor's--they are the ones that tell the world, 'oops, sumosobra itong si Osmeña, hindi na niya kaya.' They analyze, they project future growth in the economy, they project the sustainability of that growth. They project tax collection efforts of government, whether it is going up, going down or remaining steady. And they will tell the whole world, 'ok naman si Osmeña, kaya niyang bayaran iyon.'


OSMEÑA: There has been two types of major leakages in the people's purse: 1.) we do not collect what we are supposed to collect, that is caused by smuggling. Kung mag-i-smuggle sila, they don't pay excise taxes, specific taxes and they don't pay the 12% VAT. Pera ng bayan iyon. 2.) in expenditure side there's a contract to build a road for P10 million.Humihingi ang opisyal ng 30% under the table. There are leakages both ways. And Noynoy promised to address those two. Whether he is successful depends also on how well we cooperate with him.


OSMEÑA: Yes, we have a ceiling. Congress passed a ceiling, I'm not sure if it's $150 billion, that was several years ago. But we are always far below that. And the moment we start reaching that again -- I think the last time we did that was when Napocor bought all those power plants a decade ago -- was when Malacañang said, 'Padre, itaas mo naman ito. We won't be able to borrow.' The foreign lenders also will say, 'teka muna, we are willing to lend you money but your law says your total external debt can only amount to so much. So we just raised it.


Osmeña: Will they be effective? I don't know. Your guess will be as good as mine. Let's see what happens. I just console myself with these facts: one, Noynoy is honest; two, he will not do anything to sully the legacy that his father and mother gave him. On those two points, I'm 110% sure. There's a third point: he has brought in fairly honest people into government. But four, whether they will be competent enough to deal with a huge problem facing them, I don't know. I wish them well. But will they do well? I still don't know and you and I will give them a report card after six months or one year and see whether they did what they are supposed to do.


OSMEÑA: That's a two-edge sword, as far as I'm concerned. As suggested by President Noynoy, it must be transparent because that's people's money so you are not supposed to hide it behind the curtain or under the bed or underneath your desk. Everybody has to be able to tell the whole world where that money went and how much was spent on a particular bridge, a particular road, para iyong mga tong-pats, mahalata agad. So as long as it is transparent, and as long as they are from a list of projects that are necessary for the development of the countryside. In other words, we are not going to allow waiting sheds siguro but build farm-to-market roads, small water impoundment systems, post-harvest facilities. So leave it up to the government to prioritize these projects at sabihin sa mga congressman na 'sige, pumili ka na diyan. Sa distrito mo, ito ang kailangan.' As long as you can define where the money will be spent and as long as the voters know, the taxpayers know where it went and how much was spent, I guess nobody will complain against the pork barrel. Ang complaint naman sa pork barrel, binubulsa ng iba.


OSMEÑA: When you lease a property or when you sell it, there's still a transfer of property rights so you get value for it, so you are paying for it. I have no problems with that because my background in business and in finance gives you options on how to raise money. If leasing is one of them, because you will get income from leasing, sure go ahead. The problem there is that do those guys know what they are doing and are they going to overprice it again? They will either under price the lease or overprice the equipment that they are buying. And that's always been a problem. That's why it must be transparent, it must pass through Congress ( it must pass through) COA and (it must pass through) the DBM at hindi pwede na sabihin ng Armed Forces, "amin ito so wala kayong pakialam dito." Sorry,that belongs to the Filipino people, that doesn't belong to the AFP.


OSMEÑA: Under the last two years of Gloria's term, we lost about P100 billion from all those idiotic tax exemptions that Congress has passed. What can I say? That is the estimate of the UP School of Economics. Is that the right thing to do? No, that wasn't the right thing to do. (You will offend a lot of seniors there)Eh ano kung magalit. Magalit sila kung magalit. Ang sinasabi ko from the macro-economic point of view, from the macro-finance point of view, if we give tax exemptions to everybody who feels they deserve a tax exemption, we will end up eating, eroding the revenue base of government and that means we won't be able to educate enough of our children, pay our teachers enough, pay our doctors enough. Two days ago we got the typhoon and it's only today I learned that the Head of the PAGASA just migrated to Australia because he got a higher paying job. If that's what we want, fine. But we have to make sure that when we are doing this exemption, this will be well thought out, na hindi pwede na sasabihin ng mga disabled na bigyan nyo naman kami kasi kawawa naman kami, pagkatapos bigyan ninyo, you found out you just eroded the revenue base by about P20 billion. How will you make that up? You cannot seek too many exemptions because it makes the system more inefficient. The tax incentives given to big corporations should only be given if the big corporations are still not here. And, I found out another idiotic thing where we are giving big tax exemptions to someone who has no place to go but here. I'll give you an example, mag e-expand 'yung isang cement plant, bigyan mo ako isang tax incentive. I know you have to expand, I know you'll not get that money and put that cement plant in Vietnam. So why should we give you that tax incentive?


OSMEÑA: I believe the estimated revenue losses from smuggling could reach as high as about P120 bilion to P150 billion here. Unfortunately, we have a P350 billion deficit so even if we plug that particular loophole, it is not going to be enough. On over-pricing or inefficient spending, that's another P120 to P150; 'yung mga tong-pats, under the table, fertilizer scam, ganun. It's not gonna be easy to answer your question because there are numbers that are hard and they do not remain the same. If the economy improves and the world economy rebounds, say within two to three years and our own economy expands again, it is possible that we will be able to cover the P350 billion. Definitely there's a lot of backlog on our basic infrastructure. So maski namakahanap tayo ng additional P200 billion, we have to spend it on infrastructure. We have to build better roads, better ports, better PAGASAs, better schools, better hospitals, etc. The people need it. But as you spend naman, mas gumagaan ang economy, so more jobs are created, business are formed. That is how an economy keeps on growing. So, you don't put a hold on spending. The more money you spend, the more money is pumped in the economy. The more money is pumped in the economy, the more jobs are created and the higher the income.


OSMEÑA: I don't think Pangilinan has met with Zubiri. I have been meeting with some of the senators and Zubiri has been out of the country. I think he only arrived Sunday or Monday. I don't think that can be a bargaining chip because if you want a bargaining chip, don't sign and get a promise. But if Kiko signed as you say and said Zubiri has not endorsed Kiko, eh wala na siya leverage kay Zubiri.


OSMEÑA: There are two parts to Pagcor and let us get this clear. Pagcor is a regulatory agency and it is also a promotional agency for gambling. And the big anomaly is that we have these two duties cited under one body. So there's a conflict of interest. If Pagcor is a regulator and there's a competitor who wants to open a casino, siyempre hindi bibigay 'yung Pagcor kasi monopoly gusto nila. So, we have to first split that dual nature of Pagcor. We will always need a regulatory agency for let's say, Pagcor A or Pagcor 1 , and then the business of Pagcor, which is running casinos, or Pagcor 2. But the government will always have to be in control of Pagcor 1 otherwise you will have a proliferation of gambling without a regulatory agency; and go ahead and privatize Pagcor 2. You can always capitalize income. So, if you look at the stock market, let us say that PLDT is supporting a net profit of P30 billion a year but if you look at the market capitalization of PLDT or the market value of all the shares of PLDT, its about P350 billion. In other words, the market gives a multiple to the income of PLDT. So I would say, the government can sell Pagcor for about P350 million. That will at least cover the deficit for one year.

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