Press Release
September 30, 2013

Speech of Senate President Franklin M. Drilon
Makati Business Club's General Membership Meeting
September 30, 2013


Speaker Sonny Belmonte, Mr. Peter Angelo Perfecto, esteemed officers and members of the Makati Business Club, friends, ladies and gentlemen, good afternoon.

This my fourth time to serve as Senate President. I must confess that leading the 16th Congress is turning out to be one of the most challenging and difficult of the various government posts I have held in the past 25 years.

Admittedly, the media exposé on the so-called pork barrel scam has bared a huge crack in our Priority Development Assistance Fund (PDAF) system. We are feeling the Filipino people's indignation and wrath over the allegations of corruption in its implementation.

Let me outline the reforms that we want to implement and I will discuss them in details later. First, we have to abolish the PDAF. Number two, for the sake of transparency, I will direct the publication of my PDAF availment from 2010 up to the present. Third, the passage of the Freedom of Information bill.

The people's cry is loud and clear. Stop the corruption. Abolish the pork barrel.

For sure, we -- senators and congressmen -- have been put in an extremely negative light nowadays because of the alleged wrongdoings of a few legislators who will soon have to face the bar of justice for the misuse of the PDAF funds.

As a lawyer and your Senate President, I trust our justice system. I am confident that our justice system will clear the innocent, and punish the guilty. Definitely, I can assure our people that those who are proven beyond reasonable doubt, after a fair trial in the Sandiganbayan, to have misused the PDAF, must pay for their actions. The Filipino people will settle for no less.

Meanwhile, Congress as an institution must immediately implement drastic reforms to address the people's clamor.

Under my watch as Senate President, reforms will start with the immediate abolition of PDAF allocation for senators in the proposed 2014 national budget.

While an actual vote has yet to be officially taken, a majority of our senators, myself included, have publicly declared that we will do away with our PDAF allocations in 2014 in response to the people cry for change.

There is no turning back as far as the pork barrel system is concerned. We have to institute these reforms in order to regain our people's trust and conference.

As I have said earlier, I have directed my staff, for the sake of, to publish all my PDAF availments since I came back to the Senate in 2010. I had no PDAF availments during previous years especially during the time of the previous administration. I was not given a single peso in 2005, 2006, and 2007; and therefore, I will start publishing my PDAF availments starting in 2010.

This so-called pork barrel scandal has ushered in a cleansing process for Congress. We will overcome this crisis. We have no choice: our democratic institutions are at stake, and must work at all times.

On another issue.

Ladies and gentlemen. It was out of prudence and caution that I decided to defer to the advice and recommendation of Ombudsman Conchita Carpio-Morales not to require, at this time, Janet Lim-Napoles appearance before the Senate Blue Ribbon Committee. Note that the Ombudsman adviced us to defer only qoute, at this time, unquote, not permanently, the appearance of Ms. Napoles in the Senate hearings.

While my decision appears unpopular to media, and a public eager to see Napoles grilled by the Blue Ribbon Committee, I have decided on the side of caution. I would rather err on the side of prudence.

What is at stake here, ladies and gentlemen, is the ability of the Office of the Ombudsman to prosecute the PDAF misuse cases against Napoles with dispatch and without delay. This is the principal goal of our justice system.

This is not a question of which institution is "supreme": the Senate or the Office of the Ombudsman. It is not the supremacy of either office, but supremacy of the rule of law. There is no question that serving the ends of justice and making our justice system work is our primary objective.

I received today the letter of Ombudsman Morales on the request for me to reconsider my deference to the Ombudsman's view that it is not advisable, at this time, to allow Mrs. Napoles to testify in the Senate. In the said letter, the Ombudsman said "I am not inclined to modify said comment".

Let us not forget the issue in this debate: the alleged misuse of the PDAF allocation. I repeat for emphasis: it is corruption in the use of the PDAF that is being investigated by the Office of the Ombudsman.

With the collective calls for reforms by an engaged citizenry, and with the help of all sectors of society (business, academe, media), I am confident that in time, we can purge the "culture of corruption", and have in its place a culture of integrity and excellence.

We all want to see in our lifetime a meaningful change in our governance. The change that we aspire for also requires us to confront some painful truth, and undertake equally painful reforms. I am positive that after implementing all the reforms, difficult as they are, we shall have a nation that is economically and socially developed, and politically stable.

Ladies and gentlemen, for the longest time, the Philippines had been labeled as the "sick man of Asia". But much has changed in the last three years. Today, with a healthy economic outlook, investment grade status, and increasing confidence of the international community, the Philippines is one of the most promising economies in the world.

The Aquino administration was installed on the platform of transparency and accountability. It has shown sincerity and seriousness in pursuing its governance agenda, as well as the political will to implement difficult but needed reforms. The political and social landscape for the past three years enabled many positive things to come our way.

As a testament to the improvement of our economy, the Philippines climbed five notches higher, from 43rd to 38th out of 60 countries in the 2013 World Competitiveness Yearbook. Over the past two years, the Philippines has improved by 20 spots in the World Economic Forum Global Competitiveness Rankings. Our country is now a net external creditor with foreign exchange revenues exceeding gross external debt.

Early this year, GDP rose to 7.8 percent in the first quarter and posted 7.5 percent in the second quarter. It must be noted that this is the fourth time that GDP growth posted more than 7 percent under the Aquino Administration.

Optimism in the business sector is at an all-time high. In the recently released Thomson Reuters/INSEAD Asia Business Sentiment Survey of more 100 executives in 11 Asia Pacific countries, the Philippines is the most positive economy in Asia, posting a perfect 100 score, followed by Australia with a score of 79.

The banking system is sound and stable. The Philippines is expected to reach the World Bank's upper middle income threshold in 2016. But we are getting there. We only have to believe in the Filipino's indomitable spirit, innate resilience and capacity to hurdle all the challenges that come our way. In the Senate, we will do our share in order thaw we can achieve an accelerated, sustainable and inclusive growth. No Filipino will be left behind. Each and every Filipino will be able to partake of the fruits of development and will experience a meaningful improvement in his/her life.

To address poverty incidence and unemployment, we need to stimulate the economy to spur massive job creation.

We will therefore push policies that will encourage investments in agriculture, tourism, services and manufacturing constructions ill allocate funds to upgrade our facilities and improve our infrastructure and public services.

With these in mind, we want to introduce a comprehensive package of reforms that will improve the business climate, create jobs, reduce poverty, and foster transparency and accountability. The measures that are being considered at the Senate, as part of our legislative agenda, include the following:

First, the rationalization of Fiscal Incentives. Our study in the Senate shows that there are around 186 laws which provide numerous fiscal and non-fiscal incentives and subsidies to foreign and domestic investors. We will reassess and harmonize these laws to avoid redundant and overlapping incentives to cut unnecessary revenue loss; level the playing field by granting incentives only to industries and activities which need them, or are aligned with the government's objective of creating job opportunities.

Second, very important reform measure is the passage of the Freedom of Information (FOI) bill. The FOI bill is an important measure to drive the governance reform agenda. The proposed measure adopts and implements a policy of full public disclosure of all government transactions, involving public interest, with appropriate safeguards to protect national security and national interest. This would enable the public to access official information, thus encouraging them to participate actively in the governance process. The FOI bill is crucial in the fight against corruption, for it will empower the people to hold their leaders accountable.

Last Tuesday, September 24, the debate in the Senate started with the sponsorship of the FOI bill by the Committee on Public Information. The debate will resume when we come back from our break on October 14. The Senate will pass FOI Bill by the end of this year.

Third, your Senate is currently studying the rationalization of the mining fiscal regime, with the view of providing for a more equitable government's share from mining revenues. We would also consider adopting a fiscal regime and revenue sharing system which would make the payment and collection of all mining-related fees and taxes more transparent through standardized disclosures.

Fourth, we will review investment restrictions in specific laws cited in the Foreign Investment Negative List in order to increase Foreign Direct Investments and generate employment. The areas/activities proposed to be opened up to foreign investors will include, among others, retail trade enterprises with paid-up capital of less than US$2.5 million; contracts for the construction and repair of locally-funded public works; contracts for the supply of materials to GOCCs; adjustment, lending and financing companies, and investment houses regulated by the SEC.

Fifth, amendments to the Cabotage Law. Since the Jones Act of 1920, the Cabotage Law gives Philippine-registered marine vessels exclusive right to ply Philippine waters, thus, excluding foreign vessels from serving domestic shipment routes. As a consequence, it has been observed that transporting cargo to a foreign country's port is cheaper, compared to transporting cargo from one local port to another. In his SONA, the President asked Congress to amend the Cabotage law "to foster great competition and to lower the cost of transportation mainly for our agricultural sector and other industries." Amending the Cabotage law to allow foreign-registered vessels to engage in coastwise trade in the country would open the market to competition, bring down transportation costs by sea, and enable the country to fully utilize the supply chains for products. The local shipping industry is, understandably, strongly opposed to the proposal. We have no intention killing the local shipping industry, but we must balance its interest with the greater good. We will listen.

Sixth, amendments to the BSP Charter. To enable the BSP to effectively respond to challenges and innovations of a globalized economy, a number of amendments are proposed: first, strengthen the BSP's Monetary Stability Function by restoring the authority to obtain data from private persons or entities, and authority to issue negotiable certificates of indebtedness even during normal times, both of which were powers granted to the old Central Bank of the Philippines; second, strengthen BSP's Financial Stability Function by enhancing BSP's supervisory authority and providing legal protection for BSP officials when performing official duties; third, strengthen BSP's Corporate and Financial Viability by increasing BSP capitalization.

The Senate is also considering numerous bills that will provide protection, security and other benefits to whistleblowers. Moreover, to address the increasing backlog of cases in the Sandiganbayan, I have filed a bill allowing individual justices of this Court to sit and receive evidence, for and in behalf of his Division. This will significantly expedite the resolution of cases in the Sandiganbayan where over 2,500 cases are being tried by only five trial courts.

My dear friends. Today, we are presented with golden opportunities to propel our country to greater economic and social heights. However, we will miss these opportunities if we cannot restore the confidence of our people in our institutions. We cannot sustain the progress that we see today if we cannot solve the crisis that we have right now.

Ladies and gentlemen, we need your support so that we will not waste this golden opportunity.

Thank you very much. Mabuhay tayong lahat!

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