Press Release
November 22, 2016

on the proposed budget of the Department of Transportation

Sen. Loren Legarda: The total allocation for 2017 is P53,932,496,000.

Sen. Grace Poe: Okay. Thank you. P53 billion. Compared to the prior year, there's an increase (in budget) of about how many percent? About 16%?

Legarda: The present year's budget is P45,423,372,000.

Poe: We are well aware, and I think that this has been pointed out, that there has been a department that has underspent during the past administration--it is the DOTC. How are we going to assure that the absorptive capacity of the DOTr will now be improved? What mechanisms have they come up with?

Legarda: Mr. President, we cited actually in the committee hearing. In fact we noted that there was around P9 billion worth of funds that was going to expire and so at that time, the secretary said that he was going to download the funds to the CAAP. In so far as airports are concerned, I believe that by now, he has done that already. He has downloaded the funds to the CAAP so that the funds of the previous years, meaning 2015 expiring by next month, could still be utilized next year for the airports. For the regional airports, Mr. President.

So, what are the reasons for the low spending? They say that the low obligation rate of only 15% as of the end of the first semester of 2016 is partly attributed to the May elections. They also say there was a slow pace in the previous administration, in the procurement process and the restrictions during the period. However, this administration, with a very proactive secretary coming from the private sector like Sec. Tugade, assures that the stigma of low spending or slow absorptive capacity will not happen and they're fasttracking the procurement activities, of course, but everything based on what is legal and also on what's legally acceptable in COA.

Poe: Mr. President, quick question for the sponsor. The underspending was only 15% last year?

Legarda: It says that it's 15%, one-five, as of the end of the first semester of 2016. Those are the figures given to me as of now.

Poe: So that 15% will amount to how much in particular?

Legarda: One semester. That is as of the first semester now.

Poe: First semester of?

Legarda: Of 2016. But you're asking me how much

Poe: For the entire year? 2016.

Legarda: I believe the low obligation rate of 15% is as of the end, the 15 percent is equivalent to P10 billion, Mr. President. But as to your question, how much are the unobligated amounts as of September 30?

Poe: Yes.

Legarda: P19.2 billion, Mr. President.

Poe: And that P19.2 billion can be utilized in the coming months? Still?

Legarda: Yes. Until December of 2017, Mr. President.

Poe: Until December of 2017.

Legarda: Let me clarify. This is 2015. I'm sorry. The P19.2 billion comes from the 2015 GAA that is only available up to December of 2016. However, part of these are the airports which should have been downloaded to CAAP then it is considered obligated and therefore can be used next year, right? Or is this whole P19.2 billion for CAAP?

Poe: Has it been obligated?

Legarda: So kayang magamit? Na-download na. Okay. Mr. President, I like the innovative way of Sec. Tugade. Hindi niya sinayang yung pondo maliban sa mga airport na dinownload sa CAAP, the others were downloaded, let's say, because they did not construct the ports, they downloaded to PPA. So, that is considered already as obligated. And so, the 2015's P 19.2 billion will not expire but is considered obligated and can be used next year.

Now, the unobligated as of September 30 for 2016 is P23.6 billion that can be spent until December of next year.

Poe: So P23 billion can be spent next year but P19.2 billion will be deemed allocated as of December this year?

Legarda: It can also be spent next year so they have P23 billion from present year's budget continuing until next year, they have P19.2 billion next year again because they allocated it again next year. So they have two, they have so much funds.

Poe: No, I know but the 19.2 has to be allocated by December this year?

Legarda: No, because of the downloading to CAAP and to the PPA they are able to use it until next year. Otherwise the expiry would have been this year. Hindi po nasayang yung 2015 na P19.2 billion magagamit pa next year. Tapos yung 2016 na P23 billion magagamit pa rin next year at meron pa silang next year's budget kaya ang dami pong maaaring paggamitan, so we look forward to heavy infrastructure spending, which of course, will be good for the economy because there's a multiplier effect.

Poe: Thank you to our sponsor. Another related question under the national expenditure program: an allocation of P110 million and P419 thousand is made for transport policy services, what exactly is covered by transport policy services?

Legarda: When you say transport policy services, Mr.President, that would have PS, MOOE and capital outlay. And this would include program planning and standards development for transport and communications including infrastructure projects.

Poe: Including infrastructure at P110 million? What kind of infrastructure? Is it for administrative purposes of DOTr?

Legarda: Let me ask them so that I'm accurate. This includes PS and MOOE but not the actual capital outlay for infrastructure projects but the planning for transport communications including infrastructure. But this is just the planning.

Poe: Under the NEP (National Expenditure Program) around P17 billion is proposed for PPP transportation infrastructure projects, for the payment of right-of-way expenses and other PPP transportation infrastructure projects. Pursuant to our laws, in no case shall these amount be used to guarantee a private partner's financial obligations. Do you have funds for contingent liabilities in case the government is held liable for breach of contract? And do you have a contingent liability fund and will it be sufficient in case the DOTr is made to pay for damages?

Legarda: In the unprogrammed fund, Mr. President, there is a risk management fund which will cover the contingent fund but this is subject to the approval of DBM.

Poe: Sabagay kung magkakaroon naman tayo ng emergency powers at wala din naman masyadong mga TRO at hindi rin magkakaroon ng maraming mga legal impediments. Let me go to, I guess, very crucial provision under the GAA. Under section 24 of the 2016 GAA, the inventory of supplies, materials and equipment spare parts to be procured out of available funds shall at no time exceed the normal three month requirement. Under the 2017 GAB, section 23, the period is now limited to two months, thus, this applies to rail as well. This will make procuring for long-term supply very difficult, kasi I need to explain the situation if we have to stock up an inventory.

For materials which we might need to maintain the MRT and other infrastructure, we're limited to a three-month supply. Hindi tayo papansinin ng suppliers kung alam nila na kokonti-konti lang ang binibili natin na inventory. Is this the same situation that we have now with the 2017 GAA?

Legarda: I'm holding a request for a special provision which reads: notwithstanding section 23 of the general provisions of this Act, the DOTr, LRTA or PNR is authorized to strategically procure and maintain an inventory level of rail system spare parts for LRT2, MRT3 and future rail systems operated by government in quantities in excess of the limits prescribed in the act to ensure the reliable, efficient and safe operation of such rail systems to ensure the regular maintenance to manage the spare parts to address the ordering requirements of original equipment, manufacturers and/or the best interest of public service may require.

Poe: So there's no time frame? As long as it will address the problem of maintenance.

Legarda: It does not indicate a time frame. This was the suggested language of the Department of Budget.

Poe: That won't constrain you anymore from ordering what may be required by the suppliers as a minimum order?

Legarda: According to the DOTr, this will expressly allow the DOTr to procure and maintain the inventory-level spare parts of the present and future train systems in accordance with the level deemed normal to ensure that operations will not be affected.

Poe: That's reassuring. That was actually one of the impediments that we had before--a limit on the time frame that they have in terms of fulfilling their inventory. I also have to ask this, based on a 2015 COA report, there were only 3,985 regular or permanent employees out of a total plantilla of 6,948 in the DOTr. With the government's drive to do away with contractualization, this means only 42 percent - less than half - of the DOTr are regularized. What is the situation now with regard to employment?

Legarda: They are currently working with DBM to end the practice of job orders so that there's a rationalization of those in the plantilla position.

Poe: Ok, so you're working towards that. What is your target? How many contractuals would you retain in the following year? How many percentage of that will be contractual, how many would be permanent employees?

Legarda: The present total authorized is 18,758.

Poe: Regular employees?

Legarda: As you mentioned, 3,000 unfilled positions. They intend to fill up the 18,000 total authorized plantilla.

Poe: Another question for the DOTr is with regard to, I would like to commend the DOTr. Apparently there's been an improvement also in airport operations with regard to take-off and landing schedule. I would like to ask if there's any update on the Instrument Landing System (ILS) of the DOTr. When will it be fully operational and how much of the air traffic can it ease when it becomes operational?

Legarda: Very good. Because I recall during the hearings, they explained, we didn't even realize that there was no ILS which could have been dangerous. But now it has been installed and it is working. The spare parts have arrived, installed, ground tested and calibrated last October 10.

Poe: Is it 100% operational?

Legarda: Yes, it is operational. 98%.

Poe: What does that mean? 98% of the time it's working?

Legarda: It is now being used in all airlines and aircrafts whenever runway 24 is in use. Yes, it has been installed since October 10 and is being used. When they say 98, naninigurado lang sila pero ibig sabihin nakakabit at umaandar.

Poe: So how many take-offs and landings do they have every minute now?

Legarda: There are 40 take-offs and landings per hour which is the norm for NAIA. Whereas before it was below 40. We had no ILS for one year and a half but since they took over, just a few months it has been installed and is working.

Poe: If it was below 40 before, it is 40 now. The improvement has been very slight, am I correct? I know there's been talk about you studying the model in the UK like in the Gatwick Airport. What did they have that we don't that allows them to have more than 60 take-offs and landings per minute. They have the same situation in terms of just having 2 runways.

Legarda: Mr. President, I am informed that it's not just the ILS that can increase the number of take-offs and landings. When we say 40, that is 20 take-offs and landings and that's the norm. There are different processes that must be instituted to be able to have more take-offs and landings and that would include more technology and work processes. The ILS is for accuracy and reliability and safety.

Poe: So the work processes, what are they doing to ensure that it is optimized?

Legarda: There have been changes, Mr. President in the processes including the 5-minute rule, restricting General Aviation from flying 12 noon to 7pm.

Poe: What is the target operations for the airport? When can we actually increase and have more take-offs and landings to go beyond the 40? What is our time frame?

Legarda: With the rapid exit which is currently being bidded out, there will be an additional of 5 movements per hour with an additional rapid exit which is currently being bidded out.

Poe: Rapid exit meaning?

Legarda: A taxi way. They have 2 exits now, they are bidding for 2 more. So they will have 4.

Poe: When is the target completion of the rapid exit?

Legarda: It is being bidded out and in one year it will be completed.

Poe: Ok, so we will go back in a year and hopefully it would have increased the movement per hour. My other question would be for the air traffic controllers. How many air traffic controllers do we have in NAIA?

Legarda: There are 580 air traffic controllers. Just for accuracy, in Manila, 220, in Mactan, 65, but all over the Philippines, 580 Mr. President.

Poe: What does their shift look like? 8 hours? 6 hours?

Legarda: Every 8 hours, Mr. President.

Poe: Out of the 220 in Manila, how long is the average length of service of each air traffic controller? The average?

Legarda: Meaning how long have they been in their jobs?

Poe: Yes, are we able to keep them? Are they pirated?

Legarda: Most of them, Mr. President, have been working in CAAP for the past 8 years.

Poe: How many entry-level positions do we have in our air traffic controllers pool?

Legarda: There are 190 entry level.

Poe: 190, so we're talking about 30 veterans, the rest are all entry level, am I correct?

Legarda: The 190 entry level covers the whole country of the 580. Around 50 of the 220 are entry level (in Manila)

Poe: How much are they paid?

Legarda: The entry level are paid around P42,000 plus overtime of P5,000 to 8,000, so they have an average salary of around P48,000 a month.

Poe: So it is not true that an entry level makes P12,000 a month? I just want to verify. Legarda: So CAAP, Mr. President, intends to increase the salaries by 40 to 50% of the basic salaries depending on their workload or operational...

Poe: What is the basic salary now?

Legarda: P42,000.

Poe: P42,000. And every year they are guaranteed with an increase? Are they part of the regular salary standardization pay of a government employee?

Legarda: Because CAAP is a GOCC, they still have to comply with certain government requirements so that the staff and the employees can avail of the salary standardization.

Poe: So would it be a problem for us to remain competitive, for example, so that our air traffic controllers aren't pirated by other countries? Do we have the capability--not even the financial--but the legal capability to increase their pay? To make it more enticing for them to stay?

Legarda: Once the increase of the 40 to 50% which they intend to do, then we will be competitive.

Poe: Yes, because I think a lot rests on their expertise also. And we can't afford to have inexperienced air traffic controllers. One mistake can cost the lives of a few hundreds. So, let me now go to our rail sector. For our train system. The trains that have been ordered from Dalian, how many of those are actually working right now? Or do we still have a problem with the signalling system? That it hasn't been utlized yet?

Legarda: All the trains will be installed, operational by February next year, Mr. President.

Poe: 100% of the ones ordered from Dalian will be operational by February next year?

Legarda: Yes, Mr. President.

Poe: Right now, we don't have one or two that are operational? None? Okay. If it's operational by February next year, how many percentage in terms of ridership will we be able to accommodate if right now the utilization of the train is at most, maybe, 51%. Maybe 60%. If we have all of those trains from Dalian. How much more ridership will we be able to accommodate?

Legarda: They're starting installation now, Mr. President. And it will be completed by February.

Poe: Okay. So my understanding is they are now doing the installation for the signalling system and it will be operational in February. So when are they intending to run the tests?

Legarda: Since they are already installing, they will be running the tests in December.

Poe: It's the holiday season and I want to make sure that before this becomes operational, will you be confident enough to invite us to ride on this new train?

Legarda: They will be testing it during non-revenue hours.

Sen. Franklin Drilon: Excuse me. Aren't the trains supposed to run for a 5,000-km test before they are put in operation?

Poe: That is what is specified, Mr. President, I believe, in the contract but I'm not sure if we have the capability to do so given our tracks are only less than 100-km long. Unless they run back and forth for a few days.

Drilon: So are we going to run it without testing it to 5,000 km?

Poe: I think the contract stipulated, as a safeguard to us upon entering into this agreement, if we don't run the test, I think it's to our disadvantage and not the supplier's. Unfortunately, we don't have the capability to test it, but we already need to run it. I don't think we'll be able to comply with the 5,000-km test. It's out of our own doing and not because of the suppliers.

Legarda: I am informed, Mr. President, that the 5,000 km have been run already. The test run of 5,000 km has been accomplished.

Poe: Really?

Legarda: That is what I am informed.

Poe: Do you have proof? Who ran it?

Legarda: It was done in China. But first, only the first light rail vehicle (LRV) is required to run 5,000 km and this was done in April of this year.

Poe: Okay. So only one, and then the rest, you just assumed it will run? That's fine. I mean, I just want to make sure what the terms are. So how many trains will be added in February? Just for the record. How many?

Legarda: Six trains.

Poe: Six. So that's how many coaches?

Legarda: Six LRVs, Two trains.

Poe: So that's 12?

Legarda: There are three LRVs in one train. And we have six LRVs so you have two trains.

Poe: Dalawa lang ang train nito? I thought they ordered more than that?

Legarda: Yun ang tinatanong.

Poe: Please be definite. How many trains? How many coaches?

Legarda: Anim. There are six LRVs that will run in February 2017.

Poe: So if there are six LRVs, how many trains?

Legarda: Three LRVs in one train. So there are two trains.

Poe: Okay. Is this the complete order? No.

Legarda: He is referring to the new trains that will run in February 2017.

Poe: Okay. Mr. President, I just want to ask the sponsor: how many did the past administration order? How many LRVs did they order?

Legarda: They ordered 48 LRVs.

Poe: So out of the 48, only six will be available in February?

Legarda: I am told, Mr. President, that all 48 LRVs are available, but only six will run by February 2017.

Poe: What will happen to the balance?

Legarda: Only six at a time are allowed to run. May I ask for one-minute suspension so we can be certain of our answers?

Poe: Yes please.

(One minute suspension)

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