Press Release
September 2, 2020

Sen. Grace Poe's transcript portions Senate committee on banks hearing


Sen. Grace Poe: We have now Commissioner Dulay logged on again, would you like to make a statement? We have some questions regarding your official position on the FIST.

Commissioner Caesar Dulay: Good morning, Madam Chair, we started at 10:30 but unfortunately when it was my time to be called, there was a glitch in the computer. We apologize, Madam Chair.

Poe: No worries, we're glad that you're present now.

Dulay: First, we would also like to apologize for my absence during the last hearing. We assure the Chair and the members of the committee that we are not taking this hearing lightly. Having said that, we sent an official letter to the Chair that the BIR is fully supportive of the FIST law together with the position made by the Department of Finance, Bangko Sentral ng Pilipinas, Bureau of Treasury and all the others. While we have stated also that the tax incentives may affect our revenues in terms of forgone revenues but on balance we believe that the objectives of the bill will far outweigh the effect on our revenue collection. As to the matter raised by Senator Angara earlier, I think there are certain matters that we can address through the revenue regulations and the IRR. I think the point there is that without the certificate of exemption, they cannot avail of the incentives given by law. So, our commitment is to be ready, I heard during the deliberations that it took time for the SPV 1 and 2 to implement. We can assure the committee and the Chair that once the law is approved, we will see to it that the revenue regulations and the IRR be issued out, maybe, within the next six months. Because I understand, I was informed that the IRR for SPV 1 was issued about two years after. We join the other members and the Department of Finance and the Bangko Sentral and all the other agencies in supporting the early passage of the FIST bill. Thank you, Madam Chair.

Poe: Well that's reassuring now, at least, Commissioner Dulay. Perhaps what we can do, we hold you to your commitment that you will act on it as quickly as possible should we pass this bill. Maybe we can have continual technical working group to bring the different agencies together so that you can have a harmonious and more effective IRR, with the help also of the legislative branch just to ensure that the implementation of this will be in a timely manner. If you could send, maybe if you cannot always attend our technical working group, you can send somebody who is knowledgeable with regard to this bill. Who did you send the last time, again, Commissioner Dulay?

Dulay: During the last time, you honor, there were four hearings called by both House and the Senate, and my people were spread thinly, to say the least. Unfortunately, the one assigned to attend your hearing, they were not briefed, I must admit, about our position. So, I extend my apologies again for that.

Poe: Although I can appreciate also her perspective, because of course the concern of the BIR is revenue collection. So having not had the proper briefing as to the position of the BIR and the Department of Finance, logically she would say if this will be less of a collection for the BIR, for the revenue of the Treasury, then clearly common sense would say that they're not for it. But as you mentioned, you will actually be able to make this up because if the companies are not making money, there's no revenue collection anyway, correct?

Dulay: Thank you Madam Chair, I understand.


Sen. Grace Poe: I have a question on the anti-dummy issue, to the SEC, based on the same NTRC report, another factor that contributed to the failure of the SPV 2, involved the Anti-Dummy law because some banks have resorted to setting up and dealing with their own SPV instead, which is not legally permissible under the SPV Act. How do you propose to address this in FIST?

SEC Commissioner Ephyro Luis Amatong: Thank you very much, Madam Chair. As you might have noticed, we did not have provisions, as discussed earlier, on anti-collusion and fraud. First of all, under the FIST bill there should be a true sale from the bank to the SPV even though the bank can only hold, whether as a legal or beneficial owner, only 10 percent of the SPV; anything more than that is prohibited. Now, if the banks undertake some mechanism to circumvent that that would be subject to the penal provisions of the FIST law.


Poe: We would like to expedite the passage of this measure as we know it will help the plight of many of our small business owners, investors. You have the assurance of this committee that we will work hard and as fast as we can to come up with a bill that is fair and effective with the help of our resource persons. Some of you in the group will be asked to participate in our technical working group; I hope you make yourselves available. With that, this hearing is adjourned.

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