Press Release
September 29, 2020

Franchise Bills

Today, I have the pleasure of sponsoring eleven franchise applications - three for telecoms, five for broadcast, one power, one airport, and a race track.

The telcos we have up for renewal all operate in underserved markets and will play a critical role in our goal to bridge the digital divide:

a. Cruz Telephone Company, or simply Cruztelco, caters to underserved rural areas from Laguna to Bohol to Negros Oriental up to Zamboanga;

b. Bayan Telecommunications Inc., or more commonly known as Bayantel, caters to the twenty percent of small and medium enterprises (SMEs) which have not yet been reached by SME-related telco services; and

c. Tandag Electric and Telephone Company Inc., as stated in its name, is also an electric company. This makes it easier for Tandag to lay down cables and other infrastructure necessary for improving service coverage in the province of Surigao Del Sur.

While Bayanihan 2 already helped ease the permitting requirements, the grant of these franchises will help franchisees ensure continuous and improved operations up to the last mile of their respective markets.

For the broadcast franchises, we have four that are up for renewal and one for amendment:

a. FBS Radio Network Inc. is known for its flagship station Mellow 947. Previously known as Mellow Touch, it is an FM station in Mega Manila famous for its easy listening format that aims to bring out the mellow side of pop-alternative and light rock music and they also play OPMs;

b. Century Communications Marketing Center Inc. owns Magik FM, a radio station in Agusan Del Norte known for its slogan "Kung may K, Okay!";

c. Caceres Broadcasting Corp. owns one of the two radio stations in Camarines Sur with disaster risk management in its corporate social responsibility framework;

d. Negros Broadcasting and Publishing Corp. operates dyEM or the 96.7 Bai Radio - the first FM radio station in Dumaguete and the second FM station in the Visayas; and

e. Philippine Collective Media Corp. which operates 100.7 Kaugop Radio, an FM radio station in Eastern Visayas known for its slogan "An istasyon nga Kaugop mo". Kaugop means "partner" or "ally". PCMC will now be an ally not only of Eastern Visayas but of the entire country.

These broadcast entities will help us cascade information and generate more employment opportunities in the areas they service.

Another one up for renewal is the franchise of Davao Light and Power Company Inc. which is the third largest privately-owned electric utility in the Philippines. This franchise covers the distribution of electric power to Davao City, as well as Panabo City and the municipalities of Carmen, Dujale, and Sto. Tomas in Davao del Norte.

Customer satisfaction is so high in these areas that, as Senator Zubiri said, neighboring areas in Mindanao would like to be served by Davao Light as well. Senator Gatchalian, the chairperson of the committee on energy, also commended Davao Light for being a "well-managed company" that has been doing well across all indicators and consistently delivering satisfactory services to the people of Davao.

For when we measure a franchise's effectivity as a utility, a lot of factors matter but none is as important as the feedback of the public which relies on it for an essential service. Hindi nagkamali si Senate President Sotto sa pagrekomenda at pag-sponsor ng Davao Light Power Company Inc. 25 years ago as he mentioned.

We also have for renewal the franchise of Metro Manila Turf Club Inc. which operates a race track in a first-class development project in Batangas. Just last year alone, it contributed P1 billion in remittances for the national government. The franchise has truly boosted the local horse racing industry with its facility that conforms to international standards and operates with the highest regard for the welfare of both its employees and horses. Marami pong nakadependeng trabaho rin dito at ako po ay lumaki na nagbabasa ng dividendazo at alam ko pong pumili ng winner take all noon dahil ang aking ama ay talagang hilig niya 'yan. Kaya alam ko ang industriya talaga na ito ay kasama na rin sa ating kultura na naging responsable rin sa pagbibigay ng pondo sa ating gobyerno.

Lastly, but not the least important, it is my honor to endorse for approval of the body the franchise of San Miguel Aerocity Inc. which seeks to construct and operate a domestic and international airport in Bulakan, Bulacan.

The standards for this new airport are at par with, if not greater than, the ones set for all other airports in the country. The franchisee has an obligation to maintain the Airport City in a "satisfactory manner at all times"; but knowing the proponent behind, it will go above and beyond in terms of servicing the public.

With the passage of this franchise, construction shall commence within a year and we shall have a brand-new international hub 12 years from now at the latest at no cost to the government. After the lifetime of this franchise which is 50 years, the airport will be turned over to the government - again, at no cost.

Even better, unlike other flagship projects where we even have a government counterpart for the project cost or the government extends a sovereign guarantee, it is the franchisee here which guarantees to fulfill all the conditions of this project with a bond to be executed in favor of the government.

This is a gargantuan task that can only be undertaken by a franchisee as big as the applicant. For this reason, it shall be exempt from all direct and indirect taxes and fees during its 10-year construction period. After the construction period and during the remaining 40 years of its franchise, it shall be exempt only from income and property taxes until it has recouped its investments. After which, it will be subjected to all taxes from thereon.

Aside from taxes post-recovery of investment, the government also stands to share in its revenues in excess of its profit margin of 12 percent.

More than revenues, however, the bigger benefit of this massive infrastructure project is its employment-generating capacity. San Miguel commits to prioritizing the hiring of local residents and returning OFWs for the construction stage. The residents of Taliptip where it will be built are all set to train under TESDA for courses on skills specific to the needs of the airport's construction.

The tourism-generating capacity of this airport upon its construction is also a given. At a time when we are badly hit by the pandemic, employment and tourism-generating projects are definitely most welcome.

The benefits are many but it is still the overwhelming need for a new airport which should be the primary mover for this application. Like the public transport that crawls on its congested streets, Manila's airport is now full and overloaded. Walled in by homes, factories and offices, the NAIA has no room for expansion. It has been likened to an aircraft carrier stuck on dry land and nowhere to go.

When a landing strip was carved out of a rice field on what was once a suburb of Manila 80 years ago, biplanes were still being used to train Filipino and American pilots. Who would have thought that it would grew to become the 39th busiest airport in the world that it is today? Or make it the 39th busiest as of end of 2019 B.C - B.C or before coronavirus.

The fact is the Ninoy Aquino International Airport is five years past its maximum passenger handling capacity of 35 million annually. It was breached in 2015. Last year, it handled 47.8 million passengers. And passenger volume is forecast to reach 71.6 million a year by 2030, and 101.5 million by 2040 - a period equivalent to three senatorial terms.

So, this is the snapshot of a problem confronting the 39th busiest airport in the world, in the 11th most populous metropolis in the planet, in the 13th most populated country in the world.

But in typical Pinoy adhocracy we've been moving the goalposts, instead of building a new field. We're so good in handling planes that appear on the radar. But we do not have the foresight to handle planes that haven't been built; that will carry passengers who haven't been born; that will land in the future.

The main problem facing NAIA is that there is no land that can accommodate its future expansion, especially the critical two new runways. At 4.4 square kilometers, it is one of the world's smallest relative to passenger and cargo volume. It is one-tenth of Shanghai's Pudong, and one-eighth of Bangkok's sprawling airport. Compared to Dammam's province-size 776 square kilometer airport, NAIA looks like a COVID-19 droplet.

The only option for NAIA is to find another site, the route two of the world's mammoth, modern and newest airports - Istanbul and Beijing - has taken. Or reclaim the sea beside it, as what Hong Kong is doing.

Our population is growing by two million a year. Overseas Filipinos need, whether to rest in between contracts or rekindle family ties, a modern gateway, where the queue on the ground or up in the air should be faster than the flight itself.

Airports are crucial to tourism which account for one-tenth of our economy. That we are five hours by air to countries which host every three in 10 persons on this planet is an asset we should tap.

And most important, ours is an archipelago that is linked by air bridges. To see the splendor of this land, it is often better to fly, not drive.

Most countries are building airports for the future. We should, too. But building a new airport is not just about the future, it is also an obligation past due.

A franchise is indeed a delicate balance of conditions and privileges. As with any application, we have ensured that the applicants have a history of compliance shown through the submission of the most recent certificates of good standing, tax clearances, audited financial statements, and even feasibility studies before they are even scheduled for hearing.

However, there are instances when delinquencies arise between the submission of the application and the actual hearing. So as an additional measure, we requested the presence of the regulatory agencies in our hearings to state for the record the good standing of applicants. Regrettably, the representatives of SEC and BIR were usually not ready to do so on the day itself. So we give them additional time to submit these afterwards, sometimes to the detriment of both the Committee and the applicants.

Given the urgent nature of the franchises at hand and the Senate's tight schedule, we call on these agencies to submit their certifications; or otherwise inform and allow the applicants to settle their delinquencies, if applicable, at the soonest possible time as this Chamber deliberates above measures.

Such bureaucratic delays must not persuade against the overwhelming interest of the public in these utilities. We need more players to foster competition, and stimulate growth, creativity and improvement in these sectors. This would eventually translate into more jobs and better services for the public. Huwag na nating gamitin pa na mismo ang mga office sa gobyerno ang nagpapa-delay ng ating mga proyekto para sa ating mga kababayan.

Nagpapasalamat ako sa ating mga kasama, for your preliminary support for these measures, for signing the committee report in a very timely manner. I hope that we can deliberate these with the public need in mind.

Committee report numbers:

  • Cruz Telephone Company Inc. (House Bill No. 5491) - Committee Report No. 118

  • Bayan Telecommunications Inc. (House Bill No. 6371) - Committee Report No. 119

  • Tandag Electric and Telephone Company Inc. (House Bill No. 6373) - Committee Report No. 120

  • FBS Radio Network (House Bill No. 6254) - Committee Report No. 121

  • Century Communications Marketing Center Inc. (House Bill No. 6256) - Committee Report No. 122

  • Caceres Broadcasting Corporation (House Bill No. 6374) - Committee Report No. 123

  • Negros Broadcasting and Publishing Corp. (House Bill No. 7264) - Committee Report No. 124

  • Philippine Collective Media Corp. (House Bill No. 6919) - Committee Report No. 125

  • Davao Light and Power Company Inc. (House Bill No. 6836) - Committee Report No. 126

  • Metro Manila Turf Club Inc. (House Bill No. 6835) - Committee Report No. 127

  • San Miguel Aerocity Inc. (House Bill No. 7507) - Committee Report No. 128

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