By Butch Fernandez , Jovee Marie N. dela Cruz, Lenie Lectura, VG Cabuag, Jonathan L. Mayuga & Mary Grace C. Padin
SOME were awaiting fists to fly on June 6 at the Lower House. It was the last day of the 16th Congress when Party-list Rep. Neri J. Colmenares of Bayan Muna appealed to fellow lawmakers to reconsider and approve a motion overriding a presidential veto of a proposed increase in private pension.
However, Majority Leader Neptali M. Gonzales II refused, saying the Senate has already adjourned.
“There is no rule that prohibits the House from tackling business just because the Senate has adjourned,” Colmenares said. “The Senate can always reconvene any time, as it has done so in the past, before our term ends on June 30. The House leadership just does not want to put it [Gonzales’s motion] to a vote for fear that our motion will get the necessary votes to override the veto of the President.”
Sobriety prevailed and the lawmakers agreed to adjourn after weathering the times that Senate President Franklin M. Drilon called “the biggest political storm” of the chamber in its 100-year history.
The 16th Senate convened right after what Drilon was referring to senators who were jailed on charges of corruption and the inquiry on the massacre of soldiers in Mamasapano, Maguindanao.
But the crises apparently motivated the Upper House to overcompensate and produce legislation mandating some of the most far-reaching—and long-awaited—reforms promoting growth and income equality.
Interviewed by the BusinessMirror just after the 16th Congress adjourned on June 8, several senators gave the Senate high marks not just for the quantity of laws produced (238), but for the fact that, as Senate President Drilon put it, the harvest included “landmark measures that previously languished in the legislative mill for decades, such as the Philippine Competition Act, which we were able to pass after being stuck in Congress for more than 20 years.”
“We also initiated difficult institutional reforms, such as the abolition of the pork barrel funds.”
Senate leaders gave the chamber high marks in terms of promoting growth, especially, with Drilon remarking that the focus “on laying the foundation of a healthier Philippine economy” was quite obvious in the slew of legislation produced the past three years. Besides the Philippine Competition Act, there were amendments to the Cabotage Act, and Tax Incentives Management and Transparency Act (Timta), which, Drilon said, “are all geared to promote a better business climate for more jobs and financial opportunities for Filipinos.”
The minority view
TO be sure, the minority shares the majority’s assessment of the Senate’s performance overall, and in terms of promoting growth. Deputy Minority Leader Vicente C. Sotto III, asked by the BusinessMirror to rate the chamber on a scale of 1 to 10 (with 10 as the highest), gave the 16th Senate a grade of “8.5,” and made this justification: “the Senate in the 16th Congress was able to pass major legislations that greatly benefit the Filipinos in general.”
In terms of promoting economic growth and development, Sotto again gave the 16th Senate a grade of 8.5, citing as basis: “There were bills passed into law that promote the interest of both large and small entrepreneurs, and not singling out a particular segment in the business sector.”
Sotto also provided specific scores for certain pieces of legislation in terms of how well they promoted growth and development:
- An 8 for the Philippine Competition Act;
- A “9” for the amended 50-year-old Cabotage law;
- An 8 for the Timta;
- A 7 for the Customs and Tariff Modernization (CMTA); and
- A “9” for the creation of the Department of Information and Communications Technology (DICT).
Similarly, Sen. Juan Edgardo Angara, the chairman of the Ways and Means Committee, gave the chamber a high score (“8”) in terms of promoting economic growth and development overall.
Sen. Sergio R. Osmeña, chairman of two key committee: Banks, Financial Institutions and Currency, and on Energy; and vice chairman of the Blue-Ribbon Committee, singled out the New Insurance code among the most significant outcomes of the 16th Senate, mainly because it “replaced the 44-year-old Code,” thus, allowing for comprehensive reforms to be carried out.
Osmeña, likewise, touted as key legislation the amendments to the charter of the Philippine Deposit Insurance Commission (PDIC), seen as boosting the banking and financial system and protecting the public.
In his assessment shared with the BusinessMirror, Drilon also listed the amended PDIC charter as a major achievement, but noted as well how the chamber worked hard to pave the way for “structural reforms to government agencies that directly affect the nation’s economy,” such as the CMTA and the law creating the DICT.
Promoting income equality
THE minority, meanwhile, does not share the similarly rosy assessment by the Senate leadership of the 16th Senate’s achievement in terms of promoting income equality and redressing inequity, alongside economic growth.
“Although there were efforts made by every member of the Senate to introduce bills that shall advance income equality [i.e, amendment of National Internal Revenue Code], there were very few that were passed,” Sotto told the BusinessMirror. The number of bills passed that would have advanced income equality, Sotto added, “is not substantial enough to create a good impact to the nation. Hence, I give a rating of 4.”
Here, Drilon’s assessment sharply diverges. He insisted the “Senate of the 16th Congress did not neglect the need to help the country’s poor and underprivileged. It passed laws that seek a bigger take home pay for workers, such as the act raising the 13th-month pay and other benefits from P30,000 to P82,000. It has worked to secure ample funding for the Pantawid Pamilyang Pilipino Program [4Ps], the country’s poverty alleviation program. It also passed the comprehensive Philhealth [Philippine Health Insurance Corp.] coverage for all senior citizens,” the Senate chief said.
Drilon listed as well several initiatives “to help the Filipino youth overcome the inequities that prevent them from accessing public education, such as poverty, age or distance,” and cited the passage of the Iskolar ng Bayan Act, the Unified Student Financial Assistance System Act, Ladderized Education Act, the Open Learning and Distance Education Act and the Open High School System Act.
For his part, Ways and Means Committee Chairman Angara, who rated the Senate at 8 for promoting growth, gave it a score of 7 for income equality.”
Sen. Grace Poe, the chairman of the Committee on Public Services and on Public Information and Mass Media, took pride in the 16th Senate’s having passed the Freedom of Information (FOI) Act, although it was not enacted into law because it got stalled in the House of Representatives.
She said the FOI crowns all efforts to promote transparency and good governance, as well as public participation in making all state actors accountable, and thus, should be the fountainhead of all effort to promote growth and development, as well as income equality.
With apparent dismay at the House’s failure to match the Senate’s zeal on this legislative item, Poe told the BusinessMirror the FOI “should have been the cornerstone of reforms and transparency in government which are key motivators for more investors to come in and invest in the Philippines.”
If Poe takes pride in having shepherded the FOI bill in the 16th Senate, Drilon, for his part, listed as well the Sandiganbayan Reform Act, the Pagasa Modernization Act and the Marina Law among key outcomes of the chamber that will go a long way to strengthen key state agencies.
Likewise, the Senate president cited the Graphic Health Warning Act [mandating the use on tobacco packaging of images mirroring the horrible effects of smoking] as a significant means for preserving the gains from the earlier passage of the sin-tax-reform law. The latter had allowed the government to draw in more revenues from tobacco and alcohol manufacturers, while plowing back a substantial part of such revenue into the health sector.
Lower House
THE 16th Congress has ended its session last with the passage of a total of 1,103 bills and resolutions in the Lower House.
Speaker Feliciano R. Belmonte Jr. said the passage of these measures have significant contribution to the country’s economy.
“I am confident that history will show that we have conducted ourselves creditably,” Belmonte said. “The 16th Congress will leave behind a remarkable legacy. Inspired by the significant growth of our economy, we passed laws which enhanced our competitiveness as an investment destination.” Citing the World Economic Forum’s competitiveness report from 2010 to 2016, the Speaker said the competitiveness ranking of the Philippines rose by 38 notches from 85th to 47th.
“This was, no doubt, underpinned by our strong and stable macroeconomic environment and the structural reforms we initiated through legislation,” Belmonte said.
However, despite calls to from public and business groups, the lower chamber has failed to pass several important measures.
Among these are the measure lowering individual and corporate-tax rates and the bill relaxing the economic provisions of the 1987 Constitution.
Likewise, and the contention on the last day of the 16th Congress, is the bill increasing the pension under the Social Security System (SSS), which was vetoed by President Aquino.
Under Article VI, Section 27 of the 1987 Constitution, the Congress could pass a bill into law despite the President’s veto if two-thirds of the members of each chamber vote for its approval.
In January Mr. Aquino vetoed the bill providing P2,000 across-the-board increase in the monthly pension of SSS pensioners and adjustment of the minimum monthly pension from P1,200 to P3,200, for members who have contributed the equivalent of 10 credited years of service (CYS), and from P2,400 to P4,000, for those with at least 20 CYS.
Mr. Aquino was worried that the stability of the SSS would be compromised if he would allow the pension hike of 2.1 million pensioners.
Other failed attempts
THE lower chamber also failed to pass tax-reform measure following the strong position of the Palace against proposals coming outside the executive branch.
Taking cue from the Department of Finance (DOF) and the Bureau of Internal Revenue (BIR), Mr. Aquino repeatedly rejected the passage in Congress of a long-pending bill mandating adjustments in individual and corporate income-tax rates, saying, the government “cannot put our fiscal sustainability and credit rating at risk by doing piecemeal revenue-reducing legislation.”
The DOF has said the proposal may cause the government to lose revenues totaling to P30 billion, or as much as 1.5 percent, of the country’s GDP. Liberal Party Rep. Romeros Quimbo of Marikina City, meanwhile, vowed to refile in the 17th Congress the bill lowering individual and corporate income-tax rates.
Quimbo said the income tax should be adjusted considering that the P500,000 amounts to P1.1 million today. In the current setup, those earning P10,000 or less per month pay 5-percent income tax, while those with yearly earnings of P500,000 and above pay 32-percent income tax, he added.
Belmonte also vowed to refile the bill seeking to amend the “60-40 rule” that limits foreign ownership of certain activities in the Philippines. Several local and foreign business groups backed the passage of the measure in the 16th Congress. But lawmakers did not push through with the expected voting on the third and final reading of the bill, apparently due to lack of affirmative votes. The lower chamber needed the vote of at least two-thirds of its membership, or 217 affirmative votes, to pass the “Charter-change” measure.
The voting has also been affected by Mr. Aquino’s stance against tweaking the Constitution that was ratified under the presidency of his mother Corazon S. Aquino.
Presumptive Speaker and PDP-Laban Rep. Pantaleon D. Alvarez of Davao del Norte said he is open to the suggestion lifting the economic provisions of the 1987 Constitution in the 17th Congress.
Kind market
DESPITE Drilon’s description of the events that clutched the 16th Congress, the market was generally unmoved.
More than the actions of legislators, the local market tracked the movement and signals of its overseas counterpart. What the market reacted to was when the US Federal Reserve started flooding the market with billions of dollars to prop up the US economy but later announcing it is pulling the plug on the cash flow.
Not even the hearings on the Priority Development Assistance Fund scam, which began in 2013, was able to dampen the growth of the market. The benchmark 30-company Philippine Stock Exchange index (PSEi) was consistently ranked among the top 5 bourses in the world since 2013.
At the end of 2013, it closed at 5,899.83, slightly higher than the 5,812.7 points close in 2012. In 2014 it closed higher at 7,230.57. but fell to 6,952.08 at the end of last year.
Last year the PSEi reached its highest closing price at 8,127.48. But when news broke out that the US Fed is finally winding down its pump priming measures, the main index started to fall. This was at the same time when hearings on alleged corruption involving Vice President Jejomar C. Binay also started.
“The things that once made us stand over the shoulders of our peers in the regional, as well as the global, marketplace were half-buried when we thought it would be able to hold above ground,” Trader Justino Calaycay Jr. said. “For about three years, the PSEi consistently ranked among the top 5 bourses in the world, and fell to no further than third in the Asian continent.”
“Indeed, we were the ‘next rising star,’” said Calaycay, who is now head of marketing and research at A and A Securities Inc. “It was a year of two main emotions—guarded optimism during the first quarter, which turned into a doubtful ‘bear’ the rest of the way.”
Powerful hopes
IN the power sector, private firms had hoped for a more pronounced policy on power mix.
First Gen Corp., whose main business is anchored on the production of natural gas, noted the “lack of alignment” between what the government aspires versus what is actually happening in the power sector.
“There’s misalignment between what the private sector is doing, which is signing up for new coal, versus the commitment of the government to effectively reduce carbon emissions,” First Gen Corp. President Francis Giles Puno said.
Coal as a source of power to fuel power plants in the country still dominates the current power mix.
“Meeting the economy’s power demand with more coal-fired plants today means ‘locking-in’ those high-carbon emissions for decades. Business-as-usual is a sure road to disaster. These are extraordinary times that call for extraordinary change and everyone must shift to thinking about the fastest route to a decarbonized economy,” said First Gen Chairman Federico Lopez.
Energy Secretary Zenaida Y. Monsada had proposed for the legislation of a power-mix policy during the Aquino administration. She remains hopeful that the incoming administration would push for the legislation.
As a start, the Department of Energy is pushing for the industry to source 30 percent of its energy requirements from coal, 30 percent from renewable energy and another 30 percent from natural gas. The remaining 10 percent will come from oil-based power plants.
Good power mix
AC Energy Holdings Inc. President John Eric Francia said it is easy to put in a number to come up with a power mix. The challenge, however, is in the implementation.
“The issue of the government is the challenge of substantiating this energy-mix policy. As it is now, the latest scoreboard is roughly half of the generating capacity about 50 to 60 comes from coal- and diesel-fired power plants and 30 percent comes from natural-gas, then the remaining 10 per cent comes from renewables, which include geothermal, wind, hydro, solar, etc.
The government has to substantiate and that represents an opportunity to the extent that the government can really make it very tangible on how to grow the renewable energy and natural gas contribution for an overall energy mix to obviously represent opportunities for investors,” Francia said.
For the chairman of the House Committee on Energy, Oriental Mindoro Rep. Reynaldo Umali said legislating the said policy will not work, saying “market should dictate it.”
“It is not for us to legislate,” he said. “It is difficult to get out of it once it is legislated.”
Among other infrastructure-related laws, the 16th Congress was able to to ink the easing of the process of the acquisition of right-of-way (ROW).
Just compensation
SIGNED by Mr. Aquino on March 7, Republic Act (RA) 10752 provides for the just compensation of private owners of properties up for expropriation.
It stated that the government “shall ensure that owners or real property acquired for national government infrastructure projects are promptly paid just compensation for the expeditious acquisition of the required ROW for the projects.”
The following, according to the law, are the modes of acquiring real property for any national government infrastructure project: donation, negotiated sale, expropriation or any other modes allowed legally. “We are happy that the ROW law amendment was signed but are disappointed that the so-important amendment to the build-operate-transfer law did not make it,” European Chamber of Commerce of the Philippines (ECCP) External Vice President Henry J. Schumacher told the BusinessMirror.
Delegating tasks
THE Public-Private Partnership (PPP) Act would have institutionalized the project development and monitoring facility, the PPP Governing Board and the contingent liability fund.
The proposed amendments to the decades-old BOT law include the separation of regulatory and commercial functions of government-owned and -controlled corporations and create a list of projects called “projects of national significance.”
By virtue of being included on the list of projects of national significance, projects will be “insulated” from local laws, among others, by local government units.
The proposed amendments also include allowing time-bound temporary restraining order and the extension of the period for Swiss Challenge to six months from the current two-month period.
Also, the said piece of legislation would have given the executive director of the PPP Center a fixed tenure, and would have, likewise, made the said body a voting member of the Investment Coordination Committee and the Cabinet Committee of the National Economic and Development Authority (Neda).
“I’d rather mention what is needed to be done to avoid delays in the implementaiton of the much-needed infrastructure. I hope government permits to be obtained can be reduced to a minimum,” MTD Philippines Inc. President Isaac S. David said.
He added: “It would be better if the interagency office can be created and delegated to issue permits needed to start construction.”
‘Green’ groups
ENVIRONMENTAL groups in the Philippines said the 16th Congress have scored big in coming up with policy instruments that favor the environment.
In general, however, they claim the legislative branch failed to meet the high expectations and demand for the passage of laws that will ensure strong environmental protection and effective natural resources management.
Chuck Baclagon of 350.org said the passage of law enhancing the Philippine environmental impact assessment system, to strengthen public participation, is laudable.
“There is also the Peoples Survival Fund which a special fund in the National Treasury that will finance climate change adaptation programs and projects. For me, these two come top of the mind. In terms of legislative interventions on environmentally-destructive projects, there was the congressional inquiry into a coal-fired power plant belonging to D.M. Consunji Holdings, Inc. (DMCI) in Narra, Palawan that was initiated by partylist Bayan Muna.
However, Baclagon said passing laws is only one side of the story.
“The issue of implementing it on the executive branch is the more challenging task because it entails the creation of implementing rules and regulations and finding the financial resources to materialize mechanisms and infrastructures that can enable the law to function.”
Despite efforts
GERRY Arances of the Center for Energy, Ecology and Development (CEED) has a different perspective.
Overall, I would rate them close to nil, Arances said. “Despite efforts by progressive legislators in advancing legislations on the issues of land use, biodiversity, forest management, renewable energy, minerals management, transparency, most of these efforts never reached Congress approval.”
He cited as example the National Land Use Management Act, the Forest Resources Bill, Expanded National Integrated Protected Areas System, Alternative Minerals Management Bill, renewable-energy bills and the P1-million ceiling bill.
“There are also the advances, like the ‘Green Jobs’ law, but if we look at the overall picture, many of the supposed environmental protection bills never reached being enacted,” Arances said.
He added environmental groups were also able to defeat bills they perceive to be detrimental to the environment, like the amendments to the Clean Air Act, that would allow operating incinerators again. Arances also cited the measure giving emergency powers to the President, which would allow the suspension of application environmental laws on power projects.
“This was seen as a hastening of the construction coal projects and incinerators, among many others.”
Dismayed
CLEMENTE Bautista of the Kalikasan-Peoples Network for the Environment said expressed dismay on the 16th Congress.
“First they failed to repeal or at least amend the mining act and investigate and prosecute US Navy officers and personnel involved in the grounding of the USS Guardian,” Bautista said. “[The 16th Congress also] failed to pass resolution demanding the return of toxic waste to Canada, to legislate a law to ensure the reduction of carbon emission and to impose a moratorium on coal-power plants.”
“For me, the 16th Congress is an epic fail in terms of environmental protection and natural-resources management,” Bautista added.
‘Trusted allies’
INDUSTRY groups from the agriculture sector said they have found “trusted allies” in the 16th Congress who they claim to have “truly listened” to the woes of farmers and fishermen.
Sinag Executive Director Jayson Cainglet told the BusinessMirror both chambers have been on top of the issues that concern the agriculture sector.
“The committee chairs on agriculture [in particular] were crucial,” Cainglet said in a phone interview. “Those appointed should really work for the interest of the industry, and they have proven to be just that with us.”
Cainglet and United Broilers Raisers Association President Jose Elias Inciong lauded the ratification of bills that were seen to benefit the agriculture industry.
“I think the Food Safety Act and the recent bill of Se.Cynthia Villar, which raises the penalty for acts of agricultural smuggling, would really be good for the agriculture sector,” Inciong said.
For Philippine Maize Federation Inc. President Roger Navarro, the biggest support the 16th Congress has given is the increased budget allotted for the agriculture sector.
The budget of the Department of Agriculture (DA) from 2011 to 2016 reached P339.7 billion, or P45 billion higher than the agriculture budget from 1975 to 2010.
However, he said there should be adjustments in the budgeting system for agriculture.
“Our budgeting system, based on the Neda or the Department of Budget and Management, is on a per-capita basis,” Navarro said. “So a huge part of the budget goes to Luzon, as most of the population is in there. He added 65 percent of the budget for agriculture goes to Luzon, while 35 percent goes to the Visayas and Mindanao.
“We should change that. Instead of per-capita basis, it should be based on the production area,” he said.
Inciong, meanwhile, said that while, the Legislative body has given satisfactory support to the sector, it was the Executive bodies or the agencies who failed to properly implement the policies.