Moilday Tucsday June and 6,2006

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Moilday and Tucsday June 5 and 6,2006
SESSION NQ. 88 Monday and Tuesday June 5 and 6,2006
CALL TO ORDER
At 3:42 p m , June 5, Monday, the Senate President,
Hon. Franklin M. Drilon, called the session to ordcr.

PRAYER
Senate President Pro Tempore Juan M. Flavier read the following prayer prepared by Sen. Manuel Lito M. Lapid, to wit: Most Loving God, Creator of all things, source of all wisdom and knowledge, We come beforc You and humbly pray for Your guidance that we inay be able lo craft legislations that will answer the need of our poor, hungry and marginalized brothers and sislers. Give us the streiigth to quench the urge to do things our own way and remind us to be sensitive to tlie Feelings and opinions of oihers. FIclp us watch the words we say and keep lhein sweet, good and kind. Lord God, lake all our will, passion and pride and fill 11 with Your intense love. Lei Your compassion and love lead us to choices thai will chart the path to a better future for our couniry and countrymen. Finally, thank You, Lord, for always being on our side ihrougli all events, whether good or bad, thal have louched our lives. Truly Yon are our hope, oui- strength and our life. Amen.
Liin, A. S. Arroyo, J. 1 . Osincfka 111, S. R. Cayetano, C. P. S. Iangiliiian, F. N. Drilon, F. M. Pimentel Jr., A. Q. Ejercito Estrada, J. Ejercito Estrada, L. L. P. Recto, R. G. Ilavier, J. M. Roxas, M. Lacson, P. M.
With 13 senators present, the Chair declared tlie presence of a quorum. Senators Angara, Riazon, Defensor Santiago, Enrile, Gordon, Lapid, Madrigal, Revilla and Villar arrived after the roll call. Senator Magsaysay was on leave abroad for medical reason.
DEFERMENT OF THE APPROVAL OF THE JOUEWA.L

lJpon motion o f Senator Pangilinan, there being no objection, the Body deferred the consideration and approval of the Journal of Session No. 86 dated May 22, 23, 24, 25, 26, 29, 30 and 3 1, 2006 and the Journal of Session No. 87 dated June I & 5, 2006 to a later date.
r n P E r n N C E OF BUSXNESS
The Secretary of the Senate read the message of the Secretary General of the I-louse of Representatives, informing the Senate thal. on May 29, 2006, the House OfRepresentatives passed the followiiig bills i i i which it requested the concurrence ofthe Senate: I-Iousc Bill No. 5263, entitled
NATIONAL ANTHEM
The Senate Choir led the singing of the national anthem.
ROLL CALL
Upon direction of ihe Chair, the Secretary of the Senate, Oscar G. Yabes, called the roll, to which tlie followiiig scnators responded:
AN ACT ESTABLISHING THE CERU FREEPORT, PROVIDSNG FUNDS TI-IEREFOR AND F O R O T H E R PURPOSES
To the Comtniitccs on Economic Affairs; Local Governmeee; Ways and Means; and Finance
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DEFERMENT OF THE REFERENCE OF BUSINESS

At this juncture, with tlie permission of the Body, the Chair deferred the Reference of Business to a later hour.
farmers; and oii the other side, vehicle owners using either gasoline or diesel who keep 011 asking who would pay for repair in case their engines broke down. She stated that these conflicting issues should be dealt with, hoping that the Body could at least accoiniiiodate the Arroyo Administration that has certified the bill as urgent.
COMMITTEE REPORT NO. 55 ON SENATE RILL NO. 2226 (Continualion)

Upon motion of Senator Pangilinan, there being no objection, the Body resumed consideration, on Second Reading, orsenate Bill No. 2226 (Committee Report No. 5 5 ) , entitled AN ACT TO MANDATE THE USE OF BIOFUELS IN THE TRANSPORT SECTOR, ESTABLISHING FOR THIS PURPOSE THE PHLPPWE BIOFUEL PROGRAM, APPROPRIATING FUNDS 'THEREFOR, AND FOR OlI-IER PURPOSES. Senator Pangilinan slated that the parliamentary status was tlie period of interpellations. The Chair recognized Senator Defensor Santiago, Sponsor of tlie measure, and Senator Osineiia for his interpellation.
REQUEST OF SENATOR ROXAS

To hasten the proceedings, Senator Roxas requested the Committee to direct tlie Secretariat to Furnish the Members with a fact sliect as regards the basic data pertaining to tlie industry, such as the total area planted to sugarcane, tlie ainiual production of sugar (raw and refilled); by-products of sugar like molasses so that questions pertaining thereto would not be asked anymore during the interpellations. The Chair instructed the Secretariat to provide all senators the fact sheet upon receipt from Senator Defensor Santiago.
INTERPELLATION OF SENATOR OSMERA

At the outset, Senator Osinefia commended Senator Defensor Santiago and the Committee for their effort to find a renewable source of encrgy lor motor vehicles. He said that like Senator Defensor Santiago, he is eager to implcnient tlie law so that those who are ready to invest would do so in a more expeditious manner. Senator Osmeiia asked whether investors would not be able to apply Tor BO1 incentives undcr the existing Omnibus Investment Code if Section S(c) is not included in the bill. Senator Defensor Santiago explained that the provision was placed in the bill more as an ex abundante cautela or out of an abundance of caution. She likewise coiifirmed that Section 5(f), on financial assistance, is a superfluity and it is more in the nature of a policy statciiient rather than actually authorizing the DBP, Landbank, Quedancor and other GFIs to provide financial assistance. Asked whether there is any truth to the report of the industry players-the groups that are ready to start up their biolirel plants-that the country would be importing ethanol in tlie first few years in order to meet tlie mandate of 5% blend, Setialor Defensor Santiago replied in the aflirmative, explaining tlmt ethanol would be imported mostly from Brazil and Auslralia.
PREFATORY STATEMENT OF SENATOR DEFENSOR SANTIAGO

Senator Defensor Santiago stated that the consolidated bill is tlie resttlt of the joint efforts and bills filed by her and Senators Pimentel, Cayetano, Recto, Roxas, Gordon and Angara who are all cosponsors.
0 1 1 a personal note, Senator Defensor Santiago stated that she lias filed her second notice of indefinite sick leave with Seiiate President ~Driloii 011 the^ ground that die was sufrering from a debilitating sickiiess; however, she would try to partly defend the bill and iT she i s unable to continue, Senator Angara would take over.
Senator Defensor Santiago pointed out that there are two sides to the meastire - on the one side, the coconut and sugarcane farmers and landowners who anticipate the return of tlie glory days of sugar and coconut that would bring back millions of jobs to
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Senator Osniefia inquirecl whether tlrere is a provision i n the bill that would address the desire of tlic industry players for tarifl' protection wheii their plants come on stream as they might be unable to compete price-wise with foreign suppliers. Senator Defensor Santiago replied that tlrere is nonc.
replied in tlie al'lirmative. But Senator Osmefia cautioned that automobile engines today wonld not be able to take more tlian 1% biodiesel. Relative thereto, Senator Defensor Santiago stated that in tlie Worldwide Fuel Charter, l o which CAMPI is a signatory, standards were set for blends for both diesel and gasoline by a voluntary association of automobile manufacturers around the world. Sire added that there is a specific provision in the Charter that a 1% to 2% blend for biofuel is viable and it was used as the basis of'tlie blend formula in tlie bill. Asked if it is CAMPI's position that biorucl should remain as an alternative fucl and its use i n antoinobiles should not be mandated, Senator Defensor Santiago replied in the affirmative, stating that CAMPI is against the compulsory use of tlie blend. She clarified that CAMPI issued a statement only with respect to diesel and it has no objection to a 1% blend because in its view, it would not need any machine modification; however, CAMPI fears that a 2% blend might be too high so it wants a phase-in period during which the 2% blend wonld be tested. Asked whether it is CAMPI'S position that a I% blend at present could be utilized in existing diesel engines without any need for major modification and anything above that would be unacceptable to engine manufacturers who k a r it might damage engines, Senator Defensor Santiado replied i n the affirmative. She observed that based on tests, the Department o f Energy believes that a 1 % blend or even a 2% blend has no effect on the engine but it gave way to pressure from tlie private sector and agreed to a two-year phase-.in period Tor tlie 2% blcnd. Asked if any c o u n t y lias gone beyond tlie 1% blend, Senator Defensor Santiago replied that tlie Charter, in fact, provides for a 5% blend. Senator Osnieiia asked whether the mandate of 5% blend in the bill is inflexible. I-le observed that thc bill has fired up the interest of people because it gives an alternative source of energy that is renewable and cheaper compared to oil. However, he cautioned that there miglit come a time when bioethanol would be more expensive tlian crude.
To the suggestion of including in the bill a provision allowing the iinpositioii o r a ccrtein level of tarirfs 011imporls and letting tlic Tarirf Commission and the Office of Llie President raise such tarirfs accordingly i n tlie future as they deemed lit in order to protect tlie iicw players in tlie ethanol industry, Senator Defensor Santiago cautioned that the country might be accused of protectionism by its trade partners and provolte retaliatory measures on their part. Nowever, slie stated that slie would be averse to Icaving tlie determination or tlic specific level at some FtttLIre 'date at which point, all existing circumstances would be talten into account.
Senator Osrneih pointed out that tlie Tariff Commission has been providing tariff protection, subject to tlie World Trade Organization's Agreement on Agriculture, and that the country has succesdully applied for a higher tariff. He disclosed that lie lias received a letter From tlie National Association o f Oil Companies expressing its concern over the inandated we or coco-diesel for which the country might not yet be prepared. I-le stated tliat, apparently, the association believes that using biofuel like coco methyl ester (CME), a blending component of diesel, might turn out to be more expensive at this point as it might retail at a price rotrr times that of diesel or P 140/liter compared to P35Aiter. He suggcsted that tlic members of the bicameral conl'crence committec rtni up some numbers so that the law would not end up mandating a 1% blcnd tlvtt wonld not result in any savings for tlie coiistimers.
For her part, Senator Defensor Santiago stated that the Chamber of Automotive Manufacturers of the Philippines (CAMPI) is amenable to a I% CME blend for diesel because it would not require the retrofitting orveliicles, but it also sirggestcd that Llie use of more than I % CME blend should be subject to Curther discussion with the National Biofuel Board or any agency tasked by law to implemenl the biofnel program. She pointcd out that thc bill mandates a complsory blend ofan initial 5%, gradually iiicreasirig it to a mandatory 10% blcnd.
Asked if tlie 1% blend refers to diesel and the
5% blend refers to gasoline, Scnator Derelisor Santiago
Asked whether the Philippine Biofiiel Board would have enough elbow room sbouid
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eventuality arisc, Senator Defensor Santiago cited Section 4.3 of the bill which provides that, The Philippine Biofuel Board shall periodically review aiid asscss the economic, technical, eiivironmeiital and social impact of the use of bioethanol fuel aiid biodiesel as well as the availability and security of supply and shall determine the appropriate tiiitiiinu~n blend, subject to tlie provision in Section X(c) ofthis Act; and Section 8(c) which provides that the Board shall liave tlie power to review and ad.jiist tlie iiiiiiiniitin mandated biofuel bleiids as it dceiiis appropriate, subject to publication; provided that the minimum blend shall not be lowered within seven (7) years from tlie effectivity or full implementation of the niandatcd ininimum blend. Aslted if there would be sufficient flexibility for the Board siiice tlie minimum blend cannot be changed within scveii years, Senator Defensor Santiago stated that it i s DOES contention that although biodiesel is morc expensive than diesel at present, the rise iu price is one-time, and biodiesel is still a viable altcrnative because thc savings generated in the increase in mileage orfsets the additioual cost of CME.
its US. quota. The U.S., lie bared, retails sugar at $21.00 per pound. Senator Roxas observed that iiicentives would be offered to sugarcane planters to convert their sugar mills to ethanol plants. He aslted how tlie sugar itidustry could quickly build up its supply oL raw materials. Senator Defensor Santiago replied that with respect to bioethanol, the DOE reports that the country would be at least 65% selr-sufficient by 2010. Further, she stated that the potential feet1 slocks for bioetlranol could be produced Gum the following main types of materials: 1. Sugar-bearing materials like sugarcanc, molasses and wheat, among others; 2) starches such as cassava, corn, bagasse, tnetaca, potato, etc., which contain carbohydrates in starch form; and 3) celluloses such as wood, agricultural residues etc., which have a more complex carbohydrate molecular forin. Moreover, Scnator Defensor Santiago cited a joint study conducted by De La Salk University and the U.S. Agency for Tnteriiational Development which revealed that sugarcane and corm have the most potential for oil displacement based 011 feedstock availability and energy balance projections. She noted that in the case of cassava, the cxistiiig supply based 0 1 1 current productivity levels was insulficient to meet tlie projected 5% to 10% bioethaiol requircinent. She further pointed out that bagasse could sustain the energy requirements of tlie ethanol production given its current volume of production and capability to produce its own source of energy, while sugarcane has the most potential in supplying the local demand for ethanol.
SUSPENSION 011 SESSION Upon iiiotion of Senator Iangilinan, the session was suspended. It was 4 :15 p . In IlESUMITION OF SESSION
At 4:16 p m . , the session was resumed,
RESERVATIONS TO INTERPELLATE
Scnator Pangiliiian stated that Senators Roxas, Madrigal, Biazon, Cayetano, Recto and Enrile made reservations to interpellate Seiiator Defensor Santiago on the bill.
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INTERPELLATION OP SENATOR ROXAS

Relative to tlic security of supply for bioethanol and tlie increase in blend lrotn 2% buildiug up to 5% within a iitiniber of years, Seuator Roxas iuforined the Body that the inernhers of tlic sugar industry believe that there is near parity in supply and deinand vis-a-vis domestic sugar consumption. EIe recalled that last year alone, the country had to import close to 150,000 tons ofsugarjust to fill up
She informed tlie Body that by 2008, the estiinatcd demand would be 5,000,102 liters of gasoline while tlie mandated blcnd by that time would be 596, which shall be equivalent to a bioethanol requirement or 255 million liters and a sugarcane requirement of 3.6 million tons. She stated that 15% oi the estimated total area requiretn&t of60i000 hectares would have been achieved by 2008.
Senator Defensor Santiago also noted that from 1992 to 2002, f a i n yields averaged at 56.73 tons of sugarcane per hectare from a high of 120 toils per hectare to a low of 35 tons per liectarc at tlie farm level. She stated that the lower average productivity of farms was attributed to the large portion of sugarcane farms operated by sinall farmers who, generally, do not have enough resources for
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access to good farming practices like observing cane maturity iu harvesting due to their need for cash. On the capability of tlie market to sustaiii the 5% to 10% bioethanol supply from sugarcane, Senator Defensor Santiago said that tlie only way to sustain the supply would be to increase sugarcane hectarage or improve farm productivity. Slie said that from 2000 to 2003, the average national sugarcane yield was about 60 tonsihectare. She surmised that improving this figure to 100 tonsihectare would be sufficient to meet the etlianol demand for 10% substitution while still providiug enough sugarcaiie Cor food application. She noted tlial tlie required yield improvement to generate sufficient surplus sugarcane or fuel production was well within the yield levels of some higlibreed cane varieties which have been reported to reach 120-160 t.ons/liectare. In fact, she said, the Philippines has not been impoi-ling sugar for the last three years. Noting that a ton o r sugarcane would yield 70 liters of ethanol worth 12,000 could also yield molasses and 100 kilos of sugar, Senator Roxas posited that given the present composite price of 11,100 per 50-kilo sack of sugar, tlie sugarcane farmer would make more moncy by sending his harvest to sugar mills than to au ethanol plant. He expressed concern that a situation might arise wherein there would not be enough raw material for the production o f the rcquired volume ofethanol. He requested that l i e provided by the technical staff witli the necessary information so that the matter could be discussed at a more opportune time. Senator Defensor Saotiago stated that there were, at least, two main etliaiiol plants in the pipeline: Sail Carlos Bio-Energy Iiic., Negros Oriental, which has a productioii capacity of 100 thousand litersiday or 25 iniilioii lilersianiium; aud tlie British-led firm Bronzeoak Philippines, Inc. which has invested P I S billion to build auotlier ethanol plant in Buliidnon with a 150,000-liter capacity. However, she conceded that the combiiied capacity of these two plants would only be about 15% oftlie estimated 500 million liters of ethanol needed annually to help meet the DOE larget of 60% self-sufficieiicy in energy requirement by 2010. Shc noted tliat San Carlos alone iieeds 1,500 tous of sugarcane a day or 400,000 tous a month. Slie said that other potential ethanol producers include Canlaon Alco-Greeii hic., which would produce 60,000 literslday; Negros Green Resources Inc., 120,000 liters/ day; and JG Snmmit I-Ioldings Inc., 100,000 liters/day, making a total production of 380,000 liters a day.
She agreed that sugarcane areas would have to be expanded. She said that a teain of experts of the Sugar Regulatory Administration has already identified tlie following areas: Lililao del Norte, 38,l I0 hectares (Salvador, Nunungan, Munai, Tubod); South Cotabato, 115,000 hectares (Marbel, Polomololi, Tantangan, Norala); Sarangani, 17,000 hectares (Malungon, Alabel, Malapatan); Agusan del Norte and Agusan del Sur, 38,000 hectares (Butuan Ciiy, Las Nieves, Esperanza, Prosperidad); Maguindanao, 60,000 hectares (Datu Odiu Sinsuat, Talayau, Sultau Kudarat, Shariff Rguak, South Upi, Upi); Central Palawal, 29,486 liectares (Narra, Aborlan, Puerto Princesa), or a total of 194,596 hectares. She also eiiuiiierated the areas which have been surveyed by independent firms as follows: Cagayan, Isabela, 26,000 hectares (Enrile, Sta. Maria, Cabagan, Aui-ora); Sultan Kudarat, South Cotabato 11, 70,000 hectares (Dagumhayan, Isulan, Surallah, Banga, Tacurong); Bicol-Libinanan-Sipocot, 6,000 hectares (Sipocot, Libmanan, Ragay); Negros Orienlal-Teves, 24,l 16 hectares (Sta. Catalina, Amlan, Sibulaii, Valencia); Sail Carlos, Negros Occidental, 8,000 hectares; Southel-nBukidnon, 10,000 heclares (Kibawe, Kilaotao, Dangcagi,, Kadingilan, Damulog), or a total of 154,116 hectares. At this point, Senator Defensor Santiago cnumerated the existing sugar areas for possible conversion as rollows: Eogo and Medellin, Cebu, 6,802 hectares; Easterii Batangas, 4,38 1 hectares; Bicol, 5,650 hectares; Capiz, Panay, 6,570 hectares,, for a subtotal of23,403 hectares. On the whole, she said that tlie grand total of hectarage for sugarcane expansiou is 372,115 hectares. In addition, she said that a 10% ethanol blend would require 500 million liters ethanol, 7.143 million tous sugarcane aud 120,000 hectares planted to sugarcane. Senator Roxas expressed concerii that tlie volume of locally produced ethanol could no1 fulfill the requirements under the bill and could result in the importation o f tlie product. With ethanol currently pegged at US$2.70/gallon (IW.OO/liter), he said that, in effect, the Philippines would be exchanging tlie dollars tliat it pays the Arabs for crude to dollars it would pay the Thais or Brazilians for ethaiol. As such, lie suggested that there be some flexibility to ensure that the 5% and 2% blend mandated under the bill shall be attained so that local farmers, rather tliau foreigners, would benefit from the nse of this biofuel. Senator Defensor Santiago said ,that at the proper lime, she would acccpt any proposal to ensure the protection of national intercst.
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At this juncture, Senator Osmeiia opined that the high mandates sought to ensure that there shall be a niarltet not only for potential bioethanol plant operators but also for sugarcane or Feedstocks suppliers. In tlie meantime, he agrced that the demand would definitely have to bc filled by imports from countries like Thailand and Brazil. Bllt if the mandate was raised to IO%, hc reiterated that tariff protection would be a factor to consider. I& believed that the 5% mandate would assure investors i n biofuel production that there shall be a fixed demand for the connnodily. For his part, Senator Roxas stated that one approach is to allow importation to fill the demand for bioethanol in the early ycars, aticl let domestic production satisfy the demand in the future. He proposed that the imposition of the percentage blends be phased-in geographically so that the country would be absorbing a hundred percent of domestic production without neccssarily having to go to the international markets for large quantities. Further, he suggested that there be a differentiation between greenfield ethanol plants with sugarcane supply and bioethanol plants that may be located in existing sugar-producing regions in the country siiicc there is tlie practice of pole-vaulting wherein a product such as cane, which is used for one purpose, is used for another one. Nc posited that a sugarcanc plantation that is cquidistant to a sugar mill aud a bioethanol plant would determine the viability of one or the other. Senator Osrnciia explained that under polevaulting, which has never been controlled, the sharing system differs from one area to the next, meaning it can be 65% to the planter and 35% to the sugar central in one area; and 70%-30% i n another. He noted that in vicw of the demand for sugarcane, sugar millers are trying to discourage tlie establishment of bioethanol plants where they are located. But he stressed that there is 110 stopping a bioethanol group from putting up a plant even near a sugar central. Hence, he stated that the bill is encouraging the opening of arcas farther away from sugar m i l l s for the bioethanol plants - Nortli~Cotabato, Bukidnon, Caeayan Valley and Southern Negms.
Committee on Ways and Means is conducting a hearing 011 a bill that, in effect, closes all doors to fiscal incentives. He suggested that the Committee on Energy thresh out the matter with the Committce on Ways and Means at some future date.
On a related matter, Serator Arroyo drew attention to an item in this mornings paper that the Arroyo Administration has given telecommuliicaliolis giants, Globe and Siiiart, tax incentives to the tune of P I 2 billion iiiiniediately upon the expiration of their tax holiday.
In rcaction, Senator Defensor Santiago staled that the Coininittee would give the matter due consideration. However, she said that incentives might not he needed since biofnel has a market and people would invest in it.
ACKNOWLEDGMENT OF THE PRESENCE OF GUESTS

At this juncture, Senator Pangilinan acknowledged the presence of the witiners of thc Miss Earth Philippines: Catherine Untalan, Miss Philippines-Eartll; Ginger Aim Conejero, Miss Philippines-Air; Kathrina Grace Rigets, Miss Philippines-Water; Frances Dianne Cervantes, Miss Philippines-Fire; Reena Sarmiento, Miss Philippines-Eco-Tourism.
SUSPENSION OF SESSlON
Upon motion of Senator Defensor Santiago, the session was suspended.
It was 4:50 p.nz. RESUMPTION OF SESSION

At 4:54 p m . , the session was resumed.
INTERPELLATION OF SENATOR MADRI6AL

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At the outset, Senator Madrigal commended Senator Defensor Santiago for a timely piece of legislatioii as she exprcssed support for the measure. Asked on the basis of thc 5% bioethanol blend mandated in Section 4.1, Senator Defensor Santiago replied that the 5% is within the maximum standard set by the Worldwide Fuel Charter, adding that for biodiesel, it is a 2% blend. She noted that the car manufacturers association worldwide believe that
PARLIAMENTARY INQUIRY OF SENATOR ARROYO

Scnator Arroyo noted that the bill has a provision on tax benefits for the biofuel industry but the
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with a 5% to 10% bioetliaiiol blend, there is no need to retrofit tlie engine. On whether there is a study on how much it would cost to repair an engine that malfunctions because of tlie blend, Seiiator Defeiisor Santiago said that based 011the tests conducted by the DOE, there would be no engine iiialfuuction. She informed tlie Body that tlie DOE has even golie as far as determining the Pliilippinc staiidard for tlie blend which is more or less tlie same as tlie blends approved by the European Union and tlie 1J.S. She stated that studies and tests to deteriiiiue the tcchnical viability of CME, meaning coco-diesel, as an alteriiative fuel for vehicles were coiiducied by the following agencies: U.S. Department of Energy National Renewable Energy Laboratory iu cooperation with tlie DOE; Nihau University of Japan, College of Science and Technology i n .cooperation with tlie Technological University of the Philippines; South Korea Iiistitute or Teclinology; PTT Reseach and Technology Iiistitute of Thailand; Southwest Research Institute of tlie U.S.; Tokyo Metropolitan Research Institute for Environmental Protection, to cite some. Slie said that all the tests proved the technical viability of CME. Further, Senator Defensor Santiago informed the Body that tlie government initiated a pilot project in JUIY2004 under Memorandum Circular No. 55, mandating government agencies to use 1% CME blend iu tlie diesel file1 requirements of their vehicles. She said that tlie Suprciiie Court also issued a similar circular for tlie Judiciary to support the program and that tlie local govcrninents of Baguio, lsabela aiid Davao adopted ordinances promoting the use of CME in their transport requirements. Further, she disclosed that the DOE and PCA coriductcd tests on vehicle emission and fiicl efficiency which all endorsed tlie use of CME as a biodiesel blend from 5% to 10%. As regards bioethanol as a fuel blend for gasoline, Senator Defensor Santiago revealed that the blend is superior to uiileaded gasoline based on studies showing that tlie higli oxygen content of ethanol reduces hydrocarbon emission makes it an attractive octane-enhaiiccr. Slie conceded that despite producing more nitrogen oxides from the burning of excessive oxygen, tlie reduction of other harmful emissions using ethanol far outweighs that of using gasoline. She stated that engines using pure ethanol has lower-power performance comparcd to gasoline-run engines. Finally, slie said that ethanol is gainiiig
advantage as an additive to gasoline because it does not cause cancer unlike the current gasoline octaneenhancer called MTBE. She pointed out that no less than CAMPI has declared that a 1% blend is acceptable and can be immediately implemented. With regard to the main source of ethanol in tlie Philippines, Senator Defeiisor Santiago stated that tlie De La Salle study ideutified sugarcane and corn but, according to the DOE, other sources could be tapped in tlie future such as potatoes, cassava and sorghum. She expressed tlie view that cassava is a viable source of ethanol but whether it will be cheaper than sugarcane or coru has not been resolved. Asltcd whether mandating 1% to 2% cocobiodiesel would not disadvantage the coconut producers, considering that coconut has many byproducts like virgin coconut oil which has a higher export value, Senator Defensor Santiago cited the paper prepared by two petroleum technologists who are members of tlie Asian Institute of Petroleum Studies which asserted that a 1% blend requires only 70 million liters out of 7 billion liters demand for diesel, while coconut oil export is one billion liters per year, so that 1% coco-biodiesel is only 7% of the export volume. She said that the same study reported that current coco-biodiesel production will exceed 110 million liters per year which can easily address the 1% supply requirement; aiid tlie demand for coco-biodiesel will not increase tlie cost of domestic cooltiiig oil. Based ou the study, she affirmed that the coconut industry will not have a shortage of s~rpply despite thc increasing demand for cocoiiul oil and the mandated 1% blend for biodiesel. On tlie other hand, Senator Defensor Santiago maintained that the virgin coconut oil industry will have to source its incentives in a separate bill as the present measure covers only coconut as a viable source of biofuel. Replying to another query, slie stated that the studies consisted ouly of bioethanol demand projections and sugarcane supply projections and did not cover the infrastructure needed to transport sugarcane to processing plants. She expressed openness to accepting an amendment, at the proper time, that would address the infrastructure concern. Senator Madrigal cited a policy papcr criticizing tlie production of ethanol because tlie encrgy used to produce ethanol is roughly equal to the energy obtaiiied from its combustion. Replying to a query, Senator Defeiisor Santiago said that she did not
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liavc statistics on the amounts of petroleum-based fertilizers that the sugar industry nses. Instead, she provided figures on the competitiveness of locally produced bioethanol compared lo fuel ethanol cost estimates in Brazil, United States and Europe. She said that the production capacity buildup needed in the first two years of tlie laws iniple~nentation is between 230 million liters and 242 million liters and the capital cost for production facilities to meet the supply reqnircnient is about P38 billion. Until there is sufficient distillery capacity, she believed that importation of etlianol may be necessary to address energy secority.
On tlie concern that tlie environmcnlal credibility of ethanol plants would be sacrificed by the cnrrent trend to operate tliese plants on coal, Senator Defensor Santiago clarified that current operations use only bagasse which is a by-product of sugarcane and the country has no coal plants.
Senator Recto pointed out the bad experience with the BO1 in tlie grant of incetitivcs or income holidays, as evidenced by the UP School of Economics study that revealed that 83% of all incentives it granted were redundant or unnecessary in the first place. He wondered why there was a need to give additional incentives, particularly income tax holidays, when a market was already being created by mandating the blend of biofuel and bioethanol. Senator Defensor Santiago undcrscored tlie need to grant incentives to the industry to ensure n steady supply of tlie fuel blends in view of llie volume of capital requirements. Senatoi- Recto pointed out that tlie incentives are already provided in Section S(b) since the duties on capital investtnents have been reduced. He said that tlie fiscal incentives laws were being liarnionized and coiisolidated by the Coininittee on Ways and Means and that the general policy is to refrain fiom granting tax incentives, especially incoine tax holidays, when none is necessary. In justifying the provisions in the bill as regards exception to the general policy of refraining from granting tax incentives when none is necessary, Senator Defensor Santiago clarified that the excise tax on bioetlianol of P.05 per liter is cquivalcnt to only P125,OOO per year; and even with a zero specific tax on biofuel, oil would continue to be a major source of tlie countrys fuel needs, thus, there is a need to invoke tlie incentives under tlie Omnibus Iiivestinent Code.
REMARKS OF SENATOR PANGILINAN

Senator Pangilinan stated that Senators Biazon and Cayetano had withdrawn their reservations to interpellate on the measure.
INTEIIPELLATION OF SENATOR RECTO

Senator Recto cominended Senator Defensor Santiago for liaving sponsored a very important nicasi~rc. Adverting to Section S(a), Senator Recto noted that h e r e would be a rcvenne loss koni specific taxes 011 petroleum products ifbiodicsel or bioetlianol was subject to a zero-rate specific tax. He inquired on tlie amoinit of revciiiie loss only with regard to this particular iteni, Senator Defensor Santiago replied that die lias the figures on the rcvenne inipact but not on revenue losses. Senator Recto said that the specific tax rate would wwy depending- on d i e type of petroleuin product imporled. Hc stated that if the country would shift 10% of its energy requirement to bioethanol or biodiescl, the corresponding loss would only be 5%. Me said that lie would confirm this with the Department of Finance. Aslted whether tlie income tax holidays for the bioftiel industry would be part of the inveslnient priority plan wliicli is provided i n Scction S(c), Senator Defensor Santiago replied i n tlie affirmative.
To allay the fears of Senator Recto, Senator

Defensor Santiago said that as previously agreed upon by tlie Members, tlie bill would havc a forwardloolting provision to give some flexibility in the determination of certain energy rcquiretnenls by the Board. Likewise, she said that the bill would also include a forward-looking provision granting the govermnent, the Board or the Energy Secretary, as chair of the Board, some flexibility in applying the incetitivcs under the Omnibus Investment Code. She expressed willingness to accept aniendments at tlie proper time with regard to other incentives that could be granled without rcsorting to an income tax holiday.
INTERPELLATION OF SENATOR ENliILE

Asked by Senator Enrile on tlie average total gasoline consumption of the country per year, Senator Defensor Santiago replied it is 4.6 billioii liters this year
1277
Replying to other queries, Senator Defensor Santiago said that 255 inillion liters ofbioethanol would be needed to accoiiiplish a 5% blend o f ethanol; To achieve the target, she stated that sugarcane, which would be dciiatured into ethanol, should be planted in 60,000 hectares o f land that would yield 4,300 liters of ethanol per hectare. She affirmed that the laud area should be doubled to make a blend of 10%. As regai-ds the liincls to be used for sugarcane plantation, Senalor Defensor Santiago said that the government would give priority i n leasing unoccupied or unused public agricullural lands because under the Constitution, the government could only lease at most 1,000 hectares of land to a corporation. She pointed out, however, that the law i s ofrering incentives i n the hope that private entrepreneurs would use their own lauds. In reply to iiirtlier queries, Senator Defensor Santiago said that it was assumed in tlie bill that the private entrepreneurs would operate tlie sugarcane plantations and, thereafter, produce bioethanol by theinselves with the iiiceiitives provided by goveniment. If such was the case, Senator Eiirile remarked that the program would not really mean much to the farmers because the owner of the distillery plant who owiis or leases the land would simply hire farin workers to plant tlie sugarcane, cut and load them onto truclts and bring them to the crushing plant. Senator Defensor Santiago said that a study entitled, Uiothenol: A Policy Study on the Use of Rioethanol as Alternative Fuel in tlie Philippines revealed that the production of ethanol would create direct employment, or a total of 87,000 jobs in the agriculture and iiianufictul-ing sectors. She confii-med that soinc or the jobs would be cane cutters, loaders, truck drivers and crushing mill operators. She added that the bill could also provide the process by which tlie bioethanol plant owner shall enter into a contract with the sugarcane farmers.
At this point, Senator Defensor Santiago disclosed that the annual nul yield ofjatrophu k o r h ranges from two to five tons per hectare and its average oil yield is 30% to 40% crude non-edible oil from seed and from 48% to 58% oil from kernel. She added that the DA projects that jatroplia will produce .7Stons to 2 tons of biodiesel per hectare. Senator Enrile expressed apprehension that the use of coconut oil for biodiesel would jack up the price of coconut-based products to tlie detriment o f the consuming public. I n reply, Senator Defensor Santiago stated that there should be no fear that the domestic supply requirements might be diminished or radically reduced by tlie mandatory coco-biodiesel blend. The estimated requirement for coconut oil, she said, is 40 million liters, equivalent to only 3% oftotal coconut oil production. She added that biodiesel requirements in the next few years would not rely solely 011 the CME; and, in ordcr to ensure a sustainable biodicsel supply, the DOE is conducting studies on other possible biodiesel feed stocks. Relative thereto, Senator Defensor Santiago read CAMPIS forecasl of vehicle technology usage this century, to wit: Crude supply is projected up to 2030 with total depletion by 2080. Biofuels are projected to be widcly used by 2020. Hybrid vehicle is projected to lower its cost in the coining years and will strongly compete with conventional vehicles. Low-cost synthetic fuels would be made available by 2030 and low-cost and widespread usage of hydrogeii fuel-cell vehicles will be in place by 2070. She stressed that given this forecast, it is important for the country to develop the biofuel industry. On whether the econoiiiic prognosis is that the price of crude would increase to make the production of substitute ftiel economically viable, Senator Defensor Santiago maintained that it is just a projection. She noled that thcre is a clear indication that crude prices would coiitiiiue to be volatile in the near future. Senator Eiirile asked if there are studies on tlie possible effect of tlic cessation o r liostilitics in Iran and lraq on the volume of supply of crude to bring down its prices in the world market and, in the long run, bring down the prices o f finished products. If that happened, he said, the consuiners might be better off using traditional fuel than biofuel. I-le asked what would happen to investors in hioetlianol in such a scenario. Senator Defensor Santiago replied that for the next seven years, investors are guaranteed
With regard to biodiesel, Senator Enrile asked what tlie principal sources of fatty acids are in the country. Senator Defensor Satitiago replied that coconut is the preferrcd feedstock but there are efforls to develop other potetitial feedstock such as jatropha oil. She said, however, that tlie DOE did not have the time to produce a study on jatropha oil on the premise that Lliere is enough coconut oil in the market to supply the coco-biodiescl requirement during the inandated period.
1278
that the blends would not go lower than those provided for ia the bill, so there is a captive market. Senator Defensor Santiago stated that the geopolitical developineiits in the Middle East are in the forefront of the movement of the oil market. She admitted that there are possibilities that at some ftititre time, gasoline prices might be lower than the price of ethanol or even the price of gasoline blended with ethanol. She said that there are no indications ihat the projected lowering of gasoline prices vis-a-vis ethanol would come to pass, at least not ill the iininediate future.
On the observation of Senator Enrile that tlie proposed measure has no terminal date if enacted into law, Senator Defensor Santiago pointed out that tlie applicable dates indicated in tlie bill are as follows:
Biofuel Board shall periodically review and assess the economic, technical, environmental and social impact of the use of bioethanol fuel and biodiesel as well as the availability and security of supply, and shall determine the appropriate iniiiilnuiii blend subject to the provision in Section 8(c)n which provides that the minimum blend shall not be lowered witliin seven years lrom the efrectivity or the Act. Sciiator Defensor Santiago stated she would accept a sunset provision at the proper time. Even as she agreed that sucli provision should cover the possible contingency of lower gasoline and diesel prices, she stressed that oil supply would remain tight For ycars to come and the prices would remain volatile. Senator Enrile gave assurancc that lie would look closely into tlie matter iigain during the period of amendments.
A. Gasoline - 5% blend in tlie first two ycars then 10% blend in the next four years;
REMARKS OF SENATOR PANGILINAN

Senator Pangilinan stated that there are no other reservations for interpellation except for Senator Roxas who would continue with his interpellation after he shall have been provided the requested data.
B . Diescl - starting with the release of the implementing rules and regulations by the DOE, 1% blend i n the first year, then 2% blend in the next two years.
Senator Defensor Santiago stated that the bill gives Llie Board tlic discretion to change tlie percentages of the blends if demanded by the circumstances, and that the guaranteed period is only seven years. She added that after the seven-year period, the percentage blend could be lowered or abolished because the law cannot be extended indefinitely. She stated that any aiiiendment to this effect would be welcomed.
MANIFESTATION OF SENATOR DEFENSOR SANTIAGO

Senator Defcnsor Santiago manifested that in case she is unable to c o n h u e , Senators Angara and fimentel, as cosponsors of Senate Bill No. 2226, liavc agreed to take over during tlie period of amendments and the Bicameral Conference.
In the event or an improvement in the political aiid security climate aiid the discovery of additional sources of supply for biofuel, Senator Enrile stated that it would be uneco~iomicalfor consumers to buy gasoline products that are blended with ethanol. He reasoned that tnile~s this matter is addressed, governinent~would be compelled to maintain tlie blends to allow investors in the venture to recover their investments.
Senator Enrile suggested the inclusion of a sunset provisioii i n the measure that in tlie event certain economic conditions supervene that shall require the reversal of tlie policy, the law shall be suspended or the consumers shall be given a choice to buy blended or unbleiided products. Senator Defensor Santiago stdted iliat Section 4.3 states that, the Philippine
SUSPENSION OF CONSIDERATION OF SENATE BILL NO. 2226 Upoii moiion of Senator Iangilinan, there being no objection, the Body sttspended consideration of
the bill.
COMMITTEE mwoKr NO. 13 ON. SENATE BILL^ No. 1936 (Continuation)

Upon motion of Senator Pangilinan, there being no objection, the Body resumed consideration, on Second Reading, of Senate Bill No. 1936 (Committee Report No. I3), entitled
AN ACT ESTABLISHING A CREDIT

INFORMATION SYSTEM, AND FOR OTHER PURPOSES.
JfP
MONDAY, JUNE 5 , 2 0 O G
1279
8.
Senator Pangilinan stated that the parliamentary status was the period of individual aiiiendments. He informed tlie Body that he would be accepting the individual ainetidmetits in behalf of Senator Angara who was on official mission. Thereupon, tlie Chair recognized Senator Osmcfia for his individual amendments.
On the same page, line 7, after the word opinion, inserl the phrase REGARDING THE CREDI~WORTEIINESS OF AN ENTITY, A CREDIT COMMITMENT, A DEBT OR DEBT-LIKE SECURITY OR AN ISSUER OF SUCH OBLIGATIONS,EXPRESSED USING AN ESTABLISHED AND DEFINED RANKING SYSTEM, On the same page, lines 10 to 12, delete the phrase of a Borrowers financial AND OPERATIONAL hislory, specifically as it relates to thc Borrowers ability to meet debt obligations; phrase FACTCTALreport containing detailed information on a Borrowers credit histoi-y, including brLt no1 limited lo identifying information, credit accounts and loan, bankruptcies and late payments, and recent inquiries, and in lieu thereoE, inset-1 the phrase S U M M A R Y OF CONSOLIDATED AND EVALUATED INFORMATlON DETAILING THE CREDITWORTHINESS, CREDIT STANDING, CREDIT CAPACITY, CHARACTER,AND GfWERRAL REPUTATION OF A BORROWER WHICH MAY BE FACTUAL AND SUBJECTIVEIN NATURE.;
9.
SUSPENSION OR SESSION
With the permission of the Body, the Chair suspended the session.
10. On the same page, lines 13 to 16, delete the
It was 6:03 p.m.

RESUMPTION OF SESSION
A1 6: 1 I pm., the session was resumed.
MANIFESTATION OF SENATOR OSMEF?A

Senator Osmeiia informed the Secretariat that both he and Senator Pangiliiiaii would be using the version of Senate Bill No. 1936 as of May 30, incorporating his individual ametidments.
11. On the same page, line 27, after the word
SSMENA AMENDMEWTS
As proposed by Scnator Osincfia and accepted by
third-party, delete the word contraclor, and in lieu thereoC insert the word PROVIDER; 12 On pagc 4, line 3, after the words consolidation of, insert the phrase BASIC CREDIT DATA;
13. On the same page, line 4, delete the phrase
the Sponsor, there being no objection, the Body approved thc following amendments, one afler the other:
1.
On page I, line 13, after die word credit, delete the phrase to responsible debtors; On the same page, line 15, after the word system, delete the phrase using state-ofthe-art-techno logy;
raw Credit Information;

14. On page 6, lines 20, 21 and 24, replace tlie
2.
words Credit Information with BASIC CREDIT DATA;

15. On page 7, line 12, replace the words Credit
3.
On page 2, line 12, ailer the word CORPORATION, insert the phrase CHARGED WITH COLLECTING, CONSOLIDATING, AND DISSEMINATING FACTUAL AND OBJECTIVE BASIC ClGDIT DATA,
On the same page, line 20, afler tlie open quotatioii mark (), replace the words Credit In~orniationwith BASIC CREDIT DATA;
Information, with BASIC CREDIT DATA;

16. On the same page, line 15, afler the words
4.
Outsourcc Entities, insert the phrase WtIICI-I MAY PROCESS AND CONSOLlDATE BASIC CREDIT DATA,;
17. On the sailie page, line 16, after the word releasing, insert the phrase SUCI-I BASIC CREDIT IIKYA;
18. On the same page, line 17, delete the words
5.
On the same page and line, delete the word raw;
6.
On page 3, line I, replace the words Credit Informalion with BASIC CREDIT DATA;
Credit Information;
19. On the same page, line 24, after the word
7. On the same page, hie 6, delete the phrase a published ranking based on;
releasing, insert the phrasc BASIC CREDIT DATA ;
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20 @n the same page, line 25, delete the words
CREDIT INFOI<MATION;
21 On the same page, line 27, replace the words
satisfactorily, it might obviate the need for amendments to tlie bill.

In response, Senator Osmefia explained that after numerous consultations with the members of the Philippine Credit Ratings Association (PHILCEA), including Satiti Dumlao of PhilRatings, Jimmy Ladao of Dunii and Bright Street aiid four officers of other independent rating companies, it was agreed that the amendments would be crafted in a way that would remove the danger of government monopolizing tlie credit industry and driving the players out of business. He clarified that the data to be collected by the Credit Information Bureau Incorporated would be very basic and raw so as not lo enable it to rate any entity. Subsequently, tliat function, hc emphasized, would remain with existiiig credit-ratings agencies.
Credit Informalion with BASIC CREDIT DATA;

22 On page 9, lincs 24 and 25, delete the phrase
OR OF CONGRESS,;
23 On page IO, line 4, after the words Monetary Board, insert a coinnia (,) and the phrase
IN COORDINATION WITH EXISTING INDUSTRY STAKEHOLDERS;

24. On the same page, line 6, a h the word shall, insert the phrase BE SUBMITTED TO THE CONGRESSIONAL OVERSIGHT
COMMITTEE WHICII WALL REVIEW, REVISE AND AIIROVE THE SAME. THE IRRs SHALL;
25. On page I I , line 14, insert a new Section 9 to read as follows:
SECTION 9.
OVERSIGHT
c o M M r u m . - THERE
CONGRESSIONAL IS
HEREBY CREATED A CONGRESSIONAL OVERSIGHTCOMMIT1EE COMPOSED OF SEVEN(7) MEMBERS FROM THE SENATE AND SEVEN (7) MEMBERS FROM THE HOUSE OF REPRESENTATIVES. THE MEMBERS FROM THE SENATE SHALL B E APPOINTED BY THE SENATE PRESIDENT WITH AT LEAST TWO (2) SENATORS REPRESENTING THE MINORITY. THE MEMBERS FROM THE I-IOUSE OF REPRESENTATIVES SHALL ALSO BE APPOIhTED BY THE SPEAKER WITH AT I.EAST TWO (2) MEMBERS REPRESENTING THE MINORITY. AFTER THE OVERSIGHT COMMlTTEE WILL HAVE APPROVED TFE IMPLEMENTING RULES AND REGULATIONS, IT SHALL TI-IEREAPYERBECOME FUNCfUS OF>TIO> ANI) THEREFORE CEASE TO EXIST.
26. Renumbcr
the
Senator OsmeAa explained that the CIBI would help collate basic credit data and share them with ratiiig agencies without competing directly with them. in turn, he said, the rating agencies would add value to the basic credit data by determining the creditworthiness of the borrower by rating it.
On whether the LGUs are covered by the corporation, Senator Osmefia stated that government corporations are included and it would be to the advautage of LGUs to have a credit rating as it gives information on which LGlJs are able to meet their obligations.
Senator Pimentel observed that many LGUs have the penchant to borrow beyond their capacity to pay and local officials leave tlie matter of repayment to tlieir successors. He suggested tbat tlie provision dealing with corporation be reformulated because the LGUs are not ordiniry corporations. Senator Osmefia clarified that the information would come from the lenders and not the LGUs, therefore, if an LGU borrows from DBP aiid other banks, for instance, the latter has to inform the CIBI about it. Senator Piinentel stressed that it would not d o ~ a i i yharm if the bill specifically mentions that LGUs are obliged to share the information on the stale of their finances when they borrow so that the CIBI is fieed from the burden of informing their constituencies. I-le said that LGUs borrowings have been sanctioned by the local council boards aiid their constitueiicics are unaware of the status of LGUs financial standing. Agreeing with Senator Pimentel, Senator Osmefia proposed that amendments to the Local Government
succccdiiig
~
sections
~~
accordingly.
~ ~~~ ~~~~~~~ ~~
~~~~.~~
Senator Pangilinan stated that Senators Arroyo and Lacson would like to review the amendments and inay introduce their individual amendments at a later time,
INQUIRIES OF SENATOR PIMENTEL

Senator Piinetitel voiced the concern of the Members that the bill might crcate a monopoly. However, he stated that if tlie issue is dealt with
MONDAY, JUNE 5,2006
1281 other banks, the Chair and Senator Osmefia pointed out that the present condition would still obtain. Senator Recto disagreed, clarifying that his assumption did not mean that all borrowers would not want to share information on their loans: He pointed out that 1% to 5% of borrowers might not want the information shared with others. He said that, at present, banks do not share information, but he posed no objection to mandating the contrary, only that borrowers should at least^ b-e asked if they would agree. He expressed the desire to propose an amendment, at the proper time, that would provide for that right. On the information that all developed economies of the world have mandated sharing o f information, Senator Recto argued that more developed economies have good titling records which is not the case with the Philippines. He believed that borrowers with no titles to their assets might not benefit from the bill. Still, he reiterated that a borrower should at least have the right to refuse the sharing of information; anyway, refusal might mean that ptber banks would not lend to him. Senator Osmefia pointed out that a borrower does not have that right at present. He said that some commercial banks have their own credit information system but they hide their good creditors in order not to share their clients with the rest of the lending system.
Code on this matter be initiated. Subsequently, he read Section 5 that covers the type of credit being extended:
SEC. 5 . - Access to Credit Information from Government Offices and Agencies. The Corporation is hereby authorized to access credit information from government offices, agencies and pension funds being administered by the
government and subject td conformity by the Supreme Court from the Judiciary, its courts and offices. This authorization supercedes any/ all provisions in existing law including, but not limited to, the statutory charters of such government offices and agencies, judicial courts, and offices, which provide for the confidentiality of such information. Senator Osmeiia stated that the section clearly deals with the lenders and not the borrowers. He said tliat,uiider several laws that include the Bank Secrecy Acf, borrowers cannot be forced to give information; on the other hand, the proposed Act could mandate lenders to give credit information on Essentially, he said, it would be up to the a lender to et the borrower apply for credit regardless of the amount.
borro+t
At this juncture, Senator Recto inquired if the borrower has the right to have his information withheld. In response, Senator Osmefia stated that a borrower is required to supply certain ,credit information to his would-be lender; and, under the bill, he is also required to sign a waiver. That borrower's information, he said, is giveu to the CIBI which cannot give it to any other person but to an accessing entity. He said that people are able to borrow several times because banks were unaware of hbw much he borrowed from the others.
To the observation that his proposal would

make matters worse, Senator Recto disagreed. He believed that the bill mandating lending institutions to share information with other banks sliould also consider the rights of individual borrowers. Senator Osmefia said that he would leave the matter to Senator Angara, the principal sponsor. The Chair stated that Senator Recto wouldpropose his amendment at the proper time. Senator Pimentel conceded that private borrowers might not want their credit standing to be divulged unnecessarily. But he pointed out that his concern was on the LGUs that would pay their loans with people's money. The Chair suggested that Senator Pimentel, in consultation with Senator Angara, might insert the phrase INCLUDING LOCAL GOVERNMENT
To Senator Recto's contention that the banks would not be willing to lend the person unless they have information about him, Senator Osinefia stressed that only basic or raw data - the borrower's address, the amo nt of loan from other banks, etc. - shall be given to the CIBI.
On whether the borrower could request the lending bqnk to withhold the information he provided, Senator Gsmefia stated that the idea of establishing the Central Credit Information Corporation and the Credit Infbrination System is'to widen the information on the basic credit data hade of the borrower.
0 1 1 the assumption that a borrower might not want the bank to share inforhation on his loan with
4 "
1282
MONDAY, JUNE 5,2006
UNITS in the definition of borrowers on page 2 of the hill. Senator Pimentel agreed to introduce the amendment at the proper time. SUSPENSION O F CONSIDERATION O F SENATE BILL NO. 1936 Upon motion of Senator Flavier, there being no objection, the Body suspended consideration of the bill. REMARKS OF THE CHAIR The Chair directed the Secretariat to prepare a new version of the bill, containing the approved amendments .of Senator Osmefia, which would be used as the working draft in the next days session. MANIFESTATION O F SENATOR FLAVIER Senator Flavier stated that Senators Arroyo and Lacson had expr{d$ed the desire to introduce their individual amendments. COMMITTEE REPORT NO. 72, O N SENATE BILL NO. 2254 (Continuation) Upon motion of Senator Flavier,, there being no objection, the Body resumed consideration, on Second Reading, of Senate Bill No. 2254 (Committee Report No. 72), entitled AN ACT ABOLISHING THE DEATH I PENALTY. Senator Flavier stated that the parliamentary status was still the period of interpellations. SUSPENSION OF SESSION Upon motion pf Senator Flavier, the session was suspended.
present at the hall as he was attending the bicameral conference on the national budget. SUSPENSION OF CONSIDERATION OF SENATE BILL NO. 2254 Upon motion of Senator Flavier, there being no objection, the Body suspended consideration of the bill. SUSPENSION OF SESSION Upon motion of Senator Flavier, the session was suspended.
It was 6:48 p.m,
~~
RESUMPTION OF SESSION At 6:49 p.m., the session was resumed. REFERENCE O F BUSINESS (Continuation) The Secretary of the Senate read the following matters and the Chair made the corresponding referrals: House Bill No. 5266, entitled
AN ACT ESTABLISING A S P E ~ I A L
. ECONOMIC ZONE AND FREEPORT IN THE ISLAND GARDEN CITY OF SAMAL, PROVINCE OF DAVAO DEL NORTE, CREATING FOR THIS PURPOSE THE SAMAL ISLAND SPECIAL ECONOMIC ZONE AND FREEPORT AUTHORITY, APPROPRIATING FUNDS THEREFOR AND FOR OTHER PURPOSES
To the Committees on Economic Affairs;
Local Government; Ways and Means; aiid Finance

House Bill No. 5284, entitled
It was 6:47 p.m.

RESUMPTION bF SESSION At 6:47 p.m.,
AN ACT TO PROMOTE AND GOVERN THE DEVELOPMENT OF VOICE OVER INTERNET PROTOCOL IN THE PHILIPPJNES
To the Committee on Public Services House Bill No. 5305, entitled
p session was rehmed.
Upon resumption, Senator Flavier stated that Senator Ejercito, Estrada (J), who had made reservation to interpellate on the measure, could not he
AN ACT CREATING TWO ADDITIONAL REGIONAL TRIAL COURT BRANCHES
Alf
MONDAY, JUNE 5,2006
1283 AGRICULTURE INTO A STATE UNIVERSITY TO BE KNOWN AS T H LEYTE STATE UNIVERSITY, APPROPRIATNG FUNDS THEREFOR AND FOR OTHER PURPOSES
IN THE PROVINCE OF LEYTE TO BE STATIONED IN THE CITY OF TACLOBAN, AMENDING FOR THE PURPOSE SECTON 14, PARAGRAPH (1) OF BATAS PAMBANSA BILANG 129, OTHERWISE KNOWN AS THE JUDICIARY REORGANIZATION ACT OF 1980, AS AMENDED, AND APPROPRIATING FUNS THEREFOR
To the Committee on Education Arts and Culture

House Bill No. 5334, eniitled
To the Committees on Justice and Human Rights; and Finance

House Bill No. 5318, entitled AN ACT DECLARING THE SAMAR ISLAND NATURAL PARK (SINP), SITUATED IN THE PROVINCES OF SAMAR, NORTHERN SAMAR AND EASTERN SAMAR, AS A PROTECTED AREA AND ITS PERIPHERAL AREAS AS BUFFER ZONE, PROVIDING FOR ITS MANAGEMENT AND FOR OTHER PURPOSES
AN ACT CONVERTNG THE SULU STATE COLLEGE IN THE MUNICIPALITY OF JOLO, PROVINCE OF SULU INTO A STATE UNIVERSITY TO BE KNOWN AS THE SULU STATE UNlVERSITY AND APPROPRIATING FUNDS THEREFOR
the Committees on Education, Arts and Culture; and Finance

Hou~y Bill No. 5354, entitled
phr ACT SEPARATING THE SECONDARY

PROGRAMS OF THE NORTHERN MNDANAO SCHOOL OF FISHERIES IN T H E MUNICIPALITY OF B U E N A V I S T A , P R O V I N C E OF AGUSAN DEL NORTE INTO AN INDEPENDENT NATIONAL HIGH SCHOOL TO BE KNOWN AS T H BUENAVISTA NATIONAL HIGH SCHOOL AND APPROPRIATING FUNDS THEREFOR
8
To the Committees on Environment and Natural Resources; and Finance

House Bill No. 5319, entitled AN ACT DECLARING THE BALINSASAYAO TWIN LAKES LOCATED IN THE MUNICIPALITIES OF SIBULAN AND SAN JOSE, PROVINCE OF N E G R O S ORIENTAL AS A PROTECTED AREA UNDER THE CATEGORY OF NATURAL PARK AND FOR OTHER PURPOSES
To the Committee; on Education, Arts and Culture; and Finance

House Bill No. 5357, entitled
To the Committees on Environment and Natural Resources; and Finance

House Bill No. 5330, entitled A N A C T RENAMING T H E L E Y T E STATE UNIVERSITY IN BARANGAY PANGASUGAN, MUNICIPALITY OF BAYBAY, PROVDJCE OF LEYTE AS THE VISAYAS STATE UNIVERSITY, AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 9158, ENTlTLED AN A C T CONVERTING T H E VISAYAS STATE COLLEGE O F
AN ACT REGULATING THE PRACTICE OF ENVIRONMENT PLANNING, REPEALING FOR THE PURPOSE PRESIDENTLLV, DECREE NUME3ERED O& T H O U S h THREE HUNDRED A N D EIGHT, ENTITLED LAW REGmATDIG THE ENVIROIWNTAL PLANNING PROFESSION IN THE PHILIPP1NESI AND FOR OTHER PURPOSES
To the Committees on Civil Service and Gdvernment Reorganiaation; and Finance
&
1284
MONDAY, JUNE 5,2006
House Bill No. 5371, entitled AN A C T DECLARING CERTAIN PARCELS OF LAND OF THE PUBLIC DOMAIN WITHIN SMALL ISLANDS AS AGRICULTURAL LAND OPEN TO DISPOSITION FOR COMMERCIAL ECO-TOURISM AND OTHER PRODUCTIVE PURPOSES
and Memorandum No. M-2006-001 dated May 11, 2006
To the Committee on Banks, Financial Institutions and Currencies SUSPENSION OF SESSION

With the permission of the Body, the Chair suspended the session.
To the Committees on Environment and Natural Resources; and Tourism

and House Bill No. 5401, entitled AN ACT FURTHER AMENDING THE FRANCHISE OF ANGELES ELECTRIC CORPORATION GRANTED UNDER REPUBLJC ACT NO. 2341, AS AMENDED, T O CONSTRUCT, OPERATE AND MAINTAIN A DISTRIBUTION SYSTEM FOR THE CONVEYANCE OF ELECTRIC POWER T O THE END-USERS IN THE CITY OF ANGELES, PROVINCE OF PAMPANGA AND RENEWING/ EXTENDING THE TERM OF THE FRANCHISE TO ANOTHER TWENTYFIVE (25) YEARS FROM THE DATE OE-APPROVAL OF THIS ACT
It was 6:54 p m .
At 6 5 4 p.m., the session was resumed.
ADDITIONAL REFERENCE OF BUSINESS

The Secretary of the Senate read the following matters and (the Chair made the corresponding referrals:
I
COMMITTEE REPORTS
Committee Rkdort No. 76, prepared and submitted jointly by the Committees on Ways and Means; and Government Corporations and Public Enterprises, on Senate Bill No. 2259 with Senators Recto and Gordon as authors thereof, entitled AN ACT DECLARING A ONE-TIME AMNESTY ON CERTAIN' TAX AND DUTY LIABILITIES, INCLUSIVE OF FEES, FlNES, PENALTIES, INTERESTS OTHER ADDITIONS' THERETO, INCURRED BY CERTAIN BUSINESS ENTERPRISES OPERATING WITHIN THE SPECIAL ECONOMIC ZONES AND FREEPORTS CREATED UNDER EXECUTIVE ORDER NO. 80, SERIES OF 1993; PROCLAMATiON NO. 216, SERIES OF 1993; PROCLAMATION NO. 420, SERIES O F 1994; AND PROqLAMATION NO. 984, SERIES OF 1997, PURSUANT TO SECTION 15 OF REPUBLIC ACT hr0. 1227, AS AMENDED, AND F O R O T H E R PURPYSES, ,. recommencting its approval ,in substitution of House Bill,No. 4900. Sponsors: Senators Recto and Gordon
To the Committee on Public Services COMMUNICATIONS

Letter from Assistant Governor and General Counsel Juan De Zufiiga Jr. of the Bangko Sentral ng Pilipinas,furnishing the Senate three (3) copies of the BSP Circular No. 527, series of 2006, dated April 28, 2006, in compliance with Section 3, Chapter 11, Book VI1 of the Administrative Code of 1987.
To the Committee on Banks, Financial Institutions arid Currencies

Letter from Assistant Governor and General Couusel Juan De ZuRiga Jr. of the Bangko Sentral ng Pilipinas, furnishing the Senate certified copies of the following compliance with Section 1S (a) of Republic Act No. 7653 (The New Central Bank Act': BSP Circular Nos. 528, 529, 530 and 531, Series of 2006, dated May 3, 11, and 17, 2006, respectively;
To the,i@alendar for Ordidary Business
1285
Committee Report No. 77, prepared and submitted jointly by the Committees on Ways and Means; and Government Corporations and Public Enterprises, on Senate Bill No. 2260 with Senators Recto and Gordon as authors thereof, entitled AN ACT AMENDTNG.REPUBLIC ACT NO. 7227, AS AMENDED, O'II-IERWISE KNOWN AS THE BASES CONVERSION AND DEVELOPMENT ACT OF 1992; AND FOR OTHER PURPOSES, recommending its approval in substitution of House Bill No. 5064. Sponsors: Senators Recto and Gordon
SPECIAL ORDERS
Upon motion of Senator Flavier, there being no objection, the Body approved the transfer of the following matters to the Calendar for Special Orders:
1. 2.
3.
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Committee Report No. 76 on Senate Bill No. 2259; Committee Report No. 77 on Senate Bill No. 2260; and Commitlee Report No. 78 on Senate Bill No. 2261
COMMITTEE REPORT NO. 78 ON SENATE BILL NO. 2261

Upon motion of Senator Flavier, there being no objection, the Body considered, on Second Reading, Senate Bill No. (Committee Report No. 78), entitled AN ACT AMENDING SECTIONS 24, 3 1, 34,35 AND 110 OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED, AND FOR OTHER PURPOSES. Pursuant to Section 67, Rule XXIII of the Rules of the Senate, with the permission of the Body, upon motion of Senator Flavier, only the title ofthe bill was read without prejudice to the insertion of its full text into the Record of the Senate. The Chair recognized Senator Recto for the sponsorship.
To the Calendar for Ordinary Business

Committee Report No. 78, prepared and submitted by the Committee on Ways and Means, on Senate Bill No. 2261 with Senators Flavier Luisa "Loi" P. Ejercito Estrada, Serge Osmeiia, Manny Villar, Jiiiggoy Ejercito Estrada, Enrile, Recto, Biazon and M. A. Madrigal as authors thereof, entitled
AN ACT AMENDING SECTIONS 2 4 , 3 1, 34, 35 AND 110 OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED, AND FOR OTHER PURPOSES,
recommending its approval in substitution of House Bill No. 5296, taking into consideration Senate Bill Nos. 5, 72, 74, 446, 447, 794, 795, 879, 9 8 5 , 1197, 1198, 1320, 1339, 1577, 1917, 2038 and 2210.
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SPONSORSF SPEECH OF SENATOR RECTO

In sponsoring Senate Bill No. 2261, Senator Recto, delivered the following speech:
The nieasures I am about to sponsor will bring the Senate to a full circle on the issue of the Clark Air Base.
Sponsor: Senator Recto
To the Calendar for Ordinary BuXiness SUSPENSION OF SESSION

With the permission of the Body, the Chair suspeuded the session.
In 1991, the Senate voted to evict our American tenant out of Clark. Who would have thought th+t 15 years later, we will be asked to vote on two bills so its present occupants could stay? The call then was for a foreign military to go away. This time it is for civilian entrepteneurs t o stay. I In this'historiic vote of '91, the Senate then mustered will to right a wrong and to prove a point, the same challenges that these two meawes pose before the Senate
It was 6:56 p.m.

At 6:56 p,m., the session was resumed.
1286 Events later proved that the Senate was prescient in its belief that the military facility can be converted for peaceful civilian use. From staging ground for war overseas, Clark and Subic soon became a launching pad for many businesses. The U S . militarys hub and tripwire in the Pacific was transformed into a beehive of commercial activities. Clarks great leap fonvard from a base ofioiir insecurity to a bastion of economic growth started when 12 men from this Chamber took the brave step of saying no to easy rent, and yes to trust in the Filipinos ability to make an industrial park out of Clark instead of being just a parking space for jets. But the Senates thriving legacy is in danger of vanishing. What Pinatubo failed to do, that is, to obliterate Clark from the face of the earth, men may soon succeed at.
Pinatubo left Clark desolate. A recent judicial decision, however, now leaves it desperate. As in the past, when the Senates interventibn allowed it to rise from the ashes, we are summoned by the people of Central Luzon to ward off the cloud of doubt which makes Clarks continued existence as an economic zone uncertain.
MONDAY, JUNE 5,2006 To lure investors to the former baselands, at a time when only the gray slieet of volcanic ash blanketed their landscape, the law granted generous tax incentives to would-be locators and investors. These incentives were clearly specified and attached to the Subic Special Economic Zone and Freeport which Republic Act No. 7227 also created. These fiscal perks include tax and duty-free importations and exemptions from local and national taxes. In lieu of the latter, businesses will just have to pay the equivalent of five percent of their gross income earned (GIB). Now here comes the problem. Those provisions in Section 12 of Republic Act No. 7227, while specificaiiy applying on Subic, do not explicitly apply to C&k and other economic zones proclaimed as gnch by President Ramos.
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was stipulated later in Section 15 was a provision granting t l k President the authority to create other zones., ~, President Ramos liter invoked this license to create ecozones and forthwith issued: Proclamation No. 420, creating the John Hay Special Economic Zone in Baguio City; ProclamationNo. 216, creating the Poro Point Special Economic Zone in La Union; Proclamation No. 984, creating the Morong Special Economic Zone in Bataan; and Executive Order No. 80, creating the Clark Development Corporation. The President clothed these zones with tax and duty incentives similar to those expressly granted by Republic Act No. 7227 lo Subic, but which RA 7227 did not explicitly @an; to the four. Thiscut-and-paste transference of incentives, which an army of lawyers doing due diligence work for government &d locators failed to detect, was soon ruled as illegal by tbe Supreme Cpurt.
In two cases, John Hay Peoples Alternative vs. Lim and Coconut Oib Refiners Association vs Torres, the High Court boided all tax incentives absent an express legislative grant to inve tors 8 in Clark, John Hay, Mgrong, and Poro Poiqt.
. . What
We must write a new law for Clark or others will write its obituary. Before I proceed, let me retrace the events which led us to this point where the Senate must again come to the aid of Clark and our cabalens. My narration is also a cautionary tale on how the ambiguous language of the law and the audacious interpretation by the executive, or how the haze of legislation and the haste of implementation, conspired to put investors in Clark and three other zones in^ legal limbo. Less than a year after the Americans were evicted and Pinatubo served its own notice of ejection, Congress passed a law creating the Bases Conversion and Development Authority. That law, Republic Act No. 7227, vested the BCDA with powers to convert assets of former U.S.-occupied baselands - Subic, Clark, John Hay in Baguio, Wallace Air Station in Poro Point, La Union, and the ODonnell Transmitter Station, San Miguel Naval Communications Station and Capas Relay Station in Tarlac - into alternative productive uses.
Our magistrates stressed that Republic Act No. 7227 granted incentives only to Subic and to no one else, They scoured Republic Act
MONDAY, JUNE 5,2006
1287 This hill releases them from paying the balance of 27%, or the difference between the 32% corporate tax and the 5% GIE that they had already paid. Some may bristle at the grant of amnesty but let us not forget that in the pricing of their products, these investor-locators took into Consideration their tax expenditures. The companion measure to this bill is the one granting fiscal incentives, which is Committee Report No. 77, to investor-locators in special ecozones in Clark, John Hay, Poro Point and Morong, and aligning them with some incentives granted to Subic. This cures the oversight made, and lays down an equitable system of tax incentives that is uniform to all ecozones and freeports. This bill does not only correct an error in the past but becomes a tool to draw in future investments. But before we cast a moist eye on prospective investors, let us first keep the intrepid ones who had long cast their lot with us by passing these hills. it will be foolhardy on our part to deny the fact that we need foreign investments for our economy to grow, for our people to have jobs and for our government to be benefited through their tax payments. in 1991, this-Chamber earned a niche in history by saying No to the continued stay of U S . bases. Fifteen years later, present developments, here and abroad, impose upon us the duty to say yes to the continued stay of the businesses in the baselands we had liberated from foreign control.
No, 7227 for a legal toehold which can anchor the authority of the issuing power and found none.
Because the grant of incentives by presidential fiat was void ab initio, then those who enjoyed them are obliged to pay the difference of what should be and what bas been. Perks forfeited became tax due. The investor-locators have the reason to cry foul. First, many of them were lured into plunking down their money in an area, in the case of Clark, which at that time was the landscape version of a kabuki lady. Many were China-bound hut detoured here, and thereby eschewed good infra and cheap labor, in exchange for the investment piece de resistance of the five percent gross income tax. When it comes to investments, China was and is a big sucking sound. Its siren song is alluring while our sales pitch at that time was drowned by the sound of rampaging lahar. Yet these investors decided to stick it out here, not for love of the Philippines, but based on clear-cut rules which they believed would form the steady bedrock of their business plans that span many years. Predictability, we know, is the foundation of investments. Wg, cannot put our trade policy atop judicial 01political tectonic plates that often move or collide, The rules must he constant or investors will not even give us a second look.
Or they will just pack up and head up the Yangtze River4 as some of them are planning to do in the wake of the Supreme Court decision.
But can we stop the exodus? How? By passing these two bills in order to correct an oversight and $0 formalize the new tax regime which lured them here in the first place. The first bill or Committee Report No. 76 is the grant of tax amnesty to affected investor!ocators. As ,a result of the Supreme Court decision, they are now being hilled to pay the regular corporate income tax rate of 32% at the time of the Supreme Court decision instead of 5% of gross income earned. The tax dmnesty proposed to be granted covers all applicable taxes and liabilities, including fines, penalties and interests incurred by thein or might have accrued to them due to the ruling of the Supreme Court.
SUSPENSION OF CONSIDERATION OF SENATE BILL ~, NO. 2259

. Upon motion of Senator Flavier, the Body suspended consideration of the bill.
COMMITTEE REPORT NO. 77 ON SENATE BILL NO. 2260

Upon motion or Senator Flavier, there being no objection, the Body considered, on Second Reading, Senate Bill No. 2260 (Committee Report No. 7 7 ) , entitled AN ACT AMENDING REPUBLIC ACT NO. 7227, AS AMENDED, OTH!3RWISE
1288
MONDAY, JUNE 5,2006
KNOWN AS THE BASES CONVERSION AND DEVELOPMENT ACT O F 1992, AND FOR OTHER PURPOSES. Pursuant to Section 67, Rule XXIII of the Rules of the Senate, with the permission of the Body, upon motion of Senator Flavier, only the title of the bill was read without prejudice to the insertion of its full text into the Record of the Senate. Thereupon, the Chair recognized Senator Recto for the sponsorship.
TERMINATION OF THE PERIOD OF INTERPELLAT~ONS

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There being no interpellation, upon motion of Senator Flavier, there being no objection, the Body closed the period of interpellations.
TERMINATION OF THE PERlOD OF COMMITTEE AMENDMENTS

There being no committee amendment, upon motion of Senator Flavier, there being no objection, the Body closed the period of committee amendments.
MANIFESTATION OF SENATOR RECTO

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Senator Recto said that'the sponsorship speech for Committee Report No. 76 would be adopted as the same sponsorship speech'for Committee Report No. 77.
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SUSPENSION OF SESSION
Upon motion of Senator Flavier, the session was suspended.
SUSPENSION OF CONSIDERATION OF SENATE BILL NO. ,2260

Upon motion of Senator; Flavier, there being no objection, the Body suspended consideration of the bill.
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It was 7:13 p.m.

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At 7:13 p.m., the session was resumed
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Upon motion of Senator Flavier, the session was suspended.
TERMINATION OF THE PERIOD OF INDIVIDUAL AMENDMENTS

There being no individual amendment, upon motion of Senator Flavier, there being no objection, the Body closed the period of individual amendments.
It was 7:lO p.m.

APPROVAL OF SENATE BILL NO. 1978 ON SECOND READING

Submitted to a vote and with the majority of the Members voting in favor, Senate Bill No. 1978 was approved on Second Reading.
At 7:11 p.m., the session was resumed.

COMMITTEE REPORT NO. 52 ON SENATE BILL NO. 1978 (Continuation)
Upon motion of Senator Flavier, there being no objection, the Body resumed consideration, on Second Reading, of Senate Bill No. 11978 (Committee Report No. 52), entitled AN ACT GRANTING CITIZENSHIP TO MR. CHARLES WIqLIAM MOSSER, W I T H ALL T H E RIGHTS A N D PRIVILEGES AND PREROGATIVES I APPURTENANT TfiERBTO. Senator Flavier stated that the parliamentary status was~theperiod of inkerpellations.
SUSPENSION OF CONSIDERATION OF SENATE BILL NO. 1978

Upon motion of Senator Flavier, there being no objection, the Body suspended consideration of the bill.
Upon motion of Senator Flavier, there being no objection, the Chair declared the session suspended until ten o'clock in the morning of the following day.
It was 7:14 p.m.
"P
TIJESDAY, JUNE 6,2006
12x9
At 10:40 a m . , Tuesday, June 6, the session was resumed with Senate President Pro Tempore Flavier presiding.
SPECIAL ORDER
Upon iiiotioii of Senator Paiigiliiian, there being ob.jection, the Body approved the ti-ansfer of Coininittee Report No. 7 3 on Mouse Bill No. 4937 to the Calendar for Special Orders.
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the refiled version of a similar measure in the Eleventh and Twelfth Congresses. Actually, the cityhood of Meycauayan was the subject of a plebiscite held 011 March 30, 2001, but was unfortunately defeated due to the lack of time within which to inform the people of the imperatives of cityhood. When it was again filed in the Twelfth Congress, it was already overtaken by Republic Act No. 9009, which increased the income requireinent for cities from P20 million to PlO0 million. At that time, the income of Mcycauayan was a little below the threshold. Undaunted by these setbacks, the people of Meycauayan waited patiently and worked hard to prove that their beloved town deserves the title atid privileges of cityhood, not only by legal fiat. Interestingly, Meycauayan traces its roots in 1578 when it developed from being a settlement area 01 Catholic priests in tlie Franciscan Order into one of the largest municipalities iii the whole of Bulacan comprising the then sitios of San Jose del Monte, Bocaue, Valenzucla, Obando, Marilao, Sta. Maria and Pandi. Although not the capital of tlie Province of Bulacai, Meycauayan has become the unofficial center of the province because of the economic and social activities in the area largely brought about by its location right at the boundary of Metropolitan Manila, via the cities of Caloocaii and Valenzuela. Meycauayan has been very efCective in its role as the veritable gateway lo the Province of Bulacan and North Luzon.
As il is, Meycauayan lui-es into its territory people who want productivity afforded by urban centers and quietude and serenity typical in a provincial setting. This is made possible by the balanced land use distribution in the area - 39% residential; 32% commercial-iiidustrialinstitutional; and 28% agricultural-fishery.
c o M M r r m E REPORT NO. 73 ON ROUSE BILL NO. 4937

Upon motion of Senator Pangiliiian, there being no objection, the Body considered, oii Second Reading, I-louse Bill No. 4937 (Committee Report No. 7 3 ) , entitled A N ACT CONVERT[NG THE MUNICIPALITY OF MEYCAUAYAN IN THE PROVlNCE O F BULACAN INTO A COMPONENT CITY TO BE ICNOWN AS n r E CITY OF MEYCAUAYAN. Pursuaiit to Section 67, Rule XXlIl o f the Rules of tlie Senate, with the permission oftlie Body, upon iiiotioii of Senator Pangilinan, only the title ofthe bill was read without prejudice lo tlie iiisertioii of its full text iiito the Record of thc Senate. The Chair recognized Senator Lini for the spoiisorsliip.
SPONSORSHIP SPEECU OF SENATOR LBM

In sponsoring l-louse Bill No. 4937, Senator Lim, delivered tlie following speech: It is with greal pleasure that we sponsor Committee Repoil No. 73 and we submit this foiconsideration concerning House Bill No. 4937, authored by Representatives Reylina Neneng Nicolas, Wilhelmino Sy-Alvarado, Eduardo Roquei-o, and Ernesto Pablo. This Repoi-t contains tlie I-ecornrneiidation of your Coinmittee on L.ocal Government to coiivert the Municipality of Meycauayaii into a coinpoiieiit city i n the Province of Bulacan. There is a saying that no one can put a good mail down. So it is with a laudable and well-meaning proposal. House Bill No. 4937 is
Without doubt, Meycauayan has developed into a rast progressing district in Bulacan, meriting the title Jewel in the Province. For after all, the fine jewelry industry that thrives in Meycauayan makes every Filipino proud of the kind of craftsmen we have come to be known throughout the world - classy and dedicalcd. For all intents and purposes, House Bill No. 4937 conforms to the requirements for the creation of a ,coinpanen1 city as prescribed in Sections 449 and 450 of the Local Government Code, as amended by Republic Act No. 9009.
As such, the proposed City of Mcycauayan has a registered income of P l l 0 million and P112.4 million for 2002 and 2003, respectively, or an averige annual income ofover pi00 iniilion
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1290 based on 2000 constanl prices. These amoutits are purely locally generaied incomes, and do not include the share of lhe proposed city from the interiial revenue allotment for local government units. The populatioii of the proposed cily of Meycauayan is also above the minimum threshold of at least 150,000 irhahilants. Based on the latest official census, its population stood a1 163,037.
In lernis of tei-ritory, the proposed city will
TUESDAY, JUNE 6, 2006
COMMITTEE REPORT NO. 79 ON HOUSE BlLL NO. 4899

Upon motion of Senator. Pangilinan, tlrere being no objection, the Body considered, on Second Reading, House Bill No. 4899 (Committee Report No. 79), entitled A N A C T TO INCLUDE CERTAIN PARCEL 01; J,ANDS ACQUIRED BY ACCRETION AS PART OF THE TERRITORIAL JURlSDICTION OF THE CITY OF SIPALAY, AMENDING FOR TME PURPOSE SECTION 2 OF REPBULK ACT NO. 9027, ENTITLED AN ACT CONVERTING THE MUNICIPALlTY OF SIPALAY, PROVINCE OF N E G R O S OCCID E N T A L INTO A C O M P O N E N T CITY TO BE KNOWN AS THE CITY OF SIPALAY. Pursuant to Section 67, Rule XXIII of the Rule olthe Scnate, with the permission of the Body, upon motion of Senator Pangilinan, only the title oE the bill was read without prejudice to the iusertioii of its full text into the Record of the Senate.
have a contiguous, compact and adjaccnt land area measuring 3,210 IiccLaxes, or 32.10 square kilometers. While the size is lower than the threshold of ai least 10,000 hectai-es or 100 square kilometers, it is no longer includcd among the requirements because the proposed city lias already tnet the income and population thrcsholds. The Local Government Code allows compliance either of the population or the territorial requircment.
The proposcd creation of tho City of Meycauayan now has the overwhelming support of tlie provincial government under tlic leadersliip of Governor JoseTina dela Cruz, and as expected, by the City Covermneiit of Meycauayan with Mayor Ednardo Alarilla at the helm. The president or the Lign ng mgu Barangay of Mcycauayan also attended the public hearing and llaced on record the support OF his organization to the immediate conversion of Mcycduayan into a component city,
1 .join my kubnbayun from Meycauayan in the Province of Bulacan in appealing io my colleagues in this Chamber for the passage of Housc Bill No. 4937. 1 strongly believe tlial this proposed city that contributes much to the development efforts or the country deserves a fair share of suppost and encouragement from tlie government. Its conversion into a city is one big slep towards greater economic and social developnicnt, not only io tlie people OS the proposed city, but in tlie neighboring areas as well.
The Chair recognized Senator Liin lor the sponsorship.

ACKNOWLEDGMENT OF THE PIIESENCE OF GUESTS
At this juncture, Senator Lim acknowledged the presence of the delegation from Sipalay City headed by Mayor Oscar Montilla, Jr. and other oFficials.
SPONSORSHIP SPEECI3, OF SENATOR LIM
SUSPENSlON OF CONSIDERATION OF HOUSE. BlLL NO, 4937

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In sponsoring House Bill No. 4399, Senator Lim, delivered the falollowing speech:
I~have the honor to &hmit to the^ Senale Conimitiee Repott No. 79 on House Bill No. 4899, authored by Rep. Genaro Alvarez I11 of the 6 Dislricl of lhc Province of Negros Occidental. This measure sceks to redefine the tcrritory of the City of Sipalay in ordcr to include in its jurisdiction parcels of land that have devcloped by reason uf accretion at the hay of the Sulu Sea stretching from the Sipalay River to tlie North and Pam-on River to the South. The new land surfaces measure 46.698 hectares or a little less than half a square kilometer.
Upon niolion of Senator Pangilinan, there being no objection, the Body suspended consideration of the bill.
SPECIAL ORDER
Upon motion o l Senator Pangilinan, there being ob.jection, the Body approved the transfcr of Commiltee Report No. 79 on House Bill No. 4899 to the Calendar for Special Orders.
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TUESDAY, JUNE 6,2006
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This measure, if approved, would enable the city to acquire ownership or legal title over the additional territory and develop the same for the benefit of the people of the city and the Province of Negros Occidental. Given the opportunity, the grant o f legal rights to the City of Sipalay over thc land growths would pave the way for further development of ideal and balanced communities in the three traversing baiangays. As part of its development plan for the area, spaces are rescrvcd for housing projects, institutional offices and schools, market and commercial buildings, plaza and open spaces for a baywalk intended to rev up tourism industry in the City. The land growth is withiii the exclusive land territory and mimicipal waters of the City of Sipalay. There is no overlap whatsoever with any other city or municipality. The people of the City of Sipalay, its officials under the leadership of Mayor Oscar Montilla Jr., including all the members of the Liga ng mga Barangay-Sipalay Chapter, are i n full support of I-rouse Bill No. 4899. I associate with them i n their worthy cause and appealing to my colleagues for the approval of this non-controversial measure.
TERMINATION OF THE PERlOD OF AMENDMENTS

There being no committee or individual amendment, upon motion of Senator Pangilinan, there being no objection, the Body closed the period of amendments.
APPROVAL OF HOUSE BILL NO. 4899 ON SECOND READING

Submitted to a vote, there being no objection, House Bill No. 4899 was approved on Second Reading.
SUSPENSION OF C O N $ ~ D E ~ ~ A T ~ O N OF HOUSE BILE NO. 4899

Upon motion of Senator Pangilinan, there being no objection, the Body suspended consideration of the bill.
SUSPENSION OF SESSIBIV Upoii motion of Senator Pangilinan, the session was suspended. I t was 11:OO a.m.
RESUMPTBON OF SESSION
At 11:Ol ani., the session was resuined
llpon inolioii of Senator Pangilinan, the session was suspended. It was 10:53 a.m.
At 1056 am., the session was resumed.
COMMITTEE REPORT NO. 73 ON HOUSE BILL NO. 4937 (Continuation)

Upon motion of Senator Pangilinan, there being no objection, the Body resumed consideration, on Second Reading, of I-louse Bill No. 4937 (Committee Report No. 73), entitled AN ACT CONVERTING THE MUNICIPALITY OF MEYCAUAYAN IN THE PROVINCE OF BULACAN imo A COMPONENT CITY TO RE KNOWN AS THE CITY OF MEYCAUAYAN. Senator Pangilinan stated that tlic parliamcntary status was still the period of interpellations. Thereupon, the Chair recognized Senator Lim, Sponsor of the measure, and Senate Presideut Drilon for his interpellation.
Upon motion o f Senator Pangilinaii, the session was suspended.
It was 10:57 a.m.
RESUMPTION OP SESSION
At 10:58 a.m., the session was resumed.
TERMINATION OF THE PERIOD OF INTERPELLATIONS

There being no interpellation, upon motion OF Senator Pangilinan, there being no objection, the Body closed the period of interpellations.
129:L
INTERPELLATION OF SENATE PRESIDENT DRILON

At the outset, Senate President Drilon expressed his full support for the bill but he indicated his desire to inquire into ccrtain basic requirements, which he assumed liad been complied with, before the Body acted favorably 011 tlie measure. Replying to Senate President Drilons queries, Senator Lim informed the Body that Meycauayaii has a population of 163,037, based on the May 20, 2000 ceiisns which is more than what the law requires a populatioii of 150,000 for a municipality to be converted into a city. He said that Meycauayan has an area of 3,210 hectares or 32.10 square kilometers which is lower than the tliresholcl of at least 10,000 hectares or 100 square kilometers. But lie clarified that the law allows compliance with either the population requilement or the territorial requirement.
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Upon motion of Seuator Pangilinan, the session was suspended.
It was 11:09 a.m.

RWUMPTION OF SESSION
At 11:13 a m . , the session was resumed Upon resumption, Senator Pangilinan stated that he was trying to contact Senator Piinentel to get his comments on the bill.
SUSPENSION OF CONSIDERATION OF HOUSE BILL NO. 4937

Upon motion of Senator Iangilinan, there being no objection, the Body suspended consideratioii of the bill.
As to the iiicoine of tlie municipality, Senator Lim reported that Meycauayaii registered an income of PI 10 million in 2002 and PI 12.4 million in 2003, excluding the interual revenue allotment. He surmised that the incomes for 2004 and 2005 would be much higher than those of the previous years. He stated that the Local Government Code requires a minimum annual income of PI00 million before a municipality can become a city. He confirmed that as a component city, Meycaiiayan can still vote for officials of the provincial government. Rut he clarified that the province of Bulacan would no longcr share in the locally generated taxes such as rcal estate taxes which would be retained by the city for its exclusive use. On the matter of taxes, Senator Liin said that
ARCHIVAL OF HOUSE CONCURRENT RESOLUTION NO. 20

Relative to Committee Report No. 32 on House Concurrent Resolution No. 20 approving the transfer/ sale of all shares of stock of Meridian Teleltonis to Smart Communications, Senator Arroyo recalled that the parliamentary status was the period of interpellations, and tlie last discussion took place on March 20, 2006. He informed the Body that the proponents Mcridiaii and Smart bad sent a letter to Rcpresenlative Zribiri, chairman of the House Commitlee on Legislative Franchises, stating that after a review of the law, they felt that. congressional approval W R S not necessary to validate the transfer of Meridians controlling interest to Smart pursuant to Sectioii 23, on Equality of Treatment, of Republic Act No. 7925, tlie Public Telecommunications Act, and Section 15, on the sale/lease/transfer/usufruct, of Rep ti bl ic A c t Nos. 8334 a n d .8348. He said that the^ Legal Department of tlie House of Representatives coilcurred with the position of the two teleconmuiiications coiiipanies that congressional approval is not necessary for tlie transfer. Since the House has original jurisdiction on franchises and the Senate simply concurs, be moved that tlie matterbe archived.
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as provided for by law, the city would declare a moratorium on the increase of taxes for five years from the date of its conversion.
Senate Presidenl Diilon expressed the view that Senator Pimeutels reservations on the proposed citys compliance with the requirements of the law liad been convincingly addressed. Based on Senator Lims answers, he believed that indeed the municipality of Meycauayan would have all the attributes and qualifications to become a component city b f Bulacaii.
There being no objection, the motion was approved.
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Upon motion of Senator Pangilinan, there being 110 objection, the Body resumed consideration, on Second Reading, of Mouse Bill No. 2478 (Committee Report No. 47), entitled A N A C T GRANlING WE RADIO MARIA FOUNDATION, INC. A FRANCHISE T O CONSTRUCT, INSTALL,, ESTABLISH, OPERATE AND MAINTAIN FOR RELIGIOUS AND NON-COMMERCIAL IUIWOSES RAD10 BROADCASTING STATIONS IN THE PHIL3PINES. Senator Pangilinan stated that the parliamentary status was tlie period of committee amendments. Thereupon, ills Chair recognized Senator Arroyo, Sponsor of the measure.
9.
On the same page, line 6, after the word speech, delete the comma (,) and the phrase play, act or scene,;
10. On the same page, line 20, replace the caption Nuntransferabilz~ ofFranchise with SALE,
LEASE, TRANSFER, USUFRUCT, ETC.
Upon motion o f Senator Arroyo, the session was suspended. Jt was 11:21 a.m
RESUlMPTIOW OF SESSION
At 11:22 a.m., thc session was resumed.
11. On page 6, line 5 , after the word entity,
COMMITTEE AMENDMENTS
insert the following: WITHOUT THE PRIOR APPROVAL OF THE CONGRESS OF THE PHILIPPINES, ANY PERSON OR ENTITY TO WHICH THIS FRANCHISE IS SOLD, TRANSFERRED OR ASSIGNED SHALL BE SUBJECT TO THE SAME CONDITIONS, TERMS, RESTRICTIONS AND LIMITATIONS OF THIS ACT.
As proposed by Senator Arroyo, there being no objection, ihe Body approved thc following amendments, one alter the other:
1.
TERMINATION OF TEE PERIOD OF COMMITTEE AMENDMENTS

There being no other committee amendmeni, upon motion of Senator Pangilinan, there being no objection, tlie Body closcd the period of coininittce amendinenls.
On page 1 , line 7, alter the word frequencies, delete the phrase andlor channels;
2.
On the same page and line, after the word iadio, delete the words and/or televisioii;
3.
On page 2, line I, aFter tlie preposition in, deletc the words television and;
On the same page, line 18, after the word
SUSPENSION OF CONSTDERATIQN OF HOUSE BILL NO. 2478

Upon motion of Senator Pangilinan, there being no objection, the Body suspended consideration of the bill.
4. 5.
radio, delete /television;

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On page 3, line 7, after the word language, delete tlic comnia (,) and in lieu thereof, insert lhe word OR; On the same page and h c , delete the phrase act or scene,; On page 4 , line 4, between the words for and term, iiisert the article A;
Upon niotioii or Senator Pangilinan, the session was suspended.
6.
7.
It wus 11:23 am.

At 1124 a m . , the session was resumed
8.
On page 5, line 4, after the word speech, delete the coiiiina (J atid the phrase play, act or scene,;
1294
SECOND ADDITIONAL REFERENCE OF BUSINESS

T h e Deputy Secretary for Legislation read the following message from the H o u s e o f Representatives which the Chair referred to the Committee on Rules: Letter from the Secretary General of the House of Representatives, informing the Senate that on June 5, 2006, the House of Representatives agreed to a conference and designated Representatives Salceda, Nograles, Sandoval 11, Barbers, Macarambon Jr., De Guzman, Laginan, Veloso, Gullas, Talifio-Santos, Remulla J.C., Figueroa, Singson, Cua, Abayon, Roces, Mitra, Villafuerte, Sumulong, Miranda, Garcia, Duavit, Cojuaiigco, Joson, Lapus, Cagas and Villarosa, on the paii of the Majority, and Representatives Escudero, Antonino-Custodio, Marcos, Crisologo, Zarnora, Suplico, Magtubo, Angara (alternate), Malapitan (alternate) and Asistio (alternate), on the part of the Minority, as its conferees to the Bicameral Conference Committee 011 the disagreeing votes on House Rill No. 4710, entitled AN A C T APPROPRIATING F U N D S F O R T H E OPERATION OF T H E GOVERNMENT OF THE REPUBLIC OF T H E PHILIPPINES F R O M JANUARY O N E T O DECEMBER THIRTY-ONE, T W O THOUSAND SIX, AND FOR OTHER PURPOSES.
At l l : 3 S am., the session was resumed

Upon motion of Senator Pangilinan, there being no objection, thc Body resumed consideration, on Second Reading, of House Bill No. 4937 (Committee Report No. 73), entitled AN ACT CONVERTING THE MUNICIPALITY OF MEYCAUAYAN IN THE PROVINCE OF BULACAN INTO A COMPONENT CITY TO BE KNOWN AS 1HE CITY OF MEYCAUAYAN. Senator Pangilinan stated that tlie parliamentary status was the period of interpellations. The Chair recognized Senator L h , Sponsor of the measure, who acknowledged the presence of Rep. Key liiia Neneng Nicolas, a coauthor of the bill in the House of Representatives.
TERMINATION OF TIIE PERIOD OF INTERPELLATIONS

There being no fiirlher interpellation, upon motion of Senator Pangilinan, there being no objection, the Body closed tlic period of interpellalions and proceeded to the period of committee amendments.
MANIFESTATION OF SENATOR PANGILINAN

Senator Paiigilinan acknowledged receipt of a letter from Senator Defensor Smtiago informing him that she would be on sick leave until the end of the week. Ile said that Senator Angara has graciously agreed to take over the sponsorship of Senate Bill No. 2226 (Biofuels Act of 2006).
COMMITTEE AMENDMENTS
As proposed by Senator Lim, there being 110 objection, tlie Body approved the following amendments, one after tlie other:
1.
senator^ Pangilinan also manifested A a t ~ the only rcinaining reservation for interpellation was that of Senator Roxas who had been provided by Senator Defensor Santiago all the requested iiiformation/dociinieiits.
~ ~
On page 4, line 12, between the words The and C~ily, insert the phrase SANGGUNIANG PANLUNGSOD OF TI-LE, On page 21, line 14, between the words Education and uird, insert the phrase OR THE TECHNICAL EDUCATION AND SKILLS DEVELOPMENT AUTI-IORITY; On page 25, lines 1 and 2, delete the phrase and twice a month for the sangguniang barangay; On page 29, line 19, change the word two to FIVE,
2.
SUSPENSION OF SESSlON llpon motion of Senator Pangilinan, the session was suspended.
3.
4.
It was 11.28 a.m.
TIJESDAY, JUNE 6,2006
1295
CAREERDEVELOPMENT AND upr-rom THE MERlT PRINCIPLE IN THE LOCAL GOVERNMENTSERVICE, AND
On page 30, line 5 , change the word office to OFFICES; On the same page, ainend Section 23 to read as foilows: SEC. 23. Permanent Vacancy in the Offlees o J the Cily Mayor and City Vice Mayor. - (a) If a permanent vacancy occurs in the office of the city mayor, the city vice mayor cowerned shall become the city mayor. If a permanent vacancy occurs in the office
of the city vice mayor, the highest ranking sangguniang panlungsod inember or, in case of his permaneut incapacity, the second
6.
(111) CONDUCT A CONTINUING ORGANIZATIONAL DEVELOPMENT OF THE CITY OF MEYCAUAYAN WITH THE END IN VIEW OF INSTITUTING EFFECTIVE ADMINISTRATIVE REFORMS;
11. Renumber the succeeding paragraphs
accordingly; 12. On page 47, line 9, after the word appointment and the period (.), inseri the senleiice THE TERM OF T J ~ E CrrY LEGAL OFFICER SHALL BE COTERMINOUS WITH THAT OF HIS APPOINTING AUTHORITY;
13. On the sane pagc, between lines 22 and 23,
highest ranking sangguniang panlutigsod member shall become the city vice mayor. I F PERMANENT VACANCIES OCCUR IN BOTH TI-IE OFFICES OF THE CITY MAYOR AND TI-IE CITY VICE MAYOR, TI-IE FIRST AND, SECOND HIGHEST RANKING SANGGUNIANG PANLUNGSOD MEMBERS, OR IN CASE OF PERMANENT INCAPACITY OF ONE OR BOTH OF THEM, TFIE NEXT I-IIGIIEST RANKING SANGGUNIANG PANLUNGSOD MEMBER OR MEMBERS SHALL BECOME TI-IE CITY MAYOR AND CITY VICE MAYOR, RESPECTIVELY. Subsequent vacancies in said offices shall be filled aulotnatically by the other sanggunian nietnbcrs according to their ranking as defined herein.
7.
insei-t the following paragraphs:

(3) IN ADDITiON TO THE FOREGOING
DUTIES AND FUNCTIONS, THE CITY LEGAL OFFICER sr-IALL:

(I) REPRESENT THE CITY OF MEYCAUAYAN IN ALL CIVIL ACTIONS AND SPECIAL PROCEEDINGSWHEREIN THE CITY OR ANY OF ITS OFFICIAL, IN 111s OFFICIAL CAPACITY, IS A PARTY: PROVIDED, TIHAT IN ACTIONS OR PROCEEDlNGS WHERE THE CITY IS A PARTY ADVERSE TO THE PROVINCIAL GOVERNMENT OR TO ANOTHER COMPONENT CITY OR MUNICIPALITY, A SPECIAI, LEGAL OFFICER MAY BE EMPLOYED TO REPRESENT TI-lE ADVERSE PARTY,
On page 35, line 20, change the word may t o SHALL; On page 40, line 12, change lhe word City LO BARANGAYS;
On page 43, line 22, change the word
8.
9.
advises Lo ADVISE;
IO. On page 46, between lines 22 arid 23, insert [he following paragraphs:
(2) IN TI-IE ADDITION TO TNE FORE-
GOING DUTIES AND FUNCTIONS, THE CITY ADMINISTRATOR SFIALL:

(1) ASSIST IN n r E COORDINATlON OF THE WORK OF ALL THE OFFICIALS O F TlHE CITY OF MEYCAUAYAN, UNDER THE SUPERVISION, DIRECTION, AND CONTROL OF n m CITY MAYOR, AND FOR T H S I PURPOSE, HE MAY CONVENE THE C13IEFS OF OFFICES AND OTHER OFFICIALS OF THE CITY,
(ri) WHEN REQUIRED BY TI-IE CITY MAYOR, OR SANGGUNIANG PANLUNGSOD, D W T ORDINANCES, CONTRACTS, BONDS, LEASES AND OTHER INSTRUMENTS, lMlVOLVlNG ANY INTEREST OF THE CITY AND PROVIDE COMMENTS AND RECOMMENDATIONS ON ANY 1NSTRUMENT ALREADY DRAWN; (111) RENDER HIS OPINION IN
WRlTlNG ON ANY QUESTlON OF LAW W E N REQUESTED TO DO SO BY THE CITY MAYOR OR
SANGGUNJANG PANLmGSOD; (IV) INVESTIGATE OR CAUSE TO BE INVESTIGATED ANY CITY OFFICIAL OR EMPLOYEE FOR ADMINISTRATIVE NEGLECT O R y
(11) ESTABLISH AND MAMTAIN A
SOUND PERSONNEL PROGRAM FOR TI-IE CITY DESIGNED TO PROMOTE
1296
TUESDAY, JUNE 6,2006 MISCONDUCT IN OFFICE, AND RECOMMENDAPPROPRIATE ACTION TO THE CITY, MAYOR OR SANGGUNIANG PANLUNGSOD, AS TIHE CASE MAY BE, (V) INVESTIGATE OR CAUSE TO BE INVESTIGATED ANY PERSON, FIRM OR CORPORATION HOLDING ANY FRANCHISE OR EXERCISING ANY PUBLIC PRWLEGE FOR FAILURE TO COMPLY WITH ANY TERM OR CONDITION IN THE crawr OF SUCIH FRANCI-IISE OR PRIVILEGE, AND RECOMMENDING APPROPRIATE ACTION TO THE CITY MAYOR OR SANGGUNIANG PANLUNGSOD, AS THE CASE MAY BE; (VI) WIWN DIRECTED BY THE CITY MAYOR OR SANGGUNIANG PANLUNGSOD, INITIATEAND PROSECUTE IN THE INTEREST OF THE CITY OF MEYCAUAYAN ANY ClVlL ACTION ON ANY BOND, LEASE OR OTHER CONTRACI' UPON ANY BREACH OR VIOLATION THEREOF; AND (VII) REVIEW AND SUBMIT RECOMMENDATIONS ON ORDMANCES APPROVED AND EXECUTIVE ORDERS ISSUED BY COMPONENT BARANGAYS; LEVEL PROGRAM FOR THE TOTAL DEVELOPMENTAND PROTECTION OF CHILDRENUPTOSIX(6)YEAIEOFAGE; (IV) FACILITATE THE IMPLEMENTATION OF WELFARE PROGRAMS FOR THE DIFFERENTLY-ABLED, ELDERLY, AND VICTIMS OF DRUG ADDICTION, THE REHABILITATION OF PRISONERS AND PAROLEES, THE PREVENTION OF JUVENILE DELINQUENCY AND SUCH OTHER ACTIVITIES WHICH WOULD ELIMINATE OR MINIMIZE TIHE ILLEFFECTS OF POVEIVI-Y, (V) INITIATE AND SUPPORT YOUTH WELFARE PROGRAMS TIHAT WILL ENHANCE TEIE ROLE OF THE YOUTH IN NATION-BUILDNG; AND (VI) COORDINATE wrm GOVERNMENT AGENCIES A~NDNONGOVERNMENT ORGANIZATIONS WHICH HAVE FOR THEIR PURPOSE THE PROMOTION AND PRO'TECTION OF ALL NEEDY, DISADVANTAGED, UNDERPRIVILEGED OR IMPOVERISHED GROUPS OR INDIVIDUALS, PARTICULARLY THOSE IDENTIFIOD TO BE VULNERABLE AND tIIGl-I-RISK TO EXPLOITATION, ABUSE AND NEGLECT;
16. Renumber the rcmaining succeeding paragraphs accordingly;
17. On page 49, afler line 28, inseii lhe following
14. Renumber the succeeding paragraphs
accordingly;
15. On page 48, atler line 26, insert the following
paragraphs:
(3) IN ADDITION TO THE FOREGOING
paragraphs:
(3) IN ADDITION TO THE FOREGOING DUTIES AND FUNCTIONS, THE CITY VETERlNARlAN SHALL
(I) ADVISE TIE CITY MAYOR ON ALL MATTERS PERTAINLNG TO THl? SLAUGHTER OF ANIMALS FOR HUMAN CONSUMPTION AND TIIE REGULATION OF SLAUGHTER HOUSE'$
~~
DUTIES AND FUNCTIONS, THE CITY SOCIAL WELFARE AND DEVELOPMENT OFFICER SHALL: (I) lDENTlI% THE BASIC NEEDS OF THE NEEDY, TINE DISADVANTAGED AND THE IMPOVERISHED AND DEVELOP AND IMPLEMENT APPROPRIATE MEASURES TO ALLEVIATE THEIR PROBLEMS AND IMPROVE THEIR LIVING CONDITIONS;
(11) PROVIDE RELIEF AND APPROPRIATE CRISIS INTERVENTION FOR VICTIMS OF ABUSE AND EXPLOITATION AND RECOMMEND APPROPRIAlE MEASUWS TO DETER FURTHER ABUSE AND EXPLOITATION;
(11) REGULATE T I E KEEPING OF DOMESTIC ANIMALS;
(111) ASSIST THE CITY MAYOR IN IMPLEMENTING THE BARANGAY
(111) IIEGUIATE AND INSPECT FOULlRY,MILI<ANDDAIRYPRODUCTS FOR PUBLIC CONSUMPTION: (IV) ENI'ORCE ALL LAWS AND REUIATIONS FORTI-IEI'FZVENTION OF CRUELTY TO ANIMALS; AND (V) TAKE THE NECCESARY MEASURESTO ERADICATE, PREVENT
/f
TUESDAY, J m E 6,2006
1297
OR CURE ALL FORMS OF ANIMAL DISEASES; 18. Renumber the paragraphs accordingly;
19 On page 5 I, between lines 7 and 8, insert the
CREATION, MAINTENANCE AND DISPOSAL;

22. On page 52, between lines 16 and 17, insert the following paragraphs: (3)IN ADDITION TO THE FOREGOING
following paragraph:
(3) IN ADDITION TO THE I'ORGEOING
DUTIES AND FUNCTIONS, THE CITY GENERAL SERVICES OFFICER SIHALL; 20. On Lhc saiiic page, Iinc 8, change the nunikr "3" ill parentheses to (";");
21. On the same page, between lilies I O and I I , insert llic following paragraphs:
(11) WITH THE APPROVAL OF THE CI'R MAYOR, ASSIGN BUILDING OR LANDSPACE TO CrrY OFFICIALS AND OTI-IER PUBLIC OFFICIALS WHO, BY LAW, ARE ENTITLED TO SUCN SPACE; (111) RECOMMEND TO -rm CrrY MAYOR TI-IE REASONABLE RENTAL RATES FOR CITY PROPERTIES, WI-IETHI2R REAL OR PERSONAL, w t i w WILL BE LEASEDTO PUBLIC OR PRIVATE ENTITIES BY THE CITY GOVERNMENT; (rv)RECOMMEND TO Crm CITY MAYOR REASONABLE RENTAL RAT13 OF PRIVATE PROPERTIES WZIICI-I MAY BE LEASED FOR THE OFFICIAL USE OF TI-IE CI'W GOVERNMENT; (V) MAINTAIN AND SUPERVISE JANITORIAL, SECURITY, GOVERNMENT PUBLIC BUILDINGS AND OTHER REAL PROPERTY, WHETER OWNED OR LEASED BY THE CITY GOVERNMENT;
DUTIES AND FUNCTIONS, THE CITY ENVIRONMENT AND NATURAL RESOURCES OFFICER SHALL; (I) ESTABLISH, MAINTAIN, PROTECTAND PRESERVECOMMUNAL FORESTS, WATERSHEDS, TREE PARKS, MANGROVES, GREENBELTS AND SIMiL.AR FOREST PROJECTS AND COMMERCIAL FORESTS, LIKE INDUSTRIAL TREE FARMS AND AGRO-FORESTRY PROJECTS;
(11) PROVIDE EXTENSION SERVICESTO THE BENEFICIARIESOF FOREST DEVELOPMENT PROJECTS AND TECHNICAL, FINANCIAL, AND INRASTRUCTURE ASSISTANCE; ( I l l ) MANAGE AND MAINrAIN SEEDBANKS AND PRODUCE SEEDLlNGS FOR FOREST AND TREE PARKS;
(IV) RENDER ASSISTANCE FOR NATURAL RESOURCES-RELATED CONSERVATION AND UTILIZATION ACTIVITIES CONSISTENT WITH ECOLOGlCAL BALANCE; (V) PROMOTE SMALL-SCALE MINING AND UTILIZATION OF MINEWL RESOURCES PARTICULARLY MINMG 01' GOLD; AND (VI) COORDINATE WITH GOVERNMENT AGENCIES AND NONGOVERNMENT ORGANIZATIONS IN THE IMPLEMENTATION OF MEASURES TO PREVENT AND CONTROI.. LAND, All1 AND WATER POLLUTION WITH THE ASSISTANCE 01' THE DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES;
23. Retiumber the succeeding paragraphs
(VI) COLLATE AND DISSEMINATE INI"O1WATION REGARDING PRICES, SHIPPING AND OTI-IER C O X S OF SUPPLIES AND OTIIER ITEMS COMMONLY IJSED BY THE CITY GOVERNMIZXT
(VII) PERFORM ARCHIVAL. AND RECORD MANAGEMENT WITH RESPEC7 'r0 RECORDS OF OFFICES AND DEPARTMENTS OF THE CITY GOVERNMENT;AND
accordingly;
24. On the page 53, between liim 17 and IS, insert the following paragraphs.
(3) IN ADDITION TO THE FOREGOING DUT'IESAND FUNCTIONS, 'rm CITY
(V111) PERFORM ALL OTHER FUNCTIONS I'ERTAINNG TO SUPPLY AND PROPERTY MANAGEMENTAND ENFORCE POLlClES ON RECORDS
ARCHITECT SllALL
(I) PREPARE AND RECOMMEND FOR CONSIDERATION OF THE
dJ'
1298
SANGGUNIANG PANLUNGSOD -rim

. -
ARCI-IITECTURALPLAN AND DESIGN FOR THE c m OR A PART THEREOF, INCLUDING THE RENEWAL OF SLUMS AND BLIGHTED AREAS, LAND RECLAMATION ACTIVITIES, THE GREENING OF LAND, AND APPROPRIATE PLANNING OF MARINE AND FORESIIORE AREAS;
(11) REVIEW AND RECOMMEND FOR APPROPRIATE ACTION OF THE SANGGUNIANG PANLUNGSOD OR CITY MAYOR THE ARCHITECTURAL PLANS AND DESIGN SUBMITTED BY GOVERNMENT AND NON-GOVERNMENT ENTITIES OR INDIVIDUALS, PARTICULARLYTHOSE UNDEVELOPED, UNDERDEVELOPED AND POORLY.. DESrGNED AIU3AS; AND
FURNISHED TO SAID AGENCIES AND ORGANIZATIONS; AND

(Ill) MALNTAIN EFFECTIVE LIAISON WITH THE VARIOUS SECTORS OF TlHE COMMUNIIY ON MATTERS AND ISSUES THAT AFFECT T I E LIVELIHOODAND THE QUALITY 0 1 . LIFE OF THEINNABITANTS AND ENCOURAGE SUPPORT FORPROGRAMS OFTHELOCAILAND NATIONAL GOVERNMENT;
29. Renunibcr the succeeding accordingly; following paragraphs:
paragraphs
30. On . pagc _ 56, . between lines 2 and 3, insert the

(111) COORDINATE WITH GOVERNMENlAND NON-GOVERNMENT ENTITIES AND INDIVIDUALS INVOLVED IN TKE AESTI-IETlCSAND THE MAXIMUM UTILIZATION OF LAND AND WATER WITHIN THE JURISDICTION OF TI-IE CITY, COMPATIBLEWITH EIRONMIZ3TAL INTEGRITY AND ECOLOGICAL BALANCE;
2s. Renumber the succeeding paragraphs
accordingly;
26. On pagc 54, line 7, pul the punctuation mark comma (,) after the word television and
delete the word os between the words television and broadcast; 27. On the same page, line 7, between the words broadcast and media, insert the phrase AND OrHER FORMS OF MASS; 28. On page 54, between lincs 22 and 23. insert thc following paragraphs:
DUTIES ANE IUNCTIONS, TI-IECITY COOPERATIVESOFFICER SHALL (I) ASSIST IN THE ORGANIZATION OF COOPERATIVES; (11) PROVIDE TECHNICAL. AND OTHER FORMS OF ASSISTANCE TO EXISTING COOPERATIVES TO ENHANCE THEIR VIABILITY AS AN ECONOMICENTERPRISE AND SOCIAL ORGANIZATION; AND (111) ASSIST COOPERATIVES IN ESTABLISHING LINKAGES WITH GOVERNMENT AGENCIES AND NONGOVERNMENT ORGANIZATIONS INVOLVED JN THE PROMOTION AND EVTEGRATION OF THE CONCEPT OF COOPERATIVESIN THE LIVELIHOOD OF TI-IE PEOPLE AND OTHER COMMUNITY ACTIVITIES;
31. Renumber
the succeeding paragraphs
accordingly; 32. On page 57, line 9, delete the conjunction and;

33. On page 57, betweeti lilies 9 and IO, insert
DUTIES AND FUNCrIONS, TFE CITY INFORMATION AND COMMUNITY RELATIONS OFFICER SHALL (1) PROVIDE RELEVANT, ADEQlJATE AND TIMELY INFORMATION TO THE CITY AND ITS RESIDENTS;
(11) FURNISH INFORMATION AND DATA ON THE CITY TO GOVERNMENTAGENCIES OR OFFICES AS MAY BE REQUIRED BY LAW OR ORDINANCE AND NON-GOVERNMENT ORGANIZATIONS TO BE
the following paragsaphs:

(3) IN~ADDITION TO T I E FOREGOING
DUTIES AND PUNCTIONS, TI-IE CITY POPULATION OFFICER SHALL:

(I) ASSIST THE CITY MAYOR TN THE IMPLEMENTATION OF THE CONSTITUTIONAL PROVISIONS RFLATIVE TO IOPULATION DEVELOPMENT AND THE PROMOTION OF RESPONSTBLE PARENTI-IOOD;
(11) ESTABLISH AND MAINTAIN AN UPDATED DATA BANK FOR
/bJ
1299 THE APPLlCATlON FOR LOANS OR OTHER FORMS OF MDEBTEDNESS AND THE TERMS AND CONDITIONS THEREOF SI-IALL, BEFORE N A NEWSPAPER APPROVAL, BE PUBLISHED l OF GENERAL CJRCULATION IN THE CITY. ONCE APPROVED, THE CONTRACT COVERING THE LOANS OR OTHER FORMS OF INDEBTEDNESS SHALL BE FURNISHED TO ANY CITY RESIDENT REQUESTING A COPY THEREOF, UPON PAYMENT OF REASONABLE FEES. Senator Pimentel explained that the proposed ainendmenl is very important because loans are not secured for the benefit of the,niayor or city officials, but for the benefit of the people in tlie municipality e stressed that who would shoulder the rcpayment. M when local govesnments borrow money, the terms and conditions of the loan must be made lcnown to the public. The problem, he noted, is that local officials keep such matters under wraps and let their successors deal with repayment later 011. Accepted by the Sponsor and there bcing no objection, the proposed amendment of Senator Pimeiitel was approved by the Body. On the ability of local governments to borrow, Senate President Drilon observed that in many instances, loan repayments extend way beyond the terin of the incumbent local officials who secured the loan so that the burden or repayment falls on the shoulders of their successors. He disclosed that there were instances wlien internal revenue allotments were mortgaged for ten years and the incoming officials could not do anything about it when they assumed office. He suggested that a limit be imposed on the borrowing capacity of tlie LGUs as far as their lRAs are conceriied.
PROGRAM OPERATIONS, DEVELOPMENT PLANNING AND AN EDUCATIONAL PROGRAM TO ENSURE TILE PEOPLES PARTICIPATION M AND UNDERSTANDING OF POPULATION DEVELOPMENT;AND (111) IMPLEMENT APPROPRIATE TRAINING PROGRAMS RESPONSIVE TO THE CULTURAL HERITAGE OF THE INFIARITANTS; AND
34. Renumber
the succeeding
paragraphs
accordingly;
35. On page 58, line 1 1 , change the word considered lo CONDUCTED;
36. Delete the entire Section 48 from line 5 of page 59 up to line 2 of page 64; and
37. On page 67, line 27, delete the word approval and in lieu hereof, insert the phrase PUBLICATION IN AT LEAST TWO
NEWSPAPERS OF GENERAL AND LOCAL CIRCULATION.
TERMINATION OF THE PERIOD OF COMMITTEE AMENDMENTS

There being no other committee amendmcnt, upon motion of Senator Pangilinan, there being no objection, the Body closed the period of coininittee amendments and proceeded to the period of individual amendments.
PIMENITEL AMENDMENTS
Preliminarily, Senator Pirneiitel stated that Meycauayan lias complied with all the requirements of the law, including the income requirement of at least PI00 million. He pointed out that thc bill transforming Meycauayan into a city has long been ovcrdiie. He recalled tliat Meycauayaii was previously granted a charter to become a city but it was rejected in a plebiscite owing to some political maneuverings. He hoped that this time, tlie people of Meycanayan wonld see fit to approve the Charter because it i s now more dirficult for a municipality to be converted into a city because oftlie P100-million income requirement. He disclosed tliat a number or municipalities aspiring to be conveited into cities were, i n fact, not able to comply with tlie income requirement.
In reaction, Senator Pimentel said that the Local Government Code has to be amended accordingly as it would be unlair lo just impose that limitation on the City o f Meycauayan. Senate President Drilon agreed that the proper place for the amendment is the Local Government Code. He emphasized tlie need to address this problem because in the case of Governor Padaca, lor instance, she could not .implement any project in Isabela whose IRAs wese hoclced by the previous administration.
Senator Pimentel argued that banks should also be looked into because some conspired with the local officials and they invoke the Bank Secrecy Law tok
On page 15, line 9, Senator Pimenlel proposed the insertion of a period (.) after the word INDEBTEDNESS and tlie addition of the phrase
1300
TUESDAY, JUNIl 6 , 2006
avoid divulging tlie tcrms and conditions of loatis. Iic argitecl tliat being public money, tlie banks cannot hide beliincl tlic law and allow the LGUs to iniot-tgage the Future of their own people without limitation. Senate President Drilon agreed and pointed out that tlic Bank Secrecy Law does not apply because tlicse are loatis secured throngh the assignment of ruturc IRAs. Relative tlicrelo, Senator Litn t-ecalled tlie time wlien lie antl anotlier government official were offered by a certain bank to male a huge loan. He said that lie refiised the oETer while thc other official accepted it. M c stated tliat it was otic of the reaoiis why lic tiled a bill amending a provision i n tlie Local Govcrnmcni~Code that i n tlie event a mayor or a governor unclcrtakes a loan, the loan slinll be paid within his term limit and ifhe fails to satisfy lhe loan, his liability extends to his personal and private property as a deterrent to future abuse. On the same pagc, line 14, aftcr tlie word PROJECTS, as proposed by Senator Pimento1 and accepted by tlie Sponsor, t h e being no objection, the Body approved the iiisertion of ii pcriod (.) and llie sentence THE AUTHORIZATION TO FLOAT BONDS OR OTHER INSTRlJMENTS O F fNDEBTBDNESS SHALL BE PUBL.ISHI?D IN A NEWSPAPER OF GENERAL CIRCULATION iN TI-IE crry. ONCE APPROVED, T m CONTRACT COVERING THE FLOATING OF RONUS OR 011-IER INSTRUMENTS OF INDEBTEDNESS S H A L L DE FURNISI-iED TO A N Y CITY RESIDENT REQUESTING A COPY THEREOF (JPON PAYMENT OF RI1ASONAB1,E FEES.
antl allowances sliall be in accordance with ilie Salary Standardization Law.
TERMINATION OF THE PERIOD OF INDLVIDUAL AMENDMENTS

There being no othcr individual amendtiicnt, up011 motion oFSetialor Pangilinan, there being tio objection, the Body closed tlie period of individual aii~cti~ltiicnts.
APPROVAL OF HOUSE RlLL NO. 4937 ON SECOND READING

Submitted to a vole, there being no ob.jcction, Home Rill No. 4937 was approved on Second Rcading.
SUSPENSION OF CONSIDERATION O F HOUSE BILL NO. 4937

Upon motion of Senator Pangilinan, there bcing no objection, tlie Body suspended consideration o r the bill.
SUSPENSION OF SESSLON
Upon tiioiioii o r Senator Pangilinan, the sessiotl was suspended.
It was 12:21 p.m.

RESUMPTION OF sESsroN
At 12:23 Imi., the session was resumed.
ADJOURNMENT OF SESSION Senator Pimentel emphasizcd tliat it is to be understood that all kiiids or transactions lliat bind tlie city sliall not bc trcated as con~identialmatters and, therefore, of[-limit to the people. INQUIRY OP SENATOR PANGKINAN
~~ ~ ~~
lipon moiion of Sctiator Pangilinan, there being no ob,jection, ihe Chair declarcd the session acljourtiecl utili1 tlirce ocloclc i n tlie afternoon ofilie same day.
ll
wus 12:24 p . m
~~
Anent line 24, pagc 13, Senator Pangilinan aslted
to be clarified i T tlie provision does not exempt sclected local govertiment etnployces or officials
from the Salary Standardization Law. Senator Litii confirmed that the detet-minalion of salaries, wages
Secretary of tlie Senale
Approved on July 26, 2006

Moilday Tucsday June and 6,2006

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E6

Moilday and Tucsday June 5 and 6,2006

SESSION NQ. 88 Monday and Tuesday June 5 and 6,2006

Hon. Franklin M. Drilon, called the session to ordcr.

DEFERMENT OF THE APPROVAL OF THE JOUEWA.L

MONDAY, JUNE 5, 2006

DEFERMENT OF THE REFERENCE OF BUSINESS

COMMITTEE REPORT NO. 55 ON SENATE RILL NO. 2226 (Continualion)

REQUEST OF SENATOR ROXAS

INTERPELLATION OF SENATOR OSMERA

PREFATORY STATEMENT OF SENATOR DEFENSOR SANTIAGO

MONDAY, JIJNE 5 , 200h

5% blend refers to gasoline, Scnator Derelisor Santiago

MONDAY, JUNE 5 , 2006

INTERPELLATION OP SENATOR ROXAS

MONDAY, JUNE 5 , 2006

MONDAY, JUNE 5, 2006

ACKNOWLEDGMENT OF THE PRESENCE OF GUESTS

It was 4:50 p.nz. RESUMPTION OF SESSION

INTERPELLATION OF SENATOR MADRI6AL

PARLIAMENTARY INQUIRY OF SENATOR ARROYO

MONDAY, JUNE 5, 2006

MONDAY, JUNE 5 , 2006

REMARKS OF SENATOR PANGILINAN

INTEIIPELLATION OF SENATOR RECTO

To allay the fears of Senator Recto, Senator

INTERPELLATION OF SENATOR ENliILE

MONDAY, JUNE 5 , 2006

MONDAY, JUNE 5, 2006

REMARKS OF SENATOR PANGILINAN

MANIFESTATION OF SENATOR DEFENSOR SANTIAGO

COMMITTEE mwoKr NO. 13 ON. SENATE BILL^ No. 1936 (Continuation)

AN ACT ESTABLISHING A CREDIT

10. On the same page, lines 13 to 16, delete the

It was 6:03 p.m.

MANIFESTATION OF SENATOR OSMEF?A

11. On the same page, line 27, after the word

raw Credit Information;

words Credit Information with BASIC CREDIT DATA;

Information, with BASIC CREDIT DATA;

On the same page and line, delete the word raw;

releasing, insert the phrasc BASIC CREDIT DATA ;

MONDAY, JUNE 5, 2006

satisfactorily, it might obviate the need for amendments to tlie bill.

Credit Informalion with BASIC CREDIT DATA;

IN COORDINATION WITH EXISTING INDUSTRY STAKEHOLDERS;

INQUIRIES OF SENATOR PIMENTEL

MONDAY, JUNE 5,2006

To the observation that his proposal would

MONDAY, JUNE 5,2006

It was 6:48 p.m,

Local Government; Ways and Means; aiid Finance

It was 6:47 p.m.

p session was rehmed.

AN ACT CREATING TWO ADDITIONAL REGIONAL TRIAL COURT BRANCHES

MONDAY, JUNE 5,2006

To the Committee on Education Arts and Culture

To the Committees on Justice and Human Rights; and Finance

the Committees on Education, Arts and Culture; and Finance

phr ACT SEPARATING THE SECONDARY

To the Committees on Environment and Natural Resources; and Finance

To the Committee; on Education, Arts and Culture; and Finance

To the Committees on Environment and Natural Resources; and Finance