Press Release
June 14, 2016

Transcript of Headstart Interview with Senate President
Franklin M. Drilon by Karen Davila

Q: We are ending the 16th Congress and starting the 17th Congress soon. I want you to react on how Senator Alan Cayetano and Senator Koko Pimentel have met to talk about the Senate Presidency, is it even in their power to decide who will be the new Senate President?

SPFMD: No. You know, it is often said that the Senate Presidency is a gift of thirteen senators to whoever is the senator they will elect as Senate President. We, the senators, elect the Senate President. In this particular instance, the Liberal Party and its allies - we have eight votes - and Senator Tito Sotto's NPC (Nationalist People's Coalition) - which has about eight votes - so between Senator Tito Sotto and myself, we have 16 votes.

Q: So it matters who you vote for.

SPFMD: Of course. It is the senators who elect their officers of the Senate, and nobody else. Maybe Senator Alan and Senator Koko will talk about the agenda, but insofar as the Senate Presidency is concerned, I have with me at least 14 signatures, electing Senator Koko Pimentel as Senate President. That cannot be changed unless those who signed will change their minds.

Q: So is it right to say that you are giving up your seat as Senate President?

SPFMD: Yes I am giving up my seat. I could have contested it, but I would like to show that since President-elect Duterte has that mandate, okay, we recognize that mandate, Senator Koko Pimentel is the only PDP-Laban senator, and there is no one else, there are about six Liberals and about three or four NPC members, and as far as I know the others are independent, but insofar as the PDP-Laban, only Senator Koko Pimentel is a member of the Senate. But nevertheless, the 16 of us decided that Senator Koko should lead the chamber in the 17th Congress.

Q: What made the 16 choose Senator Koko Pimentel over Senator Alan Cayetano, who ran with Duterte?

SPFMD: Each one would have his or her own reason, but we thought that by way of showing our cooperation and support for President-elect Duterte, we elect a party-mate.

Q: Who is Senator Nancy Binay supporting?

SPFMD: Senator Nancy Binay is supporting Senator Koko Pimentel because she is a part of the group of Senator Tito Sotto.

Q: Senator Antonio Trillanes?

SPFMD: Senator Trillanes has manifested that he is willing and he will join the minority group.

Q: Is it true that the Senate Minority Leader will be Senator Chiz Escudero?

SPFMD: Depending, you know, the Minority Leader is chosen after the election of the Senate President on July 25. Those who will not vote for Senator Koko Pimentel and vote for another senator, the other senator who loses out in the election will become the Minority Leader.

Q: How about the Senate Majority Leader? Have you talked to Senator Tito Sotto?

SPFMD: Yes Senator Sotto will be the Senate Majority Leader and I will be the Senate President Pro-tempore.

Q: It is interesting how you are leaving the Senate Presidency with open arms.

SPFMD: Yes, no rancor. I didn't aspire for it.

Q: Hindi ka, as they say, "kapit-tuko."

SPFMD: All that I said that I have to provide stability to the Senate by not contesting it anymore. Because I have a group of eight senators - I have six Liberal Party supporting me, and two allied senators but I said, " Let us provide stability as early as possible, so that in July 25, we hit the ground running." Because we have a lot of things to do, and wrangling for the leadership of the Senate should be settled as early as possible, which is exactly what we did.

Q: The 16th Congress, how will you describe it?

SPFMD: Very, very productive. We have passed a lot of legislation, and what is more important is that many of these pieces of legislation were simply gathering dust in all of the previous Congresses.

I personally wrote the GOCC Governance Act, which allowed the GOCCs to be instruments of progress rather than milking cows of the past. We passed the Philippine Competition Act, this law was gathering dust.

Q: How will this act change the economy?

SPFMD: It would prohibit monopolistic practices, and as you would now, if you have monopolies, that is not good for the economy. The Philippine Competition Commission would be the body that would check whether a particular agreement or a particular practice would have monopolistic tendencies which would be prejudicial to public interest and to the expansion of the economy and business. For example the recent agreement between San Miguel Corporation, PLDT and Globe, this is now subject to the review of the Philippine Competition Commission to see whether there is a monopoly or duopoly which prevent the coming-in of other players that therefore, kill competition.

Q: Which agency is supposed to study the sale?

SPFMD: The Philippine Competition Commission.

Q: Should they give a go-signal before the sale can be made?

SPFMD: No, but they have a right to review and they have the right to declare that these agreements stifle competition and therefore can stop it, theoretically. It is a done deal, the law has been signed and we have now a Philippine Competition Commission.

Q: It is a done deal. Where does the law come in?

SPFMD: The law precisely allows and authorized the Philippine Competition Commission to review these transactions.

Q: What you are saying, is that even after the deal or sale, they can review and they can file at the Supreme Court to have it stopped.

SPFMD: I can't remember if they have to go to the Supreme Court, but on their own, they can say that the agreement encourages or results in a monopoly and therefore this cannot be implemented - either portions, or the whole agreement.

Q: On the Sin Tax Law

SPFMD: I personally wrote that. The Sin Tax Law resulted in the funding of our Universal Healthcare Program, which in turn funds our Philhealth program. We have so many million of Filipinos enjoying Philhealth benefits, free hospitalization. The other law that we passed is the Cabotage Law, which makes inter-island shipping more competitive by opening it up to foreign vessels.

Q: The incoming Finance Secretary said he would want taxes on junk food included in the Sin Tax Law. There are other countries where softdrinks have sin taxes.

SPFMD: We are open to that. We are willing to listen. That is the essence of democracy, we listen and that is precisely why we have committees which would receive these arguments and make a report to the Senate. I am open to that, we are willing to listen, that is the essence of taxation and democracy, you have to listen to all quarters.

Q: On the Reproductive Health (RH) Law

SPFMD: We have passed that, it was languishing in Congress, now we have passed it. It is a matter of proper implementation.

We also passed the full entry of foreign banks. Before we acted on this, no foreign banks can come in because there was a quota imposed before, we removed this limitation so foreign banks come in.

We also passed the Customs and Tariff Modernization Act, which again took again years, and was languishing in the legislative mills. The issue of the balikbayan boxes, and taxes, so that has been addressed.

We have also established the Department of Information and Communications Technology or DICT, which again is the clamor. One of our biggest foreign exchange earners would be the BPOs (business process outsourcing), and yet before we enacted this law there was no agency which would look after the BPOs. Now we have established the Department of Information and Communications Technology.

Q: Does that mean that President would have to appoint a new secretary for this?

SPFMD: Yes, he would have to organize this. I do hope that President-elect Duterte can give this priority, because we need this. There was some misgivings on the part of the present administration as to whether we needed this, but in fairness to President Aquino, after we passed it, he recognized that we need to establish this, so now I am calling on the Duterte administration to give this top priority.

Q: During the campaign, President-elect Duterte said he would want a different agency for OFWs. Would he need a law for this?

SPFMD: Yes he would need a law for that. I am not prepared to say that we needed that one, but let's review how the Department of Labor and Employment has performed insofar as OFWs are concerned, right now the concerns of OFWs are addressed by Department of Labor and Employment and the Department of Foreign Affairs.

Q: Should the Department of Agriculture and Fisheries be separated? That was mentioned also during the campaign.

SPFMD: I will listen, but right now I don't see any real reason why we should separate the two. We might be unnecessarily expanding our bureaucracy.

Q: Secretary Mar Roxas mentioned during the debate the separation of the Department of Transportations and Communications.

SPFMD: We have done that already. The "C" in "DOTC" will no longer be there. It's just the Department of Transportation.

Q: So entering the Duterte administration, it will only be the Department of Transportation.

SPFMD: That's correct. The "Communications" portion of that department will now be with the Department of Information and Communications Technology.

Q: Will NTC be now under the DITC?

SPFMD: If I recall correctly yes, but subject to review, yes it is.

Q: So this department will now handle Globe, Smart, landlines, internet signals.

SPFMD: Yes, anything related to communications, including our BPO industry.

Q: You have this administration suggesting to the incoming administration, do the income tax reform.

SPFMD: I am in favor of that.

Q: Why wasn't done during Aquino's time?

SPFMD: There were certain policy disagreements. Yes we pushed this, but the finance people in the Aquino administration were vehemently opposing it, so we could not push it. I am in favor of our income tax system. Our income tax system was set nearly 20 years ago, in 1995, and the rates and taxable amounts were set twenty years ago, 32 percent if you net taxable income is P500,000. Today, twenty years after, the value of P500,000 in 1995 is much lower today.

Q: Finance Secretary Purisima had wanted a more comprehensive income tax reform with the waving on bank secrecy law? Will that be possible of income tax reform would be enough in itself?

SPFMD: I believe we should take it up one at a time. The portion of tax enforcement is something we can look at in detailed separately. What is more urgent is to reform our income tax system. People are groaning under the very high income tax rates. We try to alleviate the difficulty by increasing the tax exemption on the 13th month pay.

Before we enacted the law, were your 13th month pay P30,000 and above, you were taxed 32%. The limit was P30,000 and we increased it to P82,000 in order to restore the value of bonuses to where it was 20 years ago.

Q: They want to return zero VAT on food in its original state.

SPFMD: I am willing to listen to them. Let's review it. Let's listen to all quarters insofar as this is concerned. The matter of tax administration is always an issue. Are we collecting the right taxes from the right people? In fairness to Kim Henares, she tried to enforce the tax law in its present form. Unfortunately, our justice system does not respond quickly to cases like this.

Q: On the death penalty

SPFMD: The death penalty issue will be debated upon. The issue is it is a deterrent to crime? For me, the first issue is do we have an effective justice system? Because if we have an effective justice system, then punishment becomes a deterrent. But because in our present justice system, punishment may come decades after the crime was committed. Therefore, that is a matter we will debate upon when the issue of death penalty comes around.

Q: Are you solidly anti-death penalty?

SPFMD: I was the Senate President when we abolished the death penalty. Former Corazon Aquino banned it through the 1987 Constitution. Then in 1993, President Ramos led the country in re-imposing it. But during his time, there was no execution. It was in 1999 when the first execution took place under President Estrada. Then, President Arroyo led the country in imposing a ban on the death penalty.

Q: The incoming president wants death penalty not just re-imposed but change to hanging?

SPFMD: At bottom, the issue is will death penalty - whether by hanging - be a deterrent to the commission of heinous crimes. That is the issue that we will debate on. When we were confronted with these issues in 2006, the unanimity is "no, it would not." Therefore, we voted to ban the death penalty.

Q: If it (death penalty) is so ineffective, then why no one goes to Singapore with drugs?

SPFMD: Why? Because they are able to effectively implement their laws. Not only on death penalty. When you throw a chewing gum on the sidewalk in Singapore, you will get apprehended. I am not saying that I'm totally against it. I want a good argument. I voted against death penalty in 2006, so did people like Recto, Gordon, the father of Senator Pimentel III. I counted at least five of senators in that Congress who are again in this present Congress.

There will be a debate. In death penalty, when you commit a mistake, you will no longer correct it. I want to see an effective justice system that will make punishment a deterrent. Right now, they say our justice system is "hindi pantay."

Q: Senator Sotto wants them thrown in an Alcatraz-like islands?

SPFMD: Fine.

Q: Agree ka don?

SPFMD: Yes. Throw them in an Alcatraz-like island.

Q: On the result of the Senate investigation on the Bangladesh heist and money laundering scandal

SPFMD: We will amend the Anti-Money Laundering Act, which will now include casinos.

Q: What about real estate and art?

SPFMD: As far as widening the coverage of the Anti-Money Laundering Act, we will do it.

Q: And casinos will be included?

SPFMD: Yes, it is a question of determining what is the threshold for reporting orderly transactions and what is the threshold for reporting suspicious transactions, that's the present system.

Q: What will the Bangladesh government get from the Senate? Kim Wong has already returned the $15 million, the rest are missing.

SPFMD: Let us not forget that the Senate investigation is in aid of legislation, and the fact is Bangladesh has also benefited from it, because Kim Wong returned the $15 million, though the Bangladeshi government has yet to receive it. There are some questions on whether or not Philrem has retained portions of the money. It's no longer legislation, it's police work, it's investigation.

Q: Cases need to be filed against Philrem and the bank.

SPFMD: That's correct.

Q: On Salary Standardization Law IV, President Aquino is leaving with the Senate and the House leaving an additional P56 billion for this.

SPFMD: In the budget, but we have not enacted the Salary Standardization Law, because we could not agree on the pension system of the Armed Forces of the Philippines, which will cost an additional or increase of P25 billion in the necessary appropriation, and it was not in the budget. While we were in favor of it, Malacanang said, "No, we could not have that," so we were not able to pass it.

Now the Duterte administration must take a quick look at that. The salary increases are due in January, the second tranche, and therefore they must immediately address this, and what do we do? Because 1.3 million of our government workers are waiting for this, and we must act on this quickly.

Q: We have a budget at its highest now of P3 trillion, but you also have tax collections that's half of the budget. Tax collection under the P1.4 trillion, so imagine the pressure on the next administration. They cannot collect less.

SPFMD: Certainly, they cannot collect less, because that's the lifeline of our nation, the tax collection.

Q: On 4Ps

SPFMD: What we will do is pass a law that will institutionalize the 4Ps or Pantawid Pamilyang Pilipino Program. There are 4.3 million families who are dependent on this, these are the 20 percent poorest in our society. Maybe we should take a look at increasing the coverage so that who are what we call as "near poor" will also be included, not only the very poor which is now the coverage of the program.

Q: What do you think is the best figure in the 17th Congress to expand the 4Ps?

SPFMD: If we are able to expand the 4Ps we should another 1.5 million families.

Q: So not another 7.7 million families?

SPFMD: I do not know where the 7.7 million families came from, but certainly we need to take a look at including the near poor which will increase the coverage to about 1 million or 1.5 million.

Q: So around 6 million?


Q: On the Anti-Political Dynasty Law. President Aquino said that it is now time to prioritize it but it will not pass in the lower House.

SPFMD: That's the reality. In the Lower House, their composition is more attuned to local politics, and the reality is, in the provinces, maraming magka-mag-anak doon. We have no problems in the Senate.

Q: It's not difficult for you, wala kang kamag-anak na tumatakbo. SPFMD: Yes, that's correct, not a single one.

Q: Do you think this will make it, among the priorities of President Duterte?

SPFMD: I can only speak for the Senate, we can debate on it, I understand that many senators are open about it, but honestly I don't think that it will make it.

Q: President-elect Duterte has said that his first executive order is the Freedom of Information Bill. Does he need a law for this?

SPFMD: Yes, we need a law for this, because the access to information is legislated, and we passed this in the Senate. We are confident that we can pass this in the Senate, obviously I cannot speak for the House.

Q: On the National ID system

SPFMD: The irony of it is that, in Sabah, for example, if you do not have an ID, you must be a Filipino. We need a national ID system, panahon pa ni President Ramos, we were already discussing this, and can you imagine that was back in 1992, so over 15 years ago. We need a national ID system so that government services can be better coordinated. Right now, GSIS ID, SSS ID, voters ID, all kinds of IDs are around, it is a question of being able to harness our political will in order to have this.

Q: Incoming Finance Secretary Dominguez has said that instead of specific tax on fuel, it should go back to ad valorem.

SPFMD: I am inclined, I am of the belief that the specific tax that we have today is better, it's very consistent because there is no more discretion. If you have one peso, tax it. There is no more of that marketing scheme adopted by manufacturing companies wherein you know, they have layers from the factory to the customer, and the prices are fixed on that scheme.

Q: Do you think President Aquino is not appreciated enough for what he has done for the country? Clearly there were areas were growth was small, but how would you assess him?

SPFMD: Firstly, I would just like to ask our people: Where were we six years ago? To businessmen, where were we six years ago? Where are we today? I think if we really are honest to ourselves, we can really say that the Aquino administration did a lot to improve our economy. Before the Aquino administration came in, we were the "Sick Man of Asia." Now that he will soon leave, we are the "Rising Star of Asia."

Q: I think we are number 1 in Asia in terms of GDP growth.

SPFMD: In the first quarter of the year, we were number 1 in Asia in GDP at 6.9 percent. The difficulty really - and this shadows everything else- is the basic public services especially in Manila. Here when you see people lining up in the streets to the MRT, even if you are a sympathizer or supporter of the Aquino administration, you will say, "Ano ba yan? Why are you not able to solve this?" This magnifies the difficulty of the common man. You know, my staff coming from Bulacan complains about the LRT on a daily basis.

Q: So you understand the feeling of people?

SPFMD: I understand the feeling of people, nonwithstanding the fact that we can claim that over 7 million - if I remember correctly - Filipinos have been pulled out of the poverty line because of the policies that the Aquino administration have implemented in the last six years. But again, the failure of the basic services in Metro Manila has caused all of this negative perception.

Q: Federalism - are you open to it?

SPFMD: Firstly, federalism will require an amendment of the Constitution. I am in favor of amending the Constitution, and I am in favor or a constitutional convention (concon). The form of government will be discussed in a constitutional convention and my view as a senator will not matter at that point, because it will be the delegates'. So when we have a constitutional convention - which I favor - then the delegates will lead.

Q: You can't be a delegate?

SPFMD: You have to resign. And you know, they will present themselves to the people, and present their program, and included in that is whether you are in favor of federalism or the presidential system.

Q: On your supposed "defective" SOCE according to the Comelec? Will the Liberal Party submit by June 30?

SPFMD: It will be submitted today. Just to prove my SOCE is not defective, the "defect" was it was an Excel file.

Q: So it was not about the numbers?

SPFMD: My staff filed it as a PDF file instead of an Excel file. So that's all, it was a form of defect.

Q: If the LP will fail to submit their SOCE will it affect Vice President-elect Leni Robredo?

SPFMD: No it will not. But it will be submitted this morning.

Q: Any last words?

SPFMD: I hope that I will be invited here again. Thank you.

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