HOUSE TO LEVEL PLAYING FIELD FOR INVESTORS - SPEAKER BELMONTE
MANILA, NOVEMBER 21, 2010 (STAR) Paolo Romero - Speaker Feliciano Belmonte Jr. (photo at left) bared yesterday a package of legislation aimed at leveling the playing field for investors, boosting social services, improving the country's fiscal health and stamping out corruption.
Speaking before the joint membership meeting of the Management Association of the Philippines and Makati Business Club at the Peninsula Manila Hotel, Belmonte also said President Aquino is expected to convene the Legislative-Executive Development Advisory Council (LEDAC) before the end of the month to finalize the administration's agenda in Congress.
He said that since the opening of the 15th Congress in July, over 3,500 bills have been filed. He said they were busy sifting through the documents and classifying them for easier scrutiny.
Belmonte said the country's development is being weighed down by various factors including the lack of productive employment opportunities due to low economic growth, unequal access to opportunities, inadequate social safety nets, low human capital, poor infrastructure, weak revenues and fiscal instability, business uncertainty, and corruption.
He said the House would review and amend existing laws, such as the Build-Operate-Transfer Law and the Electric Power Industry Reform Act "to vouchsafe equality and uniformity in the treatment of investors, transparency in the award of contracts, and predictability in the relations between the government and private investors," he said.
"We will reinforce competitive bidding as the central and primary mode of project procurement and award and limit unsolicited proposals to specified situations," Belmonte said.
"We will strive to equitably distribute both risks and benefits among investors, taxpayers, and users. And we shall adequately reward investors for taking risks in projects, especially in geographic areas in bad need of growth stimulus," he said.
"We expect to attract more foreign investors, and to stop local investors from exporting their investments," he said.
To improve the quality of education, the House will work on the institutionalization of pre-school education as part of the basic education system, as well as provide a 12-year basic education system, he said.
"In doing so, we intend to place our graduates at par with their counterparts elsewhere," Belmonte said.
To democratize access to education, the House leadership is seriously considering introducing a national student loan program for deserving secondary and tertiary students in all schools, as well as distance learning system in post secondary and tertiary levels.
He said the chamber also plans to institutionalize the Cash Transfer Program to reduce poverty and promote human capital.
To improve collections, Belmonte said the House would also move to rationalize fiscal incentives by reviewing, among others, the Omnibus Investments Code, economic zones laws, and the incentives given by local governments to ensure that excessive exemptions are removed without compromising the country's attractiveness to investors.
The chamber also aims to restructure the tobacco and alcohol excise taxes, amend the Tariff and Customs Code, and modernize the Bureau of Customs and make its procedures and practices in conformity with the Revised Kyoto Convention and other international standards.
The House would also push for greater fiscal responsibility by imposing a "scrap-and-build" policy, which would allow the creation of new offices and positions only when redundant offices and positions have been abolished or downgraded.
The House would also work on increasing collections from real property taxes by reforming the valuation system, developing uniform and international standards in appraising lands, buildings, machinery and other real properties.
In the drive against corruption, Belmonte cited the need for a comprehensive approach to addressing the problem, including enhancing law enforcement, increasing prosecutorial success, and establishing a culture of transparency in government.
The House is also studying bills on amending the Anti-Money Laundering Law to expand the list of predicate offenses and to allow ex parte applications for opening bank accounts, and protecting and compensating whistleblowers and witnesses.
Compensation
Meanwhile, the Supreme Court (SC) said there is nothing wrong with the Palace's plan to compensate investors who may suffer income loss due to court interventions.
"That is within their (executive department's) discretion. If that is how the head of the executive plans to do it and it is not stopped by the court because no case was filed, then they can go ahead with it," court administrator and spokesman Jose Midas Marquez told reporters.
He said the SC may act on the issue only in response to a petition contesting the arrangement. In such case, the justices would consider the stand of the President in deciding the matter.
"If no one complains, that could be within the discretion of the executive authority. Now if a well-meaning citizen says: 'Wait a minute, why should you use our money to pay off the investor when we don't even pass through that toll way?' They could put up other arguments and the court will decide if it should issue a TRO on that," Marquez said, apparently referring to the planned increase in toll fees.
Marquez was reacting to President Aquino's pronouncements before fund managers on Thursday that he would protect investors from "regulatory risks" during the launching of the administration's public-private partnership (PPP) investment program.
But for House Minority Leader and Albay Rep. Edcel Lagman, Aquino cannot disregard the power of the SC and the Congress to scrutinize huge government contracts.
"While it is salutary to protect investors from regulatory risks, government contracts are not inordinately sacrosanct so as to be immune from judicial review by the Supreme Court and police power legislation by the Congress," Lagman said.
"It is beyond presidential prerogatives to shield contracts from final court judgments and valid legislative enactments," he said.
He said Aquino gave investors "an errant assurance" when he declared that if private investors are impeded from collecting contractually agreed fees – by regulators, courts, or the legislature – then the government would use its own funds to compensate them.
"If, for some reason, a court decision threatens the adjustment, the government will compensate the private concessionaire for the difference between what the tariff should have been under the formula, and the tariff which it is actually able to collect," Aquino had told fund managers.
Nearly P20 billion for PPP had been taken from various agencies and inserted by Malacañang in next year's P1.54-trillion national budget. Lawmakers look at the allocations with suspicion.
"It is heretic for the President to assert that he will defy the Supreme Court by not following its decisions annulling or modifying contractual stipulations, and instead he will pay investors the difference between what they are supposed to earn under the original contract and what they can only collect under the Supreme Court verdict," Lagman said.
He said the constitutional injunction that "no law impairing the obligation of contracts shall be passed" as well as the Civil Code provision that "contracts have the force of law between the contracting parties" are not absolute.
He said contracts must bow to the police power of the state on prescription of "regulations to promote the health, morals, peace, education, good order or safety and general welfare of the people," Lagman said.
He added that contracts are only valid if they are "not contrary to law, morals, good customs, public order or public policy" as provided for in Article 1306 of the Civil Code.
"Considering the propensity of the Aquino administration to resort to legal shortcuts and constitutional infractions as many of the President's executive orders have been challenged before the Supreme Court, it would be foolhardy to propagandize that all its contracts should be 'kept whole' despite adverse judicial and legislative scrutiny," Lagman said.
Challenge
Bayan Muna party-list Rep. Neri Colmenares, for his part, vowed to challenge before the courts the legality of any PPP contract containing regulatory insurance.
"The most dangerous part of PPP is that it will make regulation of these companies impossible as they are assured of profits," Colmenares said. "It will also castrate the courts as TROs will be useless."
"With this regulatory insurance we will expect more budget cuts next year for social services in favor of PPP," he said.
Militant fishers group Pambansang Lakas ng Kilusang Mamamalakaya ng Pilipinas (Pamalakaya) also denounced the huge budget for PPP.
"The 94 million Filipinos should go out in the streets, show their outrage and stage protest actions against the said plan of the Aquino government," Pamalakaya national chairman Fernando Hicap said.
Hicap urged lawmakers to declare the P200-billion seed fund for PPP projects, which would be sourced from funds of government financial institutions, as "grossly illegal, unconstitutional and highly immoral."
"We also ask senators and congressmen to do whatever the legislative branch can do to stop Malacañang from spending P200-billion worth of taxpayers' fund for the infrastructures needed by foreign investors," the group said in a statement.
The Bagong Alyansang Makabayan (Bayan), meanwhile, called the PPP "a very dangerous proposition" and anti-consumer.
"However way you look at it, at the end of the day, it is still the consumers who are taxpayers themselves, who will end up paying for the profits of the private investors," Bayan secretary-general Renato Reyes said.
"In one fell swoop, the regulatory risk guarantee being offered by the administration renders regulatory bodies, Congress and the courts useless," he said.
"The executive and the private investor will be undermining the power of the courts, Congress and its very own regulatory bodies," he pointed out. With Edu Punay and Rhodina Villanueva
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