Minutes of the First LEDAC Meeting of the twelfth congress Held on august 15 2001 at 10:00 a. m.
At State Dining Room MalacaÑan

Summary of Discussions and Agreements

Presiding Officer

With Her Excellency, President Gloria Macapagal Arroyo presiding, the LEDAC meeting was called to order at 10:00 a. m. Senate President Franklin M. Drilon led the opening prayer.

Attendance

The following government officials attended the meeting:

REGULAR LEDAC MEMBERS

A. Executive

1.   Her Excellency, President GLORIA MACAPAGAL ARROYO   
2.   Vice President TEOFISTO T.  GUINGONA (DFA)
3.    Executive Secretary ALBERTO G. ROMULO ( OES)
4.    Secretary EMILIA T. BONCODIN (DBM)
5.    Secretary DANTE B. CANLAS (NEDA)
6.    Secretary MANUEL A. ROXAS II (DTI)
7.    Secretary JOSE ISIDRO N. CAMACHO (DOF)
8.    Secretary HEHERSON T. ALVAREZ (DENR)

B.  Senate

9.     Senate President FRANKLIN M. DRILON.
10.   Senate President Pro-Tempore MANUEL VILLAR
11.   Senate Majority Floor Leader LOREN LEGARDA-LEVISTE
12    Senator Minority Floor Leader AQUILINO Q. PIMENTEL

C.  House of Representatives

D.  Private Sector Representative

15.    Mr. GUILLERMO M. LUZ (Makati Business Club)

E.  Youth Representative

16.    Com. RICHARD ALVIN M. NALUPTA (NYC/SKC)

F.  Invited Executive Branch Officials

17.     Secretary NOEL C. CABRERA (OPS)
18.     Secretary VICTORIA P. GARCHITORENA (PMS)
19.     Secretary GABRIEL S. CLAUDIO (PLLO)
20.     Presidential Spokesperson RIGOBERTO C. TIGLAO (OP)
21.     Undersecretary ROMEO PAJARILLO (OPS)
22.     Director General ROILO S. GOLEZ (NSC)

G.  Invited Legislators

23.     Rep. OSCAR S. MORENO
24.     Rep. ROLANDO G. ANDAYA, JR
25.     Rep. JULIO A. LEDESMA IV
26.     Rep. JOSE MA. C. SALCEDA
27.     Rep. JAIME S. LOPEZ
28.     Rep. PROSPERO A. PICHAY JR.
29.     Rep. ANTONINO P. ROMAN

H.  Invited Presentor

30.     Pres. Adviser EDUARDO R. ERMITA (OP-Peace Process)

I.  Other Invited Official

31.    Mr. MELITO S. SALAZAR (Monetary Board)
32.    Dep. Gov. ARMANDO M. TETANGCO JR.(BSP)
33.    Deputy Director-General RAPHAEL P.M. LOTILLA (NEDA)
34.    Undersecretary CATHERINE H. BELLO (PLLO)
35.    Asst. Secretary BERNARDINO E. SAYO (PLLO)
36.    Assistant Secretary EVELYN V. GUERRERO (DBM)
37.    Director-General ROMULO L. NERI (CPBO-HOR)
38.    Deputy Director-General RODOLFO V. VICERRA (CPBO-HOR)
39.    Director RONALD R. GOLDING (PSG-Senate)
40.    Director IRAH RUTH BORINAGA (PSG-Senate)
41.    Director GISELLA C. LOPEZ (DBM)

J.  NEDA/LEDAC Secretariat

42.    Director VICTORIA V. QUIMBO 
43.    Asst. Director VIRGILIO V. SALENTES
44.    Mr. JOEL B. LASAM
45.    Mr. AUREO P. CASTRO
46.    Mr. RICARDO R. SUNICO
47.    Ms. MYRNA N. CACPAL
48.    Ms. ELVIRA L. CUSTODIO
49.    Mr. JAIME V. SERVILA

K.  Presidential Legislative Liaison Office (PLLO

50.    Ms. IRENE AFORTUNADO
51.    MR. REY B. ZARATE

L.  Presidential Management Staff (PMS)

52.    Mr. ANTONIO AVEDAÑO
53.    Mr. ARNEL R. REOLA
54.    Mr. REY MIRA

M.  Others

55.    Ms. SUSAN T. BULAN (CPBO-HOR)
56.    Ms. JEAN SIERA FRANCO-ENCINAS (PSG-Senate)
57.    Mr. ANTONIO ATAYDE (DBM)
58.    Mr. DINO NABLE (DBM)
59.    Secretary OSCAR YABES (Senate)
60.    Deputy Sec. EMMA L. REYES (Senate)
61.    Director ANTONIO DE GUZMAN (Senate)
62.    Atty. TONESITO UMALI (Office of Sen. Legarda)       
63.    MS. SHERBETT MARALIT (Office of Sen. Legarda)
64.    Ms. REGINA V. EVANGELISTA (Office of Sen. Drilon)
65.    Atty. FRANCIS NAVARETTE (Office of Sen. Pimentel)
66.    Director GRACIA GORGONIA (PA-Peace Process)
67.    Mr. RYAN B. SULLIVAN (PA-Peace Process)
68.    Mr. JOSE CORREA (OP-IHAO )

Agenda

The meeting had the following agenda:

                      Agenda Item                                       Presented By

I.   FOR DISCUSSION

              The President's Budget for CY 2002            DBM (Presentor)

II.  OTHER MATTERS

     a)   Update on the Peace Process             PA Peace Process (Presentor)
           and the ARMM Plebiscite

     b)   Activation of the LEDAC                        OP-PLLO (Presentor)
           Task Force on the Common
           Legislative Agenda (TF-CLA)

1.        Call To Order

1.1  After calling the meeting to order, the President welcomed the members of the LEDAC. She noted that in the previous meeting of the LEDAC was conducted in a cordial manner that she hoped would continue. She also expressed the need for the Executive and the Legislature to work together to win the battle against poverty within the decade.

1.2  The President stressed the crucial role of the national government budget in promoting peace and prosperity, and the importance of its timely enactment into the General Appropriations Act. She also expressed the urgency of securing peace and order, especially in Mindanao, to attract investments and create jobs throughout the country; and forging an agreement on a Common Legislative Agenda (CLA). The President then called on the Senate President and the Speaker to make their preliminary statements.

1.3  Senate President  Franklin B. Drilon thanked the President for convening the LEDAC at the first available opportunity. He looked forward to unified effort to provide solutions to the country's problems specially with the legislative initiative pronounced in the State of the Nation Address (SONA).

1.4  House Speaker Jose de Venecia also expressed his honor in participating in the meeting. He expressed his belief that the meeting would be a great opportunity in moving the country and lifting the economy in order to win the battle against poverty. He also stressed that the battle against poverty should be waged with the moral equivalent of war. He also stressed the need for the both Houses of Congress and the Cabinet and the President to work towards an agenda is united and complete and multipartisan initiative.

2.        The President's Budget for CY 2002           

2.1  The President explained to the Council that the budget should be submitted within one (1) month after the State of the Nation Address (SONA). This being accomplished, Her Excellency then called on Budget Secretary Emilia T. Boncodin to make a presentation on the salient features of the budget proposal.

2.2  The budget proposal for CY 2002 is PhP 780.8 billion which is 11.6 % higher than the previous budget or 19.7% of GDP. The modest budget proposal has the following macro-economic assumptions:

a)      assumes a GDP growth rate of 4.3 per cent;

b)     assumes a fifty pesos (P50.00) to the dollar foreign exchange rate;

c)     conforms with a balanced budget by the year 2006; and

d)     assumes a PhP 624.3 Billion revenue collection with a PhP130 billion deficit target in CY 200).

2.3  The executive also proposes to finance the deficit through total foreign and local borrowings amounting to PHP 267.4 billion of which PhP 155.6 is allocated for debt amortization.

2.4  The budget also has the following key features:

(a)     allocates the largest share to education and manpower development at

(b)     provides for  the seventeen percent (17 %) of the total budget;

(c)     accelerated  implementation of foreign assisted projects (FAPs);

(d)     assumes the automatic appropriation of PhP 134 billion for the Internal Revenue Allotments (IRA); and

(e)      appropriates PhP 50 billion to fund projects mentioned in the SONA.

2.5  The bulk of the budget will be allocated to the National Government (PhP 422.9 Billion) at 54.2% of the total. Personal services still constitutes the major expense class of the budget at 46.4 per cent of the total.

2.6  After debt servicing, the 2002 Budget allocates a major share of government resources to fund programs focused on basic needs in the amount of PhP 45.9 Billion. Of the government departments, the Department of Education Culture and Sports (DECS) receives the largest share at PhP 104.9 billion.

2.7  Rep. Andaya requested Secretary Boncodin to submit the President's Budget Message no later than Monday so as to allow his Committee to initiate its review of the budget and eliminate debates.

2.8  Senator Loren-Legarda queried Sec. Boncodin on the adequacy of the budget of the Department of Agriculture (DA) to meet the SONA commitment to create one (1) million jobs in agriculture. Secretary Boncodin clarified that the amount allocated for the DA does not include the amounts allocated for the AFMA and other associated expenditures. Moreover, President Arroyo clarified that the employment target was for a three (3) year period.

2.9  Speaker Jose De Venecia suggested that the government find ways to hasten the balancing of the budget and the creation of a modest budget surplus. He reminded the Council that in 1992 the country was in a similar situation. A working group from the DOF, DBM and Committees of Finance and Appropriations of both Houses of Congress were able to craft strategies that lead to balanced budgets with modest surpluses from 1993 until the Asian financial crisis of 1997. He suggested that a similar approach be considered by the government.

3.        Update on the Peace Process and the ARMM Plebiscite

3.1  Presidential Adviser (PA) Ermita's briefing covered the latest developments on the peace process after the President issued Executive Order No. 3 which rationalized and reorganized the Office of the Presidential Adviser on the Peace Process.

GRP-MILF Peace Talks  

3.2  Last 24 July 2001, the opening ceremonies of the second round of the peace talks between the Philippine government (GRP) and the Moro Islamic Liberation Front (MILF) were held in Kuala Lumpur, Malaysia as a follow up activity to the Agreement on the General Framework for the Resumption of Peace Talks between the GRP and the MILF signed on 24 March 2001 also in Kuala Lumpur.

3.3  Also as a result of the 24 March Agreement 2001, the Peace Panels of the GRP and the MILF met at Tripoli from 20 to 21 June 2001 with the support of Mr. Saif Al Islam Gaddafi, Chairman of the Gaddafi Foundation for Charitable Institutions and assisted by the Malaysian and Indonesian governments entered into the Agreement on Peace between the GRP and the MILF 0n 22 June 2001 which embodied the rehabilitation and security aspects.

3.4  As a result of the 24 March Agreement, the panels met in Malaysia for the Second Round of Talks and entered into the Implementing Guidelines on the Security Aspects of the GRP-MILF Agreement of Peace on 07 August 2001. The salient points of the Guidelines are as follows:

·        Identification of prohibitive hostile and provocative acts;

·        Commitment of both parties to a general cessation of hostilities and the implementation of all necessary measures to normalize the situation in conflict-affected areas to pave the way for rehabilitation and development;

·        Creation of Local Monitoring Teams with representatives from LGUs, the MILF and non-governmental organizations (NGOs) nominated by the GRP, the MILF and the religious sector;

·        Recognition and respect for the Agreement on Safety and Security Guarantees of 09 March  2000; and

·        Invitation of both parties to the OIC to monitor and observe the implementation of the GRP-MILF Agreements.

3.5  Negotiations between the parties would focus on two issues: rehabilitation, and ancestral domain. Shifting venues will be used for the talks until such time that the parties can build enough trust and confidence to move the negotiations to the Philippines.

Role of Libya and Malaysia

3.6  PA. Ermita highlighted the roles of the Libyan and Malaysian governments in the peace process. Libya, a long time actor in the Mindanao peace process, and Malaysia, a recent participant in the process, have both stated their belief on the that secession as a model for Islamic liberation from sovereign non-Islamic states is no longer viable.  The more realistic path would be a liberation from poverty though development, social reform and meaningful autonomy. 

Road Map for the Peace Process

3.7  PA Ermita listed the following landmarks milestones for the Road Map of the Mindanao peace process, as follows:

·        Conduct of the GRP-negotiations leading to a final peace agreement with enhanced regional autonomy;

·        Implementation of a shifting venue strategy to promote third party facilitation without prejudice to national sovereignty and constitutional processes;

·        Securing a unification agreement between the Moro National Liberation front (MNLF) and MILF based on the 1996 GRP-MNLF Peace Accord and the consolidation into a single representation in the Organization of Islamic Countries (OIC) on observer status;

·        Recognition by the GRP and the OIC of the new collective leadership of the MNLF; and

·        Possible joint MNLF-MILF participation in the new ARMM plebiscite and elections.

3.8  Likewise, PA Ermita cited the following events which support achievement of the above-mentioned landmarks:

·        Signing of an agreement with the MILF on the detailed ceasefire guidelines;

·        Reorganization of the MNLF with a fifteen (15) member Executive Council taking over leadership;

·        Unification of the MNLF and the MILF under a formal accord signed on 07 August 2001 at Kuala Lumpur;

·        Implementation of the final phase of the 1996 GRP-MNLF Accord with the passage of Republic Act (R.A.) 9054 which lead to the ARMM plebiscite of 14 August and the subsequent elections in the new ARMM on 26 November 2001. 

MNLF-MILF Unification

3.9  The MNLF and MILF signed an agreement consolidating themselves into the Bangsamoro Solidarity Conference. The agreement emphasized the parties commitment to peace justice equality and progress of the Bangsamoro peoples. Moreover, the MNLF and MILF have constituted a Coordinating Council to determine their respective roles and involvement in the achievement of the said objectives. They also have agreed to form a Joint Delegation to serve as an Observer in the OIC meetings.

3.10 PA Ermita opined that a unified MNLF and MILF will lead to greater stability in Southern Philippines as brings more militant Muslim groups under a single bloc for peace and justice. To this end, the government has initiated action for the recognition of the fifteen member Executive Council as the current and legitimate leadership of the MNLF.

NEW ARMM Plebiscite

3.11 PA Ermita reported that the ARMM plebiscite of 14 August 2001 is the final GRP implemental of the 1996 GRP-MNLF Final Peace Agreement. It is expected that the plebiscite will further stabilize the situation in Mindanao.

The Threat of Gov. Misuari

3.12 PA Ermita also informed the Council that despite ARMM Governor Nur Misuari protestations, Misuari's ability to destabilize the region is limited. Misuari reportedly can muster some 2,000 armed troops but these are limited to the Sulu area and which are counterbalanced by a similar number on the side controlled by Sulu Governor Yusop Jikiri.. On the mainland, Misuari can be contained by MNLF forces loyal to the MNLF Executive Council, like those loyal to Cotabato City Mayor Muslimin Sema and Marawi City Mayor Commander Solidario.

Interact Mindanao

3.13 The Inter-Agency Committee for Relief, Rehabilitation and Development of Areas Affected by Armed Conflict in Mindanao or INTERACT-Mindanao was created by Executive Order No. 2 dated February 27, 2001 in order to implement an integrated approach to building peace in Mindanao

3.14 To date, two (2) committees have been formed: the Sub-Committee on Relief and Rehabilitation; and the Sub-Committee on Peace and Development. The former Sub-Committee will focus on the provision of relief services, production and livelihood mechanisms for resettlement sites while the latter Sub-Committee will be tasked to develop a peace and development action plan geared at addressing the roots of armed conflict through social and economic reforms.

GRP-NDF Peace Talk

3.15 Formal negotiations with the National Democratic Front (NDF) were resumed on 27-30 April 2001 in Oslo Norway with discussions on the modality of implementing the Comprehensive Agreement on Respect for Human Rights and International Humanitarian Law (CAR-HR-IHL) and the conduct of meetings of the Reciprocal Working Committees (RWCs) on Social and Economic Reforms (SER). The second round of negotiations were also held in Oslo on June 10-13, 2001. Simultaneously, the RWCs of both panels began formal negotiations on the draft SER.

3.16 However, negotiations were stalled on 13 June 2001 when the GRP Panel called a recess after the killing of Congressman Rodolfo Aguinaldo by the Fortunato Camus Command of the New People's Army (NPA). Previously, the Melita Glor Command of the NPA claimed responsibility for the killings of Mayor Cesar Platon of Tanauan on May 7 and Congressman Marcial Punzalan Jr. on May 12. The conduct of political assassinations by the NPA run counter to the basic principle for building an environment for peace.

3.17 While the peace negotiations with the NDF is on indefinite recess, prospects for the resumption of talks remain positive as communication lines between the panels remain open to thresh out issues leading to the resumption of the peace talks. Talks may move forward with a meeting possibly by the second or third week of September following a consensus of both panels on contentious issues.

Discussions 

3.18 Rep. Pichay questioned PA Ermita if the MNLF-MILF merger means that the MILF will be bound by the GRP-MNLF Peace Agreement. PA Ermita  responded affirmatively that it can be safely assumed that MILF will be bound by the GRP-MNLF peace Agreement. President Arroyo also noted that the Tripoli and Kuala Lumpur Agreements that there was a reference to the 1996 GRP-MNLF Peace Agreements hence an implicit recognition of the 1996 Peace Agreement.

3.19 Rep. Pichay then asked if the Executive Branch government will negotiate separately with the MILF or will the government panel wait for the MNLF and the MILF to complete its merger agreement prior to resuming negotiations.  The President responded that the government has already reached agreement with the MILF and expected the MNLF to exert a stabilizing influence over the MILF. 

3.20 Senator Pimentel wish to make on record that Governor Misuari was invited to the Senate public consultations of the Amendment of the ARMM Bills in the areas to be affected by the plebiscite. Gov. Misuari's personal Secretary and some members of the MNLF Executive as well as all the members of the Regional Legislative Assembly. However, Governor Misuari never attended a single consultation hence Governor Misuari has no moral ascendancy to question the conduct of the ARMM plebiscite.

4.        Activation of the LEDAC Task Force on the Common Legislative Agenda (TF-CLA)

4.1  Secretary Gabriel Claudio informed the group that the LEDAC traditionally constitutes a Task Force on the Common Legislative Agenda (TF-CLA). The TF-CLA has the following tasks: 1) make an inventory of all priority legislative measures based on the President's SONA and the legislative agendas of both Houses of Congress; 2) undertake an effective merger of both agendas in support of the development thrusts of the government for adoption by the Council; and 3) monitor the enactment of laws consistent with the Common Legislative Agenda (CLA) and recommend to the LEDAC, measures to address impediments to the accomplishment of the CLA.

4.2  He informed the Council that the matrix was distributed during the meeting to the Council members list the sixteen (16) priority measures mentioned in the SONA together with the corresponding bills filed in both Houses supportive or related to the said bills. He pointed out that the House of Representatives has filed 59 bills related to the sixteen measures listed in the SONA while the Senate has filed 38 bills.

4.3  The LEDAC TF-CLA traditionally has the following composition: Executive Secretary as the Chair with 2 representatives from both Houses of Congress named by Senate President and the Speaker of the House together with the NEDA Director General and Presidential Legislative Adviser. The members from legislative branch are usually the Majority and Minority Floor Leaders of Both Chambers.

4.4  Secretary Claudio then requested the body for a motion to activate the LEDAC TF-CLA. Speaker De Venecia moved for the activation of the LEDAC TF-CLA while Senate President Drilon seconded the motion. There were no objections hence the motion was carried.

Discussions

4.5  Secretary Roxas queried the President if the Matrix of Bills constituted the LEDAC CLA. In reply, Her Excellency replied that the list is just the bills cited in the SONA as culled by Sec. Claudio. She also noted that the Departments may wish to push other bills with the appropriate legislative bodies like the Ant-Child Trafficking Bill of the DSWD and the Optional Reserve Officers Training Corps (ROTC) Bill of the Department National Defense (DND).

4.6  Senate President Drilon asked which of the sixteen (16) bills listed in the SONA which Congress should work on first. President Arroyo left the manner of the passage to Congress but mentioned the money laundering bill because of the deadline. Senator Loren-Legarda suggested that both Houses of Congress could also submit their priority legislative agenda to the TF-CLA like the Clean Water Bill.

4.7 PA Ermita reminded the members of the Council that there is a Presidential Decree 1706 or the National Service Law which covers the topic of Optional ROTC. He suggested that Congress review the Decree.

5.        Other Matters

           Frequency of Meetings

5.1             President Arroyo requested for suggestions on the frequency of meetings. Senate President Drilon suggested that meetings be held once every two months considering the nature of the legislative process without prejudice to the more frequent LEDAC TF-CLA meetings. President Arroyo then noted that the next meeting would be in October. She asked the body for suggestions on the agenda items. She stated the one of the items would be the report on the CLA.

           Memorandum of Speaker de Venecia

5.2  Speaker De Venecia then queried the Secretary Camacho about issues raised in his memorandum regarding the mobilization of funds specifically the utilization of the proceeds from the Malampalaya natural gas field. Secretary Camacho replied that the government is currently studying several proposals on the use of the revenues proceeds from the Malampalaya either in the form of equity or debt securitization. Her Excellency stated that the equity proposal is more desirable.

            Anti Money-Laundering Bill

5.3  Lopez noted that the Amendment of the Central Bank (CB) Act and the  Money Laundering Bill were both listed. He noted that they are separate bills and the Money Laundering Bill has a deadline. He suggested that Amendment of the Central Bank Act being taken up after the passage of the Money Laundering Bill.

5.4  The President replied if the Money Laundering Bill can incorporate provisions strengthening the Central Bank's power to monitor money laundering then Amendment of the CB Charter Bill could be taken up later.  

5.5  Rep. Moreno expressed his concerns that the Money Laundering Bill and the Amendment of the CB Charter may not be enough to meet the conditions of the FATF. Other sectors of the economy aside from the banking sector are also involved in money laundering. Other legislation such as the Suspected Activity Report Bill and the Creation of a Financial Intelligence Unit may need to be passed by the government in order to meet the concerns of the FATF.

5.6  The President replied that based on her experience as a legislator, she would leave it to the wisdom of Congress to pass the necessary legislation. She stated that it may be easier to pass several laws rather than an omnibus law. She noted that certain sectors believe that bank secrecy need not be lifted to combat money laundering which may be more acceptable to the business community.

5.7  Senator Pimentel informed the Council that his informal poll of his colleagues was negative and he opined that the passage of the Anti Money Laundering Bill would be difficult in the Senate. He suggested that as matter of strategy, the government could explore the possibility of ratifying a United Nations International Treaty in order to satisfy the FATF which would be easier than passing the money laundering bill.

5.8  Senate President Drilon queried Secretary Camacho if ratification of the treaty would suffice to satisfy the FATF in lieu of the money-laundering bill. Secretary Camacho informed the group that the FATF is requiring the Philippine government improve its ability to suppress and monitor money laundering. However, he was not aware of the treaty hence he could not answer the Senate President's query. He suggested that matter be referred to the government's Interagency Task Force negotiating with the FATF.

5.9  Monetary Board (MB) Member Melito Salazar informed the Council the Interagency Task Force would have to discuss the matter with the FATF in Paris if ratification of the treaty could be presented as an option if passage of the money-laundering bill would be difficult. Rep. Roman raised the point that the treaty may also require the passage of a municipal law to make the treaty effective.

5.10 Senator Pimentel pointed out that other countries without money laundering laws were not blacklisted because they ratified the treaty. Rep. Moreno concurred with Senator Pimentel. He noted that were several treaties. Legislation is not enough. Effective implementation of anti-money laundering measures may suffice. President Arroyo also pointed out that the FATF report mentioned the Philippine regulatory regime invites money laundering.

5.11 Rep. Moreno reminded the group that the June 2000 FATF report placed us second to Russia in money laundering activities. This was exacerbated by the other problems the country had like the impeachment trial. This solidified our reputation as a center for money laundering. This is significant as this information is shared among the countries of the FATF.

5.12  Rep. Lopez stated that other countries do not have money laundering laws but are not considered uncooperative. Money laundering is part of a process to cover up the proceeds of an antecedent crime. In fact, the Bangko Sentral has issued two (2) Memorandum Circulars that substantially address three (3) to four (4) policy recommendations of the FATF. He agreed with Senator Pimentel that passage of the treaty plus the issuance of the proper administrative regulations should suffice to have our status as an uncooperative country lifted.

5.13  House Speaker De Venecia suggested that the Department of Finance and the Central Bank get copies of the Anti Money Laundering Laws of Malaysia, Singapore and Thailand that allowed these governments to meet FATF criteria and at the same time see how these countries protected the secrecy of their local bank depositors.

5.14 Secretary Romulo agreed with Rep. Moreno that the effective implementation of anti money laundering laws is just as important. This requires vigorous prosecution and a strong judiciary. However, money laundering occurs more often in the developed countries like the United States and Switzerland.

5.15  Board Member Salazar concurred with Rep. Moreno that the country would have undertake a series of actions to get us of the list: namely: a) ratification of the treaty; b) then the anti money laundering bill; and c) the effective implementation of anti money-laundering laws. 

5.16 Rep. Moreno emphasized the need for strong cooperation among government agencies involved in combating money laundering. This has been the trend among other countries. In reply, Secretary Camacho noted that the bill has an Anti-Money Laundering Board.

5.17  Senate President Drilon then asked the DOF and the BSP if the September 30 deadline is correct. Mr. Salazar confirmed the correctness of the deadline. After the passage of the deadline our transactions will be affected by the sanctions. This evident from the notices being passed by local branches of foreign banks to the their Filipino clients requesting to waive the secrecy of their bank deposits.

5.18  Secretary Camacho agreed that the Interagency Task Force must confirm with the FATF as soon as possible if the passage of the treaty would be in substantial compliance with the FATF conditions. Senator Pimentel was concerned about the effect of the FATF demands on our sovereignty. He opined the Philippines should try to assure the international community that we are doing our best efforts by mobilizing the Committee on Foreign Affairs to expedite ratification of the treaty. Senate

5.19  While, President Drilon concurred with Senator Pimentel but reiterated his need to know as soon as possible if passage of the treaty is sufficient to comply with the FATF conditions. MB member Salazar opined that mere passage of the treaty is not enough to get the Philippines removed by the list.

5.20  Secretary Camacho suggested that demands for the passage of the money laundering bill is not an incursion into our sovereignty. Sanctions that are to be applied are not official sanctions but are imposed by private sector companies in reaction on our being on the list. The effect will be on our local business interests as their transactions become uncompetitive.

5.21 Speaker De Venecia asked if the treaty has been signed. President Arroyo requested Vice President Guingona to confirm if the Philippines is a signatory to the treaty.

          Revenue Measures

5.22   Rep. Andaya requested Secretary Camacho to expedite the submission of the Administration Bill versions of the Gross Income Tax and the Indexing of Excise Taxes. He informed the Council that his committee assumes these measures as the source of PhP 9.5 billion in revenues for next year's budget.

5.23  President Arroyo clarified that in the SONA she asked that Congress pass a Gross Income Tax Bill in short to medium term. Moreover, Secretary Camacho also clarified that the revenue projections are not tied to the passage of certain bills since the government cannot safely determine which measure will be passed.

6.        Council Agreements

6.1  The DBM shall submit the President's Budget Message no later than Monday so as to allow his Committee to initiate its review of the budget and eliminate debates.

6.2  The Council agreed to reactivate the LEDAC TF-CLA.

6.3  The Council also agreed to have bimonthly meetings with the next meeting scheduled for October.

6.4  The DOF and the BSP shall furnish both Houses of Congress with copies of the Anti Money Laundering Laws of Malaysia, Singapore and Thailand.

6.5  The DOF and the BSP shall consult the FATF as soon as possible in order to confirm if ratification of the U.N. International Convention against Transnational Crime would be sufficient for the removal of the Philippines from its' list of non-cooperative nations.

7.        Adjournment

           There being nothing else to discuss, the  President adjourned the meeting at 11:30 a. m.

Prepared by:
The LEDAC Secretariat

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