Third Meeting of the
Legislative-Executive Development Advisory Council
10:15 a.m. - 12:05 p.m., 15 November 1999
State Dining Room, Malacañan

SUMMARY OF DISCUSSIONS AND AGREEMENTS 

   Presiding Officer

            With the Honorable Executive Secretary Ronaldo Zamora presiding, the LEDAC meet­ing was called to order at 10:15 a.m. Representative Daisy Avance-Fuentes led the opening prayer. 

   Attendance 

   The following officials attended the meeting: 

A.     Executive 

1.      Executive Secretary Ronaldo B. Zamora (OES)

2.      Secretary Felipe M. Medalla (NEDA)

3.      Secretary Benjamin E. Diokno (DBM)

4.      Secretary Edgardo B. Espiritu (DOF)

5.      Secretary Jose T. Pardo (DTI)

6.     Secretary Rodolfo T. Reyes (OPS)

7.      Secretary Leonora V. De Jesus (PMS)

8.      Secretary Jose Jaime C. Policarpio (PLLO)

9.      Undersecretary Mario S. Roño (DENR)

10.  Assistant Secretary Renato P. Santiago (DILG)

B.     Senate  

11.  Senate President Blas F. Ople

12.  Senate President Pro Tempore John H. Osmeña

13.     Senate Majority Floor Leader Franklin M. Drilon

14.     Senate Minority Floor Leader Teofisto T. Guingona

15.     Senator Anna Dominique M. Coseteng

16.     Senator Ramon B. Magsaysay, Jr.

C.     House of Representatives 

17.  House Speaker Manuel B. Villar

18.  House Deputy Speaker Alfredo E. Abueg, Jr.

19.  House Deputy Speaker Eduardo R. Gullas

20.  House Deputy Speaker Daisy Avance-Fuentes

21.  House Majority Floor Leader Manuel A. Roxas II

22.  House Minority Floor Leader Feliciano R. Belmonte, Jr.

23.  Representative Gilberto M. Duavit

24.  Representative Ralph G. Recto

E.      Local Government  

25.  Governor Joey D. Lina as President League of Governors

F.      Other Officials 

26.  Deputy Director-General Raphael Perpetuo M. Lotilla(NEDA)

27.  Undersecretary Rodrigo P. Castelo (DOF)

28.  Undersecretary Conrado V. Apacible (PLLO)

29.  Assistant Secretary Paula  P. Defensor  (DENR)

30.  Director-General Romulo L. Neri (CPBO)

31.  Deputy Director-General Rodolfo V. Vicerra (CPBO)

32.  Director Ronald R. Golding Senate (PSG)

33.  Director Irah Ruth B. Borinaga Senate (PSG)

34.  Director Bernardino E. Sayo (PLLO)

35.  Director Margarita R. Songco (NEDA)

36.  Director Victoria V. Quimbo (NEDA)

37.  Director Eduardo Garvida (Senate)

38.  HEA Victor Emmanuel S. Dato (NEDA)

39.  HEA Nelson A. Victorino (PLLO) 

G.     NEDA/LEDAC Secretariat 

40.  Director Eugenio R. B. Inocentes III

41.  Mr. Aureo P. Castro

42.  Mr. Archimedes C. Lazaro

43.  Mr. Jose Ma.  J. Palabrica

44.  Mr. Ricardo R. Sunico

45.  Ms. Myrna N. Cacpal

46.  Ms. Marlene M. Vegafria

47.   Mr. Leody P. Barcelon

48.  Mr. Ildefonso P. Santillan, Jr. 

40.  PLLO

49.  Atty. Fe Lioaoa S. Baun

50.  Mr. Rey B. Zarate, Jr.

51.  Ms. Irene Afortunado

52.  Ms. Evelyn S. Ruiz

53.  Mr. Melchizedek E. Manalo 

H.     PMS 

54.  Mr. Jaime A. Bondal, Jr.

55.  Mr. Severino D. Del Rosario

56.  Mr. Rudy N. Funclara

57.  Mr. Reynaldo B.  Mira

58.  Mr. Antonio C. Avendaño

I.        Other Staffs

59.  Atty. Raul J. Palabrica (Office of the Vice-President)

60.  Atty. Milagros C. Cruz (Office of the Senate President)

61.  Atty. Raul L. Lambino  (Office of Sen L. Legarda)

62.  Mr. George A.  Aranas (Office of Sen. R. M. Magsaysay, Jr.)

63.  Mr. Roy M. Picart(Office of Sen F. S. Tatad)

64.  Atty. Ricardo B. La Viña(Office of the Speaker of the House of Representatives)

65.  Ms. Sandra T. Paredes (League of  Provinces)

66.  Ms. Susan T. Bulan (CPBO)

67.  Ms. Jean S. Encinas-Franco (Senate-PSG)

68.  Mr. Josenilo M. Vallido (IHAO)

69.  Mr. Jeffrey T. De Mesa (Malacañan Protocol Office) 

   Agenda 

   The meeting had the following agenda: 

            I.          FOR ADOPTION/APPROVAL 

                        A.        Highlights of the Second Meeting

                        B.         Resolution Number 1 (series of 1999) 

   II.         FOR DISCUSSION 

                           A.        Status of and Updates on the LEDAC Common Legislative Agenda     

               B.         Outlook on the Proposed 2000 Budget 

   III.       OTHER MATTERS  

   IV.       DOCUMENTS DISTRIBUTED DURING THE MEETING 

               A.        Highlights of the Second LEDAC Meeting

                        B.         Summary Update on the LEDAC Common Legislative Agenda

                        C.        Summary Update on the President’s Legislative Agenda

                        D.        Performance of  Congress Relative to Bills of National Application

                        E.         Summary Update  on Legislative Measures Certified by the President

                        F.         List of Proposed Bills of the  League of Governors 

I.          CALL TO ORDER 

1.1       After calling to order the third LEDAC meeting under the Estrada Administration, Executive Secretary Ronaldo B. Zamora conveyed the President’s wish that the meeting be conducted in two (2) parts. The first part would be to conduct the regular session of the LEDAC in the State Dining Room and chaired by the Executive Secretary. The second would be held at the President’s residence with the legislators and cabinet members in attendance. Deputy House Speaker for Mindanao, Daisy Avance-Fuentes led the opening  prayer.  

1.2       Secretary Zamora explained to the Council that the meeting would focus on arriving at a LEDAC Common Legislative Agenda (CLA). He discussed some of the pertinent legislation in the current CLA, specifically bills that form part of commitments relative to the program loans that have been negotiated or are being negotiated with various multilateral and bilateral aid agencies. These bills are in the areas of banking, energy, tax reforms and trade liberalization. 

II.        A.        ADOPTION OF THE HIGHLIGHTS OF THE PREVIOUS MEETING

2.A.1.  Senate President Ople moved for the adoption of the highlights. There being no objections, the minutes of the second LEDAC meeting were adopted by the body without revisions. 

B.         LEDAC RESOLUTION NO. 1 (Series of 1999) 

2.B.1    Senator Guingona requested for some clarification on the role and the need for weekly meetings of the LEDAC Task Force on the Common Legislative Agenda (TF-CLA). Executive Secretary Zamora and House Majority Floor Leader Roxas explained that the weekly meetings would facilitate the updating and graduation of the bills from the respective Lower House or Senate Committees to the Bicameral Committees. Further, the Task Force meetings would help the legislative branch to pace and set definite timeframes for the processing of the bills.  

2.B.2    There being no objections, Resolution No.1 was adopted by the body without revisions. 

III.       For Discussion/Approval

III.A.0 Updates on the CY 2000 Budget                   

3.A.1   Executive Secretary Zamora explained that Secretary Diokno wished to present an urgent motion concerning the CY 2000 budget. 

3.A.2   Secretary Diokno informed the group that the President would like to accelerate the planned grant of the ten per cent (10%) across-the-board wage increase for all government employees from September to January 2000.  In view of this, the Executive would have to make adjustments in the CY 2000 budget proposal. 

3.A.3   Secretary Diokno explained that the accelerated wage increase could be effected through the continued but stricter application of the Attrition Law and non-expansion of teaching plantilla positions. The Attrition Law would be made stricter by not allowing the Departments to fill up positions vacated for reason of resignation, retirement or death save for unique positions like Chief of Surgery. Of the 16,000 new positions proposed to be created in the budget, only 5,000 teaching positions in the Department of Education, Culture and Sports (DECS) would be considered. All adjustments in the budget would be in the Personal Services (PS) and not in the Maintenance and Operating Expenses (MOOE) or Capital Outlays (CO) accounts. Secretary Diokno proposed that the Council approve a Resolution in support of this. 

3.A.4   Senator Guingona noted that the Attrition Law which had already lapsed was frequently violated by the executive departments. He requested for empirical data on the actual implementation of the said law. Secretary Diokno explained that the Attrition Law was administered by the Civil Service Commission (CSC) which did not have the capability to monitor the financial disbursements of the different agencies. 

3.A.5   Senator Osmeña queried Secretary Diokno on the financial  implications of the proposed adjustment. Secretary Diokno estimated that the reduced number of new positions would save the government PhP 5 billion; the stricter application of the Attrition Law would generate another PhP 5 billion. These  measures, coupled with Senator Osmeña’s proposal to reduce training costs in the budget by PhP 2 billion, would provide the means to effect the early wage increase. 

3.A.6   Representative Duavit voiced his concern about the negative effects on public opinion of the Secretary’s motion to source the early wage increase from the reduction in the number of new teaching positions. Secretary Diokno assured Representative Duavit that the effect of the realignments would result in a net gain for DECS. 

3.A.7   Senator Magsaysay noted that the DECS may not be able to meet its mandate with the reduction in new teaching positions. He suggested that DBM consider other methods in meeting shortfalls in educational system requirements. He suggested using the voucher system to meet shortfalls. Senator Magsaysay suggested that the government explore implementing a voucher system in providing bright but poor school children the opportunity to enroll in private schools. The system would allow the DECS to meet its mandate without the added expense of building new classrooms and hiring new teachers. 

3.A.8   Governor Lina supported Senator Magsaysay’s suggestion. Governor Lina discussed the experience of Laguna in meeting the needs of provincial high school and college students. Moreover, Governor Lina pointed out that local governments have access to their Special Education Funds which are funded from local tax collections.  

3.A.9   Representative Gullas requested that DBM find ways and means of maximizing support for DECS considering that this is a constitutional imperative. Secretary Diokno clarified that DECS had been granted 7,000 new teaching positions by the previous administration. However, DECS used the money allocated for new positions to grant a centennial bonus. Under the current administration, DECS is still trying to fill-up those 7,000 teaching positions as well as new positions granted recently. 

3.A.10 Representative Roxas queried Secretary Diokno about the possible effects of the motion in relation to the budget deficit. Representative Roxas noted that the deficit figure as reported in the previous meeting had increased from PhP 85 billion to around PhP 97 billion. Secretary Diokno replied that the motion would have no effect on the deficit as the exercise involved adjustments in the PS account of the budget. Secretary Diokno explained that his motion was a straightforward request without enumerating the details of  effecting the pay increase. Secretary Diokno explained the deficit was still manageable as the growth of the deficit was well within the projected two and half percent (2.5%) budget deficit to GDP ratio. 

3.A.11 Senator Guingona put on record his reservations about the proposal of Secretary Diokno. Representative Belmonte, however, expressed his support for Secretary Diokno’s  proposal.

Council Agreement  

            The Council members expressed their support to the President’s call for the granting of the ten per cent (10%) wage hike for government employees beginning January 2000. The Council, however, did not issue a resolution. 

III. B. 0 Status of and Updates on the LEDAC Common Legislative Agenda

3.B.1    Secretary Policarpio and Director Sayo of the Presidential Legislative Liaison Office (PLLO) made the presentation. Hereunder were the major items presented in the report:

The following items have been passed by the legislature and signed into law by the President: 

1.      Concurrence to General Amnesty Proclamation

2.      Postponement of ARMM Election

3.      Amendments  to PEZA Law

4.      Clean Air Act

5.      Mandatory Use of Seat Belts

6.      Countervailing Duties

7.      Amendments to Anti-Dumping Act

8.      Incentives to MNCs Regional Headquarters (For Presidential Consideration) 

Six bills were still pending in plenary at the respective chambers of the legislators: 

1.      PNP Devolution to LGUs 

Senate: Approved on 3^rd Reading

                           House:  For 2^nd Reading 

2.      Securities Regulation & Enforcement Act 

Senate:  Approved on 3^rd Reading

House:  Pending on 2^nd Reading 

3.      Power Sector Reform Act 

Senate: 2 out of 5 components Approved on 3^rd Reading

                                          Another component On 2^nd Reading

House:  Omnibus Bill Pending on 2^nd Reading 

4.      Amendment to General Banking Act 

Senate:  Pending on 2^nd Reading

House:  Pending on 2^nd Reading 

5.      Amendments  to Retail Trade Law 

Senate: Pending on 2^nd  Reading

House:  For 2^nd Reading 

6.      Anti-Racketeering Act 

Senate:  Pending in Committee

House:  Pending on 2^nd Reading 

Two bills are still pending at the committee level of both chambers of the legislators: 

1.      New Central Bank Act

2.      Pre-Need Plans Code 

On the President’s Legislative Agenda

            Thirty-nine bills were earlier classified as part of the President’s Legislative Agenda (PLA) under the 1999 State of the Nation Address (SONA) of the President during the opening of the second regular session of Congress under the Estrada Administration. The distribution of these bills, by program focus, is as follows:  

By Program Focus

• Agro-Industrial Development (8)

• Macro-Economic and Financial Resources and Development (7)

• Social and Human Resources Development (5)                        

• Infrastructure and Energy Resources Development (10)

• National Security and Political Stability (7)                                     

• Development Administration (2)

Significant Bills for Priority Consideration  

• Omnibus Amendments to LGC

• Amendments to DILG Law

• Film Development and Incentives Board

• Fiscal Incentives to BOI-Registered Investments

• Extending the Life of COP/APT

• Financial Sector Tax Reform

• Shift to Transaction Valuation System

• Plant Variety Registration and Protection Act

• Computerization of BIR and BOC

• Anti-Trust Act of 1999

• Sustainable Forest Management

3.B.2    Representative Roxas noted the plethora of lists of legislative priorities and the need to harmonize these lists. 

3.B.3    Secretary Policarpio explained that the PLLO had planned to come up with updated priority legislative agenda during the TF-CLA meeting scheduled for Friday. However, due to scheduling problems, the meeting did not push through and PLLO decided to present the lists directly instead to the Council and let the Council determine the priority list.

3.B.4    Representative Roxas suggested that the matter be taken up in the TF-CLA. He requested that the TF-CLA meeting be scheduled by the PLLO early in the week to accommodate the commitments of the Majority Floor Leaders of the House and the Senate.      

Amendment of the Retail Trade Act 

3.B.5    Senator Magsaysay, Chairman of the Senate Committee on Trade and Commerce, raised questions on the need for and the urgency of the bill. Senator Magsaysay suggested that the government carefully pace its liberalization program so as not to defeat the purpose of the program by effectively decimating Philippine industries. Senator Magsaysay reminded the Council that WTO principles likewise aim at strengthening local industries to be able to withstand international competition fairly. 

3.B.6    Representative Recto, Chairman of the House Economic Affairs Committee, reported that the House Bill is considering allowing 100% foreign capitalization of retail trade enterprises but would require a high capitalization requirement in the PhP 200 million to PhP 400 million range. However, the House version would not limit the period of 100% foreign ownership. 

3.B.7    Secretary Pardo explained that DTI would prefer a capitalization level for foreign retailers of at least PhP 100 million but would defer to the Bicameral Committee’s decision. 

3.B.8    Senator Drilon expressed his confidence that the Senate will vote on the Retail Trade Bill by  01 December 1999. 

Council Agreement 

The LEDAC prioritized the following bills for processing/passage by end of year 1999: 

1.      Bill to Extend the Life of the COP/APT;

2.      2000 Budget;

3.      Amendment to the Retail Trade Act;

4.      Amendment to the General Banking Act;

5.      Securities Act of 1999; and,

6.      Bill to Suspend the Value Added Tax on Banking Transactions.

VII.     ADJOURNMENT 

   The meeting was adjourned at 12:05 p.m.

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