SESSION NO. 4 2 SEVENTEENTH CONGRESS SECOND REGULAR SESSION

■k
REPUBLIC OF THE PHILIPPINES
P asay C ity
Journal
SESSION NO. 42
W ednesday, December 13, 2017
SEVENTEENTH CONGRESS
SECOND REGULAR SESSION

SESSION NO. 42
Wednesday, December 13,2017
CALL TO ORDER
At 6:29 p.m., the Senate President, Hon. Aquilino
“Koko" Pimentel III, called the session to order.
PRAYER
Sen. Maria Lourdes Nancy S. Binay led the
prayer, to wit:
Panginoon,
Dumudulog po kami sa Inyo para sa
haling sesyon ng Senado para sa taong ito.
Nawa’y mapagtuunan namin ng pansin
at mahigyang solusyon ang mga panga-
ngailangan ng anting mga kabahayan.
Tulungan po Ninyo kaming makamit
ang hinahangad naming tunay na pag-
hahago sa pagsisimida ng taong 2018.
Nawa y pagmamahalan, pagkakaisa
at pag-asa ang mamayani sa aming mga
puso sa panahong ito.
Heavenly Father,
This holiday season, wrap all Your child
ren in the spirit of Christmas.
Teach us to practice kindness and
compassion in our everyday lives.
And may we all enjoy the warmth of
love and laughter of family and friends this
special time of the year.
This we pray to You, our Lord, our God,
and Savior.
Amen.
ROLL CALL
Upon direction of the Senate President, the
Secretary of the Senate, Atty. Lutgardo B. Barbo,
called the roll, to which the following senators
responded;
Angara, S.
Aquino, P. B. IV B.
Binay, M. L. N. S.
Drilon, F. M.
Ejercito, J. V. G.
Escudero, F. J. G.
Gatchalian, W.
Gordon, R. J.
Honasan, G. B.
Hontiveros, R.
Lacson, P. M.
Legarda, L.
Pangilinan, F. N.
Pimentel III, A. K.
Poe, G.
Recto, R. G.
Sotto III, V. C.
Trillanes IV, A. F.
Villanueva, J.
Villar, C.
Zubiri, J. M.

1234 WEDNESDAY, DECEMBER 13,2017
With 21 senators present, the Chair declared the
presence of a quorum.
Senator Pacquiao was unable to attend the session
“due to a very important meeting that the Senator
needed to attend to” as indicated in the December
13, 2017 letter of the Senator’s chief of staff.
Senator De Lima was unable to attend the
session as she was under detention.
APPROVAL OF THE JOURNAL
Upon motion of Senator Sotto, there being no
objection, the Body dispensed with the reading of the
Journal of Session No. 41 (December 12, 2017) and
considered it approved.
ACKNOWLEDGMENT
OF THE PRESENCE OF GUESTS
At this juncture, the Chair acknowledged the
presence in the gallery of the guests of Senators
Villar and Zubiri, namely, Mr. Jose Manuel Alba and
Mayor Virgilio Pactura of Talakag, Bukidnon.
Senate President Pimentel welcomed the guests
to the Senate.
REFERENCE OF BUSINESS
The Deputy Secretary for Legislation, Atty. Edwin
B. Bellen, read the following matters and the Chair
made the corresponding referrals:
MESSAGE FROM THE
HOUSE OF REPRESENTATIVES
Letter from the House of Representatives, informing
the Senate that on 11 December 2017, the House
Representatives passed the following House
bills, in which it requested the concurrence of
the Senate:
House Bill No. 6604, entitled
AN ACT REGULATING THE RATES
OF POLITICAL PROPAGANDA ON
TELEVISION, RADIO AND PRINT
DURING AN ELECTORAL CAMPAIGN
PERIOD, AMENDING FOR THE PUR
POSE SECTION 11 OF REPUBLIC
ACT NO. 9006, OTHERWISE KNOWN
AS THE FAIR ELECTION ACT
To the Committees on Electoral Reforms and
People's Participation; and Public Information
and Mass Media
AN ACT ESTABLISHING A NATIONAL
VISION SCREENING PROGRAM
FOR KINDERGARTEN PUPILS AND
APPROPRIATING FUNDS THEREFOR
To the Committees on Education, Arts and
Culture; Health and Demography; Ways and
Means; and Finance
AN ACT REGULATING THE PRACTICE
OF FOOD TECHNOLOGY IN THE
PHILIPPINES, CREATING FOR THE
PURPOSE THE BOARD OF FOOD
TECHNOLOGY, AND APPROPRIAT
ING FUNDS THEREFOR
To the Committee on Rules
AN ACT REGULATING THE IMPORT
ATION, MANUFACTURE, DISTRI
BUTION AND SALE OF CHILD
REN’S PRODUCTS CONTAINING
HAZARDOUS CHEMICALS, AND
PROVIDING PENALTIES FOR
VIOLATION THEREOF
To the Committees on Health and Demo
graphy; Trade, Commerce and Entrepreneur-
ship; and Finance
AN ACT EXTENDING FOR ANOTHER
TWENTY-FIVE (25) YEARS THE
FRANCHISE GRANTED TO RAVEN
BROADCASTING CORPORATION,
UNDER REPUBLIC ACT NO. 8084,
ENTITLED AN ACT GRANTING
RAVEN BROADCASTING CORPORA
TION A FRANCHISE TO CONS
TRUCT, MAINTAIN AND OPERATE
RADIO AND TELEVISION BROAD
CASTING STATIONS WITHIN LUZON
AND OTHER AREAS IN THE PHILIP-

WEDNESDAY, DECEMBER 13,2017 1235
PINES WHERE FREQUEN-CIES
AND/OR CHANNELS ARE STILL
AVAILABLE FOR RADIO AND
TELEVISION BROADCASTING; and
AN ACT EXTENDING FOR ANOTHER
TWENTY-FIVE (25) YEARS THE FRAN
CHISE GRANTED TO ADVANCED
MEDIA BROADCASTING SYSTEM,
INC., UNDER REPUBLIC ACT NO. 8061,
ENTITLED AN ACT GRANTING THE
ADVANCED MEDIA BROADCAST
ING SYSTEM, INC., A FRANCHISE
TO CONSTRUCT, INSTALL, OPERATE
AND MAINTAIN RADIO AND TELE
VISION BROADCASTING STATIONS
IN THE PHILIPPINES
To the Committee on Public Services
AN ACT DECLARING BARANGAY
TALA IN THE MUNICIPALITY OF
ORANI, PROVINCE OF BATAAN AN
ECOTOURISM ZONE AND APPRO
PRIATING FUNDS THEREFOR
To the Committees on Environment and
Natural Resources; Tourism; and Finance
AN ACT SEPARATING THE HERACLEO
CASCO NATIONAL HIGH SCHOOL
ANNEX IN BARANGAY SAN ISIDRO,
MUNICIPALITY OF STA. MARIA,
PROVINCE OF DAVAO OCCIDENTAL
FROM THE HERACLEO CASCO
NATIONAL HIGH SCHOOL, CONVERT
ING IT INTO AN INDEPENDENT
NATIONAL HIGH SCHOOL TO BE
KNOWN AS PEDRO MARISCAL
NATIONAL HIGH SCHOOL, AND
APPROPRIATING FUNDS THEREFOR;
and
AN ACT SEPARATING THE KALBAY
NATIONAL HIGH SCHOOL ANNEX
IN BARANGAY SUGAL, MUNICI
PALITY OF JOSE ABAD SANTOS,
FROM THE KALBAY NATIONAL
HIGH SCHOOL, CONVERTING IT
INTO AN INDEPENDENT NATIONAL
HIGH SCHOOL TO BE KNOWN AS
EMELIANO S. FONTANARES SR.
Culture; and
AN ACT DECLARING THE PORTA
VEGA BEACH AND THE SHORELINES
OF BARANGAYS T.R. YANGCO,
CADULAN AND DIVISORIA, ALL
LOCATED IN THE MUNICIPALITY
OF DIMASALANG, PROVINCE
OF MASBATE, AN ECOTOURISM
SITE, ESTABLISHING THE PORTA
VEGA ECOTOURISM COUNCIL AND
To the Committees on Environment and
Natural Resources; Tourism; and Finance
AN ACT DECLARING THE LIMAHONG
CHANNEL LOCATED IN THE
MUNICIPALITY OF LINGAYEN,
PROVINCE OF PANGASINAN A
TOURIST SPOT AND APPRO
PRIATING FUNDS THEREFOR; and
AN ACT DECLARING THE PROVINCE OF
LA UNION A TOURIST DESTINATION
AND THE “SURFING CAPITAL OF
THE NORTH”, PROVIDING FOR ITS
DEVELOPMENT AND APPROPRIAT
ING FUNDS THEREFOR
To the Committees on Tourism; and Finance
AN ACT UPGRADING THE DR.
PAULINO J. GARCIA MEMORIAL
RESEARCH AND MEDICAL CENTER

1236 WEDNESDAY, DECEMBER 13, 2017
EXTENSION HOSPITAL IN THE
MUNICIPALITY OF TALAVERA,
PROVINCE OF NUEVA ECUA, TO A
LEVEL n HOSPITAL AND INCREAS
ING ITS BED CAPACITY FROM
FIFTY (50) TO ONE HUNDRED (100)
BEDS TO BE NOW KNOWN AS THE
TALAVERA GENERAL HOSPITAL,
AND APPROPRIATING FUNDS
THEREFOR;
AN ACT UPGRADING THE LABUAN
PUBLIC HOSPITAL IN ZAMBOANGA
CITY INTO A LEVEL II HOSPITAL
TO BE KNOWN AS THE LABUAN
GENERAL HOSPITAL, INCREASING
ITS BED CAPACITY FOR GENERAL
CARE SERVICES TO ONE HUN
DRED (100), AND APPROPRIATING
FUNDS THEREFOR; and
AN ACT INCREASING THE BED
CAPACITY OF THE ZAMBOANGA
CITY MEDICAL CENTER IN ZAM
BOANGA CITY FROM FIVE HUN
DRED (500) TO EIGHT HUNDRED
(800) BEDS AND APPROPRIATING
FUNDS THEREFOR, AMENDING
FOR THE PURPOSE REPUBLIC ACT
NO. 7272, AS AMENDED, ENTITLED
AN ACT CONVERTING THE ZAM
BOANGA REGIONAL HOSPITAL IN
ZAMBOANGA CITY INTO ZAM
BOANGA CITY MEDICAL CENTER,
THEREFOR
To the Committees on Health and Demo
graphy; and Finance
AN ACT SEPARATING THE SOUTHERN
PHILIPPINES AGRICULTURE,
BUSINESS, MARINE AND AQUA
TIC SCHOOL OF TECHNOLOGY
(SPAMAST) — DIGOS CITY CAMPUS
IN THE CITY OF DIGOS, DAVAO
DEL SUR, FROM THE SPAMAST
IN THE MUNICIPALITY OF
MALITA, DAVAO OCCIDENTAL
AND CONVERTING IT INTO A
STATE COLLEGE TO BE KNOWN
AS THE DAVAO DEL SUR STATE
COLLEGE, AND APPROPRIATING
FUNDS THEREFOR ; and
AN ACT CONVERTING THE ZAMBO
ANGA CITY STATE POLYTECHNIC
COLLEGE INTO A STATE UNIVER
SITY TO BE KNOWN AS THE
ZAMBOANGA PENINSULA POLY
TECHNIC STATE UNIVERSITY,
THEREFOR
Culture; Ways and Means; and Finance
BILL ON FIRST READING
Senate Bill No. 1635, entitled
AN ACT PROVIDING FOR THE BASIC
LAW FOR THE BANGSAMORO
AUTONOMOUS REGION AND
ABOLISHING THE AUTONOMOUS
REGION IN MUSLIM MINDANAO,
REPEALING FOR THE PURPOSE
REPUBLIC ACT NO. 9054 ENTITLED
“AN ACT TO STRENGTHEN AND
EXPAND THE ORGANIC ACT FOR
THE AUTONOMOUS REGION
IN MUSLIM MINDANAO,” AND
REPUBLIC ACT NO. 6734 ENTITLED
“AN ACT PROVIDING FOR AN
ORGANIC ACT FOR THE AUTO
NOMOUS REGION IN MUSLIM
MINDANAO; AND FOR OTHER
PURPOSES.”
Introduced by Senator Zubiri
To the Committees on Local Government;
and Constitu-tional Amendments and Revision
of Codes
COMMITTEE REPORTS
Committee Report No. 198, submitted jointly by the
Committees on Education, Arts and Culture; and

Finance, on House Bill No. 5578, introduced by
Representative Mangaoang, et al., entitled
AN ACT SEPARATING MAGTOMA
NATIONAL HIGH SCHOOL -
DUPLIGAN ANNEX IN BARANGAY
DUPLIGAN, MUNICIPALITY OF
TANUDAN, PROVINCE OF KALINGA
FROM THE MAGTOMA NATIONAL
HIGH SCHOOL. CONVERTING IT
BIGA NATIONAL HIGH SCHOOL,
THEREFOR,
recommending its approval without amendment.
Sponsor: Senator Escudero
To the Calendar for Ordinary Business
Representative Gatchalian, et al., entitled
HIGH SCHOOL IN BARANGAY
LINGUNAN, VALENZUELA CITY,
TO BE KNOWN AS LINGUNAN
NATIONAL HIGH SCHOOL AND
APPROPRIATING FUNDS THEREFOR,
Committee Report No. 200, submitted Jointly by the
Representative Almario, et al., entitled
AN ACT CONVERTING THE LICOP
ELEMENTARY SCHOOL IN BARA
NGAY LICOP, MAT! CITY, PROVINCE
OF DAVAO ORIENTAL INTO AN
INTEGRATED SCHOOL TO BE
KNOWN AS LICOP INTEGRATED
SCHOOL AND APPROPRIATING
FUNDS THEREFOR,
Representative Garcia, et al., entitled
SCIENCE HIGH SCHOOL IN BARA
NGAY BAGUMBAYAN, BALANGA
CITY, PROVINCE OF BATAAN TO
BE KNOWN AS BALANGA CITY
NATIONAL SCIENCE HIGH SCHOOL,
THEREFOR,
Representative Amatong, et al., entitled
AN ACT SEPARATING THE LILOY
NATIONAL HIGH SCHOOL - PATA-
WAG EXTENSION IN BARANGAY
PATAWAG, MUNICIPALITY OF
LILOY, PROVINCE OF ZAMBOANGA
DEL NORTE FROM THE LILOY
NATIONAL HIGH SCHOOL, CON
VERTING IT INTO AN INDEPEN
DENT NATIONAL HIGH SCHOOL
TO BE KNOWN AS PATAWAG
Representative Ungab, et al., entitled
r"

SIBULAN, TORIL DISTRICT, DAVAO
CITY TO BE KNOWN AS MT. APO
TALISAY, MUNICIPALITY OF SAN
ISIDRO, PROVINCE OF DAVAO
ORIENTAL TO BE KNOWN AS
TALISAY NATIONAL HIGH
SCHOOL, AND APPROPRIATING
FUNDS THEREFOR,
Representative Almario, el al., entitled
CORPORACION, MUNICIPALITY
OF LUPON, PROVINCE OF DAVAO
ORIENTAL TO BE KNOWN AS
CORPORACION NATIONAL HIGH
FUNDS THEREFOR,
MAGDUG, MUNICIPALITY OF
GOVERNOR GENEROSO, PROVINCE
OF DAVAO ORIENTAL TO BE
KNOWN AS MAGDUG NATIONAL
HIGH SCHOOL AND APPROPRIAT
ING FUNDS THEREFOR,
Representative Cerilles, et al., entitled
DIGON, MUNICIPALITY OF MARGO-
SATUBIG, PROVINCE OF ZAMBO
ANGA DEL SUR TO BE KNOWN
AS DIGON NATIONAL HIGH
FUNDS THEREFOR,
Representative Bautista-Bandigan, et al., entitled
AN ACT SEPARATING THE LAWA
IN BARANGAY LAPUAN, MUNICI
PALITY OF DON MARCELINO,
FROM THE LAWA NATIONAL
HIGH SCHOOL, CONVERTING IT
LUISA JOYCE MALLARI NATIONAL
HIGH SCHOOL, AND APPROPRIAT
ING FUNDS THEREFOR,

WEDNESDAY, DECEMBER 13, 2017 1239
Representative Bautista-Bandigan, et at., entitled
AN ACT SEPARATING THE FISH
ING VILLAGE COMPREHENSIVE
IN BARANGAY MANA, MUNICI
PALITY OF MALITA, PROVINCE
OF DAVAO OCCIDENTAL FROM
THE FISHING VILLAGE COMPRE
HENSIVE NATIONAL HIGH SCHOOL,
CONVERTING IT INTO AN INDEPEN
TO BE KNOWN AS BENJAMIN
VELASCO BAUTISTA SR. NATIONAL
HIGH SCHOOL, AND APPROPRIAT
ING FUNDS THEREFOR,
recommending its approval without amendment
Representative Amatong, et ai, entitled
AN ACT SEPARATING THE KALAWIT
NATIONAL HIGH SCHOOL -
PIANON ANNEX IN BARANGAY
PIANON, MUNICIPALITY OF
KALAWIT, PROVINCE OF ZAMBO
ANGA DEL NORTE FROM THE
KALAWIT NATIONAL HIGH SCHOOL,
CONVERTING IT INTO AN INDEPEN
TO BE KNOWN AS PIANON
recommending its approval without amendment
Representative Ungab, et ai, entitled
CATIGAN, TORIL DISTRICT, DAVAO
CITY TO BE KNOWN AS CATIGAN
Committee Report No. 212, submitted by the
Committee on Education, Arts and Culture, on
Senate Bill No. 1270, introduced by Senator
Emmanuel “Manny” D. Pacquiao, entitled
AN ACT DECLARING THE LAST
MONDAY OF JANUARY AS
“NATIONAL BIBLE DAY” AND
PRONOUNCE THE SAME A
REGULAR HOLIDAY AND EVERY
YEAR THEREAFTER,
recommending its approval with amendments,
taking into consideration Senate Bill No. 1301.
Committee Report No. 213, prepared and submitted
by the Committee on Economic Affairs, on
Senate Bill No. 1636, with Senator Gatchalian
as author thereof, entitled
AN ACT REQUIRING PUBLIC TELE
COMMUNICATIONS ENTITIES TO
PROVIDE NATIONWIDE MOBILE
NUMBER PORTABILITY TO SUB
SCRIBERS,
recommending its approval in substitution of
Senate Bill No. 1237.
Sponsor: Senator Gatchalian
f

ADDITIONAL REFERENCE OF BUSINESS
MESSAGE FROM THE
HOUSE OF REPRESENTATIVES
Letter from the House of Representatives, informing
the Senate that on 13 December 2017, the House of
Representatives adopted House Concurrent
Resolution No. 13, entitled
CONCURRENT RESOLUTION REFLECT
ING THE CORRECT AMOUNT IN
THE SPECIAL PROVISIONS UNDER
THE OFFICE OF THE PRESI
DENTIAL ADVISER ON THE PEACE
PROCESS AND LOCAL GOVERN
MENT SUPPORT FUND IN THE
BICAMERAL CONFERENCE COM
MITTEE REPORT ON HOUSE BILL
NO. 6215, OTHERWISE KNOW AS
THE “2018 GENERAL APPROPRIA
TIONS BILL,” AS APPROVED BY
THE BICAMERAL CONFERENCE
COMMITTEE AND RATIFIED BY
BOTH HOUSES OF CONGRESS,
in which it requested the concurrence of the
Senate.
Proposed Senate Resolution No. 574, entitled
RESOLUTION CONGRATULATING
AND COMMENDING SENATOR
LEILA M. DE LIMA FOR BEING
AWARDED AS ONE OF FOREIGN
POLICY’S “50 LEADING GLOBAL
THINKERS OF 2017” AND FOR
BEING BESTOWED THE “PRIZE OF
FREEDOM AWARD” BY LIBERAL
INTERNATIONAL IN RECOGNI
TION OF HER STEADFAST AND
UNFALTERING DEDICATION IN
UPHOLDING THE RIGHTS AND
DIGNITY OF THE FILIPINO PEOPLE
Introduced by Senators Pangilinan, Drilon,
Trillanes IV, Aquino IV and Hontiveros
COMMITTEE REPORTS
Committees on Sports; Ways and Means; and
Finance, on Senate Bill No. 1515, introduced by
Senator Emmanuel “Manny” D. Pacquiao,
entitled
AN ACT STRENGTHENING THE PHILIP
PINE SPORTS COMMISSION, AMEND
ING FOR THE PURPOSE REPUBLIC
ACT NO. 6847, OTHERWISE KNOWN
AS THE PHILIPPINE SPORTS
COMMISSION ACT,
recommending its approval with amendments.
Sponsor: Senator Emmanuel “Manny” D.
Pacquiao
Committees on Local Government; and Electoral
Reforms and People’s Participation, on House
Bill No. 1926, introduced by Representative Uy,
entitled
AN ACT CREATING A BARANGAY TO
BE KNOWN AS BARANGAY
POBLACION 2 IN THE MUNICI
PALITY OF VILLANUEVA, PRO
VINCE OF MISAMIS ORIENTAL,
recommending its approval with amendment.
Sponsor: Senator Sonny Angara
Committees on Local Government; and Electoral
Reforms and People’s Participation, on House
Bill No. 5367, introduced by Representative
Ferrer IV, et ai, entitled
AN ACT REAPPORTIONING THE SIXTH
AND SEVENTH LEGISLATIVE
DISTRICTS OF THE PROVINCE OF
CAVITE TO CREATE AND ADDI
TIONAL LEGISLATIVE DISTRICT
TO BE KNOWN AS THE EIGHTH
LEGISLATIVE DISTRICT OF THE
PROVINCE OF CAVITE,
recommending its approval with amendments.
f

Sponsor: Senator Sonny Angara
ADOPTION OF HOUSE
CONCURRENT RESOLUTION NO. 13
objection, the Body adopted House Concurrent
Resolution No. 13, which is the measure reflecting
the correct amount in the special provisions under
the Office of the Presidential Adviser on the Peace
Process (OPAPP) and the Local Government
Support Fund (LGSF) of the Bicameral Report for
the 2018 GAB.
COMMITTEE REPORT NO. 192 ON
SENATE JOINT RESOLUTION NO. 11
{Continuation)
objection, the Body resumed consideration, on Second
Reading, of Senate Joint Resolution No. 11 (Committee
Report No. 192), entitled
JOINT RESOLUTION AUTHORIZING
THE INCREASE IN BASE PAY OF
MILITARY AND UNIFORMED PER
SONNEL IN THE GOVERNMENT,
AND FOR OTHER PURPOSES.
Senator Sotto stated that the parliamentary status
was still the period of interpellations.
Thereupon, the Chair recognized Senator
Honasan, sponsor of the measure, and Senator
Pangilinan for his interpellation.
INTERPELLATION
OF SENATOR PANGILINAN
Prefatorily, Senator Pangilinan stated that he has
no issue regarding the additional compensation of
uniformed personnel as he recognizes the sacrifices
and challenges of the soldiers who are committed
to defend the Republic from either internal or foreign
threats. He said that his concern was on how the
increase in pay of one sector of the government
could be harmonized with the compensation of other
government employees. He recalled that in the
previous interpellations, there was mention of salary
or compensation distortion in view of the proposed
58.7% increase in the average base pay of military
and uniformed personnel.
In reply. Senator Honasan explained that a
noncombatant private would receive around P43,000
per month inclusive of benefits; on the other hand,
an entry level lawyer in the Department of Justice
with a Salary Grade 21 would be receiving about
P64,563 monthly, or an aimual pay of P774,756.
Senator Pangilinan asked on the salary grade and
pay of an entry-level doctor in the Department of
Health (DOH).
SUSPENSION OF SESSION
Upon motion of Senator Honasan, the session
was suspended.
It was 6:54 p.m.
RESUMPTION OF SESSION
At 6:55 p.m., the session was resumed.
Upon resumption. Senator Honasan explained
that an entry-level lawyer and Medical Officer I both
fall under Salary Grade 16 and would receive an
aimual salary of P483,710.
Senator Pangilinan noted the disparity in the
salaries of uniformed personnel with other civilian
workers considering that under the proposal, even
the lowest ranking man in uniform would receive
more than P50,000/month, which would even increase
to P625,000 annually if combat pay was included.
This, he said, would present a problem since MUPs
would be paid more than an entry-level government
lawyer or doctor. However, Senator Honasan pointed
out that soldiers put their lives on the line and are
exposed to a high risk environment.
To Senator Pangilinan’s concern that the
implementation of the proposed base pay increase
would affect the morale of the rest of the bureaucracy.
Senator Honasan said that like the Salary Standard
ization Law which is periodically up for review, the
increase in the base pay of MUPs would be rational
ized in terms of the attention that would be given to
other professions.
Senator Pangilinan pointed out that the dilemma
lay in the need to increase the necessary support for
the soldiers and, at the same time, harmonize it within
the context of what the civilian employees in govern
ment would say: that they too deserve an increase.

He pointed out that the resolution would be tantamount
to amending the SSL by exempting uniformed
personnel from the SSL scale.
Senator Honasan pointed out that medical
officers are entitled to the Magna Carta benefits
such as 25% of the base pay, while government
lawyers are normally hired as Attorney III classified
under Salary Grade 21 to be competitive with the
private sector.
Senator Pangilinan stated that on the contrary,
the proposal would not make government pay
competitive and might even become a disincentive
for professionals like lawyers to enter public service.
He noted that under the measure, even the Armed
Forces Chief of Staff would be receiving a pay
higher than the salary of a senator.
Senator Honasan clarified that a Medical Officer in
(Salary Grade 21) would be receiving an annual salary
of P774,756 or about P64,149 monthly. However,
Senator Pangilinan said that a fair comparison would
be that of the salary of a private in the Armed
Forces and the Grade 11 entry level in the civilian
bureaucracy. He doubted that the measure could
simply be passed in view of the wide disparity in
salaries and the distortion that would be created as a
result. He asked for a solution that could be included
in the measure to address that problem.
Senator Honasan clarified that while the approval
of the resolution would be an individual and
collective judgment call, his Committee sought to
present the proposal so that the Senate could
make its decision based on a more complete, timely
and more accurate information. He said that his
Committee was laboring under time constraints
considering that the measure had been certified as
urgent and that he wanted to exhaust the remaining
time to put as much information without prejudice
to any questions that would be raised during the
period of interpellations.
As regards the observation that the measure
did not address the huge financial obligations of the
government to retired armed personnel and officers.
Senator Honasan acknowledged that the measure
would not address the issues concerning the funding
of the retirement pay and benefits, but he explained
that the Senate version made room for the issue of
indexation without the airtight guarantees of where
to source the needed funds. He added that the
objective act of the Committee in considering
Resolution Nos. 9 and 10 was to come up with a
substitute resolution that would incorporate the core
components of both resolutions preparatory to
reconciling the two versions. He explained that under
the House version, the indexation is suspended;
however, it would be automatically lifted on January
1, 2019, or upon effectivity of a pension reform law,
whichever comes first.
Senator Honasan recalled that during the
committee hearing, the consensus among the
pensioners was that when the funds become avail
able, they would prioritize those in dire need like
the non-commissioned officers, widows and orphans
of retirees.
Asked how much is needed to fund the measure
and where it would be sourced. Senator Honasan
said that the budget of P62,641,197,501 is already in
the GAA. He noted, however, that the only problem
was the indexation issue; that is why it was included
in the Senate version.
Senator Pangilinan expressed his concern on
how to reconcile the distortion that would take effect
when the measure is passed as it amounts to a 58.7%
increase, as he further feared that other civilian
employees could likewise ask for a raise on their
basic pay because of the measure. Senator Honasan
pointed out that EO 201 still has two tranches of
salary increases for civilian personnel in 2018 and
2019, which would give Congress a window for
intervention; in fact, the SSL would be up for review
by the DBM. He added that he actually wanted to
incorporate a commitment from the DBM that they
would attend to the issue of distortion.
Senator Pangilinan reiterated the serious issue
of distortion, and the necessity for it to be
addressed.
INTERPELLATION OF SENATOR DRILON
(Continuation)
Continuing with his interpellation. Senator Drilon
stated that during the debate the previous day, the
inequity of the salary structure between the military
uniformed personnel and the civilian personnel was
recognized because if the proposed measure would
be passed, the civilian personnel with a similar skill
level and nature of job would receive a lower rate
than the military personnel.

Upon motion of Senator Drilon, the session was
suspended.
It was 7:18 p.m.
Upon resumption. Senator Drilon reiterated the
inequity that the measure would bring upon the
civilian side of the government as thousands of entry-
level nurses, teachers, lawyers. Economist I and
budget analysts would receive less salary than that
of a private in the Armed Forces, a Fire and Jail
Officer I, a Police Officer I, and an Apprentice
Seaman Third Class. He clarified that he was not
insinuating that the men in uniform are not entitled
to the increase; he was simply pointing out that
equity and fairness dictate that the welfare of the
civilian side should also be taken into account.
Senator Honasan believed that the measure would
somehow afford some time to address the short- and
medium-term concerns that would eventually catch
up with a rational salary standardization intervention.
He added that the President has made a commitment
to the men in uniform in active service to have their
salaries increased and the effect on the morale of the
men in uniform should be factored in as they consider
the proposed measure.
Senator Drilon reiterated that he fully supports
the measure and that the Chamber would carry out
the commitment of the President to the men in
uniform. However, he pointed out that in fulfilling the
commitment, they should not neglect the welfare of
the one million civilians in government who would
suffer from demoralization.
Senator Honasan said that what was being talked
about was how to introduce the sense of Senator
Drilon’s observation within the given time constraint.
He said that the Committee was simply putting on
the table all accurate infonnation that would allow
the Body to individually and collectively decide on
the measure.
Senator Drilon said that he was glad that Senator
Honasan recognized the need to look at the iniquitous
situation which might arise if the measure is approved
as it stands.
Asked whether his concern was that there was
time constraint given the fact that the resolution was
already approved on Third Reading in the House of
Representatives, Senator Honasan replied that the
President would not certify the urgency of the
measure without a compelling reason.
Senator Drilon pointed out that technically, the
presidential certification to the urgency of the measure
not only dispenses with the three-day rule before
approval on Third Reading, it also indicates the need
to pass the measure as soon as possible because the
salary increases of the MUP will be effective on
January 1, 2018. He believed that as long as that
deadline is achieved, the Senate would have been
able to fulfill the commitment of President Duterte.
Since Congress would resume its session on January
15, he proposed that the Body come up with a more
rational and equitable measure by January 15 or 16
and make its effectivity retroact to January 1, 2018.
He feared that if the measure is passed as it stands,
and becomes effective January 1, 2018, it would
perpetuate the inequities and salary distortion because
it was hastily passed with no reason or rationale.
Upon motion of Senator Honasan, the session
was suspended.
It was 7:34 p.m.
Upon resumption. Senator Honasan explained
that he asked for a suspension so that the Committee
could find a common ground on the issue of wage
distortion which was raised by Senator Drilon. He
believed that they have gained traction on the ground
as Senator Drilon had put in writing the intent of the
issue that he had raised. He then informed the Body
that the DBM would be tasked with rationalizing not
only the salary scheme but also the pension reform.
He said that though the pension is not related to the
increase in base pay, it can be addressed soon after
the bill is passed.
For his part. Senator Drilon stated that he had
submitted a proposed compromise language that would
allow the immediate implementation of the increases
to the military uniformed personnel, provided that the
f

DBM, within six months upon passage of the
resolution, should review and revise the existing
salary and compensation program. He said that at
the proper time, he would propose the following
amendment on page 6, between lines 2 and 3, to
insert a new item. Paragraph fV to read as follows:
(4) ADJUSTMENT OF THE BASE PAY OF
CIVILIAN PERSONNEL. THE BASE PAY
FOR CIVILIAN PERSONNEL WITH SALARY
GRADE 11 SHALL BE RAISED TO THE
SAME LEVEL OF A PRIVATE, FIRE/JAJL
OFFICER 1, POLICE OFFICER 1 AND
APPRENTICE SEAMAN 3rd CLASS
PROVIDED UNDER THIS RESOLUTION.
TO AVOID SALARY DISTORTION, THE
DBM SHALLRECOMPUTE AND READJUST
THE BASE PAY OF CIVILIAN PERSONNEL
BELOW AND ABOVE SALARY GRADE 11
BASED ON THE FOLLOWING COMPENSA
TION ADJUSTMENT STRATEGIES:
(A) BRING THE COMPENSATION OF
GOVERNMENT PERSONNELCLOSETO
THE MILITARY AND UNIFORMED
PERSONNEL COUNTERPARTS; AND
(B) ELIMINATE OVERLAPS IN BETWEEN
SALARY GRADE ALLOCATIONS OF
GOVERNMENT PERSONNEL TO
RECOGNIZE THE DIFFERENCES IN
DUTIES AND RESPONSIBILITIES OF
THEIR POSITIONS.
THE NEW BASE RATES FOR THE
CIVILIAN PERSONNEL SHALL TAKE
EFFECT SIX (6) MONTHS FROM THE
EFFECTIVITY OF THIS RESOLUTION.
Senator Drilon explained that under the proposal,
the salary increases for the MUPs would take effect,
as provided in the resolution, on January 1, 2018.
However, he stated that while it was recognized that
there would be wage distortion and that the proposed
provision does not require such distortion to be
corrected at the moment, the proposal would require
the DBM to revise the base rates for the civilian
personnel to correct the salary distortion and to bring
the civilian personnel compensation closer to their
MUP counterpart. He stressed that he was not pro
posing to hold the MUP’s salary increase in abeyance,
only that the law would require the DBM to review
the salary structure of the civilian personnel.
Asked if the proposed amendment would be
put forward during the period of amendments and
whether there were other issues that concerned the
Minority, Senator Drilon stated that as far as he
was concerned, it was only the wage distortion that
mattered. He then inquired if the Committee would
accept the amendment at the appropriate time.
In reply. Senator Honasan stated that he would
not want to split hairs but he gave assurance that the
Committee would consider the proposal since the
distortion is a serious concern.
Senator Drilon stated that in recognition of the
need to study further the issue of salary distortion, he
was proposing that the DBM be given six months to
come up with a system or rate that would at least
moderate the inequity that would be created by the
resulting salary structure borne from the proposed
joint resolution. He emphasized that the proposed
amendment did not contain the amounts as it was up
to the DBM to figure them out. He reiterated that
the amendment would require the DBM, within a
six-month timeframe, to study and revise the salaries
so that it would not be unfair to the civilian personnel.
He believed that it was a very reasonable amendment
since the salary increases for uniformed personnel
would not be stopped.
Senator Drilon stated that he has not even
mentioned the one million personnel in the LGUs.
He said that although their funds are sourced from
their respective LGUs, Congress should also provide
a guidance as to how their salary scale should look
like. He said that he wanted to give hope to the
civilian personnel that their salary scale would be
reviewed after the approval of the joint resolution
for the MUP.
Senator Honasan recognized the valid issues that
had been raised, and he believed that the Members
would decide on the proposal either during the period
of amendments or on Third Reading of the measure.
He said that his Committee was also looking for a
way forward on the issue.
At this juncture, Senator Drilon stated that he
would suspend his interpellation until after the
Committee has thoroughly reviewed his proposal. He
expressed hope that the Body could come up with a
consensus on the concept before the start of the
period of amendments.
Asked by the Chair if he would pursue the same
issue at a later time. Senator Drilon replied in the
affirmative.

INTERPELLATION
OF SENATOR ESCUDERO
At the outset. Senator Escudero thanked Senator
Honasan for the document furnished to him as
regards the points he raised the other day. He said
that even though he was in favor of the proposed
measure, he shared the reservation raised by Senator
Drilon as regards government civilian personnel and
the distortion in salaries that the increased base pay
of MUPs would create. He hoped that such distortion
would be addressed in the Joint Resolution, if not in
another bill or in another resolution.
He then sought the commitment of Senator
Honasan as chairman of the Committee of National
Defense and Security to conduct an inquiry and look
into the payroll and roster of the AFP, PNP and all
uniformed personnel covered by the joint resolution.
Senator Honasan placed on record his commit
ment to comply with the request of Senator Escudero.
Senator Escudero said that he would file the corres
ponding resolution the following year.
Senator Escudero also raised the civilianization
of the uniformed services in light of reports that
some MUPs were not performing the actual work
demanded of their position. For instance, he cited
uniformed personnel who serve as drivers or body
guards of a general or as office clerks. He appealed
to Senator Honasan to push for the civilianization of
the uniformed agencies to make sure that the people
who would be given the increased salaries would
be performing the functions they were intended to
perform when government hired them as soldiers,
as policemen, as teachers, as jail guards, or as BFP
personnel.
Senator Honasan informed the Body that aside
from the National Defense Act which provides the
legal and constitutional basis for what constitutes
national security policy and strategy, the Committee
has been raising regularly the issue of “tooth-to-
taif' ratio, the ratio of uniformed personnel deployed
in the field to the number of personnel assigned
in headquarters. He then committed to Senator
Escudero that he would look into the issue of
civilianization in the military and uniformed personnel
(MUP) services.
Senator Escudero hoped that like the rationaliza
tion plan of the departments in the Executive Branch,
the AFP, PNP, and other uniformed personnel
services would have an organizational structure and
a system of promotion for civilian personnel within
their department so that those in lower positions
would have a chance for promotion. He said that
with the proposed base pay for the MUP, there
is the possibility that two or three civilian personnel
could be hired for the salary of one uniformed
personnel, which, in effect, would enable to
government to save more money to put more men
in the field.
Relative thereto. Senator Honasan pointed out
that there are deeper and worse situations in the
government, like, in the case of the Philippine National
Police (PNP) which is civilian in character and
national in scope but which, he believed, has not been
clearly defined and enforced. He also cited the
secretary of the Department of the Interior and
Local Government (DILG) who has two sets of
responsibilities - operational control and administrative
supervision. He pointed out that the DILG secretary
is also the chainnan of the Napolcoin and one of the
bureaus under the DILG is the PNP. He said that
the government should look at and fix the situation
because there is a need to untangle the bureaucracy
and to achieve this purpose, he said that there is a
need for complete, accurate and timely information.
He pointed out that if the salaries of intelligence
analysts in the uniformed services, who were supposed
to be at least holders of masters degree or doctorate
degree in Asian Studies or China Studies, are not
commensurate to their job descriptions, they would
wait for the opportunity to leave the intelligence
community for much higher pay.
As regards the issue of salary distortion that was
raised earlier. Senator Honasan said that the questions
that the Body must address are: which should be
considered first; how much fund is needed; and
where to source the funds.
Senator Escudero asked for the meaning of
suspension of indexation, its intent, if it is applicable
to the MUP pensioners or whether they would not be
paid unless the funds are already available. He
feared that if the pensioners would not be paid yet
upon the effectivity of the Joint Resolution, government
debt would keep on growing. However, he stated
that if the pensioners are not yet covered as of January
1,2018, the government would not owe them anything
and it would need another joint resolution for the
pensions to be paid.

Senator Escudero warned against giving false
hopes to the pensioners because it was like telling
them that they are covered by the joint resolution but
the funds are not available. He stated that as a
former chair of the Committee on National Defense
and Security, he very well knew that it has been the
complaint of the veterans that their pensions were
not paid up-to-date because the system was flawed.
He pointed out that one example of the flawed
system is on the number of veteran pensioners, that
instead of getting lesser, they were increasing.
Senator Honasan replied that he would take
in sequence the concerns of Senator Escudero. As
regards the indexation of the pension, he said that
certain factors were considered, and that the
Committee has been hard put, together with the
resource persons, not only in consolidating but
also in correlating the factors that came in. He said
that the intent of the Senate version of the Joint
Resolution was to give hope to the pensioners as
well as to their widows and orphans, although the
Committee was not sure when the increase would be
given. However, he said that there is a little assurance
of the pension because of the House version. He
stated that based on the information gathered by the
Committee from the resource persons, the pensions
that would be released in 2019 would be doubled.
Senator Escudero noted that the provision of
the House version states that “... the suspension
shall be automatically lifted on January 1, 2019 or
upon effectivity of the Pension Reform Law.”
Assuming a Pension Reform Law was not passed,
he asked if it would mean that come January 1, 2019,
the suspension is lifted. Senator Honasan replied
in the affirmative.
Adverting to an earlier provision which stated
that “the indexation of the pension of the retired
MUP with the base pay of those in the active service
shall be suspended with respect to the base pay
increase authorized in this Joint Resolution,” Senator
Escudero asked if from January to December 2018,
the pension is considered payable by the government
or the pension is only effective January 2019. Senator
Honasan replied that when the base pay of the MUP
is increased by 2018, by indexation, the pension of
retired MUP would also be increased so that by
2019, they would also be paid for what the government
owe them in 2018 plus the 2019 pension they are
entitled to. He affirmed that it is only the payment
that was being suspended, not the entitlement upon
which payment shall begin together with the active
uniformed personnel on January 1,2018. He said that
Congress would be carrying the moral burden of not
only hastening the approval of the Joint Resolution
but also in coming up with the promised pension
reform intervention with a sense of urgency.
On the pension indexation, Senator Escudero
asked how the pension reform law would relate to
the commitment that Congress would give to the
pensioners that they would receive the benefits of
the law on January 1,2019. He noted that the reform
was just starting, yet there were already flaws in the
system, raising fear that finances would be insufficient
to carry out the load or that only a select few would
be entitled to benefit from the pension reform law.
He stressed that Congress could not pass an
irrepealable law and while they would not want to
raise false hope, the pensioners would be holding on
to something certain at present but should be worried
if the pension reform law would be changed.
Senator Escudero further stated that the pension
reform law does not involve the non-impairment
clause of the Constitution, that whatever pension
reform law that would be passed would apply to
those in the active service only because when
they joined the military or the police, they already
knew of their pension when they retire.
Senator Honasan agreed that there is predict
ability, so that they would know that they still have
money for their necessities at a certain point in
their timeline.
Senator Escudero opined that it would be unfair
to apply the pension reform law to the current
pensioners because their contribution would not
be sufficient to cover their pension benefit. Again
adverting to the provision which said “automatically
lifted on January 1, 2019 or upon the effectivity of
the pension reform law, whichever comes first,”
he asked whether the Committee foresaw a pension
reform law that would be made to apply to the
current retirees, and whether Congress could even
provide for a law that would be made to apply to
them when they are not expected to make any
contributions anymore, unless it would be provided
in the GAA.
In closing. Senator Escudero asserted that there
is no pension reform law that can be made to apply
to the existing pensioners. He said that for the past

five years, he has been trying to study the figures
insofar as the intersection of what the government is
paying the active and the retired military personnel,
and the way to run the system is to work with
existing retirees, for instance, by offering a lump-sum
and foregoing with their pension until a certain period
of time, or by offering the enlisted personnel a
different retirement scheme because based on the
attrition rate of the AFP of about 5%, it would take
the government 20 years to correct the system even
if the pension reform law would be passed the
following year.
Senator Honasan stated that the Committee
was still waiting for the actuarial studies from GSIS
which might open a window for serious interven
tion. However, Senator Escudero pointed out that
the actuarial studies of GSIS can only be made to
apply to active personnel and not those who have
already retired because the retirees cannot pay
their contribution anymore. He suggested giving
the retirees something to hold on to, for instance, any
retirement law camiot affect vvhateer conmiitments
have been given to them because that would have
the effect of changing the rules of the game.
He expressed hope that in the next 20 to 40 years,
Congress can correct it once the pension reform
law is passed the following year.
INTERPELLATION OF SENATOR RECTO
At the outset, Senator Recto stated that he had
the opportunity to ask questions the other day and to
make his own reservations and manifestations about
the resolution. He believed that the matter is a
political decision to be made and that he supports
the Majority bloc’s political consideration in passing
the measure.
Asked why the joint resolution was being
considered when the applicable law was an executive
order, and whether it could be possible that the
President would just issue another executive order
only for the military to address the concern. Senator
Honasan replied that “indexation’’cannot be decided
by the President alone because it needs congressional
cover, and the President took the initiative to seek
congressional approval.
To the observation of Senator Recto that a law
was more appropriate because under the Constitu
tion it is Congress that can determine the salaries
of all government employees. Senator Honasan
agreed, but he pointed out that the President, with
his own style of communicating, made a public
commitment to increase the salaries of uniformed
personnel.
Adverting to Section 8 {Repealing Clause) in
the House version which is similar to the Senate
version. Senator Recto noted that the repealing clause
made reference to Executive Order No. 201, series
of 2016, which was issued because Congress was
not able to pass an SSL fV in 2015, and he pointed
out that SSL IV and EO 201 were essentially the
same as both govern the salaries of all civilian and
military uniformed personnel, the only difference
being that the SSL IV increased the salary of civilian
employees in four tranches, from 2016, 2017, 2018
and 2019, while the military and uniformed personnel,
through EO 201 that President Aquino issued, went
home with higher pay also in 2016 and 2017, but in
the form of an increase in allowance so that indexation
in the pension of retired military and police personnel
could be avoided.
Senator Recto then questioned why the Executive,
instead of issuing an executive order, was asking
Congress to pass a joint resolution for the military
and uniformed personnel when it could have asked
for the enactment of a law to cover the whole
bureaucracy.
Senator Recto further noted that many quarters
have been saying that the current EO was unconstitu
tional on the ground that it is only Congress that can
mandate salary increases, the reason the Civil Service
Commission tried to file a bill in an attempt to enact
the Salary Standardization Law but failed because
of the pension indexation.
As regards the suspension of indexation.
Senator Recto recalled that since 2015, the release
of the pensions of retirees was always delayed by
one year, and worse, the beneficiaries were not able
to get what was due them in 2016 and 2017 because
of the EO 201. He said that his understanding of
why the joint resolution was being considered was
that it was simply an attempt to make it more
palatable for the pensioners by promissing them that
they would receive what is due them in 2019. He
asked why the pensioner’s benefits have been always
the last priority of the government when there is a
clear mandate for it. He hoped that the Executive
department would listen to the plight of the retirees,
especially the uniformed personnel.
f

Assuming that the joint resolution would be
passed into law, Senator Recto warned of possible
complaints at the Supreme Court, questioning why
the salary increase for the civilian personnel was
not enacted into law; why there was distortion;
why the mandate for the increase in salary of the
civilian was through an executive order only; or
why Congress, being the representative of the
people, was not the one who approved the increase.
And he feared that the Supreme Court might find
it unconstitutional and might order that the salary
of the uniformed personnel go back to the 2015
rates, creating, as a consequence, a greater gap.
Thus, he suggested coming up with a joint resolution
similar to the SSL which would specify what is for
the civilian and what is for the military, adding that he
would not even object to increasing the salary for the
military in advance.
INTERPELLATION
OF SENATOR AQUINO
At this juncture. Senator Aquino noted that it
was only the House version that provided for the
suspension of the indexation, although there is a
proposal in the Senate version to just suspend it for
one year starting 2019. Relative thereto, he asked
whether “suspension of indexation” means that the
retired personnel would still continue receiving their
p>ension at current level but they would not receive
any increment which they should have gotten because
of the increase in pay. Senator Honasan replied in
the affirmative, clarifying that they would start
receiving the increment only in 2019.
Senator Aquino expressed his support for the
proposed increase including indexation, and he hoped
that the Body could come to an agreement regarding
the measure.
Upon motion of Senator Sotto, the session was
suspended.
It was 8:54 p.m.
Upon resumption, the Chair recognized Senator
Drilon for his interpellation.
FURTHER INTERPELLATION
OF SENATOR DRILON
Preliminarily, Senator Drilon noted that beginning
January 1, 2018, the monthly base pay schedule
of the military and uniformed personnel would be
implemented in the manner enumerated on page 2
of the measure.
As regards the amounts indicated as the new
base pay of the different ranks. Senator Drilon
noted that effective January 1, 2018, the Candidate
Soldier in the Department of National Defense and
the Coastguardsman in the Philippine Coast Guard
would have a base pay of PI 8,587; while the Private
in the DND, the Fire/Jail Officer 1 in the BJMP and
BFP, the Police Officer I in the PNP and PPSC,
the Apprentice Seaman/Seaman Third Class in
PCG, and the Apprentice Seaman/Seaman Third
Class in NAMRIA would be receiving a total of
P29,668 per month.
Asked how much a private in the DND was
receiving as of December 13, 2017, Senator Honasan
replied that the base pay is PI4,834 which, by virtue
of the resolution, would be increased to P29,668,
while the total monthly compensation of a combatant
would be P33,030 inclusive of additional allowances.
As regards the total monthly compensation
received by private non-combatants. Senator Honasan
stated that they would receive P26,510 less combat
duty pay and combat incentive pay in the amount of
P3,000 each, but pursuant to the proposed joint
resolution, they would receive P43,l 16, or an increase
of 62% for 2018.
Asked what allowances would no longer be
received under Section 7 of the proposed measure.
Senator Honasan mentioned provisional allowance
and officer’s allowance, as he clarified that the
private would still be entitled to longevity allowance,
PERA, clothing, cash gift, subsistence allowance,
hazard pay, laundry, and quarter’s allowance. He
confirmed that there would be no increase for the
candidate soldier, private, private first class, corporal,
sergeant, staff sergeant, technical sergeant, master
sergeant, senior master sergeant, and chief master
sergeant in the second tranche beginning January 1,
2019, because the increases were already incorporated
in the first year. He explained that for lower military
and uniformed personnel ranks, from Petty Officer I
to Senior Petty Officer III in the PNP and its

equivalent rank, the full implementation of the increase
in base pay would commence by January 1, 2018;
essentially, for higher ranks up to director general in
the PNP and its equivalent, the implementation of the
initiative would take two years so that the second
year base pay schedule would approximate the total
pay that they are going to receive under the fourth
tranche of Executive Order No. 201. He said that
the average increase would be rationalized at 72.18%
by fiscal year 2019 for all ranks.
Saying that Executive Order No. 201 would
only repeal the provisional allowances and officers’
allowances in the third and fourth tranches.
Senator Drilon asked if the pay scale of military and
uniformed personnel would continue and if there
is another schedule for them in the proposed
joint resolution beginning on the third tranche.
Senator Honasan replied that there would be none,
as he pointed out that Executive Order No. 201 did
not provide a salary schedule for military and
uniformed personnel.
To the remark that there could be salary distortion
within the ranks of the military under the new
schedule. Senator Honasan maintained that there
was no projected distortion within the military as
everything would be rationalized in time, but he
agreed that the only salary distortion that would take
place is between the civilian side and the MUP side.
As regards the need for legal authority. Senator
Drilon noted that under Executive Order No. 201, the
third “whereas” clause cited Section 13 of Presidential
Decree No. 985 and Section 17 of Joint Resolution
No. 4 (2009) which authorized the President, upon
the recommendation of the Department of Budget
and Management, to periodically revise or update
the CPCS as well as the policies and levels of
allowances, benefits and incentives applicable to all
government personnel. He said that arguably, the
Constitution is deemed to have repealed Presi
dential Decree No. 985, but on the other hand, there
is also a provision in the Constitution that until
a presidential decree is declared unconstitutional,
it remains valid.
TERM INA1 ION OF THE PERIOD
OF INTERPELLATIONS
There being no further interpellation, upon motion
of Senator Sotto, there being no objection, the Body
closed the period of interpellations.
Being a substitute measure, upon motion of
Senator Sotto, there being no objection, the Body
proceeded to the period of individual amendments.
PROPOSED AMENDMENTS
OF SENATOR DRILON
On page 6, between lines 2 and 3, Senator Drilon
proposed the insertion of a new item No. 4 to read
as follows:
(4) ADJUSTMENT OF THE BASE PAY OF
CIVILIANPERSONNEL. - THE BASE PAY
FOR CIVILIAN PERSONNEL WITH SALARY
GRADE 11 SHALL BE RAISED TO THE
SAME LEVEL OF A PRIVATE, A FIRE/JAIL
OFFICER 1, POLICE OFFICER I AND
APPRENTICE SEAMAN THIRD CLASS,
PROVIDED UNDER THIS RESOLUTION. TO
AVOID SALARY DISTORTION, THE DBM
SHALL RECOMPUTE AND READJUST THE
BASE PAY OF CIVIIAN PERSONNEL
BELOW AND ABOVE SALARY GRADE 11,
BASED ON THE FOLLOWING COM
PENSATION ADJUSTMENT STRATEGIES:
(A) BRING THE COMPENSATION OF
CIVILIAN PERSONEL CLOSER TO THE
MILITARY AND UNIFORMED
PERSONNNEL COUNTERPARTS; AND
(B) ELIMINATE THE OVERLAPS
IN BETWEEN SALARY GRADE
ALLOCATIONS OF GOVERNMENT
PERSONNEL TO RECOGNIZE
DIFFERENCES IN DUTIES AND
RESPONSIBILITIES OF THE
POSITIONS.
THE NEW BASE PAY RATES FOR
THE CIVILIAN PERSONNEL SHALL
TAKE EFFECT SIX MONTHS FROM
THE EFFECTIVITY OF THIS
RESOLUTION.
In explaining his proposed amendment. Senator
Drilon stated that with Senator Honasan’s admission
that there would be salary distortions as a result of
the adjustment to the MUPs salary, he realized that
it would be extremely difficult to come up with a
eomplete salary scale for the entire civilian government
at that stage of the debates. He said that the amend
ment would make it a legally binding duty of the
DBM to correct the salary distortion, and considering
its monetary implications, the DBM is given the full
discretion to solve the issue without harming the
financial position of the government.

MANIFESTATION OF SENATOR SOTTO
To facilitate the approval of the measure and
having informed the Members of the situation
regarding the Joint Resolution in relation as well to
the adjournment of the Lower House, Senator Sotto
appealed to Senator Drilon to have the intent of his
amendment reflected in a resolution which could be
passed by the Body before the session adjourns.
Upon motion of Senator Drilon, the session was
suspended.
It was 9:37 p.m.
REUSMPTION OF SESSION
SUSPENSION OF CONSIDERATION
OF SENATE JOINT RESOLUTION NO. II
objection, the Body suspended consideration of
the resolution.
CONFERENCE COMMITTEE REPORT
ON SENATE BILL NO. 1592 AND
HOUSE BILL NO. 5636
objection, the Body considered the Conference
Committee Report on the disagreeing provisions of
Senate Bill No. 1592, entitled
AN ACT AMENDING SECTIONS 5, 6,
24, 25, 31, 34, 35, 51,79, 84, 86, 89, 90,
97, 99, 100, 101, 106, 107, 108, 109, 112,
114, 116, 148, 149, 150, 151, 155, 171,
196, 232, 237, 249, 264, AND 288;
CREATING NEW SECTIONS 148-A,
150-A, 237-A, 264-A, 264-B, AND 265-
A; ALL UNDER REPUBLIC ACT NO.
8424, OTHERWISE KNOWN AS THE
NATIONAL INTERNAL REVENUE
CODE OF 1997, AS AMENDED, AND
FOR OTHER PURPOSES; and
22, 24, 25, 31, 32, 33, 34, 79, 84, 86, 99,
106, 107, 108, 109, 116, 148, 149, 155,
171, 232, 237, 254, 264 AND 288;
237-A, 264-A, 264-B AND 265-A; AND
REPEALING SECTIONS 35 AND 62,
ALL UNDER THE NATIONAL
INTERNAL REVENUE CODE OF
1997, AS AMENDED.
The Chair recognized Senator Angara to sponsor
the report.
SPONSORSHIP SPEECH
OE SENATOR ANGARA
Senator Angara submitted for the consideration
and ratification of the Body the Conference Committee
Report on the disagreeing provisions of Senate Bill
No. 1592 and House Bill No. 5636. He reported the
highlights of the agreements arrived at during the
Bicameral Conference Committee meeting.
The following is the full text o f the speech o f
Senator Angara:
It has been a long day and because of the
lateness of the hour, I will try to keep my remarks
brief
This is to report that after five (5) bicameral
conference meetings over three weeks, the
Senate and the House of representatives have
finally come up with a unified version of the first
package of the Tax Reform for Acceleration and
Inclusion (TRAIN). Marahil ito ang pinaka-
maganda at pinakamalaking regalo na maibi-
bigay ng gobyerno sa sambayanang PUipino.
Dalawang dekada na hindi nabago ang ating
buwis tungkol sa income o kita.
For income tax, we have a P250,000
exemption across the board, whether one is a
compensation income earner or employee, like
our staff here, or a self-employed or professional
person.
We raised the tax exemption for the 13lh
month pay and other bonuses to P90,000. We
have also introduced provisions ensuring that
income tax rates will be reduced further in 2023.
Self-employed and professionals (SEPs)
earning P250,000 and below will be exempt from
income tax, and those with gross sales or
receipts of P500,000 and below will be exempt
from the 3% percentage tax, a reform or an
amendment proposed by Senate President Pro
Tempore Ralph Recto.

Starting January 1, 2023, instead of filing
every month, VAT returns will be filed quarterly.
We have also simplified the income tax return,
shortening it to only four (4) pages instead of
the current 12, also a Recto amendment.
Estate and Donor’s Tax
Estate and donor’s taxes shall still be reduced
and simplified to a flat 6% tax rate. Standard
deductions have been raised to P5 million in lieu
of itemized deductions that require substantia
tion. This will be on top of a tax exemption of
a family home worth PIO million.
Sweetened Beverage Tax
We ensured that milk and coffee remain
exempt from the proposed sweetened beverage
(SB) tax, now at P6/liter for beverages using
sugar and other sweeteners, and P12/liter for
beverages using high fructose corn syrup
(HFCS) which will definitely please our colleague,
the gentleman from Bukidnon. Sen. Migz Zubiri.
The Bicameral Conference Committee
provided for varied increases for petroleum
products but ensured to keep to a minimum the
increases for LPG, diesel, and gasoline which are
commonly used by ordinary households and
among the most .sensitive products to consumers.
We increased the VAT threshold from PI.9
million to P3 million, meaning only those above
P3 million will pay the value-added tax to benefit
medium, small enterprises which represent up to
99% of all registered businesses in the country.
While various leakages in the VAT system
have been plugged, the Bicameral Conference
Committee retained the VAT exemptions for
senior citizens, PWDs, cooperatives and zero
rating for renew-able energy, tourism and BPOs
in special econo-mic zones. In addition, starting
2019, drugs and medicines for diabetes, high
cholesterol and hypertension will be VAT-free.
The Bicameral Conference Committee also
retained the VAT exemptions for socialized
housing and low-cost housing for the next three
years, leases below PI5,000 per month, and
housing and condomi-nium association dues will
also be VAT- exempt. Starting 2021, socialized
and mass housing projects worth P2 million and
below, both in and outside Metro Manila, will be
VAT exempt.
As to automobile excise tax, we made changes
in the proposed schedule for automobile excise
taxes, making it simpler to administer while retain
ing the progressivity of the rates. To encourage
greener and cleaner transportation, electric
vehicles shall be exempt, while hybrid cars will
be taxed at only half the taxes for regular cars.
Some taxes were raised, particularly those
that affect high-income earners like the docu
mentary stamp tax, the final tax on foreign
currency deposit units, and tax on gains from
shares of stocks not traded in the stock exchange.
We aimed to promote fundamental fairness
and progressivity throughout the tax system and
spread the burden of the proposed tax reform.
We worked to ensure that those who caimot,
carry less, while those who can, carry more.
Excise taxes were also imposed on invasive
cosmetic procedures and body enhancements,
and raised on coal and coke, both domestic and
imported and on non-metallic minerals and
quarry resources as well as on cigarettes.
The Bicameral Conference Committee decided
that within the next five years after this measure’s
enactment, 70% of all incremental revenues will
be used for the Build, Build, Build program, for
infrastructure to address urban congestion; as
proposed by Senator Gordon, to support military
requirements; to build sports facilities for public
schools; and potable drinking water supplies in
all public places. The remaining 30% shall be
devoted to social mitigating measures.
With the extra funds from this measure, our
people can expect bigger cash transfers under
the DSWD’s Listahan program (National House
hold Targeting System for Poverty reduction).
They can also expect bigger social pensions for
seniors. They should expect better networks
and public transportation systems, better health
projects for addressing obesity, diabetes and
other non-communicable diseases, also for
combatting malnutrition especially among child
ren and pregnant and lactating women, which
our colleague Senator Poe will also appreciate,
being an advocate of child and women issues.
The Department of Education (DepEd) will
be able to install potable drinking water stations in
many elementary and secondary schools that do
not have a regular source of clean and safe water.
Affected sectors like sugar farmers will
receive greater government assistance along
with other affected sectors.
Qualified PUJ franchise holders will receive
fuel vouchers. There will be fare discounts in all
PUVs, free skills training under TESDA, and
discounts for NFA rice from accredited retails
stores for all minimum wage earners, unemployed
and the poorest 50% of the population.
A more comprehensive joint explanatory
note has been prepared for this measure which
takes up many pages. We ask that this be spread
into the record for future reference.

We would like, in the end, to thank all of our
colleagues here in the Senate as well as in the
House of Representatives for working hard and
making this a truly collective effort. We hope we
have fulfilled our ultimate goal to provide
millions of Filipinos some relief from their tax
burdens so that they can take home more from
their paychecks and spend for their family and
their loved ones.
Thank you, Mr. President. Thank you,
particularly to the members of the Senate panel
to the Bicameral Conference Committee: Senate
President Pro Tempore Ralph Recto; Sen. Loren
Legarda, Sen. Juan Miguel F. Zubiri and Senate
Minority Leader Franklin M. Drilon.
I would like to thank the Senate Secretariat,
especially the Senate Tax Study and Research
Office (STSRO), the Legislative Debate Reporters
Service, the stenographers, all the pages, my
staff in particular, who have not had a personal
life in the last six months.
I would like to thank government agencies
like the Department of Finance and the BIR. Of
course, the President for making this a priority.
We would like to thank the academics who
helped us, including Dean Ron Mendoza of the
Ateneo School of Government, Dr. Chat Manasan
of the PIDS, Commissioner Stella Quimbo of the
Philippine Competition Commission (PCC); and
Dr. Nene Guevarra of Synergia Foundation.
Maraming salamat po sa ating lahat.
MOTION OF SENATOR SOTTO
Senator Sotto moved for the adoption and
ratification of the Bicameral Conference Committee
Report on the disagreeing provisions of Senate Bill
No. 1592 and House Bill No. 5636, and that the text
of the Joint Explanation be inserted into the records.
Senators Aquino and Lacson manifested their
objection to the motion.
MANIFESTATION OF SENATOR AQUINO
Senator Aquino stated that he would move for a
nominal voting on the ratification and thereafter
explain his vote.
INQUIRY OF SENATOR GORDON
Senator Gordon sought an assurance that the
13% earmarking for the modernization of the military
was carried. Senator Angara confirmed that it was in
the earmarking provision, and that the Secretary of
Finance gave his personal assurance that it would
be included in all financing in the years to come. He
added that there is a P400 billion set aside for the
AFP in the next years. He said that he would get the
details from Secretary Dominguez.
Senator Gordon stated that he wanted to get the
confirmation first before voting on the report. Senator
Angara assured him that there would be sufficient
funding for his concerns.
Upon motion of Senator Angara, the session was
suspended.
It was 9:53 p.m.
SUSPENSION OF CONSIDERATION OF THE
objection, the Body suspended consideration of
the Conference Committee Report on Senate Bill
No. 1592 and House Bill No. 5636.
COMMITTEE REPORT NO. 192
ON SENATE JOINT RESOLUTION NO. 11
{Continuation)
Upon motion of Senator Sotto, there being
no objection, the Body resumed consideration,
on Second Reading, of Senate Joint Resolution
No. 11, entitled
Senator Sotto said that the parliamentary status
was the period of individual amendments.
Thereupon, the Chair recognized Senator
Honasan, sponsor of the measure, and Senator Drilon
for his amendments.

MANIFESTATION OF SENATOR DRILON
Senator Drilon said that earlier, he proposed an
amendment but before Senator Honasan could either
reject or accept his proposed amendment, the session
was suspended. He said that during the suspension
of the session, they agreed that a separate resolution
authored jointly by him and Senator Sotto would
be passed expressing the strong sentiment of the
Senate that the DBM should review the salary
compensation structure of the civilian persormel of
the government and come up with a new salary
structure that would cure the distortions which
admittedly would happen once Senate Joint Resolu
tion No. 11 is passed. He said that the new
compensation scheme for the civilian employees
should be submitted by the DBM to Congress within
six months from the time the separate resolution is
passed or approximately by June 2018. He said that
he was amenable to the compromise agreement and
that he was willing to withdraw his amendment if
Senator Sotto could manifest on record that this was
the agreement which they have worked out.
Senator Sotto concurred with the statement of
Senator Drilon and manifested that a separate
resolution would be passed after the approval of
Senate Joint Resolution No. 11
WnilDRAWAL OF PROPOSED AMENDMENT
Thereupon, Senator Drilon withdrew his proposed
amendment.
TERMINATION OF THE PERIOD
OF INDIVIDUAL AMENDMENTS
There being no other individual amendment, upon
motion of Senator Sotto, there being no objection, the
Body closed the period of individual amendments.
APPROVAL OF SENA I E JOINT RLSOLU I ION
NO. 11 ON SECOND READING
Submitted to vote, there being no objection,
the Chair declared Senate Joint Resolution No. 11
approved on Second Reading.
Senator Sotto manifested that Senate Joint
Resolution No. 11 was certified as urgent by the
Office of the President pursuant to Section 26,
Article VI of the Constitution.
PRESIDENTIAL CERTIFICATION
Upon direction of the Chair, Secretary Barbo
read the President’s certification as to the necessity
of the immediate enactment of Senate Joint Resolution
No. 11, to wit:
11 December 2017
SEN. AQUILINO -‘KOKO” PIMENTEL 111
Senate President
The Philippine Senate
Pasay City
Mr. Senate President:
Pursuant to the provisions of Article VI,
Section 26 (2) of the 1987 Constitution, 1hereby
certify to the necessity of the immediate
enactment of Senate Joint Resolution No. 11,
entitled
“JOINT RESOLUTION AUTHORIZING THE
INCREASE IN BASE PAY OF MILITARY
AND UNIFORMED PERSONNEL IN THE
GOVERNMENT, AND FOR OTHER
PURPOSES,”
to address the urgent need to adjust the
compensation package of M ilitary and
Uniformed Personnel (MUP) in order to make it
adequately commensurate with their critical role
in maintaining national security and peace and
order, taking into account prevailing economic
realities, and to promote their professionalism
and commitment to the service.
Best regards.
(Sgd.)
Very truly yours,
RODRIGO ROA DUTERTE
President
APPRON AL OF SENATE JOINT RESOLUTION
NO. 11 ON THIRD READING
In view of the presidential certification, upon
motion of Senator Sotto, there being no objection, the
Body considered, on Third Reading, Senate Joint
Resolution No. 11.
Pursuant to Section 67, Rule XXIII of the Rules
of the Senate, upon motion of Senator Sotto, there
being no objection, Secretary Barbo read only the
title of the joint resolution, to wit:
/

Secretary Barbo called the roll for nominal voting.
RESULT OF THE VOTING
The result of the voting was as follows:
In favor
Angara Lacson
Aquino Legarda
Binay Pimentel
Drilon Poe
Ejercito Recto
Escudero Sotto
Gatchalian Trillanes
Gordon Villanueva
Honasan Villar
Hontiveros Zubiii
Against
None
Abstention
None
With 20 senators voting in favor, none against,
and no abstention, the Chair declared Senate Joint
Resolution No. 11 approved on Third Reading.
MANIFESTATION OF SENATOR LEGARDA
Senator Legarda manifested that even before
the approval of the Joint Resolution on Second and
Third Readings, the Committee on Finance had
already allocated P62.8 billion in anticipation of
its passage.
Senator Sotto manifested that the Body received
a communication dated 12 December 2018 from the
House of Representatives, informing the Senate that
the House approved on Third Reading House Joint
Resolution No. 18, to which it requested the con
currence of the Senate. He said that House Joint
Resolution No. 18 was the counterpart of Senate
Joint Resolution No. 11 which was just approved
by the Body.
ADOPTION OF HOUSE JOINT
RESOLUTION NO. 18
objection, the Body adopted House Joint Resolution
No. 18 as an amendment to Senate Joint Resolution
No. 11.
SECOND ADDITIONAL
REFERENCE OF BUSINESS
The Secretary of the Senate read Proposed
Senate Resolution No. 575, entitled
RESOLUTION EXPRESSING THE SENSE
OF THE SENATE TO ADJUST THE
BASE PAY OF CIVILIAN PERSON
NEL WHICH SHALL BE AFFECTED
BY THE DISTURBANCE OF WAGE
STRUCTURE BY REASON OF SENATE
JOINT RESOLUTION NO. 11.
PROPOSED SENATE RESOLUTION NO. 575
objection, the Body considered Proposed Senate
Resolution No. 575, entitled
RESOLUTION EXPRESSING THE SENSE
OF THE SENATE TO ADJUST THE
BASE PAY OF CIVILIAN PERSON
NEL WHICH SHALL BE AFFECTED
BY THE DISTURBANCE OF WAGE
STRUCTURE BY REASON OF SENATE
JOINT RESOLUTION NO. 11.
Senator Sotto read the full text of the resolution,
which he and Senator Drilon principally authored,
to wit:
WHEREAS, by virtue of Joint Resolution
No. 4, series of 2009, the Congress has consi
dered the adoption of Senate Joint Resolution
No. 11, series of 2017, to adjust the compensation
package of military and uniformed personnel;
WHEREAS, the grant of benefits to military
and uniformed personnel by reason of the
adoption of SJR No. 11 may undermine the
compensation standardization and equal
protection of the law clauses in the Constitution,

cause disturbance of wage structure and dampen
the spirit of government civilian personnel;
WHEREAS, the increase in the base pay of
civilian personnel is a means of recognizing the
differences in the nature of the position and
scope of their duties;
WHEREAS, to ensure that the Compen
sation and Position Classification System and
Base Pay Schedule would continuously and
consistently encourage all government personnel
to provide better service to the public, a reform
in the present compensation systems must
be done;
NOW, THEREFORE BE IT RESOLVED, as it
is hereby resolved by the Senate of the Philip
pines, That the base pay of civilian personnel
who may be affected by the disturbance of wage
structure by reason of Senate Joint Resolution
No. 11, series of 2017 shall be adjusted in order
to cure salary distortion and inequities;
RESOLVED, FURTHER, To authorize the
DBM to recompute and readjust the base pay of
the civilian personnel and to submit the same to
Congress;
RESOLVED, AS IT IS HEREBY RESOLVED,
That the new base pay rate for the affected
civilian personnel shall take effect six (6) months
after the implementation of the increase in the
base pay of military and uniformed personnel in
government.
Thereafter, Senator Drilon requested that the
approval of the resolution be subject to style and that
a copy of the resolution be sent to the President and
to the DBM Secretary.
ADOPTION OF PROPOSED
SENATE RESOLUTION NO. 575
objection. Proposed Senate Resolution No. 575 was
adopted by the Body, subject to style.
COAUTHORS
objection, all the Members present were made
coauthors of Proposed Senate Resolution No. 575.
MOTION OF SENATOR ESCUDERO
Relative to Senate Bill No. 1456, entitled “An
Act Institutionalizing the Philippine Qualifications
Framework (PQF), and Establishing the PQF National
Coordinating Council” authored, sponsored and
spearheaded by Senator Villanueva, Senator Escudero
moved that the Senate adopt House Bill No. 6572,
entited “An Act Institutionalizing the Philippine
Qualifications Framework (PQF) Establishing the
PQF National Coordinating Council (NCC) and
Appropriating Funds Therefor,” as an amendment to
Senate Bill No. 1456.
PARLIAMENTARY INQUIRY
OF SENATOR RECTO
At the outset, Senator Recto stated that he was
not objecting to the motion. However, he inquired
what would happen to Senate Bill No. 1456 if the
Chamber was adopting its House version.
Responding thereto. Senator Escudero stated that
Senate Bill No. 1456 would still remain. He placed
on record that except for some grammatical style.
House Bill No. 6572 was almost a verbatim reproduc
tion of Senate Bill No. 1456.
ADOPTION OF HOUSE BILL NO. 6572
AS AN AMENDMENT TO
SENATE BILL NO. 1456
Upon motion of Senator Escudero, there being
no objection, the Body adopted House Bill No. 6572
as an amendment to Senate Bill No. 1456.
Upon motion of Senator Sotto, the session was
suspended.
It was 10:36 p.m.
ON SENATE BILL NO. 1592 AND
HOUSE BILL NO. 5636
{Continuation)
objection, the Body resumed consideration of the
Conference Committee Report on the disagreeing
provisions of Senate Bill No. 1592, entitled

24, 25, 31,34, 35, 51, 79, 84, 86, 89, 90,
97,99, 100, 101, 106, 107, 108, 109, 112,
114, 116, 148, 149, 150, 151, 155, 171,
196, 232, 237, 249, 264, AND 288;
150-A, 237-A, 264-A, 264-B, AND 265-A;
ALL UNDER REPUBLIC ACT NO. 8424,
OTHERWISE KNOWN AS THE
NATIONAL INTERNAL REVENUE
CODE OF 1997, AS AMENDED, AND
FOR OTHER PURPOSES,
and House Bill No. 5636, entitled
22, 24, 25, 31, 32, 33, 34, 79, 84, 86, 99,
106, 107, 108, 109, 116, 148, 149, 155,
171, 232, 237, 254, 264 AND 288;
237-A, 264-A, 264-B AND 265-A; AND
REPEALING SECTIONS 35 AND 62,
ALL UNDER THE NATIONAL
INTERNAL REVENUE CODE OF
1997, AS AMENDED.
MANIFESTATION
OF SENATOR SOTTO
Senator Sotto stated that earlier, he moved
for the adoption of the Bicameral Conference
Committee Report to which Senators Aquino and
Lacson objected; on the other hand, Senator Gordon
took the floor for a manifestation.
Tliereafter, the Chair recognized Senator Gordon.
MANIFESTATION
OF SENATOR GORDON
Senator Gordon stated that he took the floor
a while ago to seek an assurance that 13% of
the TRAIN proceeds would be earmarked for
the military. He said that he did so out of a firm
belief that it is time for government to stop taking
the military — the soldiers and its officers — for
granted.
He reminded the Body that when the U.S.
bases were taken out, Subic suffered dearly for
it as the pull-out came just after the Pinatubo
eruption which resulted in losses of homes and
businesses.
He said that one of the reasons why he
opposed the pull-out was the lack of readiness of
the military to be able to protect the country.
He narrated that when the Philippines erected a flag
on the Scarborough Shoals, no other country went
out there and stopped the Filipinos from making
its claim.
Senator Gordon pointed out the need to fund
the military which is in a bad state — all air and no
force, no navy, and is practically all coast and no
guard. He said that while the Senate has passed the
resolution increasing the salaries of soldiers, they
cannot fight on salaries alone. He lamented that the
government could not even protect the country’s
shorelines as part of the drug smuggling routes;
it could not even protect the people from being
kidnapped in the high seas by the Abu Sayyaf; and
it could not even deliver relief goods because of
imavailability of boat docks.
He stated that when Congress said that it would
eannark 13% of the revenue collected through
TRAIN, to the military, he was hopeful that the
modernization program for the military would finally
happen. He stressed that what Congress approved
should be respected by the Executive and no secretary
of Finance should take it upon himself to remove and
realign it. He said that he was just glad that President
Duterte gave his word that there would be an
improvement and modernization of the Philippine
military.
Senator Gordon thanked his colleagues for their
patience, assuring them that he would vote on the
proposed measure because of the need to pass the
TRAIN for the Filipino people.
APPROVAL OF BICAMERAL
There being an objection, the Chair directed the
Secretary of the Senate to conduct a roll call vote on
the Bicameral Conference Committee Report on the
disagreeing provisions of Senate Bill No. 1592 and
House Bill No. 5636.
Thereupon, Secretary Barbo called the roll for
nominal voting.
RESULT OF THE VOTING
The result of the voting was as follows:
r

In favor
Angara Legarda
Binay Pimentel
Drilon Poe
Ejercito Recto
Escudero Sotto
Gatchalian Villanueva
Gordon Villar
Honasan Zubiri
Against
Aquino Lacson
Hontiveros Trillanes
Abstention
None
With 16 voting in favor, four
abstention, the Bicameral Conference Committee
Report was approved by the Body.
EXPLANATIONS OF VOTE
By Senator Aquino
Preliminarily, Senator Aquino said that his “no”
vote on the ratification of the measure was by no
means an indication of the leadership and diligence
of Senator Angara who worked very hard for
the bill.
He explained that one major provision that was
important to him was the effect of the measure on a
number of poor Filipinos. True, six million would
benefit from the measure, he said, but he pointed
out that based on the records, deliberations and
presentations of the DOF, 40% of the Filipino people
would carry the brunt of the tax reform because
of the price increases. He stated that even with the
assurance of an additional P200 per month to the
unconditional cash transfer (UCT) for roughly
10 million Filipino families to help them financially
with the price increases, based on his interpellations
and research, the UCT could not be implemented in
conjunction with price increases. Thus, he said that
he could not support the tax reform program unless
financial assistance would be granted to the poor
families.
Senator Aquino hoped that his “no” vote would
spur the concerned government agencies, especially
the DOF and the DSWD, to work faster to create a
program that could assist financially the citizenry in
conjunction with the increased taxes on consumer
goods as soon as possible. He reiterated that it was
this reason why he could not support the measure.
By Senator Lacson
Senator Lacson said that he would submit a
written explanation of his vote although he could
summarize it in one very short sentence: “The Body
missed the TRAIN by several billion miles.” He
reiterated that he would submit a more detailed
explanation of his “no” vote.
Hereunder is the written explanation of vote
of Senator Lacson:
The TRAIN of Vested Interests
"The goal of the reform is to make the VAT
system simpler, fairer, and more efficient,
characterized by a lower rate and a broader
base so that it encourages investment, job
creation, and poverty reduction." This is the
key message of the Department of Finance
(DOF) when it pushed for the reform of the
Value-Added Tax (VAT) System as a component
of its Comprehensive Tax Reform Program under
package one known as the "Tax Reform for
Acceleration and Inclusion (TRAIN). "
The statement was and still true. Indeed,
with too many exemptions and a very high VAT
Rate, our current VAT System is not only
inequitable but also complex and distorted.
In 1988, Executive Order No. 273 (EO 273)
was issued to simplify the tax structure and
administration. It imposed a standard VAT Rate
of ten percent (10%) on the sale and importation
of goods and services based on gross sales or
receipts and zero percent (0%) on exports and
other foreign currency-dominated sales and
those covered by international treaties. (Eight
years thereafter, the Expanded VAT (EVAT) Law
or Republic Act No. 7716 (RA 7716) was enacted
not only to widen the coverage of VAT but also
to exempt additional goods and transactions. In
1997, the Tax Code was passed into law.
In order to arrest the burgeoning fiscal
deficit and avert an impending fiscal crisis.
Republic Act No. 9337, also known as Reformed
VAT (RVAT), was passed in 2005. RVAT
authorized the President of the Philippines, upon
the recommendation of the Secretary of Finance,
to raise the VAT rate from 10% to 12% after
meeting certain conditions. RA 9337 was

implemented on November 1, 2005 while the
increase of the VAT rate from 10% to 12% took
effect only on February 1, 2006 through the
Bureau of Internal Revenue (BIR) Revenue
Memorandum Circular (RMC) No. 7-2006. RVAT
also imposed VAT on previously exempt goods
and service, subjected to zero-rate VAT certain
goods and services, incorporated other reform
measures to plug the leaks in the existing VAT
system, simplified VAT administration, and
provided mitigating measures.
Thus, it was due to an imminent economic
crisis in 2005 that the VAT rate was raised from
10% to 12%. With the increase in revenue
collections, brought by the raising of the rate
and other concomitant measures, the economic
crisis was averted.
The present economic situation of our
country is very different from that of 2005. Just
last quarter, the Gross Domestic Product (GDP)
grew by 6.9%. If the GDP growth of recent years
would be our determinant, the country’s
economy is robust. However, such growth is not
necessarily shared by our people. The GDP is
not something that our people can immediately
comprehend or feel. However, every change in
the prices of goods and serv ices will have an
instant effect in their pockets.
Accordingly, it is our duty to make sure that
economic gains truly and meaningfully benefit
our people. It is our duty that prosperity is
shared and inclusive. We need to reduce the
existing inequality and tilt the balance towards
our people.
Reverting VAT Rate to 10%
Accordingly, based on the mentioned
premises, this representation proposed to revert
the VAT Rate from 12% to 10%. This is to
provide our people a respite from the ever
increasing prices of goods and services subject
to VAT. This is also to make the VAT system
“simpler, fairer, and more efficient. " Even with
the reversion to 10% VAT rate, our government
will not suffer losses in revenues as it will gain
more by lifting exemptions not otherwise
necessary and which made our VAT system too
porous.
It was, therefore, the intention of this
representation to plug the leakages that were
introduced through the years. Indeed, with a
profusion of exemptions and extremely high VAT
Rate, our current VAT System is not only
inequitable but also complex and distorted.
An economist once said, “Economic
policies need to be analyzed in terms of
incentives they create, rather than the hopes
that inspired them. " Thus, the TRAIN should
have been measured in their actual economic and
social consequences rather than their political
popularity. Unfortunately, politics, or 1 may say,
interest group politics, decided on what kind of
TRAIN would come out of the station.
Limiting VAT Exemptions
Equally fundamental to lowering the VAT
rate is limiting VAT exemptions to necessities
such as raw food, agriculture, health and educa
tion. These measures are key to achieving a
VAT System that is “simpler, fairer, and more
efficient. ”
Ironically, in the Southeast Asian region,
the Philippines not only has one of the highest
VAT rates but also grants the most number of
exemptions. Notwithstanding, we have not collected
the same amount of VAT revenues as a percent
age of the economy compared to our neighbor
ing countries imposing much lower VAT rates.
Fact is, exemptions are not free. Exemptions
are foregone revenues that someone has to pay
for, which in our case, refers to no other than the
general public —our people who bear the brunt
of the tax burden.
Thus, the proposal of this representation
was to lift the exemptions on 78 lines out of the
143 lines of exemptions found in the National
Internal Revenue Code (NIRC) and numerous
Special Laws. Regrettably, vested interests super
sede the greater interest of the general public.
The economist Gary Becker said, “lichen it
comes to interest group politics, it pays to be
small. ” Instead of making the VAT system fairer
where everyone who consumes ideally pays
VAT based on their ability to pay, the TRAIN
that drove out of the station was directed
towards protecting vested interests.
Broadening the Base: Removing Tax-Exempt
Sectors
Let us take the case of cooperatives:
Cooperatives have been enjoying exemptions
from almost all types of taxes since the passage
of Republic Act 6938 in 1990 or a period of more
than 27 years. Almost seven million cooperative
members enjoy the privilege of tax breaks as
against the 13 million non-coop families whose
every purchase of goods or services is covered
by VAT and paying their fair share of taxes.
VAT, being a consumption tax and not a
redistributive tax, is not the right way to “help”
cooperatives which after 27 long years still need
such assistance.

More so, due to the inefficiency of the
Cooperative Development Authority, it cannot
audit properly the cooperatives that result in
large revenue leakages. This complex and
distorted VAT system also plays well for fake
cooperatives which could easily evade paying
correct taxes. These loopholes may amply explain
why exempting cooperatives from VAT is a
privilege extended by only two countries — ours
and Kazakhstan.
It is therefore high time that cooperatives
contribute more to the country after being
supported all these years by blanket tax
exemptions. Cooperatives are taxed differently
because they operate differently from other
forms of business, not because it is a privilege.
It was thus the proposal of this representation to
level the playing field by removing the VAT
exemption of cooperatives except when they sell
raw agriculture products with sales below the
VAT threshold of three million pesos.
In the case of the Housing Industry, the
government has been supporting the same for
decades through income tax exemptions and
VAT exemptions, among others. For 18 years,
the industry has been one of the mainstays in
the investment priority program. In 1994, only
the socialized housing was included but the
scope was widened to cover lowcost housing.
Considering the nature of the VAT System,
it is not the best way to help those in need of
housing. Using VAT as an incentive only
promotes large leakages that erode the revenue
of the government, which could have ultimately
been used to provide housing for the poor.
Leakages in the Housing Industry come in
various forms: tax avoidance, such as splitting
of lots and condo units to avail of exemptions;
tax evasion, such as non-payment of input VAT/
non-issuance of receipts by suppliers and
contractors; and, transfer pricing of revenues
and cost to reduce VAT liability. Only developers
benefit from the exemption at the expense of
government revenues that could have benefited
the poor. In the end, the developers reap the
gains of tax exemptions while many still cannot
afford to purchase a home of their own. Adding
insult to the injury, it is the ordinary people who
pay for the exemptions that are being enjoyed by
those moneyed and powerful developers.
Limiting Zero-Rating
While it is acknowledged that the
information technology-business processing
outsourcing (IT-BPO) sector is a key driver in
our economic growth and job creation, tax
exemptions and fiscal incentives —particularly
VAT exemption and VAT zero-rating — are not
the proper measures in assisting the industry
since such lead to large leakages. Also, the
industry has been enjoying income tax holidays,
VAT exemptions, reduced income taxes in lieu of
other taxes (which are granted in perpetuity), and
duty and VAT free importation for 17 years since
it started in 2000.
In line with the destination principle and
with the primordial goals of simplifying tax
administration and preventing leakages, VAT
zero-rating should be limited to direct exports.
VAT zero-rating was extended to indirect
exporters or suppliers of inputs to exporters due
to the failure of the government to provide
refund to exporters. Instead of solving a problem,
the zero-rating creates huge leakages and is
being abused by indirect exporters who cater to
both exporters and domestic firms. It also creates
complications in tax administration. It is thus a
necessity that the VAT zero-rating of indirect
exporters or suppliers be lifted and the same be
limited only to direct exports.
Amid the roll out of the bold tax reform, we
missed the viable opportunity to institute change
in our VAT System. The TRAIN that went out of
the station was a product of rent-seeking sectors,
groups and individuals that were out to protect
their own interest at all costs, even if such
interests are averse to that of the public.
Despite the many privileges and government
support they have been enjoying for decades,
“infant industries” remain at the centerpiece of
our reform, so much so that we tend to “baby
them with tax exemptions”, as DOF puts it.
Rung ang "hahy" ay lurnataniia at sa
kalaunan ay maghahayad ng kanyang tax, is it
not fair to ask that those industries enjoying tax
benefits, privileges, and support for years should
pay their fair share of taxes?
Meaningful Gains from Lowering the VAT
Rate and Limiting Exemptions
Our 12% VAT Rate is the highest in the
ASEAN standards, where the rates range from
7% to 10%. It is thus perplexing that while our
rate is the highest in the region, the revenue
generated by the government is only 4.3% of the
GDP and with tax efficiency of just 35.7%.
Meanwhile, Thailand whose VAT rate is only
7%, enjoys a VAT revenue of 4.1% of the GDP
and a tax efficiency of 59%. In the case of
Vietnam with VAT rate of 10%, VAT revenue as
share of GDP hits 6.1% and a tax efficiency of
61%. Thus, this begs the question, what gives?
Z'

SESSION NO. 4 2 SEVENTEENTH CONGRESS SECOND REGULAR SESSION

SESSION NO. 4 2 SEVENTEENTH CONGRESS SECOND REGULAR SESSION

Recommended

Recommended

More Related Content

Similar to SESSION NO. 4 2 SEVENTEENTH CONGRESS SECOND REGULAR SESSION

Similar to SESSION NO. 4 2 SEVENTEENTH CONGRESS SECOND REGULAR SESSION (20)

More from rodelhenrysynavarro_phsenate_journals

More from rodelhenrysynavarro_phsenate_journals (10)

Recently uploaded

Recently uploaded (20)

SESSION NO. 4 2 SEVENTEENTH CONGRESS SECOND REGULAR SESSION