REPORT TO THE NATION
LAWS AUTHORED AND SPONSORED IN THE 13TH CONGRESS

Work and life in the Senate is immensely gratifying. I savor every issue that puts me to the test and allows me to find the common good, not just a common ground. Debates that are intrinsic to the law-making process had made the Senate a raging arena, but their equitable resolution time and again proves the Senate still is the refuge of democracy. Just that alone fills me with pride.
We set forth on this Congress with the mandate to address a looming financial crisis to make us competitive as a people and as a nation. As Chairman of the Ways and Means committee, it was one of my duties to see to it that government has revenues enough to prevent our debts from escalating further. I am optimistic that we can cease to be dependent on borrowings, grow out of our debt and be truly self-reliant.

It gladdens me that colleagues across party lines have seen the point of my initiatives. With collective effort, success has met my efforts to make more resources available to government so that it can respond to your immediate needs today. Being aware that you have an unending stream of concerns, I crafted laws that would serve us in good stead for many more years to come - beyond the life of this Congress or of this Administration.

When ventures into complex issues affected public welfare, I opened the doors of the Senate to contrary views and heeded the counsel of experts. The laws I tackled all bear the imprint of that diligence and empathy to your aspirations, those of the common man and of the Filipino nation.

Since my Report to the Nation in 2005, I have sponsored five more laws. Through these laws, I hope that we shall balance the budget, improve economic conditions and fill the gaps on health, education, housing, agriculture infrastructures and security.

RA 9334 (SIN TAX) We balanced efforts to raise revenue mindful of the need to keep Filipino tobacco and alcohol industries viable. We imposed higher excise tax rates on higher-priced products especially imported luxury brands and lower rates on lower-priced indigenous brands of distilled spirits, wines, fermented liquor, tobacco products, cigars and cigarettes.

We took a panoramic view of the interests of all the stakeholders. Contrary to the myth, the sin tax law is not between a couple of taipans, a foreign tobacco colossus, on the one hand, and the BIR on the other. The alcohol and tobacco industries are more textured than meets the eyes. There are the consumers, the farmers, the workers, the LGUs in between and the national government at the end of the line.

This law raises around P10 Billion in incremental revenue annually of which 2.5 % shall be appropriated for the National Health Insurance Program to achieve universal coverage especially of poor families and another 2.5 % for the Department of Health for its disease-prevention programs. (December 21, 2004)

RA 9335 (LATERAL ATTRITION) To end the perennial shortfall in collections by the Bureau Internal Revenue (BIR) and Bureau of Customs (BoC), we set up a system of rewards and punishments for BIR and BoC personnel. The incentive fund rewards are as follows: if the collection exceeds target by 30%, the incentives will amount to 15% of the excess collection over target; if the collection exceeds target by more than 30%, the incentives will amount to 15% of the first 30% plus 20% of the remaining excess.

But more than the monetary reward, it was the fear factor that would make honest men out of tax collectors: if they miss the target, they can get fired. A Revenue Performance Evaluation Board is ready to mete out the penalties that include removal from service if collection falls short of the target by at least 7.5%. (January 25, 2005)

RA 9337 (E-VAT) We expanded the coverage of the Value Added Tax. At the same time, we gave the Executive the option to increase the rates from 10% to 12% under very strict and clear conditions. It was the preferred measure to increase revenues as it did not impose the heavier burdens intrinsic in a cascading sales tax. Nonetheless, we raised an additional P100 billion annually that cut the budget deficit drastically leading to lower interest rates, promote business confidence, strengthened the peso and reduced inflation. These improved macroeconomic conditions.

We imposed a single E-VAT rate to simplify taxation. We equalized the treatment of mom-and-pop operations and big business and provided exemptions only on hard to tax sectors.

It granted 0% VAT on transactions of goods and services critical to growth like exports and indigenous and renewable energy. It softened the impact on prices of inputs to processors of sardines, milk, refined sugar and noodles. We removed excise taxes on diesel, kerosene and fuel for power generation that lessened the rise in prices despite the imposition of VAT.

Today, the E-VAT is much fairer as we tax only the sectors that can bear the brunt. Those with gross sales not exceeding P1.5 million are VAT-exempt. Staples and basic necessities remain VAT-free. Staple food and agriculture, education, low-cost housing and lease of residential units remained VAT-free zones.

To plow back the fruits of our sacrifice to the public, we earmarked 50% of the VAT incremental revenue to the Local Government Units to be used as follows: 15 % for construction of school buildings, purchases of school furniture and in-service teacher trainings in public elementary and high schools; 10 % for health insurance premiums of enrolled indigents as a counterpart contribution of the local government; 15% for environmental conservation to fully implement a comprehensive national reforestation program; 10% for agricultural modernization to finance the construction of farm-to-market roads and irrigation facilities. (May 24, 2005)

RA 9341 (RENT CONTROL ACT ) This law defined the rights of lessors and lessees. Housing tenants are protected from unreasonable rent increases for three years until December 31, 2008. It retained the 10% cap on rent increase per year on housing units at P10,000 monthly rent in Metro Manila and other highly-urbanized cities and at P5,000 in other areas. Direct beneficiaries are around 1.74 million residential tenants nationwide, of which more than 600,000 are in Metro Manila and more than a million student boarders in the University-belt. (December 31, 2005)

RA 9343 (SPV ACT) This law would reduce non-performing assets (NPAs) of banks and financial institutions by allowing Special Purpose Vehicles (SPV) to acquire NPAs at a reduced rate. Banks will then be unburdened of their NPAs, thus, have more funds for lending while businesses distressed with piling debt get a chance for rehabilitation. SPVs are expected to invest into P200 Billion and thereby reduce banks’ NPAs and improve industries’ stability. These investments also reinvigorate the real estate industry. Most important, mass ejectment of dwellers from their mortgaged homes is averted by the guarantee of their rights under this law.

More than just offering relief for borrowers, this would put back to health banks and financial institutions and offer opportunities to investors. Individuals, like housing borrowers, and corporations are treated equally and enjoy the same tax exemptions, incentives and fee privileges to be availed within a five-year entitlement period. It also granted anew a two-year period to transfer non-performing assets. (April 24, 2006)

Since my assumption to the Senate in 2001 up to the present, I have sponsored 14 laws of national significance. For this 13th Congress, I tackled five of 14 laws of national significance passed by the Senate, namely: RA 9333 (Lateral Attrition); RA 9334 (Sin Tax); RA 9337 (EVAT); RA 9341 (Rent Control); and RA 9343 (SPV Act). In the 12th Congress, I sponsored nine, namely: RA 9301 (Philippine Overseas Shipping); RA 9295 (Domestic Shipping Development Act); RA 9294 (FCDU); RA 9243 (DST); RA 9238 (GRT) RA 9224 (Excise on Automobiles); RA 9182 (SPV); RA 9178 (Barangay Micro-Business Enterprises); RA 9167 (Film Development Council); and RA 9161 (Rent Control).

I have several more laws in the pipeline that will bring in investment, generate job opportunities and reduce income taxes for low-income earners. It is my earnest hope that I can match the trust you bestow on me with laws relevant to your needs.