18 October 2016




SENATOR CHIZ ESCUDERO (CHIZ): Maraming salamat. Tatalakayin po natin sunod-sunod 'yung mga panukalang batas. Hangga't maari hindi ko po aaksayahin ang panahon ninyo. May ilang mga katanungan lamang ang inyong lingkod kaugnay sa panukalang batas na inihain ng aming mga kasamahan dito sa Senado. The first line in the agenda is Senate Bill 264 filed by Senator (Ralph) Recto with respect to the DBP (Development Bank of the Philippines). Basically, Senator Recto seeks to allocate 80%. Have you read the bill, not yet? Did anyone read the bill about DBP? Basically 80% to SMEs limiting the 20% other transactions of the bank with respect to the lending function. What is the current picture of the DBP's loan portfolio? Ma'am, anyone?

RESOURCE PERSON (RP): Good morning po. The current portfolio of DBP in SMEs is only 6% of the loan portfolio. For the LGUs (local government units) is 25%.

CHIZ: The balance?

RP: So in total is 31 and then the balance is 69.

CHIZ: Saan napunta ang 69%?

RP: 69 distributed in our investment banking accounts, corporate banking accounts and treasury accounts and other portfolios.

CHIZ: Hindi kayo nagpapahiram sa mayaman? Nagpapahiram kayo sa mayaman?

RP: 'Yung mga peak accounts namin, mga investment accounts or ano…

CHIZ: You call that investment accounts, Ma'am?

RP: In corporate bank, oo.

RP: I'm actually, we also had corporate banking but I'm here separately as OIC of Amanah. We do our mandate right now is a developmental bank. So we do finance infrastructure projects, we do logistics. We also fund PPPs so these are corporates. And we actually, 60% of the loan portfolio of DBP is with the developmental projects.

CHIZ: Can I have that please? Can we also have the list of the loans that you have written-off in the past ten years? I had that initial list before and I want it updated. Sa DBP Ma'am and I hope you understand too that you are here in the Senate. You've been lending to Zamoras, the Lopezes and whoever and SMEs 6% yung mga mayayaman pinapahiram niyo Ma'am whether its infrastructure or PPP ilang percent 'yung sa bank? Ilang percent 'yun sa portfolio ang inihanda sa bank? Sa 69% ilan 'yun?

RP: Sa corporate accounts?

CHIZ: Yes Ma'am.

RP: 60%.

CHIZ: May investments ba kayo ng 60%. So 9% lang 'yung treasury investments niyo? 60% yung corporate accounts?

RP: Ang treasury ay iba sa PPP po.

RP: Ang treasury is different activity and lending is a different activity. I think there was confusion there. But Mr. Chairman, I think it would be best if we give you the figures so that we make up error in the breakdown.

CHIZ: You just be with the DBP before.

RP: No, I'm still with the DBP, the head of corporate banking.

CHIZ: And Al Amanah is under?

RP: Who is also the subsidiary of DBP.

CHIZ: We talked about this with respect duon sa lahat and BSP had concerns and about limiting the exposure of tax and only in one sector in this particular we have SMEs for the record Sir. Can you state the possible pitfalls providing for an 80% exposure of one factor to one sector which is SMEs?

RP: Mr. Chairman, (inaudible) combine with the mandated requirements for….

CHIZ: Sa Agri-Agro 'yan?

RP: For SME.

CHIZ: Even for SME?

RP: Yes, for the micro-small medium 80%, for the medium enterprises 3%. Based on the latest data for SME, I have some figures here in DBP, submitted to us a total of portfolio as of June 30, 2016 the total portfolio of DBP is Php135.810-B. For the SMEs around Php8.412-Bor 3.267%.

CHIZ: 3.267%?

RP: 3.07%.

CHIZ: 3.07% for SMEs

RP: Micro, small and medium enterprise.

CHIZ: Lahat na 'yun?

RP: Micro, small medium enterprise. The micro, small the compliance is around 2.53% which is way below the percentage requirement and for medium enterprises is 3.08%. The requirement is 2%. So for major enterprises the DBP has complied while the micro, small enterprise is below the required 8%.

CHIZ: When you say compliance what's your compliance with what law?

RP: It is the law that requires banks to allocate a certain portion the total of portfolio.

CHIZ: What law is that?

RP: Magna Carta of 19051

CHIZ: Noon pa? Walang pine-present diba? May penal clause ba 'yan?

RP: Meron.

CHIZ: You just pay penalties to BSP. I presume its law because you are still smiling. Mababa lang ang penalty, how much is the penalty?

RP: Sir, masyado pong mataas ang penalty.

RP: We have a developmental sector in charge for SMEs and we are trying to grow it. There's another sector in charge for that

CHIZ: What's the penalty, Mr. Cruz?

BSP EXAMINATION SECTOR RESTITUTO CRUZ (RC): For zero compliance portfolio, SMEs and MSMEs is Php500,000

CHIZ: For?

RP: For zero compliance.

CHIZ: It's Php500,000 per one time? One time lang ho? Is it yearly?

RP: Zero compliance.

CHIZ: No, is it yearly, quarterly?

RP: Quarterly.

CHIZ: So for every quarter na hindi ka nagko-comply, kung bangko ka zero ka Php500,000 per quarter.

RP: For other compliance Mr. Chairman, for SMEs percentage under compliance multiplied by Php400,000 per quarter.

CHIZ: Percentage of under compliance. Example Sir, let's say DBP 2.5% it should be how much?

RP: 8%

CHIZ: So papaano tayo?

RP: So sa non-compliance is around 5.7.

CHIZ: 5.47

RP: 5.47 under compliant and that will be multiplied by the Php400,000.

CHIZ: So magkanom Sir? It's not percent anymore, it's 5.47 x 400,000 or is it .0547 x 400,000.

RP:.0547 x 400,000

CHIZ: Magkano 'yon? Kayo naman. Para mo namang pinalo sa kamay wala talagang magko-comply. .0547 x 400,000 ang penalty?

RP: Php21,880

CHIZ: Per quarter?

RP: Per quarter.

CHIZ: That's Php21,000 per quarter?

RP: Yes, Mr. Chair.

CHIZ: Hindi ho ba medyo nakakatawa 'yun? Wala talaga magko-comply. Bangko ang pinag uusapan natin at Php21,000 per quarter let's say…

RP: They just have to pay the penalty.

CHIZ: Exactly that's Php84,000 a year. They will pay. What do you recommend or suggest? On the part of DBP is 8% too high? For MSMEs why have you not been able to comply? Pangarap pa nga ni Senator Recto 80%, ito 8% pa lang hindi niyo na ma-comply.

RP: Kasi po, actually, we are working on our way to reach ang gross na 'yun. (inadible) So ganoon po ang history nun. Kaya po 'yung compliance na sinasabi na diba po ang 8% of the total portfolio of the bank should be allocated to micro and small and 2% for medium. Hit namin ang medium pero sa micro and small hindi namin ma-hit kasi ang structure ng DBP was not really designed to have it servicing micro and small enterprises.

CHIZ: But isn't it in your charter originally?

RP: 'Yun po sa revised charter na ang nakalagay na po na to finance development countryside, give priority to SMEs. Kaya nga po nag redesign po at nag-create ng ano ng panibagong unit ang focus unit ng DBP to cater micro small. But before, hindi po ganoon ang charter. 'Yung sa revised charter ganun na.

CHIZ: May I know when was the charter amended?

RP: Sabagay matagal na.

CHIZ: Ma'am, it was amended by Republic Act 8523 that was in the 90s.

RP: Oo, that was in the 90s.

CHIZ: In 2014 doon lang kayo nag-create ng division.

RP: Doon pa lang nag-focus ang division for SMEs.

RP: May I butt-in, I joined the DBP almost five years ago but I know for a fact then DBP then had all the financing. So meaning as mentioned earlier we had ODA financing for wholesale. So we lend to bank, banks became conduits to lend to SMEs. So that was the structure then. So to shift to really becoming SME bank we need to have our structure in terms resources. Meaning so many people to address the SMEs so giving towards that direction but when it takes a while.

CHIZ: Not twenty years.

RP: Yes Sir, because the wholesale was until 2000? Around those years. I'm sorry but I don't know the exact the figure because I joined the bank five years ago.

CHIZ: Is that compliance? Kapag nagpahiram sila sa bangko, magpapahiram sila sa SME although hindi naman nila malalaman 'yun. They won't know anymore, right? Is there a way of tracking?

RP: Yes.

CHIZ: You lend to a bank, a rural bank or whatever, is there a way of tracking to lend that money? And how can you gain credit for them let's say nagpahiram sila sa SME ng 10% pinahiram ko lang sa inyo, they don't get credit for that?

RP: For wholesale lending compliance with the mandated SME loan requirements that will be counted but in terms of the question whether if we monitor rural banks where they lend to SMEs then that will be covered by our examination.

CHIZ: How do you counted in their favor?

RP: The whole because…

CHIZ: The whole amount?

RP: Yes, Sir.

CHIZ: Paano kung 'yung pinahiram sa iyo sa SMEs lahat 'yun? Paano 'pag in-invest 'yun ng bangko? Paano kung ang pinambayad ng bangko yun sa sweldo?

RP: They have an agreement mostly when they lend to rural banks they just don't lend it on the basis of ad-hoc reasoning without monitoring. It's part of their good governance when they lend a program that should be covered by the program. So the monitoring should be in the part of DBP.

CHIZ: Is the 2.5% for micro and small and 3.08 compliance for medium kasama ho iyon 'yung pinahiram sa kanila ng rural banks sa mga maliliit na thrift banks?

RP: For medium enterprises because of the amount involved, DBP can really lend on account basis because of they are not on medium enterprises. But for the rural banks it will be focus on micro and small.

CHIZ: Agree but you are saying doon sa record sa submission sa DBP na 2.5 kasama na dun 'yung pagpapahiram nila sa rural banks?

RP: I'll just check.

CHIZ: Yes please. Kasama na ba iyon? Why did you say it?

RP: Pwede po ba i-ano natin sa timeline, Sir. Kasi ang DBP was actively wholesale bank hanggang starting 2008 medyo nawawala na ang aming mga ODA files. Kaya nagsa start kami ng our team. Yung figures siguro baka ang Magna Carta naman kasi compliance nag-start about, kailan po ba sila nag start? 2008 later lang iyon. Kumbaga on the side of DBP iyon talaga ang directly lending po is naguumpisa po kami after the ODAs kasi ang set up before ang conduit banks namin as a depositor ODA funds ang mga beneficiaries nun ay mga bangko. So it was different timeline so starting 2008 nag uumpisa na ang DBP na nagdi direct lending na sa SMEs so yung data po namin na 3.5 at 2.5.

CHIZ: Recent lang iyon?
RP: Recent lang po iyon.

CHIZ: Can you give me the compliance not compliance with the law but basically banks history because with or without that law ideally in a perfect world 'yung charter nito mandated naman. 'Di ba?

RP: At saka Sir, if I may, hit naman namin siguro before. Dati namin structure na active kami as an ODA kasi through conduits so nahi-hit iyon kaya lang kasi siyempre nag change kasi tayo ng landscape namin na wala ng ODAs at wala na so struggling kami ngayon na we are going to that direction.

CHIZ: Ia-abolish na kayo Ma'am o hindi na? Ia-abolish po ba kayo, hindi na?

RP: Sir, 'wag naman.

CHIZ: Tinatanong ko so there was a plan with the previous administration, right?

RP: Merge.

CHIZ: Merge nga there will be a surviving entity.

RP: Land Bank lang po.

RP: That was then na ano.

CHIZ: And they were planning at that time na ang Land Bank ay surviving and…

RP: Yes, Sir.

CHIZ: Ano nangyari doon?

RP: Parang ang narinig lang po naming…

RP: Actually, Secretary Dominguez, the DOF secretary now, actually issued a statement that merger is not going to push through because of, well, based on what he mentioned several forums is that DBP has its own mandate and Land Bank has its own mandate. So they opted to, in fact they intend to appeal the Executive Order instructing the merger. So that's the update.

CHIZ: So hindi na matutuloy siya? So, Ma'am I need from you data on your loan portfolio, data on the data on the debts you have condoned in the past ten years. Particular focus on MSMEs, you said 6% earlier, Bangko Sentral said 2.5 from micro and small, 3.08 from medium. Ewan ko kung ia-add 'yun. Add ba 'yun, Sir?
You don't add it? So, in order to check on compliance, can you also give us on the part of BSP 'yung penalties na binabayad sa inyo kung magkano, I presume you have a record of each bank? Hindi naman secrecy bank deposit, hindi naman covered ng secrecy 'di ba? 'Yung penalty na binabayaran ng bangko for non-compliance? Kindly submit that to us too. And on the part of DBP, can you send it to us too your objections, I presume you have objected to this, 80%? You can't possibly meet it diba? You can't possibly comply. Submit to us your position paper on that, basically objecting it or saying no to it. Okay lang naman 'yun. And it's the bill of Senator Recto so I just want to get all the inputs.
And again, if I may reiterate on the part of BSP, when we talk to BSP officials, not you Sir, the deputy governor at that time, Espenilla. Tungkol doon sa pag-increase naman ng loan portfolio ng Land Bank to 80% to purely agri, ang sinabi niya that you won't advise it nor support it because it will increase the risk exposure of the bank to only one sector. Kapag dumapa 'yung sektor na 'yun, yari 'yung bangko. Is the same argument applicable in so far as MSMEs are concerned?

BSP GOVERNOR AMANDO TETANGCO (AT): Yes, Mr. Chairman. Because we as part of risk, we try to encourage banks to diversify the risk exposure. Although for the exposure for the MSMEs will have positive effect on the economy, we encourage them to lend more because that will encourage a lot of employment. But right now, our position is if we're going to hard-code a particular ratio, that may be difficult. Maybe we can encourage them to put up something based on their (audible).

CHIZ: Or increase the penalties in order to nudge them a bit.

AT: Let that be considered. Right now, most of the penalties, 90% goes to the SMED council and 10% goes to BSP for administrative cost.

CHIZ: On the part of PDIC, is it a concern that we are trying to put a minimum cut on the loan portfolio of banks? Given that should the bank flop or fall or falter, you'll be made to answer for it by way of the insurance coverage of PDIC, is that a concern? Anyone, from PDIC?

ATTY. MARIA ATONETTE BOLIVER (SEC): Well, of course, as pointed out by Bangko Sentral if there is like a risk that is opposed to a bank, the bank will eventually fall or close. And if the bank closes of course it the deposit insurance fund that will be made answerable to the depositors to insure the deposits.

CHIZ: Actually, the question I'm driving at is, is this risky? Allocating a minimum of 80% of the loan portfolio of a bank only to MSMEs, is it risky? Is it unsound banking practice?

MAB: Well, we tend to agree to the position taken by Deputy Governor Espenilla that concentrating it to a particular sector will of course increase the risk and the name of the game really is to diversify so we fully concur with the position taken by the BSP on this matter.

CHIZ: If that is your position that you concur, can you give me a sample of best practices kung ano yung diversification ng portfolio ng bangko? Yes po, Ma'am Tess? Good morning, Ma'am.

STOCK EXCHANGE COMMISSION TERESITA HERBOSA (TH): Actually, from the perspective of giving of credit, I'd like to call the attention of my co-resource persons here about CISA, which was enacted a long time ago and we're now in the process of launching the credit information system because I am also the chair of the Credit Information Corporation. And we've already required all banks to submit credit data so that there'd be one comprehensive credit database in the country, and all the banks and financial intermediaries could look at that and lend wisely. And I am sure the BSP supports that because they have already required certain of these principles to be applied with a bank lends to whatever sector or to whoever person. And I believe that if all the banks are subscribe to this comprehensive reliable credit database, to CIC, then these risk of lending to just one sector might be minimized.
We also have in the works a bill on secured transactions and we're helping the passage of that bill. It would sort of allow SMEs or even micro financed entities to be able to offer whatever collaterals. And we have also in the calendar today the bill on making a TESDA certificate, collateral. But actually Mr. Chairman, Ms. Gay Santos from IFC who is our consultant is the one who really knows about this secured transactions bill that might help banks like DBP to minimize the risk of lending to just one sector.

CHIZ: Actually, I've had discussion with Ms. Santos if I remember correctly.

RP: Sir, I guess one of the things that crossed our mind as we were trying to finalize or continue the drafting of the bill, we recognize that the current system in terms of requiring that percentage of portfolio for MSMEs is not really working, it's a check in the box. So, we're thinking through some may be penalty as against incentives for banks to really devote a portfolio for MSMEs. I think that's one of the thought processes that the TWG 26:10 is going to consider. As you can see, it's not working in the current system.

CHIZ: Ms. Santos, Atty. Bolivar, 'yung Agri-Agra Law which limits the portfolio of banks to the agriculture sector, admittedly agriculture is a sector. But MSMEs are engaged in various and different things. Pwedeng nasa agri sila, pwedeng nasa retail sila. So, when you breakdown the portfolio of a bank, it's divided into two essentially, correct me if I'm wrong, MSMEs and big corporations or rich individuals. Dalawa lang naman 'yan 'di ba?
But if you speak of the Agri-Agra Law limitation on loan portfolio of banks – agri maliwanag 'yun, tamaan ka ng bagyo sabay-sabay na tatamaan lahat 'yon but MSMEs are different 'di ba? MSMEs can be engaged in agri, it can be engaged in manufacturing, it can be engaged in retail. So, it's a diversified portfolio on the part of the bank, hindi lang naman siya isang sector e. You may speak of diversification with respect to MSMEs, correct me if I'm wrong, dalawa lang 'yun 'di ba? Small and big.
So, if you look at the loan portfolio of a bank, it can be by sector – meaning garments, real estate, agriculture etcetera, that's one side of it. But the other side of it is small or big. And right now, you're 94% big, and 6% small and medium. That's not diversification too, if you ask me. Ma'am please, Atty. Bolivar?

MAB: Perhaps what we can relate is what we have by way of data from the banks that are under our receivership and liquidation. We have on the total loan portfolio of about 250 plus banks, 94% of our clean. And when we say clean, we're not just talking about the unsecured but also those that are secured by chattel mortgages. So, on livestock, vehicles, jewelry; so, this is basically the bulk of the loan portfolio of the closed banks. And of course, given the nature or the character of these loans, these loans are in all likely would 100% written of. And if these receivables or these loan receivables are in fact written off then these are, of course, what would have otherwise been distributed by the creditors by way of payment. So, if you look at it – I mean we get to see the end of the entire (inaudible).

CHIZ: Assuming dumapa na 'yung bangko, Ma'am ha?

MAB: Yes, that's right. So, I mean if you look at whatever is left there by way of recoveries for the creditors and the depositors, the total loan portfolio of the banks that are based under our liquidation are 94% clean, and therefore written off.

CHIZ: If it's clean, it's not necessarily to small and medium because there are banks also I've seen some DBP loans in the past and I've investigated DBP about five-eight years ago, clean loans na malalaki nang bill 'yun ha – which DBP wrote off too. For the record Ma'am, ano 'yung pinakamalaking ni-write off niyong utang, to one company or individual, that you were aware of?

MAB: Sir, hindi namin alam ngayon.

CHIZ: At least a billion, in fact ang alam ko over Php2-B ang ni-write off niyo to at least three families, who are still rich up to now by the way, but to cite as an example. So, again 'yung mga nili-liquidate na bangko, hindi naman porke't walang collateral it's small and medium na 'di ba?

MAB: Yes, but when we speak of clean, we are also talking about the loans that are secured by chattels. So, if we're talking about in terms of (inaudible).

CHIZ: When we say "chattel", are shares of stock considered chattel?

MAB: Yes, it is.

CHIZ: Between movable and immovable diba? Real property and chattel, shares of stock are considered chattel, right?

MAB: Yes.

CHIZ: So, kasama 'yun sa chattel mortgages yung shares of stock. Walang MSME na may shares of stock.

RP: Actually, I am not the best person to talk about the MSME loan right now, but I would also like to point out that DBP also lends to LGUs, water districts, and electric cooperatives. So, it's not purely corporates.

CHIZ: To tune of 25%?

RP: Yes.

CHIZ: So, if you were to be asked, what would be a good percentage on the part of DBP? Kasi ang mga bangko, clearly according to the BSP, kung hindi sila nagko-comply, siguro walang collateral, hindi sila kikita, mas malaking kumita kapag nag-invest or whatever. But in the part of DBP, which has a mandate, which is a government bank, which is funded by the people's money essentially at least your initial capital. What would be a good figure? Clearly, you cannot be like these other banks complying with the 8% and the 2% minimum. Clearly, you should be lending to MSMEs more than any other bank, what would be the figure na kaya niyo ha?

RP: Can we come up with our own position paper so that we can consult with the heads of our development sector because they are the experts for the SMEs?

CHIZ: Please submit it to us next week. I won't delve on it that much. Kindly also address the issue of diversification in your position paper. Why is it not considered diversification if you lend to MSMEs, given that MSMEs are engaged in different so, kung ika-categorize mo – MSMEs, big corporations, LGUs. Tatlo lang naman 'yun. Right now, you're at 69%, tama ba? 69% corporations, 25% LGUs, 6% MSMEs. Ma'am, next week can we have it? So that we can schedule another hearing on this?

RP: Yes.

CHIZ: Friday? Wala pala kaming opisina ng Friday. Thursday. Four day work week kami, Thursday.

RP: Thursday next week, Sir.

CHIZ: Yes, Ma'am. You have enough time; you have more than you need. OK, thank you very much, Ma'am.
Item number two, Senate Bill No. 436, establishing environmental units in every banking institution to assess the environmental component of loan applications. Actually, staple ito, can we legislate this? It's a basic question. Can we legislate this? Can we require banks to have a certain unit in their corporation on this? Ma'am Tess, pwede ba 'yun?

TH: Actually Mr. Chairman, somebody once told us how to compute these environmental units. And I think many of the big companies especially publicly listed companies a include report on this in their sustainability reports. And I think for now it's sufficient that they do that kind of reporting every year in the spirit of corporate governance.

CHIZ: In the spirit of their CSR?

TH: Yes.

CHIZ: But can we legislate nga, Ma'am?

TH: There would be a lot of educational campaigns.

CHIZ: Can we legislate this? Do you know that companies are also organized under the corporation code, diba? This is actually, at least in so far as banks are concerned; this will essentially change their corporate structure. Can we do that?

RP: I guess Sir, international practice; there is a need to legislate this kung hinid po magshi-shift ang mindset ng mga bangko to have this as part of their risk management process.

CHIZ: So, kung kasama sa environment, let's say, coal fired powerplant. They will frown upon it? As compared to solar, knowing for a fact for example that solar is by far more expensive than coal fired. Paano 'yun?

RP: I can't generally speak about it, Sir because I am not an environmental specialist but I can speak for how I have seen which complies with international standards with these investments. So, we follow environmental standards in financial environmental standards. In the case of coal-fired, usually when we do our due diligence, we assess the impact on the environment. Kailangan ma-capacitate ang bank to do this.

CHIZ: Pero may ECC na inissue ang DENR. So, presumably kung manghihiram siya sa bangko, ipapakita niya yung ECC na galing sa DENR.

RP: I guess it's a question of, are we ready for this? Can we shift the mindset? Is it something that we want to advocate?

CHIZ: Section 7 of the bill says, non-compliance of borrowers with applicable environmental laws shall be considered a condition for default. Paano 'yun? So, kapag pinaimbestigahan ni Secretary Gina Lopez yung isang mining firm or power plant at sinabing non-compliant siya, default na 'yun sa lahat ng law niya?

RP: Sir, i-aano ko lang 'yung the way we do our portfolio in, general speaking. So, when we do a credit risk rating, isa sa mga factors we put into credit risk rating is the environment if you have insurance, we look at management. So, I guess that can be the basis for interest rates. It's just how…

CHIZ: That's up for the bank. The question is, can we require all the banks to have that? Because it also entails small thrift banks diba? Ire-require natin magkaroon ng ganoon? My question basically is, can we trust a law requiring that? Ma'am Tess, are you aware of any law that compels corporations to have a particular unit?

TH: I am not aware. It might even go against our- the right to associate the corporation of your own voice. Although--

CHIZ: That is my concern.

TH: Currently, from what we are doing Mr. Chairman in the SEC is we are tracking the rules already for crowd funding. Because a lot of the MSMEs, especially if they are just start-ups, they'd rather take investments to the general public through the internet. Many of this, again is aware of raising fund without borrowing from the banks. Because they find borrowing from banks very tedious because of the requirements. Plus some of our laws, through the Charter Mortgage Law has been around for decades and have not really kept up the times. That's the reason I think why it will be very difficult as we are just trying to grow our MSMEs sector to impose things that are rather more applicable to industrialized countries.

CHIZ: With DBP and Land Bank Ma'am, we can simply amend their Charter and include this in their charter. Can you submit to us something? How about private banks the same as through BSP, can you submit to us a position paper on that? Can we pass a law requiring banks to establish a unit in their tact? Kasi, Charter naman ang DBP at Land Bank to amend their charter. But these banks are organized under the corporation coded rules; complying with BSP rules and regulations. So, can you kindly look into it and find out if we are violating any constitutional right on the part of the banks, if ever if we do pass such a law?

RP: Sir, can we read the MOA?

CHIZ: Yes Ma'am please. Yes, Ms. Marisa?

RP: Sir, for the unity we have the- the DBP opted to- decided- the management to come up with to established the environmental unit especially when we started financing environmental projects.

CHIZ: You are free to do it on your own.

RP: Sir, we started it way back 1990s, so it's really institutionalized.

CHIZ: If that is the case, can the BSP also submit to us a report. How many banks already have an existing unit? Kasi kung meron naman na, kung nagawa na naman nila ay baka hindi na namin kailangang isabatas. Ma'am Tess pakitulungan ako corporation code, kayo naman ang nag-aano nun.

TH: Thank you very much. We are already in the process of make a simpler and propose amendments with the committee on banks.

CHIZ: Ma'am kasama iyong- actually may bill ako iyong "One-Person Corporation".

TH: Definitely that will be the major highlight

CHIZ: It is very much like what they have in Singapore. Tutal naman dummy ang apat palagi, 'di ba? It's not illegal dummy lang sila. Senate Bill number – kindly get their submissions in both BSP and SEC? Proceed now with the Senate Bill 668: "The Charter of Al-Amanah." Question, may charter ba itong Al-Amanah na ito before? Anong year ginawa?

RP: Actually, Al-Amanah is created in1973 via PD 2864. But in 1990 there was a republic act recreating Al-Amanah, Republic Act 6848.

CHIZ: Help me remember, na-recommend ba ng GCG na i-abolish sila nun in the previous administration? To wind up or abolish?

RP: I think Almanah is peculiar because it's the only Islamic Bank in the Philippines. So I think there was no intention to abolish it.

CHIZ: What is the capitalization of Al-Amanah?

RP: DBP came in to fund it and capitalize Php1-B in 2008.

CHIZ: In 2008?

RP: Yes.

CHIZ: Before that?

RP: It was Php100-M and it was owned by various government institutions like GSIS, SSS.

CHIZ: All that various institutions paid-up naman?

RP: Yes, Sir.

CHIZ: Paid-up naman iyong Php100-M?

RP: Yes, Sir. Initially it was Php100-M paid back by the various government agencies like SSS, GSIS.

CHIZ: Tapos naubos iyon.

RP: Yes, naubos iyon. Nang maubos na sir, the Bureau of Treasury help in the funding of Al-Amanah then DBP came in with one billion.

CHIZ: Paid up din po iyon?

RP: Paid up din po.

CHIZ: What is the current status of the bank? Red, green, yellow, white o black?

RP: Red sir. Since DBP took over there's an average of 50 million net losses per year. The reason being the revenue is insufficient to even cover operating expenses.

CHIZ: Negative 50?

RP: Average Sir, per every year.

CHIZ: I would like to acknowledge the presence of Senator Bam Aquino, the author of this bill.

RP: In fact, we computed the amount of capital that is needed to be able to just cover break-even. The Php80-M in operating expenses every year and looking at Php2-B in loans or income generating assets to cover the Php80-M. So, that's how it is. But, we have only capitalized Php1-B. Sir, in fact we've computed the amount of capital that is created to be able to just cover the breakeven. The Php80-M in operating expenses every year and we are looking at Php2-B in loans or income generating assets to cover the Php80-M. So, that's how it is. But, we have only capitalized 1 billion, and out of the Php1-B, Php300-M was used to pay off the liabilities of the old Amanah. So, what was really left with Al-Amanah was Php700-M and over the years we are now actually down to a capital of Php313-M as of today.

CHIZ: How much is your recommended deposits. You accept deposits, right? Magkano?

RP: Total deposits as of September is Php264-M of which 10% is Islamic and 90 % conventional.

CHIZ: What do you mean by 10 % Islamic?

RP: 10% of the 264 is Islamic.

CHIZ: What do you mean by "Islamic"?

RP: We don't pay interest. For that, deposit.

CHIZ: Lubong na lubong na nga kayo hindi kayo nagbabayad ng interest sa depositor.

RP: Tago ho iyon. It's Karam.

CHIZ: Ang sinasabi ko nga lamang nga kayo hindi kayo nagbabayad ng interest. Hindi kayo kagaya ng ibang mga ordinaryong bangko nagbabayad ng interest kahit 1 % lang a year. But the problem sir with Al-Amanah is that there is no Islamic framework that we can work around. So, it's been the issue ever since. In fact, DBP for a time wanted to privatize Al-Amanah but those interested investors didn't come because – they didn't pursue because of the absence of the frame work. Is that what this bill seeks to do?

RP: Yes.

CHIZ: But, it's amending the charter can we still privatize this after we do this?

RP: There is also provision in the Charter, I think for privatization.

CHIZ: So, once this done that's the roadmap to privatized?

RP: Yes, that was the roadmap adapted by the DBP's fully owned the owner of Al-Amanah. Like for a time during the time of the Aquino administration they were thinking of having Al-Amanah for the BBL (Bangsamoro Basic Law) so we had to stop the privatization efforts.

CHIZ: Senator Bam, you want to say something about your bill?

SENATOR BAM AQUINO (BA): Mr. Chairman, I'm just here to listen to the deliberation of the chairperson who are fully supporting this bill. Not only the support the progress of Al-Amanah bank but also to open up Islamic financing to other commercial banks in the Philippines. The second part of the bill actually allows for the commercial banks to open up Islamic financing in their own offices. And this will be similar to how it is done in Indonesia and Malaysia where the clients can actually choose what type of banking they want to.

CHIZ: Bawal ang interest sa Islamic funding?

BA: Yes.

CHIZ: Hindi kayo pwedeng magbigay ng interest sa depositor nila. Hindi rin sila magbabayad ng interest sa inyo kapag nangutang?

BA: Yes.

RP: We call it profit sharing. It is a scheme different from-

BA: Mr. Chair, if I may.

CHIZ: Muslim lang ba ng pwedeng gumawa noon o kahit Kristiyano pwede?

BA: Actually, Mr Chairman, even from other countries it doesn't matter what the religion of the client is. They can choose what type of modality or scheme they would apply their financial products to. And in some cases, even non-Muslims prefer the Islamic financing style. We are opening this up and hopefully we can correct the lack of financial services provided for our Muslim brothers and sisters. Because in the areas where it is predominantly Muslim there's really a lack of formal banking services there. So, we're hoping this will provide more opportunity to provide in this area as well, Mr. Chairman.

CHIZ: Are the depositors covered by Al-Amanah is covered also by the PDIC?

RP: No.

CHIZ: Why not?

RP: As reported earlier, 90 % of the deposits in Al-Amanah now are conventional. So, these conventional deposits are covered by PDIC. So, for the 90 % they paid premium to the PDIC but for the 10% representing the Islamic deposits, it is not covered.

CHIZ: Why not?

RP: Under the law.

CHIZ: Which law are you referring to, Ma'am?

RP: Our law and Al-Amanah law. The PDIC char ter does not apply to Al-Amanah, as far as the Islamic deposits are concerned.

CHIZ: Why is it not applicable?

BA: It cannot be Mr. Chairman, because of the restrictions of the Shariah law so hindi talaga siya puwedeng- is there something analougous to- There is something analogous, 'no? Please. Mr. Chairman, if they may?

RP: There is Takaful Islamic banking; Islamic finance that is analogous the conventional insurance that is being used by other Islamic countries also like Malaysia and Indonesia. But we do not yet takaful yet, here in the Philippines.

CHIZ: Takaful?


RP: It's the insurance type of Islamic and it is more of analogous to the conventional insurance.

CHIZ: Iyang takaful na iyan, government ang may-ari o private?

RP: In other countries there are private providers of takaful. In Malaysia, there is government agency for takaful. It can be also open to private operators.

CHIZ: If it is similar to insurance, bakit hindi ho puwedeng gawin ng PDIC, pareho din naman ang format. Ano ang bawal? Hindi ko maintindihan, ano ang bawal?

RP: The source of funds for anything Shariah compliant. Even the source of funds has to be Shariah. The existing deposit funds manage by the PDIC comes from the assesment from the conventional banks which could not…

CHIZ: And they don't want to have anything to do that money?

RP: No. It's the Shariah law that would prohibit because the fund itself will not be Shariah compliant.

CHIZ: It's dirty?

RP: Maybe.

CHIZ: Hindi Halal. Kumbaga sa pagkain, hindi Halal.

RP: That's how it is.

BA: Mr. Chairman, it is the same way sa pagkain. It has to be Halal-certified because a food may or may not be Halal. So, it has to be Halal. In the same way, the sources of funds IN the PDIC may or may not be from the right resources. It has to be certified in a certain extent. And that's the takaful.

CHIZ: Ang Max fried chicken, manok naman iyon pero ang ginagamit nila mantika ng baboy kaya masarap. Biro lang. Totoo ba iyon? Totoo iyon, 'di ba? Narinig ko na iyon. Kaya daw masarap ang Max. Kaya kapag sinasabi ko iyon sa mga kaibigan kong Muslim ay nagagagalit sa akin kasi buti pa raw noon hindi nila alam. Ngayong nalaman na nila, hindi na sila puwedeng kumain ng Max din. So, have you gone through this bill? The draft bill, PDIC and the BSP?

RP: Mr. Chairman?

CHIZ: Matagal na ba ito? Yes, Sir. Please introduce.

RP: Actually, the draft bill has been the assaults of lot of deliberations by working committees and this has been exposed and the commences have been taking into account. And if you look at the proposed bills, we divided it into three parts: The first part covers the components of purposes of the Islamic banking system. The second part contains the provision of the Al-Amanah. And the third part covers the provisions applicable to Islamic banks of the rights to conduct business in accordance with the Shariah laws.

CHIZ: Actually, papunta na ako roon sir. I would like to ask you. There are other lawyers here. When I was going through this bill, it seeks to do more than one thing.

RP: Yes.

CHIZ: Provide for the framework which we are looking for and at the same time the Charter of Al-Amanah. I don't think we can do that. 'Di ba constitutional? "Every bill must cover all the one subject matter which must be contained in prior to the law." If this provides a framework baka gusto ninyong i-framework na lang muna natin then let Al-Amanah will follow without amending the Charter Of Al-Amanah that raise the capitalization to Php10-B? I hihiwalay ko lamang ito. To the lawyers here, Ma'am Tess, to the most senior lawyer here. The bill basically seeks to amend the charter of Al-Amanah bank. Number two, it establishes a framework by which other banks can actually give the Islamic banking, too.

RP: In fact, we are also planning on Sukuk which is a Shariah compliant listing in the stock exchange.

CHIZ: Talaga?

RP: So, we are also coming up also with rules on that.

CHIZ: Yes. We wished to trade those kinds of investment-

BA: Mr. Chairman, we would like to seek for your wisdom, if you wished to split the bill, I am happy to file other…

CHIZ: This is reported out several times?

BA: Yes. Mr .Chairman

CHIZ: So, can you work with us? We'll create a TWG of these. Comprise of Al-Amanah, PDIC and BSP? Just to split the bill. We will come up with two committee reports subject matter to two separate bills emanating from a singular bill filed by Senator Bam. We'll just wait through the procedural rules we have to follow in order to do that. But, I believe we do that because we already did that in the past.

RP: Mr. Chair, we understand the pleasure of the chair but the BSP will just like to manifest that the reason Mr. Chair, why we are- as you have said there are two subject matters: the framework and the Al- Amanah Charter itself. But then, the reason why we added the provision of the regulation and organization of the expanded banking system is germaine to the purpose and viability of the operation of the AIB. Its existing charter paid with the bank is the loans' Islamic bank in the country with the account party and support infrastructure for its continuous growth and viability. This bonded Islamic banking system will be the essential element of AIB to become a full pledge Islamic bank since such Islamic banking system may produce critical mass market players in the competitive but regulated environment; regulatory environment that encourage provision of innovative products and services for Islamic finance. Broader customer and as of this and those entire regulatory and supervisory framework to encourages the field for Islamic banking. So, while we are opposing for the amendment Al-Amanah charter, the conclusion of the regulation and conclusion. The conclusions regulations and organization is really related close to intertwined with this objective of amending the Al-Amanah Bill, Mr. Chair.

CHIZ: Balak ba ninyong maging part ng Central Bank itong mga Islamic Banks hindi naman hindi ba? It's not, it is an ordinary bank.

RP: Yes, Mr. Chair.

CHIZ: In this Charter who will own it? DBP pa ba hindi na?

RP: As of now it is still DBP, unless…

CHIZ: No once this bill is passed, who will own it? DBP pa rin?

RP: DBP pa rin.

CHIZ: No who will fund it? Will you fund the Php10-B?

RP: Until somebody will give that Php10-B, who would be the real owner. But I, I don't think DBP will…

RP: I don't think we can give Php10-B so it is open.

CHIZ: But who will own it? Where will the money come from?

RP: Government or if it's privatized the, foreign investor.

CHIZ: The authorized capital stock is Php10-B.

RP: The proposed.

CHIZ: Ma'am mag-aapply pa ba iyong 25-25 sa chartered bank? So they will have to pay at 25% or Php2.5-B. Iyong 25% nun Php500-M. Iyon ba ang rules sa BSP? So 25-25? So all you have to do is pay, ang paid-up nila is Php500-M kanila na iyong banko?

RP: Hindi ho. Hindi ho pwede.

RP: Mr. Chairman generally that is (inaudible)

RP: Like universal banks minimum capital requirements. Under the proposed the Islamic banks are to follow the required…

CHIZ: Which is? How much is the paid-up?

RP: Yeah there is an amount.

CHIZ: So minimum of Php4.5-B

RP: (inaudible)

CHIZ: But who will? Kasama na ang privatization agad dito whoever will fund it?

RP: Bahagi lang.

CHIZ: Yes, Sir.

RP: Based on our latest, for the universal banks we issue a minimum capitalization to head office only is Php3-B. It is a calibrated regarding depending on the number franchises. But for the head office is Php3-B for universal banks.

CHIZ: But again, where would the money come from? Since you drafted it you…

RP: We expect it to come from interested investor or the national government if the government would like to retain it. If not then we will go to privatization and we'll offer this to private investors.

RP: Mr. Chairman maybe we can clarify that on the TWG.

CHIZ: Babayaran ba kayo sa Php1-B ninyo sa DBP? Kung sinumang bibili nito?

RP: Sir, because it is a government asset, DBP definitely will have it bided out under Republic Act 9184

CHIZ: That is not here.

RP: Yeah maybe we need to add some of those provisions for clarity Mr. Chairman.

CHIZ: Yes, Sir.

RP: Under the proposed bill Section 8, the authorized capital stock of the AAB is Php10-B and then if there would be any increase. The monetary report from the recommendation of the Secretary of finance and with the approval of course of the president of the Philippines, may request to increase the TCS, total capitalization…

CHIZ: Where does the money come from? Usually when you put an amount in a bill, you say where it will come from. Usually if it's an amount in the bill, you will say, to be funded in the General Appropriations Act. Or you hear market from a particular revenue reserves. Pero hindi 'yung Php10-B open to privatization, open to bidding out. Pwedeng private sector, pwedeng government. And then if it's going to be privatized, if that is your roadmap, bakit kelangan maaprubahan ng presidente ng Pilipinas?

RP: Sir, the process…

CHIZ: If it's privatized and if it's chartered at bago ma-increase may approval ng presidente ng Pilipinas? Nasa charter na?

RP: Sir, iyong privatization, sir ang privatization there is a process. I believe that we have to go through... First we have to have the approval by the board, and then we go to GCG, DOF…

CHIZ: I agree Ma'am but in the charter the capitalization says that any increase will be approved, will be recommended by the Secretary of Finance ay ipa-privatize ninyo naman pala. Hindi ba?

RP: I think Sir…

CHIZ: But it is in the charter.

RP: Yeah.

CHIZ: Kumbaga ito iyong article of incorporations sabi dito. Article of incorporations of the privatized bank states that he needs the approval of the Philippines before you can increase?

RP: Well in the assumption but still it is a government bank.


BA: Maybe Mr. Chairman, again for clarity sake, we can just clarify that in the provisions because we don't want to eventually it will be privatized and then may ganoong klaseng probisyon. Tapos somebody would challenge that, we might as well be clear with it. As early as now so we will, we can have the committee take note of this, of this item Mr. Chair.

CHIZ: So help us out, Sir. Actually, para wala nang question, ihiwalay natin. Para mag-kwestiyon man sa Islamic structure at least charter iyong Al-Amanah mapasa natin.

RP: Mr. Chairman, also if it's going to be privatized maybe there should a provision there that says that they have to come up with new articles for incorporation. Because it sees is to be chartered and once it's privatized. Articles should be filed with SCC.

CHIZ: That's a good point. Government Corporation with provisional charter then if it is privatized then may nangyari na ba non? Sa NAPOCOR.

RP: Actually Mr. Chairman, that's in the law, the CISA, law. The CIC should be privatized at the certain point and we have to file, the new owners will have to file articles this time with SEC.

CHIZ: The NAPOCOR Ma'am, noong nag-privatized siya, hindi assets lang niya iyong pinrivatized under the law. OK. Pero may mga pinrivatized na bang government fully owned corporations organized with original charter or a law. And then they had to do that?

RP: Mr. Chairman, so far, we sometimes get from the GCG let us assume that they are no longer going to extend the term of the non-chartered GOCC's. But I haven't come across one where from chartered to now become non-chartered.

CHIZ: Chartered ito and if you will privatize it…

RP: PNB when it was privatized.

CHIZ: Ay oo nga pala PNB. No but PNB have been chartered?

RP: Yes.

CHIZ: A law?

RP: Yes.

CHIZ: What happened? Would you know? Yes Ma'am. Can you identify yourself?

RP: (inaudible) the separate charter of PNB before allowed the privatization.

CHIZ: And then up to now they are still using…

RP: No, no it is already, the charter allow the privatization through incorporation SEC so that is why they are no longer using the charters.

CHIZ: So noong pinrivatized naging corporate na sila sa SEC?

RP: Yes.

CHIZ: Of course with BSP endorsement, let's say you have to review with the owners of the bank hindi ba before they can approve of the sale? So let's clarify that to, here in the case of privatization, they have to incorporate under the corporation law.

RP: We have Section 19, privatization Section, says there nothing in this act shall concludes or exclude the DIB from privatizing its ownership for this purpose and the limitation of the transfer of operation applicable with respect to the SEC holdings of the government or any of its instrumentalities. In the event the privatization of the bank shall be registered with the SEC and shall be registered to be the subject with the provisions code of the Philippines. In addition with the rules and regulations of the BSP and other…

CHIZ: Sir, that's another reason why we should split it because if it's privatized, and the new corporation registered to the SEC, under the corporation code. Then half of this law will be (inaudible) already. Magkakaroon na siya ng sariling article incorporation hindi na ito so, (inaudible).

RP: Sir, I would like to correct myself, when we sell our government assets it's because it has to comply with COA Circular 896 and not Republic Act 9184 which is procurement, sorry. Sorry for that.

CHIZ: It is OK Ma'am. So babayaran ko iyon kapag pinrivatized na? Does it mention here na counted iyong Php1-B ninyo? Parang hindi. Baka hindi siya inilagay para masabihan maglagay ka ng isang bilyon.

RP: (inaudible)

CHIZ: OK lang but they should pay the Php1-B. Ano iyon goodbye na iyon? Hindi ba parang…

RP: Actually, the Php10-B should include the Php1-B of DBP so it encompasses so meaning if there are additional investors; it's the Php9-B supposedly. I think that should be clarified, Sir.

CHIZ: So you owned 10% of the bank?

RP: I think yes.

CHIZ: But you should if you told hindi ba? No DBP not you. Let's clarify that with organized TWG that issues. And let's come up with the version of the bill. Moving forward, Senate Bill No. 677 authored again by Senator Aquino, Senator Bam would you like to say a few words…

BA: Mr. Chairman, this is a very simple. Basically it requires the fees charged by banks for their usage of their ATM machines must be made clear and possibly also lessening the interbank charges which are charged to the consumers when they withdraw for somebody else's banks. So it is a very simple bill hopefully it's not too much of the trouble but would like to ask the comments of the BSP regarding the interbank charges for ATMs.

CHIZ: Sir, first, is this suggested by the regulations by the BSP already or not?

CRUZ: Right now we issued the memorandum in 2013 whereas holding the instance and some of the banks increase their fees. Most of them followed same suit so we are trying to make sure that it is not a cartel on their part to just increase the ATM fees so what we are looking now is we try to look at the operations of the Swiss, of the operations of the issuing bank and the acquired bank. So we need to look into that and take head to justify the increase.

CHIZ: First the disclosure muna the bill of Senator Bam seeks to require certain disclosures to be made. Is that covered by regulation or hindi?

CRUZ: That is covered by regulations. We have regulations on that but right now it depends on what type of disclosure is made.

CHIZ: So in short…

BA: Sir if I may?

CHIZ: Yes.

BA: Sir, Mr. Cruz, the banks really need to disclose these fees. But when go kasi to somebody's. Hindi ba kunwari Land Bank kami ano, payroll ng Senate is Land Bank. When use another bank's ATM I don't see that your card has been charged 15 pesos because… I don't see that. Wala naman iyon hindi ba?

RC: Based on my experience I am using my ATM sometimes I am using another bank, it appears to the ano sometimes.

BA: But it is not universally, I mean universal ba iyan o it was all the banks and ATMs? That they will say that because you don't belong to this bank you will be charged of an amount? Parang hindi siya universal, Sir? Or maybe you could check.

RP: We can check.

BA: We can check? I think if it's already universal then maybe there is no need for that provision anymore. Or if there is already a bill or regulation and all the banks are complying…

CHIZ: Can you give us that information, Sir?

RP: Yes.

CHIZ: Second on the fees, Senator Bam is suggesting under Section 5 single paper transaction. No customer shall be built for more than one paper ATM transaction regardless of the number of financial institution involved in that transaction. Can we legislate this, Sir? Meaning it is an agreement between two bank hindi ba? Parang sabininyo unless it's a cartel then we can come in but on the pricing on a singular fee, paano iyon? Can we do that?

RP: My interpretation of the provision is we will only charge a single fee…

CHIZ: Per transaction?

RP: If we are going to do, let us say per transaction. Let us say you are the bank and you are going to withdraw from another atm of another bank, it will be on a per transaction basis. Right now…

CHIZ: Kunwari Megalink, may Megalink ang Land Bank hindi ba. Kunwari Megalink, Land Bank ako. Nag withdraw sa another Megalink kunyari BPI. Ang sinasabi ni Senator Bam, I am going to be charged by both Land Bank and BPI for that transaction. Tama?

BA: First, if that is the case Mr. Cruz, what is your charge price?

RP: The charging has its components, what we see now is the total amount charged. But in terms of sharing on the cost they have the acquired…

BA: So Php15 magkahati na sila doon?

RP: Yes.

BA: OK, is that justifiable? That you're charged price, of your charge on both ends considering that you do belong to one of these banks, anyway? If I use their, if I use their ATM wala rin akong charge hindi ba because I am a consumer, hindi ba? But why is it they still charge me. I don't know bakit justifiable that the ATM I am using Bank B charges me, that is kind of justifiable. But bakit Bank A have to charge me as well?

RP: That normally goes to your bank. Actually, the charges can emanate resulting from the cost incurred by the foreign bank. Basically, there are sometimes they do not open or they do not establish a lot of ATMs. So they rely on some banks that do the investments on ATM. As far as acquiring banks is concerned, it has cost. Now the question now is the charges are being made by the bank where you maintain a deposit because the relationship is (inaudible) so what we are trying to look at now is the justification on the cost that have been incurred acquiring the depository bank as well as the Swiss network.

BA: Mr. Chair, I'd be happy with the position paper from the BSP on this matter. I don't think we need to spend so much time on this but if I may ask Mr. Cruz lahat ho bang mga charges ng mga banko kelangan dumaan sa BSP? With their approvals hindi po ba? No? So in this case they could charge a Php100 and we cannot do something about it?

RP: It's a question of competition among them.

BA: If it's a competition like what we raised earlier, iyong cartel-like behavior. That is something to, I mean that's an interesting thing or maybe you could even submit our position paper to SEC and we could have them look into this as well. Because, if everbody, right now nasa Php15 lahat hindi ba? Noon iba iba, there's a time mag kakaiba pa iyan. May eight pesos, may Php10, hindi ba? And suddenly lahat na sila ay nag-15. So maybe this is something you can look into. Mr. Chairman I'll be happy with if there is a position paper on this. And secondly, if you wish to pursue with the SEC and have them look into this, and that is something that the BSP should consider.

CHIZ: Before we do this bill. Do you have a copy of the bill?

RP: Yes, Sir.

CHIZ: Can you refer sa Section 5?

CHIZ: A) screen display and printed receipt. That can be addressed by regulation. B) Telephone or mobile phone transactions, no customers shall be charged any fee or surcharge for any ATM transaction initiated via phone or mobile phone. Can we legislate this or is it in restraint of trade or any rule or regulation you might have? Or as an alternative, can this be addressed by the regulation of BSP?

RC: Right now the banks charge using the telephone or mobile, going to internet banking right now.

CHIZ: C) Single paper transaction, yun yung pinag-usapan kanina. Ang problema ko naman doon Senator Bam, kahit 15 'yan, 'di ba? 15 'yung fee sa isang bangko, nothing is preventing them from imposing Php30 single fee pa rin. 'Yun 'yung compliant sa batas pero mas mataas. Covered na 'yung fee ng dalawang bangko. Mr. Cruz, to my next question, can we actually put a cap on what they can charge? Can we say, 'di ba example on letter E, no ATM fee can exceed one percent of total transaction amount. The closest to this I can't remember that we impose a cap will be our usually lost, remember? Na 'yung interest which has been repealed effectively by a BSP circular. Can we impose a cap on the charges or fees? Can you impose a cap on bank charges? Can BSP do that or will you rely on competition and simply let the market decide?

RP: I think so, we will let just happened, Mr. Chair because as far as the BSP, just like Mr. Cruz mentioned a while ago, there was a memo then imposing a cap. But this would impede on the contractual clause, contract, and the right of the parties to enter in contract. So, we cannot just put a cap if there is such competition.

CHIZ: But ERC the regulatory body of the government puts a cap on how companies charge. For example penalty, by analogy banks which are highly regulated by the BSP in this case. Have you ever impose a cap on what bank can charge? There's a transaction paid, its interest or what have you. Can you impose a cap or a guiding rate?

RP: We can Mr. Chair but there must…

BA: I think the answer Mr. Chair is they can but they would chose not to because, it's fine. Ganon naman 'yun, 'di ba. So in this case Mr. Chair maybe we just look at the position paper and see the reasons for they agree or not.

CHIZ: Can you comment on the five. Sir? The five examples? Examples sir, yung D. I'm in full agreement actually with D and E, kasi di ba wala nga namang low cost na pera, baka mamaya dahil gumulong ang makina, baka counter 'yun e. Baka gumulo 'yung makina nandoon na, Sir para i-claim 'yung Php15, pamasahe palang talo ka na, oras mo talo ka na. So mananahimik ka na lang nandoon na yung kinse. But this can be covered I guess in regulations too. Cause' nobody complained, for Php15 nobody will go out to this way to go to the bank. Kaya nga sila nag ATM, hindi na pupunta sa bangko. Nobody will go to the bank, fall in line, talk to the manager and ask for Php15 back and claim wala siyang nakuha sa withdrawal.

RP: Mr. Chairman, the part that the ATM that can dispense is subject to any investigations because the ATM did not dispense any cash but the records will show cash has been dispensed.

CHIZ: What?

RP: That was taken by the person withdrawing or another person took it. Then it will be on security, CCTV. There are lot of complains that they did not get the cash dispense, but it will have to place on Bancnet too. Because they have to go into process. But we totally agree that really proven that there is no copy tested, they should have charge using another ATM. For letter E, Mr. Chairman, bank transaction fees, we put a cap on total transaction amount it may probably set ....

RP: That is something but in terms of recovering the cost will not be able to put in a cap, let us say Php1,500 and Php1,000 the minimum amount to be withdrawn, it should be taken into consideration..

CHIZ: 'Yung Php1,500 nila para makuha pa rin yung 15pesos, hindi ka na pwede mag-withdraw ng Php200.

BA: Mr. Chairman, 'yung Php15 nga I think is arbitrary. Where did you get Php15? Where did you go from Php10 to Php15? I mean what is change, presyo ba ng kuryente? I mean what change to go from Php10 to Php15 transaction fee?

RP: We conducted a, we ask the switch network and the bank itself what caused the increase in their fees. One of the reasons they said, escalated cost in installing the ATM because the ATM have gone up probably several years ago. Some of the services offered by ATM have been enhanced. So they want, P15 is reported based on their computation by data that they will recover the cost. We cannot do the ATM…

CHIZ: You asked them to explain but do you have the power to tell them to bring it out? Does your charter empower you to tell banks to lower certain fees that their charging. Let's say, you file an arbitrary (inaudible) can you actually order the banks, are you empowered by your charter to lower the fees back to Php10? Do you have that power?

RP: No Mr. Chair, we will have to go the BSP has a judicial and quasi-legislative power and they can exercise the power in its power to issue rules and regulations.

CHIZ: Have you ever done it before in the history of Bangko Sentral?

RP: Not yet Mr. Chair because the policy now is let it be a market-driven competition, but we want to maintain the transparency, the principle of transparency that's why let the market compete. But if we see for example, if the data we can see that the risk if the again there is collusion, there is cartel and I think BSP will now be justified to invoke its regulatory, its power to issue rules and regulations, and that's the legislative power.

BA: Well, ano kasi attorney ano, in the competition act the cartel behavior is purposive. So there has to be collusion but in some cases, there just basically maximizing what they can. And if half of them, if the whole, Bancnet, Megalink and yung others konti lang naman di ba. So if one big group goes to 15 and the other group, 15 I think, not necessarily nag-usap sila, it's just they want to maximize ano. But even then at the end of the day, this charges can be regulate if you wanted to. So let me ask nalang, when they submitted to you the reasons why they went from Php10 to Php15, were you satisfied with their reasons or not? Because you know, what year was that nung nag Php10-Php15 sila?

RP: Just recently, probably when they issue memorandum in 2013.

BA: So parang the ATM's in 2010 and 2016 I can see what, maybe a better screen? Touch screens sila? I don't know. I'm not sure if, kasi again if you're withdrawing a thousand you don't really care much for Php15. But if you're withdrawing in the hundreds, Php15 is a lot. So malaking bagay 'yung Php15 kung hundreds 'yung wini-withdraw mo. So again Mr. Chairman, we just want, maybe BSP to take a second look at this it might something that has seemed innocent but we wouldn't file this bill if people hadn't complain about it. So if we just can kindly look into it, maybe not yet with TWG but position paper first from BSP would be very appreciated at this point then we can take it from there Mr. Chairman.

RP: Mr. Chairman, when we try to put a stock on their ATM increase we impose certain conditions that we want banks to implement like we want to make sure that they have a very effective system in place and we require them to have transition of all their ATMs. So we are making use of our recent issuance to make sure that enhancers are being made before we can act on possibly any increase in the ATM subject to verification on this data. So we don't want them to increase.

BA: We also like to ask Mr. Chairman, from BSP data anong porsiyento po ng earnings ng mga bangko itong transaction fees na ito? Is it a significant amount? I don't know if you have the data now Mr. Cruz, but if you could kindly position paper or give us some background on how important or not important this piece are. Because, if again they insignificant to the banks, I have no idea if this would be significant source of or not. If it's a matter of getting ROI bank in 10 years instead of 8 years, maybe the banks might be willing to take that risk. I don't know.

CHIZ: I'll do the reverse, by way of regulation. Can you not impose on banks that they cannot earn from this service were this should be providing anyway their depositors? Meaning pass on lang, hindi pwedeng kumita from providing ATM pero anuman ang ginastos nila para doon, okay lang na bumalik sa kanila. But they cannot earn from it. Is that even part of the mandate of the bank to earn from ATM transactions? It should be part of their service. Ang ATM parang teller 'yan. Hindi naman nila pwedeng pagkakitaan ang binabayad sa teller. Ni wala ngang bayad yung teller. Sweldado na ng bangko 'yun. So the BSP not look into that fact na banks cannot or should not be allowed to earn from a service that they're providing but they can pass on the cost, okay lang. But to earn from it as Senator Bam said, baka naman pati yan pinagkakakitaan pa tayo, sa interes nga pinagkakakitaan tayo pag-umutang, pati ba naman doon.

RC: May I respond Mr. Chair.

CHIZ: Please.

RC: Basically, the ATM are being established by banks as a support of their compete as a market strategy most of them. Some do establish a lot of ATMs, some do not. But based on the data, I think the main component of the piece is really to recover the cost. If there is any difference, it cost of the switch network. So the main objective is not to earn from ATM, because even the feedback, because they will save part of their tellers, they be able to have a 24/7 banking. Those are the reasons but for them to earn, but I don't think so. The data may prove otherwise. Will try to give you the data, Mr. Chair.

CHIZ: Kindly submit that to us. Next week sir, kaya? Senate Bill No. 785, Resolution No. 69 are hereby directed to be consolidated as roughly the same subject matter, this bill authored by yours truly was actually referred to as we file and can be discussed. But again the principles, 'yung mga sinabi ko kanina can we legislate such things, I'm not convinced yet we can legislate such things.

RP: On the proposed Senate Resolution no. 69, quite concerned about the usage of the terminology of collateral in the context of TESDA certificate. Because when you say collateral, it's something that you can associate value with, and at the same time, in case of default. Yun nga po, yun ang ma-acquire mo.

CHIZ: What's the better word to use?

RP: Sorry. Maybe this should feed in to the character collateral na sinasabi in the context among other things that in the context. If you look at the credit history, ito ang isa sa mga factors that should fit in. Like, as you know, benchmark ko po US din dahil matagal po ako nahinahan doon, isa sa mga aspects na ina-ask pag nag loan application ka, is yung highest level of educational attainment, of course duon applicable doon.

CHIZ: Dito sa Philippines, ang binibigyan ng character loan ng bangko 'yung dati nang mayaman.

RP: 'Yun nga, I guess maybe we can, having this as a law maybe it's more on or finding other ways that this can be factored in, in terms of risk management.

CHIZ: Can we legislate that?

RP: I'm not a lawyer, Sir.

RP: Mr. Chairman, I mentioned crowd funding earlier so at the SEC once you come out with the rules on funding, we encourage tie up to raise funds in public, you can make that a requirement. I mean one of the things that we will make us approve the application to crown funding the test certificate.

CHIZ: You're going to rule up? Can we require this on banks? Taking into account ang isang character loan meaning clean loan. A character loan is clean loan right?

RP: Yes. Kasi may impact 'yun sir, pag ginawa mo yun sa loan provision. 'Di ba 'pag claim doon, tsaka Sir sa BSP concern po ang tingin ko dapat tanungin kasi whenever we used this may impact po siya sa law provisions on banks.

CHIZ: So you need a law for BSP not to look at it negatively?

RP: Hindi po, kung papayag po sila.

RP: May I mention, in the context CICA Law which mandates credit information incorporation naka-reinforce na po doon ang 'pag use ng character loan in terms of responsible barrowing behavior.

CHIZ: Paano pag wala pa? You're talking of a person, ang kwento nila, who comes to Manila from the province, you know nakakuha ng scholarship sa TESDA, nakatapos ng kurso, magaling naman, gusto magsimula ng negosyo, wala siyang credit history. Ang buhay lang niya di ba binayaran lang ng magulang niya nasa probinsya, pagdating dito lahat ng binibili niya sari-sari store, grocery, cash. So he doesn't have anything to speak for, speak of. And that's about 90%. So essentially, what they give us this bill actually and we wanted it to discuss kasi anong panghahawakan niya? Wala siyang panghahawaka. 'Yung may placement sa abroad, pati nga yun nahihirapan na. Essentially yung may placement abroad, tanggap na, that should be considered a PO. That is purchase order, pwede nang pangutang 'yan. 'Di ba 'yung kumpanya, 'yung manufacturing na may PO pwede nang ipangutang sa bangko 'yun.

RP: 'Yung PO Sir tinatanggap.

CHIZ: 'Yung placement sa OWWA, can't you considered that a PO? Meaning may trabaho na siya, tanggap na siya. Pero kailangan niyang magbayad ng certain fees. Hindi ba pwedeng parang PO na rin 'yun?

RP: Sir, kasi po considered as clean loan 'yun. Pag may clean loan meron pong corresponding risk, so kaya kung ile-legislate siya siguro, baka kailangan, meron talagang additional fund na, again kasi, hindi ba required kami na maging feasible dapat ang bangko. Lahat dapat kasi it's a government fund kailangan din na, we have to save time na bumalik siya para mai-pass on na naman sa susunod. Pero ang cases kasi namin so far is that whatever 'yung mga clean loans na ganoon, kailangan lagyan namin siya ng corresponding ano na loan laws provision.

CHIZ: On the part of PDIC, how do you view that? All of these are cleans loans ha. It's risky?

RP: It's primarily contractual. I don't even know exactly the volume of…

CHIZ: It's small because they don't get it.

RP:… involved here. We don't really have any idea to even say it is risky or not. The data are not in place. So we leave it to Bangko Sentral to make a determination. But PDIC, we are looking at this more as contractual.

CHIZ: On the part of OWWA, sir, anong panghahawakan ng isang OCW na papel, na pwedeng gamitin, the equivalent of a PO, purchase order?

RP: Tony Chua po your honor from OWWA. First sir we fully support your bills Sir. For the record your honor, under Republic Act 181, we have the provision under Section 35 the benefits and services to OFW which is integrated to OFW, repatriation assistance, Loan, other credit assistance. The OWWA shall provide low interests loans to member OFW and shall have the authority to hire experts to finance or banking (inaudible). This is recent passed law.

CHIZ: No. My question Sir is, ano yung dokumentong pwedeng panghawakan ng isang OCW na pwedeng ma-consider na parang purchase order na pwede na niyang ipangutang ito kasi meron nang trabaho siya at ganito ang sweldo niya? What is that document?

ATTY. CHARLIE CHUA (CC): Previously, we have the pre-departure loan. But it was suspended. I think I am not so familiar with the...

CHIZ: Who lends that money?


CHIZ: From the OWWA fund.

CC: OWWA fund.

CHIZ: 'Yung pondo ninyo galing din sa OFW eh. So parang pinahiram ninyo lang sila ng pera nila. It's not new money coming in to the system. Hindi ba? Yes? Sir?

RP: There is a provision under Section 6 of Republic Act No. 8042 as amended by Republic Act No. 1022 which prohibit the granting of loan to an OFW with an interest exceeding eight (8) percent requiring collaterals. As a matter of fact, if you will view…

CHIZ: Prohibiting?

RP: The granting of loan to a OFW.


RP: Opo. With, 'yung interest exceed eight (8) percent. And requiring them to issue checks whether accommodated or personal. And then the loans should be used exclusively for the purpose of recruitment fees, under Section 6.

CHIZ: That's for recruiters.

RP: Yes, your Honor.

CHIZ: Not for banks.

RP: Not for banks.

CHIZ: Kasi ang banks…

RP: Wala po Sir, wala pong distinctions, it is general po ang statement.

CHIZ: Kasi ang problema ko 'yung recruiter talagang that addresses the problem with recruiters. Kung ako 'yung bangko, prohibiting the charging of more than 8%, since I charge more than 8% I won't lend him money. Hindi ko na siya papahiramin they just won't let them. So walang applicability sa bangko. They just say, no! They might be accused for lending more than. So they would just not lend to them. They have the right to do that. So I think that is more applicable sa recruiter eh. Hindi ba, na it's dubious na makikinabang naman siya, may porsiyento siya, hindi ba, tapos papahiramin ka ng malaki, but now what we are looking at is making money available for OCW, getting money available to OFW, how do you do that?

RP: Experience-wise Sir, there are lots of lending institutions, private lending institutions giving loans to OFW without any collateral.

CHIZ: Sino 'yung mga 'yun? Mga private?

RP: Yes, Sir.

CHIZ: Anong collateral?

RP: Lending institutions, they just want to ensure that this worker is…

CHIZ: How can they secure their loans?

RP: It's a matter between the two of them…But I see a lot of people who are giving leaflets that say no collaterals.

CHIZ: Ms. Tess?

TH: Mr. Chairman, the SEC is does regulate lending companies. And a lot of this lending companies, they just give out loans to let us say buy a cellphone bought for Php8,000 and they do it without any collateral. And there is this lending company that was just reported to me that we have already issued about 400,000 of such loans of Php8,000, that means 400,000 young people have applied for the Php8,000 loan each and no collateral at all. But I think they just rely on the fact that the cell phone is really something that they we need very much and also together with the policy of the CIC to encourage even young people to incur debt in order to have good credit history. So I guess…

CHIZ: So mga Bumbay ganoon din? Bumbay?

TH: Well, there is also big concern actually of the President himself. He told us we must come up with measures to lower the interest rates charged to ordinary market owners.

CHIZ: But all government offices may nagpapautang. Senado, Kongreso, munisipyo, barangay, at 'yung sa DBP malamang meron.

TH: Those are informal lending…

CHIZ: It's not illegal but it has to be regulated in some point.

TH: Actually, under the Lending Company Act, they should incorporate so that we can regulate them.

CHIZ: I promise you Ma'am that all municipalities and cities, may nagpapautang.

TH: Yes. But…

CHIZ: Personal loan, 'yung salary deduction. Pagdating ng swelduhan pupuntahan ka. Hindi paluwagan ha. Utang lang talaga iyun. In fact kung sinong mayor na mananalo sa isang lugar, kung sino ang may hawak nun, madami nang governor at congressman dahil dun kasi hindi mataas 'yung interest.

RP: They probably have to (inaudible).

CHIZ: But this one Ma'am ang daming nagpapautang, bakit? What we are trying to address the TESDA graduate sa simula pa lang yung OCWs na magsisismula pa lang, how can you make credit available to them? How can we bridge that gap? Kasi itong mga ito pinapautang na, may trabaho na. Parang yung mga nagpapautang sa mga teacher. 'Yung ATM ng teacher hawak na nila 'yun. In fact…

TH: That's what we are supposed to achieve through the CIC. Actually now, we've already gotten the agreement of the utilities, even for just starting out if you have cellphone and CIC would reflect the fact that you have been diligent in paying your cellphone bills that's a good sign for lenders.

CHIZ: How do I make credit available to a TESDA graduate who wants to set-up a welding shop, who wants to set up a backyard industry based on what they've learned in TESDA. How can I make credit available to an OFW who would want to leave basically ang problema pang placement fee, pamasahe, mga magkano? Singkwenta mil?

RP: One month, Sir, the placement fee, the legal is equivalent to one month salary.

CHIZ: Which will be paid before?

RP: When there is a reasonable certainty that the worker will leave.

CHIZ: Yeah. Kung makakaalis na siya. Kumbaga advance na kailangan bayaran yun agad?

RP: Yes, Sir. Theoretically.

CHIZ: Can you imagine, we're earning so much from OFWs, from OFW remittances, and yet there is no window that can help Filipino that actually wants to work abroad.
RP: Mr. Chair with TESDA graduate, I think there is a need for Bangko Sentral to review their system regulation if they will issue…

CHIZ: Loans.

RP: Because, one of the requirements in the implementation of the section in the general banking law as to the in granting loans will look into the capability of the borrower, one of the requirements in the existing BSP regulation is the submission of the ITR and submitted to the BIR. So the TESDA graduate…

CHIZ: Wala ring ITR 'yun.

RP: Yeah. So I think there is a need for BSP to review that portion of their regulation. If they will issue a newer regulation it's still a compliant to General Banking Law.

CHIZ: We should amend the general banking. In so far as, Sir, is it possible, if we are headed to that direction, is it possible for us to follow the provision of the law, parang Agri-Agra? But which basically says, each loan to an individual cannot exceed a certain amount but that a certain percentage to a normal let's say 1%-2% should go to this types of same concept, but not 80% as proposed. We are talking about 1% of total loanable .05 because we are talking about loanable in a maximum of a hundred. So sa OCW sobra na 'yung 100, to set up a business OK na 'yung 100. Non-compliance same bayad kayo bente-uno mil kada quarter, kaya na niya yun. Hindi diba? But we will have to amend it to accept it the General Banking Act. Kasi walang collateral ito. Yes, Sir?

RP: When we issued a circular we encourage clean loans because our experience, most banks are doing collaterized entity, the first question they will ask when you go to a bank, do you have any property to collateralized? So we have discouraged that, discouraging such collaterized lending. We are encouraging banks to go enhanced secured lending based on the cash flow the financial capacity. Most banks they never take a look the paying capacity of the borrowers. So if clean loan that's the time we have provision, we encourage them. On the issue of documentation, Circular 855, we issued the flexibility to banks to make use of alternative lending, reform of credit investigation report whatever credit measure in use but the question is what is the basis to this borrower? So we focus now on the financial capacity, paying capacity. We encourage banks on clean loans, now the issue here, because they say you are TESDA graduates, newly-graduates, we want collaterals can be use, I'll just give my own personal, I think one way of doing this, we encouraged banks to grant non-secured loans on the basis of these documents. Because we based it on documents will help them start, they will be going out, so these certificates I think the best way to initiate this one, why don't we establish a credit surety. Now once banks grant loans without any credit surety bond, then we give them incentives. But right now based on their loans to grant on a credit surety in a particular borrower, then…

CHIZ: How do you fund the credit (inaudible)?

RP: Then it will be sourced. Now we call it surety fund.

CHIZ: (inaudible) it's a guaranteed fund. I don't think so, basta guaranteed fund for unsecured loans of LGUs na ubos na 'yung IRA.

RP: Ay iba po Sir, 'yun. Yung sa credit fund na sinasabi ni Sir, 'yung Local Government Cooperative who have put themselves together and then DBP, Land Bank and GLF, we all contribute to an amount with which we use as a guarantee nung mga loans nung mga cooperatives under LGUs.

CHIZ: O sige Ma'am, ito na lang gawin namin, o natin. (inaudible) rural banks to comply with their SMSE minimum compliance requirement, can you also lend to OWWA, can you also lend to those lending already to OFWs as compliance to the minimum basic requirement that we are imposing? And number two, will you impose that guarantee?

RP: Sir, pwede po bang?

CHIZ: Kumbaga, we'll appropriate an amount as surety bond. Kapag surety, is there rule, ano 'yung amount na pwedeng equivalent na pwede nilang ipahiram, kung let's say maglagay kami ng Php1-B na surety bond, ano yung pwede nilang mahiram? It's how many? Hindi one-is-to-one 'yun.

RP: Based on to the proposed bill Mr. Chairman recommending to Php100,000.

CHIZ: Pero hindi po. If there is surety bond of 1 billion, it can enable banks to lend up to how much? Kasi hindi naman one-is-to-one yun. Kahit naman PDIC hindi naman one-is-to-one 'yun. Hindi ba? So up to how much can banks lend if the surety bond is Php1-B? Kasi hindi naman lahat magbabayad hindi ba? May mga magbabayad. Parang PDIC. In your case, what's the formula? Yung pera ninyo is equivalent to how much of total deposits that you are covered?

RP: One-fifth of 1% your honor.

CHIZ: One-fifth of 1%.

RP: But this is is the basis of our assessment. We are talking about a loan so not analogous, Mr. Chairman.

CHIZ: But it's not one-is-to-one?

RP: No. It's not.

CHIZ: (inaudible) of Php1-B, it must be more? They can lend a lot more. Kasi 'yung sa OWWA, lending-wise, you are guaranteed by the government pa iyun. Lending muna sa financial institution sabi ninyo Director Reyes maraming nagpapahiram. May turnover naman sila. May assets 'yan.

RP: Sir, pwede pong ma-discuss. Meron po kaming program with OWWA about reintegration program. Actually ang partner po sa reintegration program Land Bank.

CHIZ: Ma'am, reintegration 'yun. Pabalik na 'yan dito.

RP: Pangalan lang po reintergration.


RP: Actually, kasi generic ang ginamit nila. Pero kaya lang kasi entrepreneurial na pero ang pinakaimportanteng element dun they engage into gainful activity so popondohan. In fact, may Php1-B ang OWWA for that, supposed to be hatiin nila sa Land Bank and DBP for, to finance, 'yung feature nga ng program is to extend loans para sa enterprising activity ng OFWs returning at babalik pa. 'Yun ang design nila. And then, to be guaranteed ito nung pondo ng OWWA.


RP: Ang situation kasi with us medyo ginagawa na naming sa OWWA 'yun, with Land Bank ginagawa na yata nila with the implementation of the program.

CHIZ: Actually, OWWA funds can be used and a portion of that can be set aside for surety fund that you are talking about. But on the part of TESDA graduates kailangan silang pondohan ng gobyerno. Committee secretary is directed to kindly look into the points raised with respect to 785 as consolidated with BSP Resolution No. 69 and come up with a draft bill in so far as the consolidation Senate Resolution and Senate bills are concerned.

One more thing before I move along leave OWWA. Atty. Chan, I don't know if its POEA or OWWA, lahat ng OFWs nakarehistro sa OWWA? Hindi? In a perfect world? May hindi oo nandun na ako. Can you not make your database available to airline companies? So that if a person buys a ticket, and he happens to be an OFW, he doesn't need to secure a refund and fall in line all over again at the airport to get that refund. If only you make it available to them they will immediate find and know na OFW ito. In fact, it would even encourage the OFWs to register with you because if not, they won't get a refund. Kasi, nagpasa kami ng batas na exempted na sa terminal fee ang mga OFW. Ang problema, nagtanggal din kami ng pila, nagtanggal ng pila ang DOTC para i-incorporate yung terminal fee sa ticket. Kasi tayo na lang 'yung bansa na nagbabayad ng terminal fee. Ang pangit na nga, hiwala pa 'yung bayad. Kaya ang sakit sa dibdib hdi ba? So na-incorporate naman sa ticket at exempted 'yung mga OFW kaya tuloy nagbabayad ung OFWs part of the ticket tapos bago siya mag board may pila siyang napakahaba para i-refund. But if you only make that accessible, kasama na sa trabaho ninyo Sir, coordinate with airline companies, ticketing nila, let's take the initiative na if he is an OFW, if there is a control number that he can give to the member na hindi na siya pipila that you can check and verify para hindi na nila irerefund 'yung ticket.

Kaya Sir ginawa namin yun para bawas na sa pila. Look at any of our airports, Terminal 1, 2 or 3 pipila ka bago ka makapasok sa airport, pipila ka sa check-in, pipila ka sa Immigration, nuon pipila ka sa terminal fee, pipila ka na naman ng security check bago ka makapasok sa boarding gates, pipila ka na naman bago ka makasakay sa eroplano. Anim na pila 'yun. Tapos may pila ka pa ngayon sa refund. Bawasan natin 'yung pila. Kindly look into it and coordinate with, either the airline companies are through CAAP na lahat ng nagbebenta ng ticket dito na lahat ng airline na naglalanding dito, 'yun na lang covered mo na without need of translation of the matter. Sir, hindi tayo nagtanghalian, nag-sandwich lang at may pansit.

RP: Mr. Chair, can I ask the deadline? When are we supposed to submit this?

CHIZ: Next week.

RP: Thursday, thank you Mr. Chairman.

CHIZ: Anymore points you want to raise? Going, going. Thank you for coming Ma'am Tess. Thank you for coming. Thank you ladies and gentlemen for joining our meeting and hearing this morning. Hearing is suspended.








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