OPENING STATEMENTS:

PRESIDENTIAL SPOKESPERSON ABELLA:

Good morning. Today we are going to be giving a backgrounder on the Tax Reform for Acceleration and Inclusion which PRRD, the President, has already communicated to Congress that it’s going to be a — it is a high priority bill to be passed before they go on recess.

The Tax Reform for Acceleration and Inclusion seeks to change the current tax system to make it simpler, fairer, and more efficient.

Through TRAIN, every Filipino contributes in funding more infrastructure and social services to eradicate extreme poverty and to reduce inequality.

Again, let me state that TRAIN is a priority reform of the Duterte administration.

This morning we’re going to have two resource persons who will be giving us a backgrounder and give us further understanding.

The NEDA chief Ernesto Pernia, who has been here a few times already.

He’s Professor Emeritus of Economics at the University of the Philippines and he’s lead economist at the Asian Development Bank.

With him is Usec. Lilibeth David. She’s the Undersecretary for Health Policy Development and Planning Bureau of the Department of Health.

She has more than 23 years of experience in health policy development, working on technical public health program policies.

It’s very timely that they’ll be discussing the tax reform package and also the benefits.

Without further ado, ladies and gentlemen of the Malacañang Press Corps, let us give a warm welcome to Secretary Pernia and Undersecretary Lilibeth David.

All right and suddenly she appears, Assistant Secretary Paola Alvarez.

First, we’d like to call on Secretary Pernia.

SEC. PERNIA: Good morning everyone, friends and colleagues for the development of the Philippines, right? We’re all colleagues. Okay.

Okay, as Secretary Abella has said, the President has directed or — not directed but suggested to Congress that the CTRP is a priority bill and should be passed statim or immediately before they go on recess.

And that is quite understandable because the CTRP and the PDP are actually natural intimate bedfellows. They are inextricably linked, the two programs of the President, the tax reform program and the Philippine Development Plan these are all the President’s program and, of course, the people’s programs are really tied together.

One will not be good without the other, okay. And you will recall that the PDP stems from the zero to 10-point socioeconomic agenda. And the zero, number zero is peace and order, which is being tackled now in Mindanao.

And the number point, socioeconomic agenda point, is — or has to do with maintaining macroeconomic stability. And the second one is tax reform, reforming the tax reform system.

And these two are also just about, they are really twins – maintaining macroeconomic stability and the tax reform program are twins and they are inseparable.

So that is why the President has decided to direct or to admonish Congress that it is an urgent measure. The PDP has already passed, has been approved and it’s going to be launched on Friday.

But the tax reform program still has to be passed, at least the first package.

Okay. So that is the… That is my point number one, that the two are inextricably linked — PDP and CTRP.

Okay. Our analysis at NEDA shows that with CTRP the real GDP level is higher by between 0.6 percent and 1.1 percent by 2022. Those are net increases in GDP.

If without CTRP, on the other hand, the GDP level will be lower by that magnitude between 0.5 percent and 1.1 percent by 2022.

The adjustment in indirect taxes also raises inflation by the impact of only 1.4 percent in 2018. But it quickly — this impact, this higher inflation impact — quickly dissipates in succeeding years. The reforms in personal income taxation will improve equity.

The excise taxes on fuel and sweetened beverages are also likely to be progressive. So in other words, the CTRP is needed to increase the fiscal space of the government so that this ambitious infrastructure program as well as human capital investment program, education and health can be funded.

So the dual objective therefore is improving equity which is pretty bad across households as well as generating funds for infrastructure development, both hard infrastructure and soft infrastructure.

The World Bank estimates that the country has an investment gap, both physical and human capital of around 6.8 percent.

A permanent reduction of revenues without offsetting measures will make it more difficult to close the gap. The sequencing of reforms is also crucial. NEDA supports the assertion that good tax administration is crucial. So not just tax reform, reforming the tax rates but also tax administration — collection and spending of taxes.

.To illustrate, in a 2010 study by Richard Bird of the World Bank, he finds that for many transitional countries in the 1990s and even tax imposition, widespread tax evasion and lower than anticipated revenue collection resulted from the failure to improve tax administration after the introduction of new tax structure.

The study further asserts that an effective tax administration should reflect improved governance to keep tax officials honest and reinforce the legitimacy of the tax system — of the new tax system.

The IMF also enumerated some lessons for policymakers in its paper published in 2015.

First, broadening the tax base by rationalizing tax exemption and preferential regimes, raises revenue and boosts horizontal equity meaning across households. Shifting the tax composition to the least distortionary taxes such as taxes on consumption increases efficiency. As you know, the VAT is the most efficient tax measure and that is why it’s being broadened under the CTRP.

Taxes on property or wealth can also increase progressivity of the tax system. Improvements and revenue administration including through introducing risk management techniques, segmenting taxpayers, meaning differentiating taxpayers, and simplifying laws and procedures can strengthen taxpayer compliance and enhance revenue collection as well as equity.

Rationalizing the government wage bill where public sector wages and employment are high relative to the private sector and improving the targeting of social spending can increase expenditure efficiency.

Addressing environmental externalities by phasing out energy subsidies and introducing environmental taxation can create fiscal space while facilitating implementation of growth enhancing measures such as lower wage legislation.

Finally, the NEDA asserts its position that in reforming the tax structure the government will need to recognize equity considerations alongside those of revenue generation and efficiency, broadening the tax base, and simplifying the tax system will raise the needed revenues while progressive schedule will promote equity.

This means that those with higher ability to pay actually get to pay more, so this is called vertical equity, and those with the same ability to pay regardless of income source should be treated equally.

That ends my presentation and we’ll have…

Okay, before we open the forum.

USEC. DAVID: Thank you, Secretary Pernia. So we’re here today because we believe the Comprehensive Tax Reform is important for our country and the health sector.

The Department of Health fully supports the Comprehensive Tax Reform for Acceleration and Inclusion due to its health gains that will allow the government to intervene better in the health sector.

Currently, the Philippines lags behind its ASEAN neighbors in terms of its per capita spending for health.

We ranked 6^th in per capita health expenditure in the ASEAN, trailing behind Malaysia, Thailand and Vietnam.

This aggregating per quintile or by income segments shows that the per capita health spending varies per income segment.

There is actually unfair spending inequity across the quintile groups at the disadvantage of the poor households who cannot afford to spend for health.

This has impact on our health outcomes. Even for nutrition, if you look at our statistics for the past decade, stunting and wasting has remained flat, meaning there has not been any improvement. And in 2013 to 2015, the stunting and wasting has even increased.

Furthermore, the protection of people for financial risk from ill health is still greatly challenged with an out-of-pocket spending in the country that is still very high at 57 percent. This means that the patient has to pay for most of the expenses for ill health.

Because of this fear of potential financial hardship, poor households have a stronger tendency to delay seeking care.

We have seen how tax reforms benefit health. The government was able to address poor performance disparities as a result of the sin tax law in 2012.

We have seen decreasing trends in smoking prevalence because of the sin tax. And this is a consistent finding across different service done in the country.

The incremental revenues from the sin tax law which was earmarked for health resulted into increased government revenue and increased budgets for health.

This increase in fiscal space enabled the DOH to cover the PhilHealth premium subsidy of all indigent families so that we have been able to enroll 100 percent of the poor and even now our senior citizens.

We’ve been able through the sin tax to deliver new health services such as health centers in schools and mobile dental clinics; deploy new cadres of human resources like dentists and medical technologists in the field.

We’ve given additional coverage for the diagnosis and treatment of endemic and infectious diseases and even increased immunization services for the population because of the sin tax.

The Comprehensive Tax Reform is likewise a win for health since it will provide additional resources that the health sector can leverage to scale up multi-sector wide public policy interventions to prevent the risk factors for non-communicable diseases.

And to increase the breadth and depth of PhilHealth coverage through substantial services covered and the support value provided by the National Health Insurance Program.

And also, for more health workers hired to deploy on the ground and enhancing our public health facilities.

So the Comprehensive Tax Reform, with its proposed earmarking for health under the social benefits program, is a necessary government intervention that will ensure that quality health will no longer escape the poor.

The DOH reiterates the support for the Comprehensive Tax Reform since this is a modality that will safeguard population health and will enable the people to be a contributing member of society.

Thank you very much.

QUESTIONS AND ANSWERS:

Joseph Morong (GMA): Hi, sir. Good morning. I’d like to focus on income tax and excise. First on the income tax, I’m sure… I remember in the past presentations here that basically the tax reform program, in terms of income tax, this will entail lower taxes for low income families, right?

SEC. PERNIA: Yes.

Mr. Morong: And then bigger for bigger income families. Can we have a little more detail again on that aspect, sir?

SEC. PERNIA: Well, the tax rate for individuals — for personal income taxation is as high as 32 percent right now, regardless of income level.

The reform will bring it down to 25 percent, which will be more aligned with our neighbors, ASEAN neighbors, and which is going to be more — make the tax system for personal income taxation more progressive.

Meaning, it will be more favorable to lower income groups than to higher income groups. So that’s the, that’s the… And also, well, for high-income households or persons, the tax rate can be as high as 35 percent.

I think it’s above a certain level, something like five million. If you have five million per annum then the tax rate can go as high as 35 percent.

Mr. Morong: But in terms of percentage and population, sir, medyo maliit lang naman ‘yun ‘di ba?

SEC. PERNIA: Oo, maliit lang ‘yun.

Mr. Morong: Would you know how much—

SEC. PERNIA: That’s probably what? Less than 10 percent, maybe five percent.

Mr. Morong: Sir, sa income, in terms of collection, magkano po ‘yung pwede natin ma-collect under that kind of system? Would you be able to quantify?

SEC. PERNIA: With the compensating measures, it’s about 167 million net positive revenue generation.

From the combination of personal income tax reduction, as well as corporate also is going to be reduced from 30 to 25 percent.

So that will result in revenue loss but with the excise tax and the broadening of that — of the VAT base and the sweetened sugary drinks, it will result in a net gain — revenue gain of about 165, is that correct? 165 billion — 162 billion.

Mr. Morong: 162, sir? Sir, ‘yung sa excise ‘yung sa mga kotse ‘no, I mean also sa kotse?

SEC. PERNIA: Sa kotse also.

Mr. Morong: Some are afraid na it might affect the car business. Do you think that’s a — that has basis?

SEC. PERNIA: Well, it’s also going to be graduated the poorer — the lower income groups who buy, who tend to buy cars on the order of 500,000, half a million, the tax will be minimal. And it’s not going to really discourage them.

But if you buy Mercedes-Benz or you know, Ferrari, then you will be hit harder and… Which is just fine because we need to — we need to promote equity in society.

Mr. Morong: Sir, last na lang sa oil. Do you think this will not cascade, sir, sa higher fare?

SEC. PERNIA: Well, it will but then there is a provision to provide direct subsidies to those — to lower income groups who will be hit directly by higher fares. Right?

Mr. Morong: Okay, sir. Thank you.

Dharel Placido (ABS-CBN Online): Good morning, sir. Sir, ano po ba ‘yung growth impact ‘nong ano, if not passed this week, ano po ‘yung growth impact nito sa ano natin — targets natin? And will we revise economic growth, revenue spending, and deficit targets this year if the bill is not passed this week?

SEC. PERNIA: This week.

Mr. Placido: Yes, sir.

SEC. PERNIA: Well, hindi naman kailangan na… Well, it doesn’t mean that it will be the end of the world if the first package is not passed before Congress goes on recess. But it should be — it should be passed before they go on recess.

And with the President’s, you know, strong message to Congress, I think it’s going to be passed.

Mr. Placido: Sir, in its current form in the House, magkano po ‘yung projected annual revenues natin from the tax reform?

SEC. PERNIA: Annual… As I said about 162. It’s with DOF.

[It’s the DOF version. The House now is 82 billion.]

SEC. PERNIA: Ah, 82 billion. Okay, the DOF version is 162 billion, but with the modifications introduced by the House, it’s going to go down to 82 — 82 billion. So it’s about half ‘no, it’s about half.

So it’s… It’s not good. I mean, you know, they should have passed it, Congress should have passed it in toto.

Yeah, because you know, they should realize that we in the economic team, our interest is really just the country’s development. The improvement of society. We have no personal agenda at all.

And we are trained to do economic analysis, tax analysis. Hence, we know what is best, what is optimal. So that is my message really.

And you know, I don’t think the legislators are as well-versed as the economic team is.

I mean the legislators as a whole. There may be —some of them may be experts but not all of them. And they work as a whole ano, so… And the economic team also works as a whole and therefore, you know, they should have more trust in the economic team.

Mr. Placido: Sir, so kung walang dagdag na revenue or we have smaller revenue, saan natin — how do we fund ‘yung Build, Build, Build natin? Saan natin kukunin ‘yung–?

SEC. PERNIA: Well, that’s a problem. Then we will be unable to fund the Build, Build, Build. It will be small build, small build, small build.

Celerina Monte (Manila Shimbun): Good morning, sir. Meron bang effect siya like sa inflation? Have you… Do you have any simulation kung how much would be the effect if ever?

SEC. PERNIA: Yeah, the effect on inflation is 1.4 percent by 2018 if it is… Because this is likely to be introduced — to take effect, the reform will likely take effect in 2018.

The immediate impact, in terms of inflation in 2018, will be 1.4 percent. But then that quickly dissipates over time. It’s really just a shock effect. But then… It’s a small shock effect but then it goes away. It tapers out over time.

Ms. Monte: Sir, regarding naman doon sa ongoing action in Mindanao. Meron na bang effect siya sa economy, if there is, like how much if ever in terms of revenue or loss?

SEC. PERNIA: Do you know how much the… I mean what the extent of the crisis will be? It depends on how these things, the crisis pans out, it depends on how the crisis mutates.

But we don’t… Well, I think the military is resolute in, you know, in resolving it quickly. And we believe in the capacity of the military and the determination of the President to, you know, to quell it as soon as possible.

So it should be — it should be minimal, if any, and also transitory.

Ms. Monte: Like in what sector, sir, if ever?

SEC. PERNIA: Well, this is a press conference on the tax reform, right? Not on the Mindanao thing.

So let’s… Let’s leave that to another forum. Maybe later when we know what the extent of the crisis has been, then we can give you better estimates.

Alexis Romero (Philippine Star): Secretary, you mentioned if lawmakers failed to pass the tax reform in toto, we will just have small build, small build, small build.

SEC. PERNIA:  Yeah, but maybe no build, no build, no build.

Mr. Romero: Or no build, okay. What about the impact on social services because you talked about infrastructure?

SEC. PERNIA: Same thing because, you know, the revenue generation to stem from the tax reform program will fund not only hard infrastructure but also soft infrastructure, human infrastructure, human capital, education and health, as elaborated by Undersecretary — Health Undersecretary.

Mr. Romero: So would that put more pressure on the government to borrow money, say from commercial — from the commercial…?

SEC. PERNIA: Well, that’s going to be a more expensive proposition. And, you know, once you’d realize that — that is not sustainable.

Borrowing without the capacity to pay back and to service the debt is not going to be a wise move. It’s going to be fiscally irresponsible.

Mr. Romero: But will that happen if Congress does not pass the bill in toto? We will be forced to borrow?

SEC. PERNIA: Well, the government will be more — is going to be very cautious in, you know, in increasing the country’s indebtedness. Yeah.

The government, of course, will borrow to finance really basic social or public services but that’s all. No improvement in terms of improving quality of education and health care, as well as improving infrastructure.

Mr. Romero: So how do you intend to convince the lawmakers to pass the measure in toto given that, for example, some lawmakers want the exemptions for cooperatives retained, others are arguing about the — ?

SEC. PERNIA: No, wala na. I mean, they have already ano — they have already decided on the modifications.

And I guess, you know, unless there’ll be some reconciliation with a different tax thrust from the Senate then ganon na siguro ‘yun, because, well, that is — we cannot revise what Congress has passed.

Ian Cigaral (BusinessWorld): Good morning po, sir. Sir, with the lower than expected first quarter GDP growth, what is your estimate now for the second quarter po? For the second quarter po, given po the lower than expected first quarter GDP growth.

SEC. PERNIA: Well, we expect the second quarter GDP will be better — GDP growth rate.

Mr. Cigaral: Around what ano po figures?

SEC. PERNIA: Wala pa. We have ano… We have this current quarter model but we haven’t looked at it yet.

Mr. Cigaral: Sir, for the second quarter po, ano po kaya sa tingin ninyo ‘yung magiging drivers and risks po for this second quarter growth or GDP growth?

SEC. PERNIA: Well, household spending and, well, essentially domestic spending — domestic demand both investment, government spending and household spending would continue and exports are picking up.

Agriculture is also improving on the supply side and I guess there’ll be stronger spending for infrastructure.

If you… I saw in the papers today that April spending, government spending on infrastructure fell by about 20 percent. So I’m sure that will be reversed in the second quarter and subsequent quarters, too.

Mr. Cigaral: Sir, next question po sana. Sir, what can be done po to make up for that huge drop in projected revenue doon po sa first package po?

SEC. PERNIA: Kuwan nga, ‘di ba ano, the compensating measures are going to be the broadening of the tax base and then excise tax on fuel, excise tax on automobiles, excise tax on sugary drinks. Those are the…

Mr. Cigaral: Thank you po, sir.

Pia Ranada (Rappler): Hi, sir. Sir, what impact will the non-passage of the tax reform bill have on our projects, our deals with China and Japan, in the possibility that we might — that it might not be passed, will we have to reject the aid given that we can’t come up, for example, with the counterpart — ?

SEC. PERNIA: Well, we’ll have to go slow on, you know, accepting or entering into ODA, you know, agreements with China.

Yeah, because we need to balance, you know, spending, indebtedness on one hand and capacity to pay and service the debt on the other hand.

So instead of 10 projects, maybe just one or two. So it’s not going to be the golden age of infrastructure. It will be the bronze age maybe of infrastructure or maybe dark age — dark age of infrastructure.

So that is how terrible, that is how unwelcomed the non-passage of the CTRP is going to be.

And you know, we have ought to realize that and people should rally with the administration to motivate, to urge Congress to pass the bill. Especially, of course, the first package and the subsequent packages have to be passed.

AC Nichols (CNN Philippines): Hi, sir. Sir, can we just get your thoughts on claims that the packages anti-poor?

SEC. PERNIA: It cannot be anti-poor because it’s going to be progressive. It’s going to exempt those who are earning 200,000 and below.

They don’t have to pay any taxes at all. Isn’t that good? I may not have to pay taxes anymore because being in government, you know, is really, you know it’s really — yeah it’s kind of a budget salary, you know. So that’s okay for the lower income groups.

Ms. Nichols: But, sir, how does… How will it affect the fuel tax and self-employed, ‘yung self-employed taxes, sir, how will it affect the poor?

SEC. PERNIA: Well, it will, yeah… There will be an increase in fares maybe, transportation fares. But then, as I’ve said earlier there’s going to be some direct subsidies going to be given to disadvantaged — those who are disadvantaged and who are hit directly by the increase in transport fares, yeah.

Ms. Nichols: But it will be given back to them in other forms of services, sir?

SEC. PERNIA: In direct cash ‘no. So they’ll be targeting those that are — who are targeted as deserving of subsidy. They’ll be getting the subsidy to compensate for the increase in–

Ms. Nichols: Sir, through what programs, sir, ‘yung direct cash?

SEC. PERNIA: It’s going to be… It’s going to be a top-up of the DSWD. It will be administered by the DSWD.

Ms. Monte: Sir, you have mentioned that we have to go slow into entering ODA agreements with China? Are you going to do the same with Japan?

SEC. PERNIA: Yeah, actually, we have fewer — we have fewer promises, commitments coming from Japan, compared with China.

China is really, you know, a big litany of projects. So and, also, well, the interest charge of ODA Japan — Japanese ODA is less than one percent.

So it’s really the cheapest you can get. Long grace period, long, you know, long repayment period. So, it’s going to be easier to incur.

Ms. Monte: Compared with China, how much po ‘yung interest rate and — ?

SEC. PERNIA: China, I think it’s on the order of two — two to three percent. We are not sure yet. It’s still being, you know, it’s still being discussed with the DOF — between DOF and Ministry of Finance or MOFCOM in China.

Ms. Monte: Sir, I remember previously you have mentioned ‘yung regarding Russia na parang we should not depend too much with Russia because I forgot the right word that you used but apparently it’s yeah — parang mahirap na kausap, not very trustworthy.

SEC. PERNIA: No, no, no hindi naman. I did not say that. All I said is that the… Russian economy is not doing well.

In fact, it had negative growth rate in 2014 and 2015 — 2015, 2016. And before that it was growing at one percent or 1.5 percent for three years.

So it’s not, it’s not really… Well, on balance, it’s probably a stagnant economy as of now because small positive previous to 2015, 2014 and then, you know, negative — small negative the past two, three years.

Ms. Monte: So, sir, the Philippines should not rely also too much with Russia?

SEC. PERNIA: No, I think Russia is more private, mga private ano eh, sa private deals between business — business here and business there. Not… They don’t have ODA. They don’t have ODA.

Andreo Calonzo (Bloomberg): Hi, sir. Sir, you mentioned a while ago that from 162 naging 82 billion na lang ‘yung net revenue. Ano po ‘yung lowest na acceptable sa inyo na net revenue considering the Senate will most likely implement more amendments to this bill? So bababa po ito. So ano ‘yung — ?

SEC. PERNIA: Well, there are three

subsequent packages after the first one, right? And maybe those three other packages will be able to compensate for, you know, what the shortfall that we are going to get from the first package.

And so, you know, and well as I’ve said, we will do with what Congress approves and the President signs, you know, what the, you know.

PRESIDENTIAL SPOKESPERSON ABELLA: No more questions for? All right. A few things on the horizon.

The Department of Transportation starts live stream bidding and procurement process:

For the first time, the Department of Transportation gave the public access into its bidding and procurement processes via online streaming over the opening of bids for several maritime projects.

In the spirit of transparency and good governance, Transportation Secretary Art Tugade ordered the live streaming of the procurement processes of all projects of the department.

The first live stream coverage via Facebook reached more than 45,000 followers, viewed more than 8,000 times, received positive feedback.

Also, business outlook improves for second quarter of 2017:

The Bangko Sentral ng Pilipinas has reported an improvement on the Philippines’ overall confidence index gaining 43 percent for the second quarter for 2017, reflecting a positive outlook from the business sector [in] doing their business operations in the country.

Also, Philippine key fiscal indicators improve in the first quarter:

As of March 2017, the Department of Finance reported that the country’s public debt in proportion to its gross domestic product went down to 41.87 percent, better than last year’s 43.56 percent.

Also, Landbank tallies record-high loans to priority sectors:

As of March 31, 2017, the total loan, amounting to P434 billion released to all sectors by the Landbank has increased by 12 percent from the same period of last year.

Also, as promised, we’d like to give the latest updates as of May 29 from the Armed Forces:

We will not be joined by the spokesperson this morning. So we will simply just give you their report.

First, precision airstrikes have been judiciously used to prevent collateral damage and employ the specific targets of resistance to protect our troops and to hasten clearing of the city of terrorist elements who continue to resist.

We call on the remaining terrorists to surrender while there is an opportunity.

Civilians killed by local terrorist groups, as of yesterday May 29, has been 19. Civilians rescued, 560.

As of 29 May, 121 were rescued. And from 26 to 28 May, 49, 390.

Also enemy killed, 65; 42 confirmed by body count, 23 confirmed by eye witness.

Also recovered firearms 55; high-powered 51, low- powered 4. 

Government casualties killed in action 20; 17 AFP, 3 PNP. Wounded in action, 72; 69 AFP, 3 PNP.

The current focus of the operations remains.  

1) Clearing of Marawi of militants still in the area.

2) Rescue of trapped residents.

3) Recovery of civilian casualties and victims.

From the DOH, to date, there have been 12,509 families or 59,665 persons displaced in Regions 10 and ARMM. Of which, 1,018 families or 4,278 persons are still staying in 14 evacuation centers or 10,974 families or 54,870 persons are staying outside the evacuation centers with their relatives or friends.

We’re open to a few questions.

Ms. Monte: Sir, good morning. You promised yesterday na you will give us an update regarding the President’s trip to Japan, matutuloy ba or hindi?

PRESIDENTIAL SPOKESPERSON ABELLA: As of now, I still don’t have the update as promised now. You have to understand that the President is faced with a lot of — a multitude of situations. So we cannot simply presume on it.

But as far as we know, he would rather stay here — as far as we know, he would rather stay here. Thank you. 

Leila Salaverria (Philippine Daily Inquirer): Sir, good morning. On the peace talks with communist rebels, there’s a recommendation for the CPP to recall its order to the NPA to attack government forces. If the CPP recalls this order, will this be enough for the government to resume the peace talks?

PRESIDENTIAL SPOKESPERSON ABELLA: A statement should be… A formal statement should be given if at all. And, of course, the accompanying confidence-building measures must be in place.

Ms. Salaverria: Aside from recalling the order to attack government forces, what other confidence-building measures are you hoping to see?

PRESIDENTIAL SPOKESPERSON ABELLA: It remains upon what they offer. Okay.

Mr. Morong: Sir, I understand si Presidente nasa Davao ‘no, but can you just give us parang update, what he’s doing, is he monitoring the events in Marawi? 

PRESIDENTIAL SPOKESPERSON ABELLA: That we can assume that he is doing. There is a… We can also provide you later, if it’s released, his appointments for today.

Pia Gutierrez (ABS-CBN): Sir, comment lang.

PRESIDENTIAL SPOKESPERSON ABELLA: Yes, ma’am?

Ms. Gutierrez: Netizens have discovered that the Philippine News Agency have been using a — an old photo in its story about soldiers in Marawi. What’s your comment on this, sir? 

PRESIDENTIAL SPOKESPERSON ABELLA: I think that’s better referred to PNA itself. Maybe Sec. Martin would be able to give you a credible response.

Ms. Gutierrez: But, sir, how is the Palace accepting this or parang receiving this, how are we vetting ‘yung information being shared, of course, by the government to the public?

PRESIDENTIAL SPOKESPERSON ABELLA: Well, as we said, the reason why we have the Mindanao update is because there must be only one source of news, actually.

It should be coming from… The process is actually that the military on the ground gathers the news, vets it, and then sends it to AFP here.

And then, AFP provides the Office of the Presidential Spokesperson with the news and then it goes out. That should be really the flow.

And so if you’re asking me about how are we vetting everything? That’s… I just told how we do it. And I believe that’s pretty credible. So that should be — that ought to be the proper flow.

Ms. Gutierrez: But what about, sir, the PNA?

PRESIDENTIAL SPOKESPERSON ABELLA: Like I said, you might be better off by asking Secretary Andanar.

Ted Tuvera (Daily Tribune): Good morning, sir. What was discussed last night between the President and I guess the MILF in Davao, sir?

PRESIDENTIAL SPOKESPERSON ABELLA: The details regarding that we don’t have. Thank you.

Mr. Morong: Sir, doon lang sa call on the terrorist to surrender, can we expound on that? Why is there such a call for the terrorists when we have an operation already?

PRESIDENTIAL SPOKESPERSON ABELLA: Come again?

Mr. Morong: Why is there such a call when we have a military operation?

PRESIDENTIAL SPOKESPERSON ABELLA: Well, to lessen the damage on the ground, definitely, to lessen the damage on the ground and so that they’ll be — civilians will be less affected.

Next question please.

Ms. Salaverria: Last week, the President has reported — as calling on the terrorist that they can solve the problem through a dialogue. How serious is the President in initiating talks with them? And is there even a mechanism for this?

PRESIDENTIAL SPOKESPERSON ABELLA: Well, already he has opened the doors, right? I mean, as you can very well see. But the mere fact that he states it, that means to say that he’s open to it and if the mechanism is he has opened it and there should be some adequate response to that.

As we can very well see that — the way he has ran his Cabinet, it’s from left to right, right to left, top to bottom, in other words — in other words, he’s very, very open to dialogue.

So there should be… His sincerity regarding the matter should not be questioned.

Yes?

Ms. Salaverria: But, sir, there is an ongoing operation, so where is the opportunity for them to come in and—?

PRESIDENTIAL SPOKESPERSON ABELLA: They can always backchannel, right?

Ms. Salaverria: Is there an appointed emissary for this, sir?

PRESIDENTIAL SPOKESPERSON ABELLA: Well, that I don’t know. But, if so, they can always find a way.

Ms. Salaverria: But, sir, isn’t it the policy not to negotiate with terrorists?

PRESIDENTIAL SPOKESPERSON ABELLA: Not to negotiate with terrorists? Definitely. But in this particular case, we have… That’s already a policy, okay. So I will not presume on that.

The only thing I can — I can respond to, is the fact that the President himself has said that he’s open. So…

Mr. Romero: Usec, will the President push through with his plan to expand the coverage of marital law to include illegal drugs?

PRESIDENTIAL SPOKESPERSON ABELLA: We don’t have policy on that. We don’t have policy on that. 

Although, I think he said… I think… Regarding expansion… Regarding expansion, we don’t have official word on that.

Mr. Romero: Because he mentioned, he’s going to issue a general directive to include the drug menace in the scope of the martial law.

PRESIDENTIAL SPOKESPERSON ABELLA: Then we will have to wait for the general directive.

Thank you.

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