THE DEPUTY SPEAKER (Rep. Singson, E.).  The Honorable Castro is recognized. 

REP. CASTRO.  Mr. Speaker, my dear colleague, before I start my interpellation, I would like to congratulate the Gentleman from the Party-List CIBAC for having brought to the attention of the Members of this Chamber one of the most important concerns of our country now, that is education.  And having brought to the attention of this Chamber this issue, I would like to advise, Mr. Speaker, the Gentleman from the Party-List CIBAC that I am  joining him in his concern for a better Philippine education..

Mr. Speaker, the Gentleman from the Party-List CIBAC alleged that there was an interference on the part of World Bank insofar as biddings of contracts in the Department of Education.  Did I hear the Gentleman from CIBAC correctly? 

REP. VILLANUEVA.  First of all, I would like to thank the distinguished Gentleman,  Congressman Castro, for interpellating this humble Representation.  With regards to his question, Mr. Speaker, Your Honor, the records will show, Mr. Speaker, that after the disqualification of these two bidders namely, Vibal and Watana, in a letter dated April 24, 2006, World Bank East Asia and Pacific Regional Senior Economist Rekha Menon wrote to DepEd Usec Hidalgo, DBM Assistant Secretary and IABAC Chairman Eduardo Opida disagreeing with the disqualification of Vibal Group and Watana.  And after this, Mr. Speaker, the IABAC made a decision to again include the two bidders together with Daewoo who deemed to have submitted the lowest evaluated bid, Mr. Speaker, Your Honor. 

REP. CASTRO.  Mr. Speaker, my dear colleague, in your privilege speech, were you referring to the same bidding that was decided by the Supreme Court? 

REP. VILLANUEVA.  Exactly, Mr. Speaker, Your Honor. 

REP. CASTRO.  Mr. Speaker, Your Honor, is the Gentleman from the Party-List CIBAC aware that before the Supreme Court comes out with its decision the members of the Supreme Court responsible in issuing the decision has to examine all the facts so that it could come out with a correct decision based on a correct application of law and a correct appreciation of facts? 

REP. VILLANUEVA.  Mr. Speaker, Your Honor, the decision of the Supreme Court is only for the implementation of the said project.  They did not touch so much, Mr. Speaker, of the bidding process, Mr. Speaker, Your Honor. 

REP. CASTRO.  When the Supreme Court, Mr. Speaker, Your Honor, handed a decision in respect of the implementation of the project, is it not an affirmation  on the part of the Supreme Court that the bidding process in the contract is above board that is why the Supreme Court instructs and directs the implementation of the project? 

REP. VILLANUEVA.  Well, not necessarily, Mr. Speaker, Your Honor.  We are more concerned on the fact that World Bank is allegedly meddling in the bidding process of this particular project that they themselves initiated.  And if you will look at the project proposal of World Bank, it talks so much about  transparency, accountability and in helping the different governments of this world to initiate and establish mechanisms on how to address the problem of graft and corruption. 

REP. CASTRO.  Do you have any idea, Mr. Speaker, whether in the case  decided by the Supreme Court, the alleged interference  of World Bank in the bidding process had also  been one of the issues resolved in the said case.  

REP. VILLANUEVA.  I am not—honestly Mr. Speaker, I am not  really aware of—I’m not really aware of the  decision, Mr. Speaker, and  the details of that decision.  

REP. CASTRO.  Will the Gentleman, Mr. Speaker, from the Party-List CIBAC agree with this Representation that if one of the issues resolved in the case decided by the Supreme Court  is the validity of the bidding conducted by the DepEd, including the validity of the contract,   the issues  raised by the Gentleman before this Chamber this afternoon  has become moot and academic.  

REP. VILLANUEVA.   Well, Mr. Speaker, Your Honor, we  are not only after the alleged meddling of the  World Bank but we are also after the accountability  of our IABAC, the Inter-Agency  Bids and Awards Committee,  including the Department of Education and the Department of Budget and Management.  We have set forth,  Mr. Speaker, Your Honor,  bids and awards committee at magiging bale wala rin po  ito  kung sa isang saglit po na —sa isang letter coming from World Bank, eh mababale wala lahat yong proseso na sinet forth ng ating Kongreso- - ng ating Procurement Act dito sa  ating bansa.  

REP. CASTRO.   May I know, Mr. Speaker,  if the  Gentleman from the Party-List CIBAC has read and studied the loan agreement  between the  government  of the Philippines  and the World Bank involving the same project.  

REP. VILLANUEVA.  Mr. Speaker, I have here some highlights of the agreement  but I don’t have the entire loan agreement.  But I think, Mr. Speaker, Your Honor, what I’m trying to raise here is the fact that  if it is indeed true that the World Bank is meddling  with  the affairs of this—with our procurement affairs,  Mr. Speaker, Your Honor, I think we should inform the national headquarters of World Bank in order for them to   realize that they are indeed part of this  worsening problem that we are having right now when we talk about our education.  It is so unfortunate  that this particular scheme led to  the printing of these—of these 17.5 million  defective books, Mr. Speaker, Your Honor.  

REP. CASTRO.   I am asking, Mr. Speaker,  the good  Gentleman from the Party-List CIBAC, whether or not  he has read and  studied the loan agreement between the World Bank and the government of the Philippines.   Because I have  come across so many international loan agreements during the time that  I was still in law practice.   And one of those agreements  was agreement entered into by  the government  of the Philippines with World Bank, agreement  entered into by  the government  of the Philippines with IMF.   And there are provisions in the loan agreement that  World Bank or IMF has  oversight powers on how  the amount loaned to the government of the Philippines would be spent for a particular project.  In this case, should this provision  considering that the  Gentleman from Party-List CIBAC has not gone over  the loan agreement between the government of the Philippines and  the World Bank on the subject contract of this discourse,  would it be now -- will the Gentleman from CIBAC agree with this Representation that accusing World Bank of having  interfered or intervened  in the implementation of the contract is  still premature at this point in time.  

REP. VILLANUEVA.  Well, Mr. Speaker, Your Honor,  I thank the Gentleman for raising this issue, Mr. Speaker, but that is actually the point.  Congress was not given the chance, Mr. Speaker, to review the contract.  And, perhaps, it is but proper for the World Bank, for the concerned agencies of government, to give us a chance to review the contract.   I respect the oversight powers due to the international financial institutions like World Bank, JBIC or ADB.  But, Mr. Speaker, I am more concerned of the fact that this guy named Rekha Menon is actually meddling in the affairs of our procurement system already set forth by our laws, by this Congress, Mr. Speaker.  

REP. CASTRO.  Mr. Speaker, I appreciate very much the zealousness of the Gentleman from the Party-List CIBAC regarding alleged interferences or non-compliance with our procurement law by a foreign lending institution.  But, is the Gentleman, Mr. Speaker, from the Party-List CIBAC, aware that there are international agreements entered into by the government of the Republic of the Philippines that exempts lending institutions from our procurement law? 

REP. VILLANUEVA.  I agree, Mr. Speaker, Your Honor, we should respect international agreements.  But considering, Mr. Speaker, that this is not a grant, this is actually a loan coming from World Bank, we feel, Mr. Speaker--this Representation feels that it is not proper for World Bank to interfere or perhaps meddle in the procurement or in the bidding process of this particular program. 

REP. CASTRO.  Mr. Speaker, will the Gentleman from the Party-List CIBAC agree with this Representation that there is actually no interference or interferences on the part of World Bank if the right to interfere or the right to intervene is provided for as a contractual right in favor of World Bank in the agreement? 

REP. VILLANUEVA.  That is actually highly questionable, I believe, Mr. Speaker, Your Honor.  Because the fact that you are lending money and you will be the one to choose who the bidder will be or who the contractor will be is absolutely disagreeable, Mr. Speaker, Your Honor.  Considering that the effects will be irreparable; considering, Mr. Speaker, that our education is at risk here so I think, Mr. Speaker, Your Honor, it is okay for World Bank, for other financial institutions to set up oversight powers but not to pinpoint or to force a certain country, a government like the Philippines, to choose the said bidder, Mr. Speaker. 

REP. CASTRO.  Will that still be immoral, Mr. Speaker, if it is a right granted to World Bank in the contract?   And in so doing, it is simply an exercise of a contractual right. 

REP. VILLANUEVA.  Well, Mr. Speaker, considering that this publishing company had already cornered 75.96% of bids by the Department of Education from 1999 to 2004; considering, Mr. Speaker, Your Honor, the historical background of this particular publishing company na nagkamali na po ng ilang beses sa pagpi-print ng textbooks; considering, Mr. Speaker, Your Honor, that World Bank is actually talking about transparency and accountability; considering, Mr. Speaker, Your Honor, that in this particular program--the SEMP No. 2--the World Bank is actually helping government institutions to set up mechanisms to address the problem of graft and corruption then it would be totally opposite of what they are crusading for, Mr. Speaker, Your Honor. 

REP. CASTRO.  We say opposite or the Gentleman says opposite Mr. Speaker, simply because that he has not investigated everything that surrounds the letter sent by World Bank to the Department of Education. 

REP. VILLANUEVA.  I would be very happy, Mr. Speaker, to get a copy of that letter, I would be very happy for the Department of Education to brief us in this matter because at this point in time, no one has come out in the open explaining this matter, Mr. Speaker, Your Honor. 

REP. CASTRO.  From the very answer of the Gentleman from the Party-List CIBAC, Mr. Speaker, it is a confirmation – one, that he has not read the loan agreement between the government of the Republic of the Philippines and the World Bank; he has not investigated and, in fact, I would say that he is not aware of the reasons why World Bank if it is true has requested or directed the Department of Education or the bidding committee to include the two publishing companies; number three, the Gentleman from the Party-List CIBAC, Mr. Speaker, has not also investigated whether or not the action of the World Bank is based on its right under the loan agreement, hence, will the Gentleman from the Party-List CIBAC agree with this Representation that up to this point in time it is premature to accuse World Bank of interference or interferences;  It is premature to accuse World Bank that what it is doing is immoral;  It is premature to accuse World Bank that it is doing acts inconsistent with what it professes. 

REP. VILLANUEVA.  Mr. Speaker, Your Honor, I beg to disagree.  Oversight powers do not include replacing the decision of the Inter-Agency Bids and Awards Committee with their own decision, Mr. Speaker, Your Honor.  What we intend to do here, Mr. Speaker, is to look into the matter – to seriously look into this matter because still at this point in time, Mr. Speaker, we have yet to hear anything from World Bank, from IABAC chair, from the Department of Education and also the fact that those who signed the loan agreement thought that the World Bank procedure is better than our procurement law.Mr. Speaker, this is again an issue in itself.  What gave these people the right to say so, Mr. Speaker?  So that is what we intend to do in this august Chamber, Mr. Speaker, Your Honor.

REP. CASTRO.  I join, Mr. Speaker, the Gentleman from the Party-List CIBAC.  I join him in his quest to discover what are the bases of the actions of World Bank.  But my only concern, Mr. Speaker, is, at this point in time it is premature to accuse World Bank of wrongdoings until after perhaps, that we shall have investigated in the proposed investigation of the Gentleman from the Party-List CIBAC before we make conclusions against a lending or international lending institution, Mr. Speaker. 

REP. VILLANUEVA.  Yes, Mr. Speaker, and the fact that in this 2008 budget, we have allotted $8.32 million for this particular program.  I think it is just but proper for this august Chamber to exercise its oversight functions in order to find out why are we paying for this particular debt, Mr. Speaker, Your Honor.And not just this debt, perhaps, Mr. Speaker, but some debts that we have already discussed like the Austrian incinerator, the pupose of which is already illegal, Mr. Speaker.  So, until now we are still paying for this P500 million debt. 

REP. CASTRO.  My position, Mr. Speaker, my dear colleague, is simple.  Before we conclude and accuse World Bank of wrongdoing, there should be an investigation first.  And for that reason I join the noble task proffered or professed  by the Gentleman from the Party-list CIBAC.  But again,  as I said, we cannot just simply put the cart ahead of the horse.  That based on fairness, we should first investigate and then make conclusions against anyone based on  our investigation which is supported by hard facts and evidence and whenever we accuse someone with bad mouth, someone of wrongdoing or ill-doings, it is necessary that it should be backed-up by hard evidence and a thorough study because, otherwise, it will place ourselves in bad light insofar  as our creditors are concerned.  That’s all, Mr. Speaker, and I thank the Gentleman from CIBAC for having given this Representation the opportunity to interpellate  him because this Representation believes that it is an honor to be given the opportunity to interpellate the Gentleman  from the Party-List  CIBAC.  Thank you, Mr. Speaker. 

REP. VILLANUEVA.  Thank you very much, Mr. Speaker.  But let me point out, Mr. Speaker, that this Representation appreciates the statements  made by the distinguished Gentleman and we are not just accusing or pointing our fingers to this World bank, Mr. Speaker, Your Honor, for no reason, Mr. Speaker.  Who knows, Mr. Speaker, the international headquarters of  World Bank are not aware of these transactions or not aware of this letter sent by a certain—by a certain Menon, Mr. Speaker. So, Mr. Speaker, I think, it is just but proper that this august Chamber do its  tasks, perform its duties and responsibilities, exercise its oversight powers in order to protect the Filipino people especially our students, Mr. Speaker.  Thank you so much.  

Interpellation of Rep. Jose Carlos Lacson 

REP. AGBAYANI.   Mr. Speaker, I move that the Gentleman from the Third District of Negros Occidental, Representative Lacson, be recognized. THE DEPUTY SPEAKER (Rep. Singson, E.).   The Honorable Lacson is recognized.

REP. LACSON.    Thank you very much, Mr. Speaker, Your Honor. In view of the fact that apparently, our distinguished colleague from CIBAC, due to previous injuries. . .  

REP. VILLANUEVA.     Surgery. 

REP. LACSON.   . . .  finds it a little bit hard to be standing there at the rostrum for the last couple of hours, being interpellated, this Representation would therefore just like to make a manifestation on the matter of the privilege speech of the Gentleman from CIBAC, and at the endpoint move for its – that his privilege speech be referred to the Committee on Basic Education. Mr. Speaker, can I make my manifestation? 

THE DEPUTY SPEAKER (Rep. Singson, E.).  You may proceed. 

REP. LACSON.  If it is all right with the Gentleman from CIBAC. 

REP. VILLANUEVA.  Certainly, Mr. Speaker.  And this Representation appreciates the observation made by the distinguished Gentleman.  This Representation just underwent two major operations and I am still standing here, Mr. Speaker, for the last couple of hours.  Thank you, Mr. Speaker. 

THE DEPUTY SPEAKER (Rep. Singson, E.).  You may proceed, Congressman Lacson. 

REP. LACSON.  Thank you very much, Mr. Speaker.  Thank you very much, Gentleman from CIBAC.  The reason I stood up, after I was listening to the eloquent interpellation of the good Gentleman from the Second District of Capiz, I felt that I should be able to make a statement here.  Actually, this Representation filed House Resolution No. 32, entitled” xxx Directing the Committees on Higher and Technical Education, Basic Education, Culture and Good Government to Conduct a Joint Inquiry in Aid of Legislation on the Alleged Irregularities in the Procurement Procedure for the Acquisition of Textbooks by the Department of Education, and Recommend Necessary Measures for the Prevention Thereof”.  One of the provisions here has something to do with allegations of interlocking directorships in corporations which were among the winning bidders.  So much so that based on  general information, based on certain biddings of an 800 million World Bank deal, there were some questions that had to be answered as far as these interlocking directorships.  Because apparently, while there seems to be an appearance of a competition to establish bid prices, they were actually artificial and non-competetive.  The speech of the Gentleman from CIBAC actually is a part of this particular problem here.  Because this was brought to the attention of a technical working group that strongly recommended the disqualification of these particular bidders who had interlocking directorships.  And as such, the Inter-Agency Bids and Awards Committee of DBM, in effect, concurred with the recommendations.  However, there are allegations that the IABAC wrote the World Bank on this particular issue at hand.  However, the World Bank allegedly urged the IABAC to consider its March 15 decision, disqualifying these bidders for violating the Government  Procurement Law and World Bank guidelines.   Mr. Speaker, the point at hand here is, as made mention by our illustrious lawyer from the Second District of Capiz, Congressman Castro, we cannot overturn the decision of the Supreme Court.  However, we have to look into the matter which I believe, that is why in my resolution, I did not particularly make mention of the World Bank because just in case I might be construed as being judgmental,  which I am not saying my good friend, the distinguished Gentleman from CIBAC is, but I was a little careful about this.  But the fact remains here that we are going to have— DepEd is supposed to procure about 70 million books worth P4 billion.  DepEd is going to be granted, or should I say, Australia is granting as part of a World Bank project an amount of P1.6 billion or 41 million Australian dollars.   While this is a grant, just the same, I think it is most important, and we have to commend the Gentleman from CIBAC for bringing this to the attention, not to overturn a Supreme Court decision, but to find out what really transpired because there are certain quarters who also feel that when we say that the rules of foreign lending institutions should prevail over our own local laws in procurement projects, it is possible that this could open the floodgates of corruption as well as probably a feeling of abdicating our own Philippine sovereignty. 

So, Mr. Speaker, once again, I would like to laud the privilege speech of the Gentleman from CIBAC, and I hope—I would like to inform my distinguished colleague that this particular resolution has already gone through the Committee on Rules.  And I am just waiting for them to assign it to the particular committees and hopefully, your privilege speech could be also a part, or rather, my resolution could be a part of your own privilege speech, and hopefully, we can come up with a clear understanding.  Congressman Castro said we probably have not read the contract.  We probably have not seen this kind of letter.  Then, let this be the forum where these things should be brought to our attention wherein we should be told what is the subject of the particular contracts, and henceforth, inform Congress so that by knowing, we would probably be in a better position to be able to understand. So, I would like to thank the Gentleman from CIBAC for this opportunity, Mr. Speaker.  And lastly, I would like to move that the privilege speech of the Gentleman from CIBAC be referred to the Committee on Basic Education.  Thank you very much, Mr. Speaker. 

REP. VILLANUEVA.  Thank you, Mr. Speaker, Your Honor.  And again, I would like to thank the distinguished Gentleman from Negros, and I join him in looking into this very important matter, Mr. Speaker, Your Honor.  The House of Representatives was given the task to exercise its oversight powers.  We were not given a chance, Mr. Speaker, in this particular issue to review the contract.  And just for the information again of this Body, the Supreme Court decision simply said that there was no basis for Kolonwel, that is the losing bidder, to complain because the system to be followed is the World Bank system of procurement.  Mr. Speaker, Your Honor, it never went into the wisdom why the World Bank procedure should take precedence over our procurement laws.Thank you very much, Mr. Speaker.  And to everyone who interpellated this Representation, I thank them, Mr. Speaker, Your Honor.  

Interpellation of Rep. Risa Hontiveros-Baraquel 

THE DEPUTY SPEAKER (Rep. Singson, E.).  Okay.  The Honorable Hontiveros-Baraquel is recognized for the same subject matter. 

REP. HONTIVEROS-BARAQUEL.  Thank you, Mr. Speaker, and thank you to the Majority Floor Leader.  In lieu of the interpellation that I will not be able to make anymore, I wish to make a brief manifestation in support of the privilege speech of Congressman Villanueva of CIBAC.   Speaking, Mr. Speaker, from the case brief of the Freedom from Debt Coalition entitled SEMP2, SEDIP textbook procurement anomaly, I wish to emphasize  the calls to action  made by Congressman Villanueva  and emphasize as well the areas for further research that he pointed out.   First of all, Mr. Speaker, punish the World Bank and Vibal not the taxpayers  for the failure to follow the set of standards of a proper, acceptable and responsible business contract and specially in the context of the creditors’ direct involvement in the anomaly.   

Secondly, Mr. Speaker, the fraudulent dealing should be exhaustively investigated by legitimate authorities  with its policy impacts thoroughly studied, particularly the punishment of guilty parties involved and the protection of the interests of public school students, policy recommendations on government procurement and policy revision regarding foreign project financing.   

Thirdly, Mr. Speaker, the defective textbooks should be replaced with the entire cost being shouldered by the publishing groups involved. 

Fourthly, Mr. Speaker, transactions with foreign creditors that are made under dubious terms should be disclaimed and not paid.  In this case of SEMP2, SEDIP, the part of the loan earmarked for textbook procurement should not be paid. And I reiterate here the point already raised by Congressman Chipeco  supporting the call of the Freedom from Debt Coalition for a comprehensive legislative debt audit.   

Fifthly, Mr. Speaker, persons and establishments involved must be punished with the full force of the law. And lastly, Mr. Speaker, to emphasize the areas for further research and these are:  the World Bank’s role in  introducing changes in the procurement system specially in relation to the Procurement Reform Act or RA 9184.  Secondly, the extent of the World Bank’s authority in the process.  Thirdly, the relationship of World Bank with publishing companies, Vibal in particular.  Fourthly, the extent of the World Bank’s influence in government agencies.  For example, even the Department of Budget and Management.  And lastly, Mr. Speaker, the degree of involvement of the other creditor—the Asian Development Bank. In closing, Mr. Speaker, many thanks to Congressman Villanueva for delivering  this privilege speech and thank you for your own indulgence, Mr. Speaker, and  Majority Floor Leader. 

REP. AGBAYANI.  Mr. Speaker, it is my understanding that the Honorable Joel Villanueva is no longer available for interpellation.  So I move that we recognize… 

REP. VILLANUEVA.  Mr. Speaker, before the… 

REP. AGBAYANI.  Before we recognize the… REP. KHO.  Mr. Speaker. 

REP. VILLANUEVA.  Mr. Speaker, there was  a motion already on the floor made by the Honorable Lacson, Mr. Speaker..  May I  know what happened to his motion. 

THE DEPUTY SPEAKER (Rep. Singson, E.).  Still pending. 

REP. AGBAYANI.  Yes, Mr. Speaker, before we recognize the next… 

THE DEPUTY SPEAKER (Rep.Singson, E.).  We allowed the Honorable Hontiveros-Baraquel to make her manifestation. 

REP. AGBAYANI.   Before we recognize the next speaker, may we refer the privilege speech of the Honorable Joel Villanueva to the proper committees, Mr. Speaker. 

REP. VILLANUEVA.  Mr. Speaker, I think the distinguished Gentleman from Negros already stated that the speech of this Representation be referred to the Committee on Basic Education and I think, Mr. Speaker, Your Honor, it is just but proper that we dispose of that motion first. 

THE DEPUTY SPEAKER (Rep. Singson, E.).  The motion of the Gentleman, Congressman Lacson, was to refer the speech to the Committee on Basic Education.