Malacaņang today clarified that the $100 million that some administration detractors have described as "kickback" on the proposed government takeover of the NAIA Terminal 3 is actually reserved to pay for obligations to other project shareholders and creditors.

Presidential Adviser for Strategic Projects Gloria Tan-Climaco said that Fraport AG of Germany has confirmed that it had agreed to raise $400 million that the government would use to pay all of the NAIA Terminal 3 contractors, creditors and shareholders, including Fraport and the Philippine International Air Terminals Co. (PIATCO).

Tan-Climaco said that of the amount, $300 million will go to Fraport. Of the remaining $100 million, $53 million will go to Takenaka, the contractor that continued with the project although it had not been paid, as well as to some other creditors and PIATCO shareholders, including the Cheng Group, Nissho Iwai and SB Airports.

In a letter to Tan-Climaco last Tuesday, Peter Henkel, Fraport’s nominee director in PIATCO, confirmed the amount of $400 million and its willingness to raise the money for the government.

"Fraport’s exposure to the project as of several months ago was $375 million. Nevertheless, after many months of negotiations, Fraport is willing to accept only $300 million, should the proposed amicable settlement be approved by the relevant parties," Henkel said.

Henkel said that aside from the $300 million, additional funds are required to satisfy the other shareholders and creditors, in particular the EPC contractors.

"It was therefore discussed to reserve another $100 million for this purpose, therefore, bringing the total amount to be financed to $400 million," Henkel said.

Henkel said his company is willing to take the loss of $75 million since its investment in the project has already reached $375 million.

He also said that Fraport understands that the proposal should be subject to the consent of PIATCO and all relevant Philippine government authorities, as well as the audit requirements of the Commission on Audit.

Earlier, President Gloria Macapagal-Arroyo created a Cabinet committee headed by Justice Secretary Hernando Perez to review the PIATCO contract. Members of the committee are Transportation and Communications Secretary Leandro Mendoza, Finance Secretary Jose Isidro Camacho, Tourism Secretary Richard Gordon, Trade and Industry Secretary Manuel Roxas II, Director General Dante Canlas of the National Economic and Development Authority (NEDA), and Tan-Climaco.

Tan-Climaco said that Fraport would likely be the only shareholder that would lose in the plan to terminate the PIATCO contract in favor of the government.

She said that the $400 million that it agreed to raise for the government would be payable over 15 years and would carry interest rates that are much lower than what the government gets for its foreign borrowings.

"Under the proposal, the government will not pay a single centavo in the first five years," Tan-Climaco said.

But even before the five years is completed, the government would have bid out the airport terminal to new owners to raise the money to pay off the $400 million loan from Fraport, Tan-Climaco said.

"Fraport is offering us a deal that would protect the government and the public," Tan-Climaco said.

According to Tan-Climaco, the government would benefit from the Fraport offer since it would be getting back the project not at $657 million that PIATCO has reportedly spent for it but at price closer to the original project cost of $350 million.

"This would also allow the government to bring down the terminal fee to P600 from the $20 or P1,000 which PIATCO wants to charge," Tan-Climaco said.

GENERAL SANTOS CITY – The government has exerted aggressive efforts in its campaign against artificial trade barriers and unfair trade practices imposed by some wealthy countries.

Agriculture Secretary Leonardo Montemayor today said the country had been asking the World Trade Organization (WTO) to do something about the unfair treatment the Philippines has been getting from big nations in relation to tuna exports.

"The European Union (EU) has granted preferential zero tariff or duty- free status on tuna coming from former EU colonies in Africa, the Caribbean, and the Pacific at the expense of Thai and Philippine tuna," Montemayor said in a speech before the 4th National Tuna Congress here.

He said Philippine and Thai tuna have been slapped with a 24-percent tariff.

"Because certain European countries have their own tuna industries to protect, they justify their discrimination against Philippine tuna by pointing out that the United State, not Spain, was actually the last colonizer of the Philippines," he added.

The Philippines and Thailand have urged the WTO to act with expediency on this issue that had become detrimental to both countries’ tuna industries.

"After three bilateral talks, all failing to give ASEAN tuna producers the same zero tariff privilege enjoyed by the former EU colonies, we have elevated the case to the WTO for mediation," he said.

GENERAL SANTOS CITY – The country’s tuna industry is in for better times.

Agriculture Secretary Leonardo Montemayor today made this fearless forecast in light of positive local and international developments that "have reinforced our confidence in the sector’s ability to overcome barriers and restrictions to expansion and development."

In a speech before some 300 local and foreign delegates to the 4th National Tuna Congress at the Family Country Hotel and Convention Center here, Montemayor attributed his projections to three reasons.

He said the industry has drawn inspiration from the significant increases in tuna production, which averaged 3.2 percent in the last two years and by 5.4 percent from January to June, 2002 alone.

He added that the tuna world prices have risen, easing the effects of export volume reduction due to uneven tariff regimes imposed by Philippine traditional markets in the United States and European Union.

Further, the government had gained headway in expanding fishing areas.

Montemayor said the Philippines and Indonesia signed early this year a bilateral agreement granting fishing access to Philippine tuna fishing operators in designated areas of the Indonesian Exclusive Economic Zones of the Sulawesi Sea.

The pact allowed 75 catcher vessels and 450 support vessels from the Philippines to operate in Indonesia. The same privilege would be accorded to 10 single seines and 20 fishing vessels using long line fishing methods for tuna.

The agreement could create 20,000 new jobs for Filipinos, 15,000 in fishing and 5,000 in the processing and allied industries. Indonesian officials have started evaluating applications for fishing licenses, he said.

He said the expansion of fishing grounds for Filipinos continued to be one of the eight major policies of the Department of Agriculture concerning the tuna industry.

The other seven approaches included further growth in tuna production, the rationalization of licensing and other regulatory requirements, the modernization of the country’s fishing fleet, the implementation of the full duty drawback privilege, building more and better fish ports and cold storage facilities, the re-establishment of an old arrangement with suppliers on purchasing tuna purse seines and other needed fishing vessels, and the fight against artificial trade barriers and unfair trade practices imposed by some wealthy countries.

Montemayor, in his speech, also commended the Socsksargen (South Cotabato-Sultan Kudarat-Sarangani-General Santos) Federation of Fishing and Allied Industries and the National Confederation of the Philippine Tuna Industry.

The Macapagal-Arroyo administration has lined up several measures to zero in on the country’s big-time smuggling syndicates and tax evaders whose activities have deprived the government of much-needed resources.

In a report on the status of smuggling and tax evasion cases to President Gloria Macapagal-Arroyo and members of the Cabinet during its meeting last Tuesday in Malacaņang, Cabinet Secretary Ricardo Saludo said that specific steps are now being taken to streamline coordination between the Bureau of Customs (BOC) and the Department of Justice (DOJ) in prosecuting cases against violators of Customs laws.

Saludo said that the government has already deputized officials of the Armed Forces of the Philippines (AFP) and the Philippine National Police (PNP) to assist the BOC in enforcing tariff and Customs laws especially against rice and sugar smugglers.

"These enforcement agencies are authorized to effect searches, seizures and arrests within the BOC jurisdiction," Saludo said.

Saludo also said a bill on anti-smuggling is being drafted to provide clearer basis for prosecution and imposition of heavier penalties on smugglers. The bill would be an administration measure and will be certified as urgent by the President.

According to Saludo, the BOC-Technical Working Group met last August 28 to discuss the legal aspects of the proposed legislation.

To help ensure the President’s pledge in her Second State of the Nation Address (SONA) to track down criminals and smugglers in the country, Saludo said the administration has been holding continuous meetings with intelligence units of various agencies to compile, validate and analyze intelligence information on persons suspected to be involved in smuggling preparatory to drawing up specific plans against each of them.

Other activities undertaken by the Macapagal-Arroyo administration to track down and eliminate smugglers in the country were the following:

• Met with the Philippine Coast Guard last August 28, 2002 to discuss the inventory of ports/wharves nationwide especially those unmanned by government authorities;

• Confiscated another 7,000 bags of Vietnamese rice with an estimated value of P3.5 million at the Port of Zamboanga on August 23, 2002, bringing the total of confiscated bags of rice to 36,005 bags since June 13, 2002;

• Gathered evidence against persons suspected of involvement in smuggling not only for violations of Customs laws but for violations of other laws such as tax evasion and money laundering, among others, to support cases to be filed against them; and

• Reviewed pending cases against violators of Customs laws, in coordination with the DOJ, to expedite resolution of said cases.

Saludo stressed that a total of eight criminal cases were filed before the DOJ for violations of Customs and tariff laws.

He also said that the administration has been consistent in the implementation of the VAT Reconciliation Listings for Enforcement (RELIEF) System wherein 592 firms were found to have underdeclared their sales, 11 of which have been referred to the Office of the Government Corporate Counsel (OGCC) for prosecution.

LAKEWOOD, Zamboanga del Sur—President Gloria Macapagal-Arroyo today lauded the provincial officials of Zamboanga del Sur for their efforts in uniting the different tribes in the province.

In her remarks at the Megayon (Unity) Festival held at the Baganian Cultural and Trade Center, the President said in fluent Cebuano that she was aware that 70 percent of the people in the province are Subanons.

But the President said that whether you belong to the indigenous tribe like the Subanons, you are still a Filipino.

"Ang akong prinsipyo alang sa Mindanao mao nga kinahanglan nga maila sa tanan nga ang Pilipinas usa ka nasod, usa ka society nga adunay lainlaing kultura (One of my principles in Mindanao is that everybody should understand that the Philippines is a nation or society composed of different cultures)," the President said.

The President said that whether you are a Cebuano or Tagalog, or a lumad, Muslim or Christian, or Chinese mestizo, you are still Filipino and you should be proud of the diversity of our culture.

The President arrived here early this morning on the first leg of her whirlwind one-day swing that also brought her to Mount Diwalwal in Monkayo, Compostela Valley, and General Santos City.

She was welcomed here by local officials led by Zamboanga del Sur Governor Aurora Cerilles, Vice Governor Roseller Ariosa, First District Representative Isidoro Real, Second District Representative Filomena San Juan, and Lakewood Mayor Domingo Mirrar.

The President also called on the farmers of the province to shift to hybrid rice so that they can double their income.

She said that the national government would support the projects of the local government, especially in promoting the province as a tourist destination.

According to the President it would not be difficult to promote the province as a tourist spot because it is known for its exotic fruits like durian and lanzones.

LAKEWOOD, Zamboanga del Sur—President Gloria Macapagal-Arroyo today released the initial amount of P10 million for the agricultural modernization program in the province, particularly for the construction of farm-to-market roads.

In her remarks at the Megayon (Unity) Festival held at the Baganian Cultural and Trade Center, the President said in fluent Cebuano that eventually, each of the towns of Zamboanga del Sur would get P1 million for their farm-to-market roads.

The President recalled that last year, she released P1 million for the road-to-market road in this town.

She said that if the initial P10 million would be depleted, she asked Provincial Director Alex Fernandez of the Department of Trade and Industry (DTI) to remind her so that she can release another P10 million until all the towns will have P1 million each.

The President arrived here this morning on the first leg of her whirlwind one-day swing that also brought her to Mount Diwalwal in Compostela Valley, and General Santos City.

In her speech, the President also called on each of the towns in the province to specialize in one product. "Unta matag lungsod, adunay usa ka produkto (I hope one town would have one product)," she said.

These products, the President said, can be propagated in each town with the help and financial support of the Department of Agriculture.

According to the President, Lakewood is a beautiful town and should be developed as an eco-tourism destination, adding that it has an added advantage because of the abundance in exotic fruits in the area.

MONKAYO, Davao del Norte - The government is slated to earn a total of P18.72 million beginning September 16, 2002 up to March 16, 2003, following the signing of 17 service contracts between the Department of Environment and Natural Resources (DENR) and the small-scale miners here at Mt. Diwalwal.

President Gloria Macapagal-Arroyo said the income that would be generated in this new scheme will be able to help the government with its current deficit problem

The President arrived here this afternoon for an inspection visit and attended a briefing conducted by Bureau of Mines Director Horacio Ramos regarding problems at Mt. Diwalwal.

During the briefing, the President directed the DENR to study whether past schemes could be applicable to other mining areas in the country.

After the briefing, the President went to the municipal covered court here to interact with the residents who are composed mostly of miners and their families.

In her speech, the President said it’s about time that the local folk of Mt. Diwalwal helped the government in solving the issues affecting their community, particularly in protecting the environment.

Also, the President donated P1 million to the municipality of Monkayo for the development of a jewelry-making project in their place.

She also announced that on October 11, she will declare a portion of Mt. Diwalwal as a National Mining and Mineral Preservation.