10 October 1990

The Honorable
TEOFISTO GUINGONA, JR.
Senator
Congress of the Philippines
Philippine Senate Building

Dear Senator Guingona,

We are pleased to transmit to you a position paper prepared by the Makati Business Club, Management Association of the Philippines, Bishops-Businessmen’s Conference, and Financial Executives Institute of the Philippines stating our organizations’ position against the passage of Senate Bill No. 1602 entitled “AN ACT TO PROHIBIT ANY PRIVATE FIRM WHOSE FORMER OFFICIAL OR EMPLOYEE IS HOLDING A POSITION OF POWER, PRESTIGE, OR INFLUENCE IN THE GOVERNMENT, FROM ENTERING INTO ANY KIND OF BUSINESS RELATION, CONTRACT OR TRANSACTION, WHETHER DIRECTLY OR INDIRECTLY, WITH THE GOVERNMENT”.

Very sincerely yours,

RICARDO J. ROMULO
Chairman
Makati Busines Club

GUILLERMO D. LUCHANGCO
President
Management Association of the Philippines

SANTIAGO DUMLAO
National Co-Chairman
Bishops-Businessmen’s Conference

JOSEFINA TAN
President
Financial Executives Institute of the Philippines

Disapproval of Senate Bill No.1602

This paper seeks the disapproval of Senate Bill No. 1602, an act which prohibits any private firm whose former official or employee is holding a position of power, prestige, or influence in Government from entering into any kind of business relation, contract or transaction, whether directly or indirectly with Government during the office tenure in Government of such former official or employee of the private firm and for a period of two years from the termination of official relation of such official with the Government. While the proposed bill has a laudable objective in preventing the commission of graft and corruption in Government, it is viewed as deficient because of the following reasons:

1. Deprives Government from entering into a business or transaction with a private firm or commercial entity which is best qualified to provide the products and/or services required by Government because of the bias imposed against private firms who have former officials or employees holding positions of power and influence in Government. The bill is so all encompassing that all the government sectors or levels are covered even if the official/employee referred to is involved only in one sector or level. Also, consider the ridiculous situation where a government entity/official/employee can’t order a bottle of Coca-Cola in official functions or in government premises because a former SMC official/employee works for the government.
   
2. Assumes that the existing bidding and evaluation procedures of the Government are defective and one way by which these can be rectified is through the disqualification of private firms who have former officials or employees occupying positions of power, prestige, or influence in Government from having a business relation with Government. Prevention of the possible commission of graft and corruption may be overruled by the constraints that will result from the disqualification of competent private firms from providing quality products and services to the Government. Such a situation will encourage incompetence and inefficiencies in the business relations and transactions entered into by Government.
   
3. Reduces the potential of executives of private firms joining the government because their employers will not encourage, much less, support any intention to move to government service, to the detriment of the employer.
   
4. Casts aspersions on the character of former officials or employees of private firms who occupy positions of power or influence in Government as individuals who, while in office and even after two years after their office tenure in Government terminates, are inclined to engage in anomalous practices and provide undue favor or advantage to their former employers. This will surely discourage private sector individuals from joining Government service even as one-peso-a-year consultants.
   
5. Draws a wide demarcation line between the private and government sectors. The bill is divisive and does not support the call for cooperation and unity among all sectors of society. It discourages and diminishes private sector participation in the overall national development efforts.

We firmly believe that Senate Bill No. 1602 is not in line with our goal to attain speedy economic development. While it seeks to eliminate a possible source of graft and corruption, it encourages incompetence and inefficiencies to prevail in Government.

Republic Act No. 6713 which refers to the Code of Conduct and Ethical Standards for Public Officials and Employees is in place. Graft and corruption can be eliminated if strict adherence to the rules and regulations embodied in the said Republic Act will be enforced.

Moreover, the government’s program to reprivatize acquired assets and pursue a truly effective privatization thrust should also reduce the opportunity for graft and corruption to be committed by both government employees and their private sector proponents.

We hope these beliefs and sentiments will be given proper consideration and appropriate action.