The price of peace, rice, and taxes: Highlights of SONA 2018

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  • House ousts Alvarez, elevates GMA as House Speaker
  • Duterte: Drug war will be 'as relentless as the day it began'
  • Bangsamoro Law passed within two days
  • Duterte calls on Congress to end endo
  • Duterte urges Congress: Pass all five packages of tax reform
  • Duterte vows to crack down on mining
  • Duterte maintains gov't 'won't waiver' maritime rights, does not elaborate
  • Duterte endorses rice tariff, coco farmers trust fund
  • Duterte wants department for disaster management

Metro Manila (CNN Philippines, July 23) — A sudden change in House leadership, a renewed defense of the drug war, and a number of economic legislation were among the highlights of President Rodrigo Duterte's third State of the Nation Address (SONA) on Monday.

Duterte, who is known for straying from prepared speeches, kept mostly to his script.

He delivered a 48-minute address at the Batasang Pambansa in Quezon City after a one-hour and 15-minute delay.

Earlier that afternoon, majority of the House of Representatives signed a manifesto of support for Pampanga Representative Gloria Macapagal-Arroyo as House Speaker, effectively ousting Davao del Norte Rep. Pantaleon Alvarez from the post. Alvarez still welcomed the President along with Senate President Tito Sotto, and opened the session on the part of the House to hear the SONA.

Here are the highlights of this year's SONA.

Confusion as GMA 'installed' as House Speaker

During his speech, Duterte did not remark on the sudden change in House leadership. Malacañang said Alvarez was still House Speaker as far as it was concerned.

Confusion happened as Arroyo took her oath as new House Speaker while the House was not in session. Alvarez, who was welcoming the President, was not present when he was — according to supporters of Macapagal-Arroyo — effectively unseated.

A handful of opposition lawmakers abstained from the vote.


Presidential spokesperson Harry Roque earlier said the President would not take sides in the supposed leadership row. Three representatives first tipped CNN Philippines about the ouster move, which they said was led by Davao Mayor and Presidential daughter Sara Duterte.

Former Senator Orly Mercado questioned the "unceremonious" timing of the ouster, saying it "grabbed headlines" from the SONA.

Drug war 'far from over'

Duterte kicked off his speech with his primary platform: the war on drugs.

"Let me begin by putting it bluntly: the war against illegal drugs is far from over," Duterte said. He added his campaign "will not be sidelined" and it will be "as relentless and chilling... as on the day it began."

He also said criticism against his administration for the bloody policy is "misdirected."

"Your concern is human rights, mine is human lives," Duterte said to a round of applause. "You worry about the present; I am concerned [about] both the present and the future... If not stopped, crimes can make human cesspools of succeeding generations. I will not allow it to happen. Not during my term."

A Pulse Asia survey shows Filipinos still believe the anti-illegal drug campaign is Duterte's biggest achievement, although the bloody drug war has been condemned across the world. According to government data, over 4,000 persons have died in police operations. However, human rights watchdogs have pegged about 13,000 deaths — including those from vigilante-style killings.

Bangsamoro Organic Law 'within next 48 hours'

Duterte promised to sign the Bangsamoro Organic Law (BOL) within the next two days. The law is expected to enable a Bangsamoro autonomous region, which will replace the current Autonomous Region in Muslim Mindanao.

"The law has been passed actually," said Duterte. "Give me 48 hours to sign it and ratify the law."

The President also announced an increased budget for Mindanao.

Malacañang said Duterte's speech was modified after the delay in the BOL, which was expected to be signed. The Palace hopes it can be passed as law this week.

The Senate ratified the BOL on Monday, but the House failed to do the same amid the powerplay for House leadership.

Duterte did not discuss peace negotiations with the Reds, with whom he has had a strained relationship amid on-off talks.

'No friends' in fight vs. corruption

Duterte said he was willing to let go of certain friendships if it meant sticking to his stance against corruption.

"I value friendship. Make no mistake about it. But it has its limit. This is a lonely place I am in," he said. "Do not make it lonelier by forcing me to end our friendship because you gave me a reason to end it."

The President has let go of some officials, while others — such as former Dangerous Drugs Board Chairman Dionisio Santiago and Labor Undersecretary Dominador Say — left their posts ahead of getting the boot. Former Tourism Secretary Wanda Teo also resigned amid reports she was about to be fired, following a P65-million advertisement scandal with government channel PTV-4.

However, critics have also pointed out that other officials accused of corruption — such as Arroyo, Agriculture Undersecretary Pompee La Viña, and former Customs Commissioner-turned Civil Defense administrator Nicanor Faeldon — remain close to the President.

RELATED: Is Duterte 'recycling' fired officials? Only 3 out of 20, says Roque

Duterte trusts Pinoys will support federal shift

The President believed Filipinos would back the shift to a federal form of government, seemingly unfazed by recent surveys that said otherwise.

"I am confident that the Filipino people will stand behind us as we introduce this new fundamental law that will not only strengthen democratic institutions but will also create an environment where every Filipino... will have an equal opportunity to grow and create a future," Duterte said.

READ: Duterte confident Filipinos will support shift to federal gov't  

The shift to federalism has been a campaign promise of Duterte, although how soon it will be passed has yet to be determined. A draft federal constitution prepared by a Consultative Committee formed by the President has been transmitted to Congress.

The House of Representatives was bent on passing charter change, but the Senate has maintained it will not rush it. Surveys from both Pulse Asia and SWS show Filipinos are against or unaware of charter change.

Duterte to Congress: End endo

Duterte brought up an executive order signed on Labor Day this year, which labor groups view to be toothless — and he said he "shared their sentiment."

READ: Duterte urges Congress to pass law ending contractualization

"Much as I would like to do the impossible, that power is not vested upon me by the Constitution," said Duterte. "That is why I add mine to the voices in asking Congress to end contractualization once and for all."

He reported that as of July, more than 300,000 workers were regularized under his term.

Duterte has promised to address illegal contractualization, but his government maintains that the law still allows for certain forms of contractualization. The Labor Department listed the top 20 companies engaged in such activities.

Price of rice a priority

Amid a rice shortage this year, Duterte certified as urgent a rice tariff.

"We need to switch from the current quota system in importing rice to a tariff system where rice can be imported more freely," he said. "This will give us additional resources for our farmers, reduce the price of rice by up to ₱7 per kilo, and lower inflation significantly."

READ: Duterte cites as urgent laws on coco levy and rice imports

Duterte also issued a warning to rice cartels, saying that intelligence and law enforcement agencies were on their tracks.

"I now ask all the rice hoarders, cartels and their protectors, you know that I know who you are: stop messing with the people," he said. "Consider yourselves warned; mend your ways now or the full force of the State shall be brought to bear upon you."

He added that the administration fast-tracked the distribution of affordable rice from the National Food Authority (NFA).


President stands by tax reform

The President stood by his tax reform package, which has lowered income taxes but raised taxes on fuel and sugar. He said the government could not respond to calls to suspend the program, as it was needed for "sustainable growth" in light of his infrastructure program.

READ: Duterte: We should not stop the TRAIN

"We have distributed unconditional cash transfer to 4 million people and will help 6 million more this year. Following the ₱1 discount per liter in gas stations we have started releasing fuel vouchers to public utility jeeps and other valid franchises," said Duterte.

He also reported ₱149 billion worth of subsidies this year, and ₱169 billion next year.

Duterte asked that Congress pass Package 2 of the tax reform plan before the year ends. He said it would concentrate on strengthening micro, small and medium enterprises.

He added that all five packages would be with the legislative this month, and he urged Congress to pass them in succession.

"Apart from TRAIN, rice tariffication, and Package 2, they include the mining, alcohol, and tobacco tax increase, reform in property valuation, reform in capital income and financial taxes, and an amnesty program," he said.

Gov't 'won't waver' in maritime row with China

The President thanked China for shared intelligence when busting a shabu laboratory with Chinese nationals. However, he said this renewed friendship would not keep the country from backing down on its claim in contested territory, where China maintains a military presence.

"Our improved relationship with China does not mean we will waver in our commitment to defend our interest in the West Philippine Sea," said Duterte.

He did not delve further on the subject, but emphasized the importance of bilateral and multilateral talks.

Chinese Ambassador to the Philippines Zhao Jianhua was present at the address. He later described the remarks as "fairly objective."


Critics such as former Solicitor General Florin Hilbay, who represented the Philippines at the arbitral tribunal, believe the Philippines should ditch bilateral negotiations and enter the table with other countries so China would not size it up.

Duterte has developed warm ties with China, refusing to bring up the Philippines' win at the international arbitral tribunal. However, most Filipinos believe the government should take a firmer stance against the eastern giant. The administration has booked billions in investments and loans from China, which critics worry will lead to a debt trap and the eventual forfeiture of rights in disputed waters.

Warning versus mining

Echoing sentiments from last year's SONA, Duterte once against warned miners against environmental degradation.

"To the mining industry, I say this once again, and maybe for the last time: Do not destroy the environment or compromise our resources. Repair what you have mismanaged," said Duterte.

READ: Duterte to impose 'restrictive' rules vs. mining companies harming the environment

The President said that restrictive policies were on the way, and the ban on open-pit mining was just one. He also told miners and their patrons to "stop destroying our watersheds."

"Expect reforms, radical ones. I do not intend to quarrel with anybody… but for as long as I am here, you just have to contend with me," he added.

Duterte told miners he would "tax [them] to death" in his address last year. That May, the rejection of then-Environment Secretary Gina Lopez by the Commission on Appointments was viewed as a loss by environmentalists. Lopez vocally criticized miners and supported an open-pit mining ban.

Earlier this month, Duterte expressed belief that there was a conspiracy in her ouster.


Priority legislation

Apart from the rice tariff and the end of contractualization, Duterte urged the passage of other laws, particularly the National Land Use Act, which according to Duterte, would "address our competing land requirements for food, housing business, and environmental conservation." He briefly mentioned the proposal in his address last year.

READ: President Duterte calls for urgent passage of National Land Use Act

He also called for a law that would allow coconut farmers access to a trust fund that they have been fighting for since the Marcos regime.

"I urge you, Congress, to convene the bilateral conference committee and pass at the soonest possible time the bill establishing the coconut farmers' trust fund," he said. "I pray you will do it."

The House approved the measure last year, while the Senate passed its own version in March this year.

The President also called for the passage of Universal HealthCare Bill.

"We shall pool all our resources for health services under the [PhilHealth]; institutionalize primary care as a prerequisite to access higher level of healthcare; and supplement human resource gaps of the LGUs through a National Health Workforce Support System," he added.

Duterte also reiterated support for the entry of a third telco and a new Cabinet department for disaster management.

CNN Philippines correspondents Ina Andolong, Joyce Ilas, and senior digital producer Eimor Santos contributed to this report.