The President is closely monitoring the issue and she is satisfied that through the intercession of our charge d’ affaires, Eric Endaya, the situation has been temporarily resolved. The rights and welfare of the workers are our utmost concern.

There is absolutely no doubt in our minds that the VAT (Value-Added Tax) measure is legal and constitutional.

It underwent rigorous and tight scrutiny in the House and in the Senate.

The wage boards had to strike the balance among providing benefits to workers, stabilizing prices, preserving jobs and keeping small businesses above water.

The government acknowledges the plight of workers and consumers during these tough times.

But more jobs and benefits are expected as the economy revs up.

We have the following factors on our side—falling oil prices, positive international outlook on the Philippines, declining interest rates and anticipated fiscal stability.

All of these will translate into more investments, more business, more jobs, and increased social services.

The country’s provincial governors vowed Friday their full support for President Gloria Macapagal-Arroyo’s 10-point legacy agenda, particularly the development of at least two million hectares of agribusiness lands and the creation of six-10 million jobs during her six-year term of office.

The governors’ pledge of support was contained in a covenant which they presented to the President during the National Agribusiness Summit and Special General Assembly held at the Grand Ballroom of the Century Park Hotel Manila Friday night.

Among those who signed the covenant were Bohol Governor Erico Aumentado, national president of the League of Provinces of the Philippines (LPP), the association of provincial governors; Agriculture Secretary Arthur Yap, Regional Agriculture and Fishery Council (RAFC) Association of the Philippines chairman Joseph Wood, Jr. for the Local Agricultural and Fishery Council (LAFC); and National Agriculture and Fishery Council (NAFC) Food Crops Committee chairman Vicente Lim Jr., representing the National Sectoral Committees.

Others who joined the President as witnesses were Department of Interior and Local Government (DILG) Secretary Angelo Reyes, National Economic and Development Authority (NEDA) chief Romulo Neri and some LPP officials.

The covenant of support states that:

* The participants will adopt the best practices of existing agribusiness models that are appropriate for their local situation, consistent with the development strategies of the Medium-Term Philippine Development Plan 2005 – 2010.

* The governors commit themselves to implement specific projects and activities that shall include: (a) validation of identified sites, (b) capability building of farmer and fisherfolk cooperators, (c) crop-livestock-fishery diversification and intensification projects in underutilized lands and inland bodies of water, (d) development of idle and marginal public and private lands, (e) provision of farm inputs, (f) promotion of farm mechanization, (g) construction and rehabilitation of farm-to-market roads, and (h) the establishment of off-farm and non-farm enterprises.

* The governors commit themselves to include in their annual local development and investment plans the specific budgetary appropriations to support the development of new lands for agribusiness, and mobilize our respective extension personnel, including those in the municipal government units, to help in project implementation;

* The private sector, composed of food processors, marketers, agricultural machinery and input suppliers, among others, commit themselves to undertake contract-growing schemes and forward contracting agreements with farmer and fisherfolk cooperators and to develop idle and underutilized public and private lands through lease or joint venture arrangements;

* The private sector shall utilize the National Sectoral Committees and the local Agricultural and Fishery Councils under the National Agriculture and Fishery Council as a forum to discuss issues and concerns of the private sector and other stakeholders; and

* The Department of Agriculture commits itself to facilitate market linkages and credit support, promote stakeholders’ participation, train the LGU extension personnel and provide technical assistance and funding support through counterpart schemes with the provincial governments for farm production inputs and machineries, establishment of nurseries and model farms, smallscale irrigation projects, farm to market roads and postharvest facilities, among others.

In a statement, Agriculture Secretary Yap said that the agribusiness summit identified effective agribusiness models that will help achieve two of the President’s 10-point development agenda focused on the development of at least two million hectares of agribusiness lands and the creation of six-10 million jobs from 2005 to 2010.

The summit also succeeded in formulating action plans and strategies aimed at boosting the country’s rural economy and improving the lives of more than 40 million Filipino farmers and their families.

Yap also said that the summit also sought to develop a common understanding among the more than 250 delegates, including 79 provincial governors, private sector investors and financing institutions on the DA’s program and strategies that will contribute to the attainment of the President’s development agenda.

"It is imperative for the DA to mobilize multi-stakeholders participation or collaboration, particularly with the private sector, local government units and financing institutions to augment its resources and attain the twin goals of agribusiness development," Yap said.

Members of the influential league of provincial governors of the Philippines have rallied behind President Gloria Macapagal-Arroyo in her campaign against jueteng and all forms of illegal gambling, even as they condemned attempts to destabilize the government.

In two separate resolutions adopted Friday night, the League of Provinces of the Philippines (LPP), the association of the country’s provincial governors, pledged unstinting support to the government’s crackdown on all forms of illegal gambling.

The governors also sent a strong message that they reject "all forms of destabilization attempts against our democracy, our democratic institutions and our political and economic stability" and reiterated their "unequivocal support to the administration of Her Excellency Gloria Macapagal-Arroyo."

Both resolutions were unanimously adopted in the LPP plenary session, which coincided with the National Agribusiness Summit and Special General Assembly held at the Century Park Hotel Manila.

Ilocos Sur Governor Luis Singson sponsored LPP Resolution No. 012 expressing the governors’ support for the government’s nationwide crackdown on jueteng and other illegal gambling activities.

"The involvement of local governments is crucial and necessary to successfully put an end to this illegal numbers game and other illegal gambling activities. Therefore be it resolved as it is hereby resolved that the League of Provinces of the Philippines support the campaign of Her Excellency Gloria Macapagal-Arroyo to stop jueteng and other illegal gambling activities," Singson said in sponsoring the resolution.

The governors are fully behind the President’s efforts to put an end to all forms of gambling, which are destroying the moral fiber of the society, he added.

Bohol Governor Erico Aumentado, LPP president, declared the adoption of the anti-jueteng resolution after it was unanimously approved by the body.

He said copies of the resolution would be forwarded to the Office of the President (OP), the Senate President, the House Speaker, the Department of Interior and Local Government (DILG) for their guidance.

Earlier, Negros Oriental Governor George Arnaiz sponsored the LPP resolution expressing support to the Arroyo administration against disgruntled elements out to destabilize the government.

Arnaiz said the governors would stand side by side with the President in protecting democracy and the Constitution.

He pointed out that destabilization attempts seriously undermine the political, social and economic stability of the country to the great prejudice of every Filipino. All attempts to overthrow the Arroyo administration deal a serious blow on the country’s economy, he added.

Malacaņang today expressed confidence that the newly-signed Expanded Value-Added Tax (VAT) Law will pass legal and constitutional scrutiny.

"There is absolutely no doubt in our mind that the VAT measure is legal and constitutional," Press Secretary and Presidential Spokesman Ignacio R. Bunye said in a statement in reaction to the claim by the Abakada Guro Party-list group that the EVAT Law is unconstitutional.

The group petitioned the Supreme Court yesterday to declare the new law null and void, arguing that only Congress has the power to set tax rates under the 1987 Constitution.

Bunye emphasized that the measure "underwent rigorous and tight scrutiny in the House (of Representatives) and in the Senate" before it was finally enacted and signed by President Gloria Macapagal-Arroyo into law as Republic Act No. 9337 last May 24.

"Be that as it may, government lawyers are prepared to defend the VAT Law before the High Court," Bunye said.

The new law takes effect on July 1 and carries a provision granting the President a standby authority to raise the current VAT rate of 10 percent to 12 percent under certain conditions by January 2006.

Malacaņang today said that Fitch Ratings’ upgrade of the Philippines’ long-term outlook from negative to stable is a clear indication that the economic reforms being implemented by the government is starting to produce results.

In a radio interview this morning, Press Secretary and Presidential Spokesman Ignacio R. Bunye said that on the heels of the credit rating upgrade, the international investing community has taken cognizance of the positive developments in the country’s economic landscape.

Following its upgrade of the outlook of Philippines’ sovereign borrowings, Fitch also upgraded the credit outlook on Philippine banks, indicating that the banks were no longer in immediate danger of being downgraded in the ratings.

In a press statement released by its Hong Kong office, Fitch said the "outlook revision reflects the recent passage of the significant fiscal policy measures which should help restore the public finance to a sustainable path over the medium term."

According to Brian Coulton, senior director of Fitch Ratings’ Sovereign Teams in Asia, the "policy response that has taken shape is really quite something in the Philippines’ historical context and should make the turning point in the country’s fiscal profile."

The crediti ratings upgrade came only a few days after the Congress bicameral conference committee endorsed the approval of the expanded Value Added Tax (VAT) bill which was signed into law by President Gloria Macapagal-Arroyo last May 24.

Bunye explained that the ratings upgrade is important to the Philippines as it serves as a "determinant" of how much the government would pay on its foreign obligations. The more favorable the credit ratings, the less the interest rate charges the borrowing country will bear, he said.