Philippines Without Borders

The Art and Science (or lack of it) of Parenting, haha!

2009-06-03T17:44:00.000-07:00

It was Children’s Day at the Bank about two weeks ago and we were supposed to bring our kids to work for them to see what we do at the office. I was surprised to realize I no longer have a “kid” to bring. “Kids” is up to 14 and Ovid is already 19, going 20 in September. Besides, he was not eager to see where I work. He is busy.

Maybe it’s a typical attitude among parents to assume that kids stay as our “baby” forever. But each day we feel their efforts to assert themselves, to show us that they have started to live their own lives (except when they need money, haha!). I could sense Ovid doing that: he always has his own schedule, his own views about anything, his own perspective, his own preferences, his own things to do.We share the love for books and reading, for hanging out at bookstores, for discussions and debates, for chatting about everything.

We share the passion for history, especially military history. We spend time. We bond regularly. But in all of these, I could always feel his ways and views about things in the universe are getting away from my orbit, especially on things political. He seems to stand on the Right in contrast to my essentially centrist views. But I couldn’t really complain because he always has something from the mists of history to back his own conclusions. I mean, he knows the Greek and Roman civilization more than I do!

And boy does he hate boxing, mixed martial arts and contact sports—things that I really am crazy about!“But you always wanted me to be an independent person, to be my own man,” he stressed. “You always told me to think critically, to assess things and decide for myself. That’s what I’m doing and you should be happy about that.”

That’s so true. It’s not because I’m a liberal who wish my child to create his own destiny, to reach his potentials in his own way. Well, that too. But the other reason is that I got married so young and clueless how it is to be a parent the “right way.” So I didn’t really know how to “guide” Ovid except to tell him to consult with us all the time so we could figure out together the answers to life’s day-to-day questions. And it seems like the arrangement is working just fine. So far.

I mean, the boy is no rotten teenager. Like most teenagers, he is crazy about computer games, Japanese anime, and social networking. But overall, he is a nice fellow, sweet to his mom, unspoiled, sensitive, responsible, and sensible. No complaints really, except that he doesn’t have a girlfriend yet.“Well, if you have to wrestle with advanced calculus and physics, you may not want to complicate your life much further,” he said.

The boy has a point there, I must concede.

Brian Viloria's killer right from Hell (We have a new world boxing champion)

2009-04-19T00:18:00.000-07:00

Brian Viloria has certainly found the fire back. He knocked Ulysses Solis in the 11th round. Those lunging overhand right after a stiff left jab was the killer. It was there all morning, complemented by a nice left uppercut.

Solis came well prepared, wit his stiff jabs, and a right uppercut counters as Viloria came that found their mark, most often below that belt. Solis also tried to end the brawl with body shots, in an effort to weaken and finish off Viloria especially in the 7th round.

But Brian’s right straight kept on landing on Solis chin, followed by an uppercut as Solis tries to clinch. Solis seems to have abandon defense, sensing he was the more powerful guy. It was only a matter of time before one of them falls.

By the 8th round, Solis was trying to press the action with body shots and right straights, while Viloria simply trying to counter with left cross and right straights, his bread and butter punch. Before the round ended, however, two left jabs hit, Solis mid-section, momentarily stunning him. Solis is weak at the midsection? Still it was a Solis round when he almost decked Brian down with a right to the head as the round came to an end.

By round nine, Brian’s straight right kept on connecting to Solis chin, followed by left cross to the head. Solis practically had no defense against it. One wonders why Solis was still standing. He tried to press the action but it was obvious he was on panic mode. He needed to score a KO before the other guy did. By round 10, Solis accelerated his aggression with most of his punches landing on the shoulders, sides, and gloves of Brian. He probably felt he needed a knock out to win.

By 11th round, Brian kept on throwing his right straights off a left jab and Solis caught them all on his chin. But Solis was the champion, a proud one, and the only thing he knew about winning was by coming forward. He lunged off a feint by Brian hoping to land his Sunday best, only to run smack into a killer right straight from Hell. He slumped like a sack of potatoes, his head hitting the canvas, staying there way beyond the count.

They don’t call Brian Villoria “Hawaiian Punch” for nothing.

We have a new boxing champion.

The books we read (Or why men love bitches)

2009-04-14T05:02:00.000-07:00

A friend one time asked me for book titled “Why men love bitches.” I was shocked to learn the title was not available in all the bookstores I called.

“It’s selling like hotcakes,” a Powerbooks staff told me.

“You mean all the girls these days want to be bitches?”

It’s probably a zeitgeist, the spirit of the age. About a decade or two ago, girls in my circles were crazy about the works of Antonio Gramsci, Franz Fanon, Karl Marx and other “socially relevant” writers. They wanted to reengineer society. Now, many simply want to be “bitches,” to be winners in life, be it in the realm of relationships, business, or career.

Times have changed. Apparently, Francis Fukuyama didn’t call the collapse of Berlin Wall “the end of history” for nothing.

But come to think of it, zeitgeist actually shapes our reading habits—or at least, my reading habits. Not the other way around.

Recently, I found myself reading books about snipers (War of the Rats; One Shot, One Kill, Sniper One, Point of Impact). I seemed to have lost interest in political economy, international trade, or globalization. Maybe it’s because all these books are proving to be inadequate to explain the global financial and economic mess were are in. Remember Alan Greenspan’s “The Age of Turbulence”? Or Thomas Friedman’s “The World Is Flat?” I use to read these types of books. Since September 2008, however, they all started to look like the works of charlatans.

Why books on snipers? It’s probably an escapist thing, a passing fancy.

In these times of uncertainty, however, books on snipers are getting to be interesting. In the world of a sniper, a problem is analyzed through a 12-power scope and solved with a well-placed shot. The world is simple: you are either on the right side the barrel, or the wrong side.

I still keep Plato’s the Republic at my bedside, though.

At the coffee shop

2009-03-19T17:50:00.000-07:00

Just another crazy poem, hehe... Sometimes you can't help but see scenes like this.

Her lush ebony strands of hair,
Stream down like lingering lust
Over a tight frame caressed by summer.
Her piercing eyes burn like ember,
Her rippling flesh struggles
Against tank tops and barbarians’ trousers—
White silken, flowing garments,
As thin as heathens' prayers.
She’s a bewitching happy face;
Like a mermaid’s midnight song.
An angel from the heavens,
In a sinner's thong.

The Lilith

2009-02-26T23:55:00.000-08:00

We all write crazy poems and I do wrote mine. In fact, I do it all the time just for the heck of it. Creative expression? Angst? Whatever. You may read it if you have time to waste. Ha ha!

The lilith crept up my nightmares
Through a narrow bridge unlit.
She came in drifting
Like a ghost from Innana's lair,
A beguiling striptease in the wind
Sweeping across the rugged hills,
An earthly lover in the wraith-like realm.

But like the morning mist,
She slips through my claws
As the roosters break the dawn.
With a temptress' smile she fades away
From the last strands of darkness
To escape the warmth of day.

Because she is a lilith
From the twilight of history,
A tormentor of ruthless hunters,
Who comes dressed as Ishtar's daugther,
She slips stealthily into the night
To posses men's hopes and dreams,
Across a heartless bridge unlit.

Penalosa versus Lopez, Margarito versus Mosley: new entries in my boxing blog

2009-01-19T00:23:00.000-08:00

Could Gerry Peñalosa beat Juan Manuel Lopez? Will the Shane Mosley suffer the fate of Miguel Cotto in Sunday’s boxing with Antonio Margarito? You may read my thoughts on boxing in my new blog entitled “Sweet Science.”

The Next Manny Pacquiao

2009-01-13T18:50:00.000-08:00

Is Bernabe Conception the next Pacquiao? You may read my take in my other blog called Sweet Science.

The global financial crisis and its impact up close and personal

2009-01-08T02:33:00.000-08:00

I sure did expect that the global financial crisis would somehow touch people’s lives in very personal ways. But International Herald Tribune's story (January 1, 2009) on how the crisis in the US is turning divorce on its head shocked me.

In normal times, divorcing couples sell their house and divide what is left after paying the mortgage. Or a partner buys out the other to maintain possession of the house. Then each one moves on with his or her life. But with the collapse of the house prices, many couples find that the values of their homes are less than what they owe the banks. There is no money to divide if they have to sell the house. There is no money to start afresh.

Result? Some estranged couples, many of them undergoing divorce proceedings, have to continue staying in the same roof. There are cases, the story says, where the husband has to occupy the first floor and the wife the second, with each of them bringing in a new lover, thus adding a new layer of complexity in their relationships.

A tragic dimension to this global financial storm, shall I say.

But let me digress. That story also reminds us what really drives social policy on marriage and divorce. Somehow, economics plays a great part in estranged couples’ decision whether or not to part ways. When a country has reach a point where its economy provides enough economic options for each, or specifically for the women, there would be greater clamor for divorce’s legalization.

In the Philippines, women’s groups have been crying for the legalization of divorce but to no avail. There is simply no political market for such a policy—at least not yet. A suffering partner, most likely the woman, would simply grin and bear a lousy marriage knowing that her life would be economically worse if she leaves the conjugal house. But wait until the country’s per capita GDP has reached a certain level (and let me hazard a guess: 5000 US dollars), and there would be massive clamor for divorce. That seems to be a long way to go, however.

This blog is officially closed.

2008-07-27T20:31:00.000-07:00

Friends: This blog is officially closed.

For now.

I'm on vacation.

Pilipino versus English: A continuing debate

2008-06-27T02:46:00.000-07:00

The debate on the use of English and Pilipino as medium of instruction is a hot topic among the middle class in the Philippines. Lately, I found myself engaging in a nice discussions with learned persons online. Excerpts (unedited):

GERONIMO SY (Lawyer and columnist. Manila Times): It is equally true that speaking English cannot be the end all and be all of our education system, that not to churn out good English speakers condemns the entire learning apparatus to hell and hence the fate of our nation. If it were so, then how do we explain the ascendancy of Japan, the rise of China, the emergence of Korea and the fast coming Vietnam—all with kindergarten English?

Studies now point to the use of the vernacular as a medium of instruction in the early years to facilitate teaching and learning. Media has long embraced Filipino as our lingua franca that sends the message home. It is acceptable and downright fashionable to speak deep and high Tagalog in political circles. It is time we take English what it is - a tool to communicate. Stop the circular arguments on which language comes first.

TESSY ANG-SEE (famous civic leader): Master our own first languages first and we can master the second language better!! In our case, we mastered Tagalog first, then learned Hokkien (our local dialect, lingua franca of the Tsinoys here), then learned English and then learned Mandarin!! We are able to master the first three, mandarin is something else because there was no speech community to support it and it is more alien to us, being a language of the north while Hokkien and Tagalog belong to the austronesian linguistics group.... [i managed to pick up mandarin much later in life while doing research]

DAVE LLORITO (journalist, researcher): Would anybody hire a graduate for her/his "mastery" of Tagalog? (I dont call it "Filipino" because its really is Tagalog.) as English-Tagalog translator maybe, or a Tabloid reporter, but not much else. Should we master Tagalog so that in the real world, in the world of jobs, entrepreneurship and business we are going to use English as the medium of communication? But that's my dilemma. But maybe there is no conflict here. but how do we translate that to policy? Maybe we should learn the basic dialects/language from the first and third grade then shift to English later until college. so we will have Visayans or Tagalogs, or Ilocanos using their languages first in early elementary before they eventually shift to English as medium of instruction. Sounds good to me. But Tagalog should never be imposed. But hey, isn’t English also part of our Filipino heritage as a nation? I'm just sharing my random thoughts here, actually.

ADDIE SUZARA (Finance expert, technopreneur and computer geek): I was born in a large family where Tagalog, Bicolano, English and some Spanish were spoken. I then went to schools where English was the medium of instruction but where Pilipino was taught as a subject and I learned grammar and read literature. I also took up formal Spanish in college.
I can now speak and write English well, speak Tagalog well but write with a little difficulty only due to lack of practice, speak Bicolano with a little difficulty because of lack of practice, haven't tried writing in Bicolano, and can't do much oral and written Spanish. I think it worked out OK for me.

DAVE: Addie, You are a very good case study. The fact is you enrolled in schools using English as medium of instruction and where Pilipino is taught as a subject and it worked well for you. Pilipino only as one of the subjects, and not as medium of instruction! I like that. And I guess no one could question Addie's nationalism, identity and patriotism.

ADDIE: Thank you Dave but let me hasten to add that, until I went to Kindergarten at age 6, Tagalog with a Bicolano flavor was my primary spoken language.

TESSIE: [We are] missing the point entirely when we insist that to find jobs we should know English. We miss to consider the fundamental role of language in establishing identity and ethnicity…

DAVE: I was raising a practical, real world perspective. The job market, the world of entrepreneurship and business, are using English and in that world mastery of this language, plus skills in the math and science are what really matters. I know because I have lots of friends who are nationalistic but who actually enroll their kids in exclusive schools that are teaching purely English. Most of those who actually argue for Tagalog, ehe Filipino, are doing their finest points in English. And they use English extensively at home.

TESSIE: For people from educated families, lower middle class and above, there's no problem using English as a medium of instruction. These are people who have access to other media, books, newspapers, adult conversation etc. Being a nationalist Filipino or not has nothing to do with it. No one becomes less Filipino just because he learns English or another dialect first and not Filipino as a first language.

However we are speaking of 60 percent of our population who live below the poverty line who should have a good grasp of a national language before a second language is forced on them. If you go to Malaysia and Indonesia, what welcomes you at the airport are all Malay greetings and Malay music ..It is a language that binds the nation. Contrast that with what greets us and our kababayan at our airport!

ADDIE: While I do come from the 40% of the population who live above the poverty line, I would not say that those from the 60% did not have all the opportunities available to me in terms of learning other languages.Let us not forget that most of us grew up in at least a two language environment - the local dialect and Tagalog. I spoke Tagalog and Bicolano because my mother was from Taagalog soeaking Labo while my father came from Bicolano speaking Daet. Both these towns are in Camarines Norte. I agree with Dave that the gut issue is when to use English as a medium of instruction. I say "a" instead of "the" because I think we can have more than one medium of instruction. I think our kids wherever they may be can easily absorb a third language. The areas of improvement are in the school system.

DAVE: Again, the question here is translating this to policy. If you are in the Visayas, you certainly will feel that Tagalog or Pilipino is being "forced" on you. If "promotion" of the national language is the Tagalogization of the entire country, that will surely fail and it has failed since Marcos.

The promotion of the local Bahasa language was done under authoritarian regime. It was imposed on them. Example: During the days of Suharto, the Chinese were barred from learning the Chinese language/dialects; they were not allowed to open up Chinese schools in the name of national unity. It's only after the fall of Suharto that the Chinese started putting up Chinese schools. This is what my Indonesian friend told me. Well, it seemed to have worked well for them, given their historical circumstances.

Marcos actually tried the same approach through the imposition of Tagalog, and we called it Filipino, and that policy failed. Maybe Marcos was not ruthless enough? Not really. I think one reason is that English is also part of our national heritage. And it's no brainer why we cling to that language despite the Marcos policy: it has become a ticket out of poverty for many Filipinos. It has become a ticket for many to escape through the claws of the monopolists and the vampire elite of this country. That 15 billion dollars that buttress the economy, that prevents the economy from total disintegration, that has become a safety valve against a Marxist socialist revolution, is the offshoot of our capability to speak and use the English language.

A case for political fact checking in the Philippines

2008-06-17T21:34:00.000-07:00

I was wondering how social media or the new media could help improve the debates in the 2010 Philippine presidential elections until I came across Factcheck.org. This site, being run by a non-partisan and non-profit group from the Annenberg Public Policy Center of the University of Pennsylvania, monitors the factual accuracy of the statements, ads, speeches, interviews, and news releases by major US political players. The g goal is “to apply the best practices of both journalism and scholarship, and to increase public knowledge and understanding.”

It's motto: "Holding politicians accountable."

Recent example: “Obama says his health care plan will garner large savings – $120 billion a year, or $2,500 per family – with more than half coming from the use of electronic health records. And he says he’ll make that happen in his first term.” The group says that statement is “overly optimistic, misleading and, to some extent, contradicted by one of his own advisers. And it masks the true cost of his plan to cover millions of Americans who now have no health insurance.” Then the group proceeds to explain and analyze why Obama is wrong.

There’s also a lot fact checking stuff on John McCain, and Hillary Clinton policy pronouncements.

We need something like this for the 2010 presidential election. In fact, we need it to enhance and advance democracy in this country. Who should do this? Suggestion: why not our universities like UP, Ateneo, LaSalle, UST and others form a consortium for this? They should gather a pool of experts, researchers and a secretariat for this effort as soon as possible. Local and multilateral institutions who care about “governance” may contribute money to finance its operations.

This way politicians and decision-makers would be forced to study and think through the issues before they could even think about opening their mouths.

What do you think?

Obama is a free-market guy after all!

2008-06-16T22:06:00.000-07:00

US presidential candidate Barack Obama after all “loves the market,” contrary to his earlier posturing as a protectionist. On CNBC, courtesy of Paul Krugman’s blog “Conscience of a Liberal,” he said: “Look. I am a pro-growth, free-market guy. I love the market” to the dismay of globalization hater Naomi Klein who castigated Obama for appointing in his policy team Chicago School economists who are supposed to be disciples of free market guru Milton Friedman.

Says Klein: “Obama's love of markets and his desire for "change" are not inherently incompatible. "The market has gotten out of balance," he says, and it most certainly has. Many trace this profound imbalance back to the ideas of Milton Friedman, who launched a counterrevolution against the New Deal from his perch at the University of Chicago economics department. And here there are more problems, because Obama—who taught law at the University of Chicago for a decade—is thoroughly embedded in the mind-set known as the Chicago School.”

Politics and politicians—they are the same all over the world. I wonder if his sentiment extends to international trade, say the Doha Round of trade talks where American leadership is sorely needed. But who knows, he might just change his tune again once he feels it’s necessary to do so just to get the votes? It’s really all about political marketing, if ever there is such a thing. And by the way, if John McCain loves the market and Obama loves the market, will anybody tell me who is who?

The old narrative about OFWs is passé

2008-06-12T21:16:00.000-07:00

We usually think of OFWs as “modern day heroes” and it’s so easy to see why. The dollar they send back home is the linchpin that’s preventing the Philippine economy from disintegrating. They work so hard in foreign lands, suffer loneliness and isolation, and some got abused by their employers—all in the name of the dollar or euro that they desperately need to feed their families, send their kids to school, build dream homes and ultimately prop up the economy. But blogger and writer Jessica Zafra has an interesting counterintuitive take on this in her review of Chito Rono's film "Caregiver":

“Hey, we’re not exactly sitting by the pool sipping banana daiquiris either. Most of us work, all of us have problems. It is also possible to experience alienation and isolation in your homeland. How about a little respect for the Pinoys who stick around and do the best they can in truly trying circumstances? No one has a monopoly on suffering, but everyone has a unique story. We need fresh insights on the Pinoy experience at home and abroad, ...”

Oo nga naman.

What social observers often miss is the fact that the narrative about OFWs may have changed. We often refer to OFWs as economic refugees driven to foreign shores by want and desperation. These days, however, a significant proportion of OFWs are high paying professionals (medical professionals, engineers, software engineers, artists, skilled workers, among others) who are attracted by a host of factors other than economic. It’s the brave new world of globalization and our professionals, the crème de le crème of society who may actually have lots of opportunities here, are exercising their options to enrich their lives by experiencing how it is to live in foreign cultures and climes. It’s a decision no different from those Americans, Koreans, and Europeans who settled here in the Philippines for the love of the warm weather and the beautiful beaches.

With the advent of technologies like Internet chat, global roaming, SMS, video conferencing, voice-over-internet calls, it’s possible that the imagined negative social impact of labor migration on family cohesiveness may not actually be that alarming. Maybe, maybe not. But what I'm trying to say is that the old story line by now should be passé and we need to appreciate that.

The secret sauce for progress: lessons from 13 economies

2008-06-11T18:16:00.000-07:00

If you want to lick poverty, it’s necessary to achieve high economic growth. That’s commonsensical, right?. But how do you achieve high economic growth and sustain it? Experts say there is no silver bullet. But in a latest study by the World Bank on 13 fast growing economies, experts say they were able to identify the ingredients of a secret sauce. These fast growing economies fully exploited the world economy; maintained macroeconomic stability; mustered high rates of saving and investment; let markets allocate resources; and had committed, credible and capable governments.

These 13 countries are Botswana, Brazil, Hongkong, Indonesia, Japan, Korea, Malaysia, Malta, Oman, Singapore, Taiwan, and Thailand. These countries posted 7 percent growth rates over 25 years or more after World War 2.

How to sustain high growth? Says the Report: “For growth to be sustained, it must be growth that takes into account that we are living in a more and more globalized world,” says Danuta Hubner, European Commissioner for Regional Policy. “We need growth that is using all the opportunities that are offered by the global economy.”

There you go! Globalization, and making the most out it, is the key.

The Brits to burn their trash!

2008-06-09T04:23:00.000-07:00

We are suffering from the garbage crisis (trash are everywhere) and yet, we don’t seem to know how to deal with it effectively. Why not recycle it by burning the stuff to generate power? I’m not talking about the old clunky incinerators here but gasification. Britain has recently decided it’s the way to go to deal with its own garbage crisis. Says the Time Online Report:

“Gasification mixes waste with small amounts of oxygen, then heats it at a high temperature — around 1,830 degrees Fahrenheit — in an air-tight chamber. The resulting syngas — a cocktail of light gases, including methane and natural gas — is burned, boiling water into steam to run a turbine. Gasification is an established technique, already used with fossil fuels, particularly coal. Applying it to rubbish opens a new and abundant fuel source. "As a waste-disposal method, it seems to make a lot of sense," says Jonathan R. Gibbins, an energy expert at London's Imperial College.”

Why don’t we consider this type of technology here? The most environmentally conscious countries like Norway and Germany have been using this type of technology. Says the Report:

“Energos — which operates five gasification plants in Norway and one in Germany — says that on balance, the plant will shrink the island's carbon footprint. It will emit the about the same amount of greenhouse gases into the atmosphere as does decay from the landfill. "The benefit is, we're producing electricity" from a renewable source, Grimshaw says. Because those 2,000 homes won't be getting power from a fossil fuel plant, Energos estimates that will cut carbon emissions by 2,000 tons.”

Technologies like these are probably expensive. But who says that caring for the environment is cheap?

Boracay, party island

2008-06-05T23:44:00.000-07:00

Even at midnight, the green tea at Lonely Planet Cafe near the Regency Hotel in Boracay looked too green for comfort. A feet away, tourists—mostly girls from as far as Korea, China, US and Europe— in tight minimal summer clothing were grinding their hips against the frenetic urgent beat, their hands raised up high swaying like tree branches being battered by the monsoon winds. Lumen, Kathy (colleagues from the IFC) and me were however not daunted. After all, neither we were there for the tea nor the humanly distraction, but a place to sit, chat, breathe fresher air, and feel the white powdery sands push through our toes. We just had a long walk along the shorelines under the gaze of the distant stars. We needed the break to clear our senses overwhelmed by the long sessions, reports, and endless discussions.

Surveying the scene, I realized how Boracay has become a place of Becoming, where souls regulated by social mores and expectations could be what they want to be while on the Island and return to their “respectable” selves once they get back into their natural abode. “It has become a place to get laid,” says one inebriated soul. “It's more like a place where predators of all types converge—sexual, corporate, or commercial or the combination thereof,” says another intoxicated "social philosopher."

True or not, I don't really know. Nor do I do I care to judge. For me, Boracay is simply a place for people who want to have some fun. It has also become a place for organizations that need to get their staff into the beach for some important team building event. Despite the overcrowding, there are still some nooks an crannies in the Island where one could enjoy a little solitude, a quiet corner to write poems and contemplate the meaning of life and the future of the universe. For the right price, of course.

Yes, Boracay could be a place for every body. Just don't ask me about sustainability, or urban management, or the lack of them.

World Bank: from the outside coming in

2008-05-22T16:13:00.000-07:00

Stan Grant introduced himself in a voice that reminded me of those gritty CNN reporters doing business in time of war. In fact, Stan was a former CNN reporter who recently joined the World Bank to do communications work. He used to cover the Asia-Pacific and most of the political hot spots in the world. I asked him why he left his exciting career for a less adrenalin-driven one at the Bank. It's because, he said, he wants to see and learn from the inside how the Bank works. “How about you?"

Tough question.

I joined the Bank about two weeks ago, the reason why I'm here in Washington DC. I'm on training. Some friends and colleagues who learned about my decision had mixed feelings. Ping G (my editor in chief) and Leah D (managing editor) at Entrepreneur magazine/Summit Media congratulated me. But there are those who gave a disconcerting, even hostile, reaction. It was as if I'd betrayed some unwritten code or sold my soul to the devil. “I always thought of you as a non-conformist who might get bored working for a rigid and formalistic organizations like the WB,” said another.

I answered Stan: “There are so many opportunities for learning new things; that really excites me. I had a glimpse of how the Bank works when I joined a team of researchers who did the social assessment of Mindanao in 2003 to help families displaced by the war recover their lives. Since then, I was wondering how interesting it would be to become part of a global institution that is doing lots of things in areas like poverty alleviation, governance reforms, infrastructure development, the environment, among other things.”

And indeed, there is so much of such learning opportunities here in Washington DC. There would be much more when I'm back in Manila.

Japan and the English language: a view from Washington DC

2008-05-21T05:12:00.000-07:00

“Seeing my country Japan from the distance, from here in Washington DC, I could see it as someone who is aging and tired, less aggressive, insular.” That comment came from my friend Nobu Saito, business journalist par excellence, who is based here in Washington DC. That really surprised me because I always knew Japan as a technology advanced country and a leading producer of electronic gadgets, cars, machines, and high tech.

“That is just my opinion, anyway,” he said.

Nobu picked me up last week from my hotel, Windsor Inn, at 16^th Street Washington DC, so we could have some catching up. Nobu and I became friends during the Jefferson Fellowship where we traveled through the US, China and India together with a dozen other journalists from the Asia-Pacific. This guy has a great sense humor, quick wit, and deep intelligence that could easily reveal through the fog of beer, red wine, and the spirited laughter.

If there's one country to watch, he says, that should be South Korea. It's high tech industries is conquering global markets and the young Koreans are going out into the world, into the United States, Australia, Europe and the Philippines to learn the English language and other things that the globalized world can offer. It's so aggressive, dynamic and innovative, says Nobu. “The Japanese people should do the same, should go out into the world.”

“But the Japanese is still the leading producer of cars, photocopiers and leading edge technologies,” I countered.

“Yeah, but you should take note that companies like Toyota, Canon and other big firms from Japan are no longer “Japanese,” he said. “They are now global companies,” he said, apparently implying that the identity of these firms are no longer linked to the Japanese flag.

I don't understand why companies or corporations should have definite national flag to look up to. It's the brave new world of globalization and the borders have become meaningless. But certainly, Nobu's take on the need to master the English language is something that resonates with me. Despite all the obvious economic and probably social benefits of learning English, there are still in our midsts those who think that going native, or going “Filipino” for “nationalistic” reasons” at the expense of English is the way to go. That probably explains why we can't seem to muster enough political and public will to bring our knowledge and use of the English language up to a higher level.

Well, that's just my opinion anyway—to use Nobu's words.

Thanks for that meeting, Nobu. I really appreciate our exchange of ideas!

The DC as Obama country?

2008-05-18T14:00:00.000-07:00

If it's only Washington DC that determines the fate of America, Barack Obama should be president this coming American presidential elections. I don't know but most people I've met here are all crazy about the audacity of Obama's presidential hope. Obama T-shirts are selling like hotcakes. Or so it seems.

Over brunch, Mara, a DC-based journalist friend asked me how I think an Obama presidency would impact on the Philippines. And how Filipinos perceive him.

"I really think most Filipinos do not really care who sits at the White House," I answered. "Of course, Americans don't care what Filipinos think either. Obama or McCain or Hillary--America will always pursue her own 'national interest' and it would be good it that interest would converge also with our interest, whatever that is. But one thing is certain: Most Filipinos would always be pro-American for historical and many other reasons."

I added: "But in general, many Filipinos seem to like Obama, maybe because he looks cute, talks smoothly, and appears different from the typical American politician. Just like in the Philippines, people who want "change," whatever that means, would always vote for a politician who looks and talks quite differently from the usual, typical politician."

Yeah, we want a duck that doesn't quack like a duck.

Personally, I'm concerned that an Obama presidency would drift towards protectionism. That's would be bad for the trade-oriented Southeast Asia, given his tendency to pander to local protectionist passions. But I could be wrong. His anti-free trade and anti-outsourcing tirades are probably just political marketing, and its something that he cannot enforce anyway given that American businesses are able to maintain global competitiveness because of outsourcing.

But his foreign trade policy statements suggest that an Obama presidency would never be expected to lead the push for a global free trade deal the way Bill Clinton did,or tried, when he was at the White House. That would be bad for developing countries. But then again, neither Hillary nor McCain are probably inclined towards a new and better global trade deal. So let's see.
Anyway...

Hey Mara! Thanks for that really nice chat and brunch. Really love that we were able to catch up. And oh, Busboys and Poets [the restaurant] is really great. I enjoyed being there a lot! See you next year, my friend.

End of domestication?

2008-05-14T05:14:00.000-07:00

So the superstition is not true after all.

No one gave me any travel bag last December so I thought I was in for a life of total domestication in 2008. I really thought so when I won an electric flat iron during the company raffle. Nothing beats a flat iron as a symbol for domesticity, right?

Well, I was probably wrong because I'm now on a journey back to Washington DC to attend the World Bank communicators' forum. (I'm at PAL's Mabuhay Lounge, enjoying the free Wi-fi). I'm excited because it will a great opportunity for learning new things in the field of communications. Also, I'll probably be seeing some relatives and friends: Judith Kliks and David Pitts from the IVP [International Visitors Program, State Department] as well as Mara Lee and Nobuhiro Saito, all DC-based journalists, from the Jefferson Fellowship last Spring 2007.

Of course, I just love DC! I just can't get enough of its historical monuments, museums, huge public buildings, and wide open spaces for the public sphere. In May, the temperature there ranges from 11-21 degrees C, probably just like Baguio City. It's perfect for an occasional visitor like me. I'm not sure though if I would have the chance to go around.

So friends, wish me good luck!

Who's afraid of the "organization of rice exporters"?

2008-05-06T19:35:00.000-07:00

Who’s afraid of Orec or the supposed “organization of rice exporting countries”? Well, importers including the Philippines seem to have been rattled by the news but the fact is that Orec is a dumb idea. We should better laugh it off. Why?

First, those countries on the Mekong like Thailand and Vietnam just cannot store rice forever. Unlike oil, rice deteriorates in just a few months of storage in the warehouse. And the Thais and the Vietnamese could eat only so much rice.

In fact, forming Orec is counterproductive for these rice exporters. When they hoard their own rice, local prices decline, thus hurting their own farmers. If they want to benefit from the current situation, it’s in their best interest to sell rice and not hoard it.

Besides their geographical advantage of having the Mekong River and extensive sources of irrigation water, the main incentive why farmers are producing more rice in these countries is the fact that they are able to sell in the global market place. There’s money in rice exports. Once their governments remove that incentive through export restraint, that incentive would be gone and farmers might just shift to other more profitable crops.

Forming that cartel would be tantamount to shooting themselves in the foot. The only real beneficiaries of Orec are the rats and bugs that will have an ample supply of rotting rice in Vietnamese and Thai warehouses.

Could we still achieve rice self-sufficiency?

2008-05-01T04:06:00.000-07:00

“Now that the price of rice is increasing and our government is having a hard time securing enough imports, I think you should reconsider your position...” That’s one comment I recently got in reaction to my blog on rice self-sufficiency. My answer: my view hasn’t changed.

But first, allow me to highlight the good news. The news says rice prices are about to drop due the onset of the harvest season. This must be a dampener for those who are conjuring a Malthusian scenario lately. These guys just don’t understand the power of price signals!

Now back to the issue.

Could we really achieve “self-sufficiency” in rice? Could we really produce all the rice that we need? Some experts doubt it given geographical constraints and rapid population growth, but I say why not? If we could only have rapid adoption of high-yielding varieties, especially hybrids, we might yet lick the issue or address a critical part of it. About 60 percent of China’s rice fields are planted to hybrids (that’s according to SL Agritech); no wonder they are not losing sleep about the supposed “rice shortage.” Why can’t we do the same especially in irrigated areas?

But how do you promote hybrids or even just high-yielding open pollinated varieties? It’s not through government seeds subsidy that will only be dissipated in corruption. The money is better spent on irrigation and other rural infrastructure. If there’s one disincentive to agricultural productivity, it’s the lack of adequate farm infra.

The way government is subsidizing certified seeds is one sure way of destroying the seed industry that is crucial in agricultural growth. Why? It’s because when government dangles the money, some unscrupulous rice seeds suppliers who simply want a fast buck come in, many of them selling low quality seeds (low germination). The farmers naturally get burned and wouldn’t use certified or hybrids next cropping season. Result: the market for these high-yielding seeds shrinks. This is actually happening these days.

Solution? No subsidy; just allow the private seeds producers to come directly to the farmers and offer their wares. Surely, any seeds producer trying to develop the seed market for his business would make it a point to provide the best seeds so that he would have repeat orders. That way, farmers would also have a choice on what rice seeds and technology to employ. And there’s no place for fly by night seeds producers under this policy environment.

But hey, we are funny! We want to be “self-sufficient” and yet we want our rice so cheap that farmers are not making money. So actually we want them to remain miserable while we urbanites enjoy the cheap rice they are producing. Crazy!

On the food crisis: Poor and hungry cannot afford to wait, World Bank President says

2008-04-29T01:36:00.000-07:00

Friends, please allow me to publish this statement by World Bank president Robert B. Zoellick after a meeting in Berne, Switzerland of the United Nations System Chief Executives Board for Coordination (April 29 2008).

The next few weeks are critical for addressing the food crisis. For 2 billion people, high food prices are now a matter of daily struggle, sacrifice and for too many, even survival. We estimate that already some 100 million people may have been pushed into poverty as a result of high prices over the last 2 years. This is not a natural disaster. Make no mistake, there is nothing natural about this. But for millions of people it is a disaster.

Donors must act now to support the WFP’s call for some $755 million to meet emergency needs. Roughly $475 million has been pledged, but pledges won’t feed hungry mouths. Donors must put their money on the table, and give WFP maximum flexibility – with a minimum of earmarking – to target the most urgent needs.

This crisis isn’t over once emergency needs are addressed, as critical as those are. Though we have seen wheat prices fall over the last few days, rice and corn prices are likely to remain high, and wheat relatively so. The international community needs to commit to working together to respond with policy initiatives, so that this year’s crisis doesn’t become a generation’s fact of life. Already hunger and malnutrition, are the underlying causes of death of over 3.5 million children every year, robbing the future potential of many millions more.

Many donors, governments and international agencies have plans and policies. Over the last days we have seen pledges of financial support. The key now is to work together so that we can have an integrated international response.

So I thank the Secretary General for convening this session of UN Chief Executives to help organize the UN response.

Ministers from over 150 countries have endorsed a New Deal for Global Food Policy. We must turn these words into action.

As we discussed here in Berne, a New Deal must embrace a short, medium and long-term response: support for safety nets such as school feeding, food for work, and conditional cash transfer programs; increased agricultural production; a better understanding of the impact of biofuels and action on the trade front to reduce distorting subsidies, and trade barriers.

The World Bank Group will work with the UN agencies represented here to identify countries most in need so that, with others, we can provide concessional financing and other support. We are already working closely with the IMF and regional development banks, to integrate our work.

At the World Bank Group, we are exploring with our Board the creation of a rapid financing facility for grant support to especially fragile, poor countries and quicker, more flexible financing for others. To address supply issues, we are doubling our lending for agriculture in Africa over the next year to $800 million.

We are urging countries not to use export bans. These controls encourage hoarding, drive up prices and hurt the poorest people around the world who are struggling to feed themselves.
Ukraine set a good example last week by lifting restrictions on exports of grains. This had an immediate effect by lowering prices in the markets. Others can do the same.

As we co-ordinate action, we must bring in the private sector and agri-business.
These are all critical issues for international action that must be fleshed out in the coming weeks so that millions do not find themselves in this same position next year.

But first and foremost donors must act now to meet the emergency and raise the $750 million for the WFP. The world can afford this. The poor and hungry cannot.

Rice supply crisis: another policy swindle?!

2008-04-09T17:12:00.000-07:00

I thought all along the government has lifted the quantitative restrictions for rice, thus allowing the private sector to import the commodity whenever they want and at whatever quantity provided the appropriate tariffs are paid. Now, based on Business Mirror reports, its seems Malacanang is simply telling the private sector to import what is allowed under the minimum access volume (MAV). See http://www.abs-cbnnews.com/storyPage.aspx?storyId=114569. Crazy!

The fact is that the MAVs have been there all along and no one dared importing much lately simply because tariff is high (50%). Who would be encouraged to import rice that are already expensive in the world market and pay 50% on top of it, thus making the landed ones so expensive? If I’m the importer, I’ll wait for local prices to really move up the heavens before I even thought about availing of the MAVs. That’s what is happening now.

So the supposed policy pronouncement about “allowing the private sector to import rice” was a bogus one—a deception. Or probably it was real, only that government, as usual, simply backtracked, nay backslided. My goodness! Now, the private sector is saying they will only import rice at zero tariff, and given the government’s very slow decision making process, we might end up having those imported rice landing our shores when the farmers are already harvesting their palay. Some of them has actually started harvesting now. That will be tragedy.

But that’s the tragedy about maintaining the QR on rice. Unless, we remove it and replace it with tariffs, a low one if necessary, all these problems about supply shortages will always be there no matter how much rice stocks are available out there in the global marketplace. Timing is important and historically, government bureaucrats always act when its too late. Solution: we need to remove the QR, replace it with tariff, and if necessary a low one. And of course, we need to rev up our production capacity.

"Rice crisis": this palay seeds subsidy could be counterproductive!

2008-04-08T05:52:00.000-07:00

Government is set to give a P1,500 subsidy per bag of hybrid rice during the wet season (May-Oct) this year supposedly to boost rice production. Hmmm, sounds good at the surface, but I have this feeling this subsidy might actually stunt the growth of the rice seed industry in the long run, an industry that you need to nurture if we want to have a vibrant rice industry. How?

One effect is corruption. Under the government’s rice subsidy program, farmers only pay about half the price or P1100 per bag per hectare for a hybrid seeds that’s supposedly would cost P2,600 since the government, through the Department of Agriculture, provides the subsidy amounting to P1500 per bag per hectare. So farmers get cheaper seeds, right?

Yes, but it doesn’t follow that the seeds will be there when he needs it. Why?

This is how the whole thing works: the seeds are distributed by the municipal agricultural officers (MAO). They also serve as conduit of the government subsidy amounting to P1500 per bag. Once the farmers give the “farmers equity” or his payment for the seeds that comes from his pocket to the MAO, he gets the seeds, and the seeds producers/suppliers then collects the payment—P1100 from the farmer and P1500 subsidy per bag from the government through the MAO/LGU—totaling P2600 per bag per hectare.

But in reality, many of these MAOs, once they got the cash both from the farmers or the money from government subsidy simply keep the money. That's why I heard anyway from lots of seeds producers all over the country. And sometimes, the subsidy money is not there so the seed producers ended up collecting nothing. Many of the seed producers these days still have collectibles worth millions of pesos from the MAO/LGUs from the last crop. Now, they are being requested to provide the seeds again for a government programs that has not been up to date in payments. Do you think they will deliver the seeds this time? Your guess is as good as mine.

This subsidy program is so complicated that it’s so prone to corruption!

Rice crisis: why are we not mobilizing Ding Panganiban or Dr Emil Javier?

2008-04-07T04:16:00.000-07:00

So by the looks of it, it seems that President Arroyo has finally come to her senses. Based on reports from the Inquirer, the private sector can now import rice, although the government still maintains high tariffs for it. High tariff for rice means we are likely to continue having expensive rice, but that policy move is good enough to remove the discretion of bureaucrats in rice importation. In the past, only the NFA could import rice, giving only small volumes to the private sector to bring in grains through “minimum access” importation. If I’m not mistaken, the new policy changes all that, thus allowing everybody else to bring in rice. Traders would be discouraged to hoard, since any sign of “scarcity” (through hoarding or real scarcity) would immediately trigger others to import from global sources.

Having said that, there’s no substitute for an honest-to-goodness government program for rice increased production. We need to because global stocks are low; the Chinese, the Indians, and the Indonesians have been buying lots of grains in the world market. And why don’t we tap the experts in our midst? Ding Panganiban for instance is the best when it comes to expertise in rice production. So is Dr. Emil Javier, Asia’s foremost agriculturist. Why is the government not mobilizing their expertise?

"Rice crisis": government is doing everything except the right thing

2008-04-03T19:25:00.000-07:00

Oh this rice crisis! It seems to me that the government is doing everything except the right thing: threatening economic saboteurs and hoarders, raising palay price buying subsidy, and more funds for the DA, I suppose. These are fine, except that they are not going to address the supposed “rice shortages.”

Rice shortages certainly has speculative element into it, especially in such a time when global food prices are rising. And speculations are necessarily rife in a policy environment where government restricts the global trade in such a political commodity either through quantitative restrictions or very high tariffs—which we do. Maintaining such protection system for rice makes us vulnerable to speculators who are inclined to hoard when buffer stocks are low or going down, and they will pounce on every opportunity, knowing that the government or bureaucracy would always act (say import) when its too late. That’s what is happening right now. For all we know, those guys from the NFA might even be collaborating with those hoarders to make a fast buck out of the situation. I’m speculating here, but that’s highly possible given the culture of corruption in the bureaucracy.

Solution: Why not open up the Philippines to global trade in rice? Why not reform the NFA? That’s the only way one could prevent hoarders from hoarding knowing that imports would always come at the right time when someone starts the nasty business of hoarding rice. An open trading regime should effectively deal with the speculative element that distorts prices.

You might say freer trade in rice might cause the collapse of the entire Philippine rice industry. That’s crap. The fact is that even right now, even under the current policy environment, lots of rice farmers especially in Mindanao are shifting to the more profitable crop like bananas and other high-value crops. Smart farmers, shall I say! There’s no sense planting something that won’t make you real money.

Under a freer rice trade environment, lots of farmers are going to adopt shift to high value crops. That’s good for them. But many are also going to stay in rice business but are going to innovate to lower their cost. Some might just focus on planting those fancy varieties that command high prices in the local market.

More on this next blog post.

Will Playboy (Philippine edition) fly?

2008-03-29T02:56:00.000-07:00

On 3 April 2008, Playboy magazine will hit the Philippine streets, promising to be an engaging read for the “mature” audience. I’m intrigued how “mature” it would be. If it could capture the essence and spirit of the old Playboy I knew, it would be interesting.

The Playboy I knew had investigative reports on politics and economy, poetry, short stories, and really very, very good essays by good writers. The quality of its fiction and poetry was a blast. Could the Philippine version deliver on those types of content as well? If not, there’s really no sense buying a copy.

Way back in college, I delivered a crisp but really juicy political science class report on Chilean politics, including the death of president Salvador Allende and the assassination of his finance minister, Armando Letelier. Our professor was impressed.

“What’s your main reference, Mr. Llorito?,” he asked.

“Ah, uhmmm, sir, Playboy magazine, sir,” I answered meekly expecting a negative reaction. But the class erupted in appreciative laughter.

“Really?” His eyes shone like a hundred-watt incandescent bulb. “Could you please hand it to me?”

“Yes, sir.”

“Thanks. I’ll return it after a week,” he said, smiling.

I never heard anything from him about that magazine again.

That was in the mid-80s. In this day and age of the Internet, I’ve read lots of reports about Playboy’s declining circulation. FHM and its copycats emerged and it seemed Playboy was destined for the dustbin of journalistic history. Launching a Philippine version at this time therefore is a courageous decision for its financiers here. I’m intrigued how it’s going to differentiate itself in a niche market that is too crowded for comfort. (Photo credit: http://www.acmewebpages.com/graphics/playboyjune1962.jpg)

The demise of social networking?

2008-03-25T03:00:00.000-07:00

Nah, I don't really mean that. What I'm saying is that social networking sites really have to evolve innovative revenue models to keep on thriving. Right now, many of them, according to the Economist are not making money.

Consider the premise behind these social networking sites: it’s all about profits, about making big someday, by getting being purchased by the big shots like Rupert Murdoch. And the likes of Murdoch are buying these sites by the billions hoping that someday, they could earn more billions from online ads. But it seems the premise or the assumptions about the business potentials of social networking are not necessarily accurate. Says the Economist:

"The big internet and media companies have bid up the implicit valuations of MySpace, Facebook and others. But that does not mean there is a working revenue model. Sergey Brin, Google's co-founder, recently admitted that Google's “social networking inventory as a whole” was proving problematic and that the “monetisation work we were doing there didn't pan out as well as we had hoped.” Google has a contractual agreement with News Corp to place advertisements on its network, MySpace, and also owns its own network, Orkut. Clearly, Google is not making money from either."

Same with Facebook. Economist observes:

"Facebook, now allied to Microsoft, has fared worse. Its grand attempt to redefine the advertising industry by pioneering a new approach to social marketing, called Beacon, failed completely. Facebook's idea was to inform a user's friends whenever he bought something at certain online retailers, by running a small announcement inside the friends' “news feeds”. In theory, this was to become a new recommendation economy, an algorithmic form of word of mouth. In practice, users rebelled and privacy watchdogs cried foul. Mark Zuckerberg, Facebook's founder, admitted in December that “we simply did a bad job with this release” and apologised."

“So it is entirely conceivable that social networking, like web-mail, will never make oodles of money,” says the Economist. And if they couldn't make lots of money, what’s the incentive of maintaining them? Are we going to see consolidation, of one site being gobbled up by the other? Scary thought, isn’t it.

Holy week hibernation

2008-03-23T04:17:00.001-07:00

I practically hibernated in the last four days, doing nothing except reading, sleeping, and transcribing some past interviews for the Entrepreneur Magazine. Yeah, I finished two issues of The Economist, digested various topics like "economics and rule of law," China’s global quest for raw materials, and fund management. I also started getting back to some old Jonathan Franzen titles. I should have done some writing but my son was reviewing for his final exams (Calculus, and Physics); I had to yield the best working space in the house up to him. No worries there. Especially after waking up to a headline like this: “Filipina wins science award for ‘black holes.’”

Who says jobs are scarce?!

2008-03-11T23:54:00.000-07:00

Indeed, jobs are not hard to find, if you have the skills. Writing skills, for instance. I mean, if you think you have the passion for writing, and some skills, and the right attitude for that kind of work, you may contact me. There's one lifestyle magazine for instance that is looking for one full time writer. I also need some part time writers for our magazine, Entrepreneur.

See? Life is not hopeless, ZTE or not! lol!

Let's tax the Church!

2008-02-23T01:35:00.000-08:00

Should we tax the Church? Why not? It’s high time!

Church officials—bishops, ulamas, pastors, priests—based on their rhetorics, are always holier than thou, especially when it comes to failure of government to provide economic opportunities for the poor. But does the Church really do something about it besides prayers and few charities? If they want to help the country, the poor, the best thing they could do is pay taxes for the Church properties, lands, and universities to generate resources for economic and social development. Church-owned schools charge the highest tuitions fees in the land, thus accumulating so much money. Since they don’t pay taxes, they hardly give anything in return to society.

The premise about separation of Church and State, about religion and politics, has always been fiction. The Church—be it the Catholic Church, Iglesia ni Cristo, El Shaddai—has always been a very active political animal in the country. When told not to meddle in politics, the Church authorities would say, they can’t help it because the realm of politics has moral dimensions, which the Church has a lot to say. Well, every thing has moral dimension.

Barack Obama's "Asian problem?"

2008-02-19T03:32:00.000-08:00

Does Barack Obama have an "Asian problem?" I think so, given the huge support Asians are giving to Hillary Clinton. Is it racism, as what some “analysts” would like to think? I don’t think so.

This is my take: the rise of China, India, and the rapid economic growth of countries in the Asia-Pacific region, including the Philippines, is significantly caused by foreign policy pursued by the Clinton administration. It was Bill Clinton’s leadership in the Asia-Pacific Economic Cooperation (Apec) that led to the Bogor Declaration envisioning a global free trade by 2020. That one really pressured the Europeans to relent on the Uruguay Round of trade negotiations, thus paving the way for the birth of the World Trade Organization. WTO is not a perfect treaty but that one really opened lots of markets for Asia’s exports, this boosting the economies in the Asia-Pacific region. Globalization in general in which the Asia-Pacific region is a major beneficiary accelerated during the time of the Clintons in the White House. So Asians have a generally warm view of the Clintons, including Hillary.

After Iowa, Obama issued statements against “the violence of outsourcing” and swore to adopt measures against the practice, a move that drew criticisms from the Asia-Pacific region. Hillary of course also seems to pander to the protectionist sentiments among the American electorates, but given the Clintons’ track record, Asians tend to look at those pronouncements as a message addressed largely to the home political market.

Plus Asian's in general don't have hang ups about having females as top political leaders.

Middle class getting back to the protest business?

2008-02-14T22:15:00.000-08:00

I just had an hour or two with finance guys this morning in Makati and know what—they are joining the anti-GMA rally in Makati. I thought all along these money guys hate joining such activities. But they are and, I guess, it all boils down to what I call “middle class values.” The core issue of course is corruption that reaches up the highest echelons of government, and corruption is certainly bad for business. Yeah, its high time the middle class should be part of this struggle for a better society. Mabuhay kayo!

Rethinking John Rambo

2008-02-06T03:19:00.000-08:00

It’s easy to think of John Rambo as a brute who does the dirty work for America, someone whom the types of George Bush would send to fight in Uncle Sam’s crazy little wars. I used to think that way. But hey, that’s actually not an accurate description of the character.

In fact, Rambo—at least the one I knew in First Blood, the first Rambo movie—was more of a victim. In First Blood, he was an ex-Green Beret guy with post-traumatic stress disorder in search of peace and quite in small town America, until a power tripping Sheriff treated him badly. In Part 2, he was stupid enough to agree to go inside Vietnam to take photos of supposed POWs only to be abandoned by the US Armed Forces when politicians realized the mission would have political repercussions. He was captured, tortured, survived and ended up saving some of the POWs. Since then he never returned to America.

He stayed in Thailand among the simple folks to live a humble and quiet life, only to be deceived once more into going inside Afghanistan (in Part 3), not for America, but for his friend and mentor who was captured by the Russians. In Part 4 entitled John Rambo: To Hell and Back, he went to Burma from Thailand to help his friends who were captured by the Burmese military (although I’m simply too busy to watch this one).

He hates politicians. He hates the military top brass. His actions were always about his friends. He had to do it because others wont.

Philippines "rejoins" the Asia-Pacific region

2008-02-02T01:49:00.000-08:00

I was in Laguna Technopark last Thursday when the government announced the Philippine economy grew by 7.3 percent in 2007, boosted by the 7.4 percent fourth quarter surge, the highest rate since 1976. I say not bad! Finally, we have “rejoined” the Asian community of fast growing countries.

I say “rejoined” because analysts always thought the Philippines seems to have been behaving like a Latin American country, with our politics prone to coups attempts and instability and economy that tended to enjoy sudden boom and busts. Now, we have reached a new level, 7 percent, after starting at a 5-6 percent GDP growth band from 2003 until 2006.

As expected, some practitioners of the Dismal Science were quick to downplay the numbers, saying the country’s economic performance this year might not be sustainable given the continuing risks posed by rising crude prices and the looming economic recession, an economic slowdown, in the US.

There is this economist from the UP School of Economics who has been going around since 2004 that the country could never achieve beyond 4 percent. He has been proven wrong all the time, but this time after hearing that the country’s GDP reached 7.4 in the fourth quarter, he stressed the country would achieve just around 4 percent in 2008. Here we go again!

The matter about economic recession in America is certainly a serious question. Unfortunately, even economist in the US are at a loss whether or not there is indeed a recession, how serious is it going to be, and whether or not it’s going to bring the global economy down. “When America sneezes, the rest of the world catches cold,” says the old dictum. And it was true then because when Americans stopped buying shirts, food, cars, gadgets, or just about anything, the factories from the rest of the world stopped humming, thus rendering thousands, if not millions, of workers jobless.

That nugget of wisdom, however, may not be true today because the world is no longer the same place that it was two or three decades ago. Now, analysts worldwide talks about “decoupling” or the capability of other economies in the world, including emerging economies like China and India, to growth despite the weak American economy. These countries could take on the role of growth drivers in the same manner that China has been boosting the economy of Japan and Australia through her rising imports of machines and raw materials iron ore, petroleum products, coal and other commodities. China now has also become a major destination for Philippine exports, a market that has become almost as huge as the America.

And more importantly, while emerging economies are riding on the wave of global trade expansion, many of them, including the Philippines, has been growing largely on the strength of domestic demand. It’s even true for China and India as much as it is for the Philippines. So the conclusion here is that, the recession in the US may or may not cause colds in the Philippines, and if it does, it might not be so severe co cause serious complications.

Realistically though, the number crunchers at the National Economic and Development Authority (Neda) believe that a full-blown recession could indeed affect us significantly. Augusto Santos, acting director general of Neda, says should America suffers a one-percentage point contraction from its current growth rate, the Philippines gross national product will shrink by 1.764 percentage points. That is huge.

But that’s assuming that neither America will do anything to lick the recession nor the Philippines address to boost the local economy and cushion the impact. But who knows, US President George Bush’s $150 billion stimulus package, wherein government will mail checks to Americans for them to spend it and prop up the American economy, might just work? And if we do our homework here, say continue spending for badly economic infrastructure, as we should, as we are doing right now, the Philippine economy might just get out of this in a decent shape.

One interesting thing about recessions is that statisticians, and therefore policy makers and the general public, know about it only when it’s long underway. It’s because of the time lag in the collection of statistics. So if there’s a recession in America, the Philippines should already feel it.

The GDP figures seem to show that with the 3.7 percent contraction in exports from a growth of 2.2 percent last year. “Net factor income from abroad” that measures remittances of Filipino expatriates working abroad also has declined. And yet the Philippine economy managed to surge to a 7.4 percent growth rate in the fourth quarter, on the strength of other sources of growth (eg., domestic demand, mining, construction, agriculture and fishery, outsourcing, among others). There are even signs of recovery in investments from the private sector as shown by the rise in fixed capital formation—an indication that business are constructing buildings, buying machines for the factories, and upgrading their equipment.

So let’s see!

America sneezes—are we supposed to get flu?

2008-01-25T21:35:00.000-08:00

Are we going to get hurt badly because of US recession? It’s so easy to worry about that especially that we sell lots of stuff to the US market. But time has changed.

Ten years ago, electronics and semiconductors accounted for only 42 percent of the country’s exports with farm-based products like coconuts, pineapples, bananas, tuna, seaweeds, and baskets having significant percentages. Today, manufactures account for 86 percent of the country’s exports, the bulk of which are electronics and semiconductors. Farm-based products now account for only 4 percent.

Ten years ago, 36 percent of our exports were purchased by the Americans, such that we would always a catch cold, nay influenza, when America sneezed. When combined with our exports to Japan, Netherlands, Hong Kong, Great Britain and Germany, more than 70 percent of our exports were purchased only by seven countries. China and India were not even listed among our markets.

Today, America only accounts for 18 percent of the country’s exports. China is now our third largest market next to Japan. Suddenly we can see our friends in the Asean buying about 17 percent of our products. The rest are accounted for by Europe and the rest of the world.

What we see here is a diversifying export market for Philippine products, a trend that should lessen our vulnerability to external shocks. And yes, the World Bank, it seems, has taken an optimistic note on the Asia Pacific Region, including the Philippines.

I’m trying to be optimistic here, of course. China ultimately sells to the US. Once the American orders for Chinese goods are down, so the Chinese orders from us will probably be. This is still an interconnected world.

But let us see, because even in the US experts don’t agree on the extent of the recession. And here in the local front, the National Statistical Coordination Board has yet to report to us the whole 2007 performance. The numbers would surely be good, considering we had good numbers from the farm sector. But the enthusiasm will surely be dampened by the sobering thoughts about the recession. So let’s wait on January 31, the official announcement of the 2007 growth rate, what the experts will say.

Meantime, you may read the take of Finance Secretary Margarito Teves by clicking here.

After the Neocons: America at the Crossroads

2008-01-22T02:08:00.000-08:00

Review
After the Neocons: America at the Crossroads
By Francis Fukuyama, 2006
Profile Books Limited, 226 pages

“Neoconservatism” as a way of thinking is a mishmash of contradicting social and foreign policy ideas originated by some New York City intellectuals who used to worship Leon Trotsky, Vladimir Lenin’s buddy who espoused “world proletarian revolution.” How these once communist intellectuals and their thoughts permeated into America’s foreign policy during the administration of George W. Bush and brought the world’s superpower to a disastrous misadventure in Iraq and the Middle East, therefore, is a very compelling story. In his latest book After the Neocons: America at the Crossroads, Francis Fukuyama, political scientist and a former neocon himself, tells us this story with great depth and forceful insights, then proceeded to disavow and castigate the movement that he was once a proud member of.

Fukuyama traces the origins of neoconservative thinking to a group of working class intellectuals studying at the City College of New York in the 30s. They were once Marxists who turned to the right shade of the political spectrum following Trotsky’s exposes of Joseph Stalin’s brutality. Thus from being ardent supporters of socialism, these intellectuals, mostly Jews, became haters of communism and bitter critiques of “social engineering” programs and social planning that they thought tend to create unintended social consequences that make societies even worse off. When America joined the Allies to defeat Germany and Japan during World War II, the neocons started to see American military power as a force for good, something that America’s leaders should use to transform the world in an exercise of “benevolent hegemony.”

Neocons, having taken some pages from Plato and Aristotle, believe that “regime” or the internal character of states matter in foreign relations. “Rogue states” are likely to become a destabilizing force in global affairs, as “regimes that treat their own citizens unjustly are likely to do the same to foreigners.” America and her allies usually deal with these totalitarian and tyrannical states through carrot and stick but said measures are likely to be ineffective, according to the neocons. The best way out therefore is through changing the “underlying nature of that regime,” a phrase that translates into what is known as “regime change” under the Bush administration.

Prior to the collapse of Berlin Wall, foreign policy circles in Washington DC didn’t really take the neocons seriously even if their views fitted well with Ronald Reagan’s Cold War rhetoric about the Soviet Union as “evil empire.” The more credible voice then were the “realists” in the tradition of Henry Kissinger who respect power, downplay human rights as well as the internal character of states. For the realists, all states whether liberal democratic or authoritarian, seek and power and America and other democratic societies have to accommodate them.

After the collapse of the Soviet Union, however, the influence of neocons soared, vindicated as they were with the fact that the communist threat didn’t vanish through containment and détente as proffered by foreign policy “realists” but by the transformation of Eastern Europe and Russia into “democratic states.” It was a profound lesson Fukuyama thinks that Neocons—deeply ensconced into the mainstream foreign policy establishment under George W. Bush—wrongly applied in a world that has drastically changed since 911.

For Fukuyama, the Neocons, in a rapidly globalizing world, have failed to appreciate the growing influence and power of non-state actors (e.g. terrorists groups like Al Qaeda and Hamas) that couldn’t be deterred by conventional military forces. They have overestimated the capacity of the American military that, while unmatched in the conventional and high-tech warfare, was not prepared to deal with insurgency and the task of nation building. Neoconservatism, he argues, has proved contradictory in the real world in that, while neoconservatives loathe social planning and “nation-building,” measures toward these ends are necessary if Bush’s democratization project in Iraq and Middle East has to succeed.

The Neocons assumed that the world will buy the idea of America’s “benevolent hegemony” and confer her actions—clothed with scary rhetoric about preemptive wars against the axis of evil—with legitimacy, unmindful of the fact that anti-Americanism had been brewing all over the world decades prior to the American invasion of Afghanistan and Iraq. Anti-Americanism—Fukuyama contends—came about as a result of several factors, among them the American-led IT revolution and globalization that are perceived by Europeans as threats to the European welfare state system, the uneven result of “Washington consensus” (i.e. structural adjustment loans that tried to foster market-driven policies) in Latin America, and the Asian financial crises precipitated by American pressure to open up financial markets without adequate safeguards.

This book is Fukuyama’s way of explaining why he turn-coated on the neoconservative movement. And yet, he remained a Neocon in essence, warning against the greater dangers of American isolationism following the debacle in Iraq. This time, however, he labels his new advocacy as “realistic Wilsonianism” characterized by the greater reliance on soft power, the promotion of economic and political development worldwide, and the creation of legitimate international institutions that could respond effectively vis-à-vis global threats and issues emerging out in this brave new world of globalization and technological change.

Readers won’t probably agree with all the things that Fukuyama say in this book, but this piece of work once again seems to prove why many think Fukuyama is one of most engaging thinker and analyst of this era. It’s his finest piece since his equally controversial work, The End of History and the Last Man, came almost two decades ago. It’s a must-read for all those who want to understand the nature of America’s foreign policy after 9/11 and figure out where it is heading for.

Will the US recession hurt the Philippine economy?

2008-01-18T22:45:00.000-08:00

America is definitely in recession. Lately, US president George Bush has lately called on the US Congress to give tax relief to consumers and business to boost the American economy. Many of us are probably wondering how it will impact the Philippine economy.

When America sneezes, the Philippines catches cold. We used to say that to highlight the Philippine economy’s dependence on the America economy. It’s a relief therefore to learn from experts from the World Bank that emerging economies including that of the Philippines could actually deal with this recession in America quite well. The reason? The continuing rapid growth in the Asia-Pacific region, particularly China, is going to cushion impact of the US recession. Says the World Bank lately:

“Resilience in developing economies is cushioning the current slowdown in the United States, with real GDP growth for developing countries expected to ease to 7.1 percent in 2008, while high-income countries are predicted to grow by a modest 2.2 percent."

The World Bank adds:

"GDP in East Asia and the Pacific is expected to grow about 10 % in 2007, with China expected to grow by more than 11%. Growth for the region should ease to 9.7 % in 2008 and to 9.6 % by 2009. The effects from the turmoil in the world’s financial centers may be small in most economies in the Region. Except for China, direct exposures of financial institutions in the region to mortgage-based securities (or sub-prime crisis) are limited.”

The Bank has a favorable prognosis for the Philippine economy in 2007 and expects it to grow by a decent 6.2 percent in 2008. What explains this trend? Simple: these trends are a part of the economic and social transformation obtaining in the Philippines, a trend I call the “Revolution from Beyond.”

Is the Economist pricing itself out of the Philippine market?

2008-01-13T02:06:00.000-08:00

I went to the National Bookstore a few hours ago to check on the latest issue of my favorite economic magazine and was shocked to learn it’s now priced P250 pesos a copy (more than 6 US dollars). The last time I bought a copy it was less than two hundred bucks and I was agonizing whether or not to buy. Now, I feel it’s way too expensive for my limited budget. It means I’ll only buy it once in a blue moon when the issues covered are really so compelling.

One thing I like about the Economist is its intellectual courage. It’s the only magazine that takes positions on issues, usually reflecting its free-market orientation. You may like its arguments or not but it’s never afraid to draw the line. And it does prescribe solutions to issues or problems, unlike most publications that only present contending views without stating its own position.

That’s the true mark of intellectual courage. It’s so easy to criticize and analyze issues or problems, but it’s so difficult to propose solutions, essentially because alternatives could be lighting rods for scrutiny from others. And it’s in proposing solutions where we are shown whether or not we really have the discipline to think through what we offer in the market place of ideas.

But I’m digressing here too much. The fact is that I could no longer afford my favorite magazine. Oh my!

Reducing oil tariff: just another misguided policy

2008-01-09T18:17:00.000-08:00

The other day, the government announced that it has reduced tariffs for oil products by one percentage point supposedly to cushion the impact of rising crude prices. Sounds good except this policy might end up becoming a subsidy to oil companies without achieving the social objective of “cushioning” the rise of oil products like gasoline, diesel and LPG.

The fact is that the industry is deregulated and movement of prices is determined more by global trends and the nature of local competition than government actions. Lower tariff for oil products simply means that importers are going to enjoy lower import costs or charges. Whether or not they are going to pass the lower import costs to consumers in terms lower prices is another matter. They probably won’t as they always did in the past. Market competition should theoretically force oil companies to go easy on raising prices but that’s only possible in a competitive environment. Right now, the local market is still dominated by the big three (Shell, Caltex, and Petron) and it seems the newcomers, the so-called independent oil producers, are simply taking the cue from actions of the Big Three.

The new policy therefore is another populist measure that may end up achieving nothing. The best thing the government could have done therefore is to maintain the current tariff levels and continue collecting the money to improve government finances. If policy makers suspect that oil companies are colluding, they might as well look for effective ways at bringing greater competition in the oil and energy sector.

Barack Obama is an enemy of outsourcing

2008-01-06T03:13:00.000-08:00

What?! Outsourcing is “a form of violence similar to the Virginia Tech killing?” That’s crazy, but Barack Obama, fresh from winning the Iowa caucus, thinks so. I thought all along he has the most realistic view about globalization and outsourcing among the US presidential candidates. Now he is pandering to the mob to fortify his lead over Clinton and Edwards who are both protectionist in their rhetorics. In his speech lately, courtesy of the Texas Rainmaker, Obama said:

“There’s also another kind of violence that we’re going to have to think about. It’s not necessarily the physical violence, but the violence that we perpetrate on each other in other ways,” he said, and goes on to catalogue other forms of “violence.”

There’s the “verbal violence” of Imus.

There’s “the violence of men and women who have worked all their lives and suddenly have the rug pulled out from under them because their job is moved to another country.”

I don’t have to react to this, for the blogosphere has plenty. Consider this one by Radley Balko of Reason Hit and Run :

"No one has the "right" to be paid by someone else for their labor. Employment in a free market is peaceful and voluntary, on both sides. So is the decision to stop that agreement, both for the laborer, who may find a better job, or for the employer, who may find someone who can do the job better, or cheaper, or both. There's nothing remotely violent about any of it. To compare a business decision to employ cheaper labor to the senseless slaughter of innocents--even if by way of tortured, nonsensical metaphor--is really reprehensible. It reeks of exploitation."

Ah politicians. They are the same all over the world. Now, surely this statement may have sent shivers down the spine of the American corporate economy that is benefitting immensely from global outsourcing.

A scam in Boracay?!

2007-12-30T02:48:00.000-08:00

Has anybody heard about “Diniwid Beach Resort” in Boracay? I bet nobody does, nor most people in Boracay. But try clicking their websites (here and here) and you will see a very enticing place supposedly just beside the beach. Well, it’s supposedly a “beach resort.” So my architect friend booked and paid here in Manila hoping she could bring joy and warm welcome to a sister who came from Canada. Upon landing in Boracay, they were surprised that nobody knows about the “beach resort” and were shocked to learn it’s not located beside the sea but an interior, almost like a squatter’s area. In her blog, my friend Louise recalls:

"Imagine to our surprise when we arrive yesterday at Diniwid Beach, looking for the Diniwid Beach Resort, and there was no Local who can point to us where's it located... After almost 30 minutes of asking around, she finally found where it was, only after she mentioned the owner's name.

And there we saw our place, after being led to an alley. A shack of a house [see picture], absolutely different from what was advertised on the web. Ano to, squatter's area?, my Ate was furious. The steps leading upstairs was only about 18" wide, too steep, my folks would sure slip any time, if they can even manage to climb it at the first place. The other cottage showed to us was more deplorable. Instantly, we decided to transfer to a better location…"

Refund! That’s the only solution when you are misled but the operator, a british national, wouldn’t return the money. Says Louise:

"Negotiating if we can get a refund for the deceit the Owner did to us, we were met by her rough British husband who flatly declared a NO REFUND policy. It seemed that he owns the place and uses only the local as his front."

The gall! Louise said she is going to file complaints at the local tourism office and I hope she gets her money back soon.

The local tourism office, nay the entire local government should act on scams like this before it destroys the image of Boracay

So let everybody be warned about this “resort” (kuno).

Get the gun, it's Santa!

2007-12-29T02:52:00.000-08:00

Get the gun, it’s Santa! That’s Eric’s good natured take on how Americans celebrate Christmas. Imagine yourself seeing a fat man getting into your house through the chimney. What will you do?

And yet this Australian actually tried getting through one’s chimney and got stuck for ten hours until rescuers did their job.

The man had been stuck inside the chimney for about 10 hours with his knees
jammed tightly into his chest, said local fire station officer Mark James. "He
was like a grub in a cocoon when we found him," James said. "He was really
wedged in there."

That guy, of course was a thief, but really I’m no fan of Santa, especially the ones they got in New Zealand.

WELLINGTON, New Zealand (AP) — A gang of about 50 apparently drunken Santas invaded a New Zealand cinema complex at the weekend — frightening customers, damaging property and swearing, the cinema's manager said Monday. Police believe the Santas were a group of university students dressed in Santa suits who ran amok for 20 seconds through Hoyts Cinema complex in the South Island city of Christchurch on Saturday, manager Derek Rive said.

Being a cop is probably one of the noblest professions (assuming one does her/his job seriously) putting order in society, enforcing the law, etc. And society respects them for that. But in America sometimes they are treated as nothing but a nose wipe, as what this woman did:

Cpl. S.E. Elliott said he had arrested the 36-year-old woman last week after
seeing her slap a man, bite him on the elbow and spit in his face. Elliott said
the woman wiped her nose on him as he led her into the police station for
booking on a charge of domestic battery.

Anyway….

If no one wants to give me any travel bag, a nice “Bush Out of Office Countdown 2008” Calendar will do. Happy New Year to all!

Complete domestication in 2008?

2007-12-28T00:55:00.000-08:00

I won a flat iron from our Christmas e-raffle. Will I be “domesticated” in 2008?

Lest you think I’m superstitious, consider this. During our 2005 Christmas party, I got a travel bag. Our editor told me: “Maybe you are going to travel beyond the shores in 2006.” A few months after, while enjoying my life in Palawan after leaving Today Newspaper, I got a call from the US embassy.

“Dave, do you want to go to the US,” said a voice from the other line.

“Sure! But why should I go there?” I asked. “And how?”

“We have chosen you as a fellow for the International Visitors Program 2006,” she said. “It’s for leadership training in print journalism. Please come to the US embassy on Monday.”

And indeed I traveled to Washington DC, Virginia, New York, Florida, the mid-West (Nebraska and Colorado), and California (San Diego and Sta. Monica) to interact and learn from media organizations there.

In December 2006, someone gave me another huge travel bag. An officemate joked that I’ll be on a tour once again. True enough, I went to Australia courtesy of the Jaime Ongpin/Australian Ambassador’s Choice Awards. Then came the Jefferson Fellowship where I got to Hawaii, Silicon Valley, China and India.

Last week, I won a Hanabishi flat iron. Does it mean I’ll be completely domesticated in 2008?

Will somebody please give me a travel bag before the year ends?! Haha! Joke. Happy New Year to all!

Christmas sans carbon footprint

2007-12-24T00:46:00.001-08:00

You will probably call me Grinch or kill joy, but I really feel there’s a need to reassess the way we celebrate Christmas. No, I’m not complaining about the “crass commercialism” that Christmas has gone down to. The flow of commerce is important if we are to create jobs and all that, but is there a way we could celebrate it in less environmentally harmful ways?

I’m no certified tree hugger (well, I did hug trees when I still enjoyed tree climbing as hobby and that was years ago), but I do think a paradigm shift is in order. But I won’t preach to you guys, but let me share here how I do Christmas with less carbon footprint.

I won’t shoot or light firecrackers, for obvious reasons.

I don’t have Christmas lights to help minimize the burning of fossil for electricity. I don’t have any Christmas tree, either. I find it so artificial.

I don’t wrap the gifts I give. Those wrappers always end up as tons of wastes in the dumps.

I minimize travel to minimize vehicular emissions.

I avoid excessive consumption for my health’s sake. Haha!

To celebrate Christmas, I only pray in silence, and read books to nourish my soul.

Would that make a difference? I don’t know, but if many of us adopt some of these measures, the world will be a better place and Al Gore wouldn’t think he is a failure.

Merry Christmas to all!

Is Mar Roxas really a reformist? I dont think so.

2007-12-21T01:41:00.000-08:00

I’m puzzled by this story going around that cause-oriented types are now warming up to Mar Roxas hoping he will pursue “policy reforms” once he captures the presidency come 2010. As far as I know, Mar has never been associated with any progressive policy agenda. Mar doesn’t seem to have the knack for speaking for or against anything even when time demanded so. We never heard him talking about agrarian reform or agricultural modernization. He never knew him being passionate about human rights and political killings. He was never truly pro-Erap nor was he really anti-Gloria. He doesn’t seem to have clear stand on anything: environment, globalization, foreign debt, gender, deregulation, Doha round of talks, etc. He never spoke against monopolies and oligopolies. Maybe he behaves this way because he is just consistent being pro-Mar Roxas.

If there’s one thing he is associated with, it’s with Corina Sanchez, and the buzz about them simply faded after he won his Senate seat. Now, that he is angling for the Presidency are we going to see him with Corina again? And why does he have to do that? What is he trying to cover for?

Mar says he is Mr Palengke (markets). But he never had any legislative proposal for expanding or freeing Philippine markets. He is probably even anti-market.

Consider this: In 2001, Roxas caved in to the local cement lobby that was then complaining about “injuries” caused by rising cement imports and was forced to slap additional duties (about P20 per bag) on them, thus significantly raising cement prices in the local market and penalizing the local construction industry. In response, the Tariff Commission conducted an investigation and found out that Roxas’s decision was totally baseless, as local manufacturers maintained an 80-percent share of the domestic market. The report also stated that there was no injury to speak of, nor was there any worker losing his job because of the rise of cement imports. The industry, in fact, improved its productivity as a result of the rising foreign competition. But Mar Roxas simply brushed off the Tariff Commission study in order to shelter the cement industry from foreign competition.

Mar, who are you really? Show us the real stuff you are made of.

Seems like the 7 percent growth rate has started to trickle down

2007-12-19T03:25:00.000-08:00

The recent numbers on jobs based on the October 2007 Labor Force Survey seem to tell us so. The NSO report says the jobless rate has declined a full percentage point from 7.3 percent last year to 6.3 percent this year. Underemployment has declined from 20.4 to 18.1 percent. That’s a two full percentage point down, meaning that a significant number of dissatisfied employees has gone down as well.

The details are quite interesting. The percent share of farm jobs has declined but those of the industry sector has gone up, mainly because of a growing job uptake in construction. There’s also a growing share of jobs in the services sector particularly in the transportation, storage and communications; real estate and renting; education; health and social work; and private households. It means more people are hiring maids and drivers? That says something.

And there’s a significant increase in own account workers, an indication perhaps of greater entrepreneurship activities. Figures on those who get wages and salaries are also encouraging as more private establishments are hiring.

In terms of occupation, the percentage shares of professionals are rising. So are those of trade and related workers; clerks; and laborers and unskilled workers. This trend is not surprising because of robust construction sector. Hey, it quite broad-based.

Is this the trickle down effect of the 7 percent growth rate we have been registering? Seems like it. But expect the doubters to dismiss these numbers. I’m a doubter myself but I don’t denigrate these numbers:I feel these are real gains by real people. And it’s not because of Malacanang but despite Malacanang.

I'll look at the numbers again when I have the time.

The middle class and the rule of law

2007-12-16T21:18:00.000-08:00

I was expecting to see retirees and middle aged guys when the boss told me I should show up for the Entrepreneurs’ “networking night” in Greenhills. That was last Tuesday, the second day in my new job. But I was surprised to see young boys and girls in 20s and 30s, many of them barely out of college. And my goodness, they were all talking about “doing business’ and making money! In my time, we were all about “social engineering,” “social change,” and revolutions as if we knew what we were talking about.

Is a new ethos taking over? I hope so. It’s about time. If we want the country to move faster into the lane of progress (whatever that means), we should have more entrepreneurs in our midst. And its not only because of its positive economic impact, its also because the growth of the middle class is the surest path to political stability. Fareed Zakaria in “The Future of Freedom” said so. Francis Fukuyama (in his “The End of History”) said so. And of course, they are not the original guys to have said so. It was Aristotle who theorized about this long time ago. And I guess, the reason is simple: the middle class, especially the entrepreneurs have a stake in stability and order.

Why? Consider this: if you are really rich, filthy rich, if you are an oligarch, you don’t really need “the rule of law.” In fact, you want the law (or rules) to be opaque so that you could buy it anytime when it suits your end. And the really poor, those who have nothing, don’t care much about the law, the rules, either because they don’t have a stake in the system. Sometimes they have to bend the rules to maintain their existence. Or at least, that’s what some of them think.

But when you are a budding entrepreneur with a little money, you have a stake in the system. Yet you can’t afford to buy the bureaucracy, so you desire for proper societal rules to work for you. You want to be protected from predatory actions of the super rich and the protection from those who will rob your of your wallet. You desire order, stability, transparency, predictability, and fairness. And these are foundations, the values, of a functional liberal democracy that we crave for.

Hmmm, seems like I got an interesting job here.

Congestion in MRT: the pain of "success"?

2007-12-11T04:07:00.000-08:00

Call it the pains of “success.” Or at least, the people’s pains for MRT’s success. It seems that these days, Metro Rail Transit is always congested. If one doesn’t start riding at either end of the line (either in Baclaran in the South or North Edsa in the opposite end), one would always have to suffer being packed and squeezed like sardines inside the coaches.

It’s not for love of the trains; it’s because a commuter could save lots of time. What takes one hour or two in the bus just takes about 25 minutes in MRT.

But there’s another reason. It’s so cheap: the 25 kilometer stretch just costs P14 pesos (0.32 US cents), probably about a hundred percent cheaper than the bus. And it’s cheap because its subsidized, meaning that people who live in the rural areas are also paying the maintenance and bank amortization of an infra that is being used solely by the dwellers of Metro Manila, a case of the rural folks subsidizing the “richer” urban dwellers.

Also, part of the value added tax that each one pays to the government whenever one eats in restaurants or pays for the grocery goes to the upkeep of the MRT. Isn’t that unfair? Of course, it is! And it’s not really improving the quality of life of the urban commuters because artificial cheapness suggests that it would be congested most of the time, thus lowering each weary commuter’s “ridership quality.”

Solution? Why not charge the true cost of the facility? That way, we free the rural dwellers, especially residents of Mindanao and Visayas, the burden of paying for such a facility that they don’t use. Those who use it should be the ones to pay for it. And of course, when ticket prices are a little bit expensive, more people would think about riding the buses again thus lessening the congestion inside the trains.

Or maybe, government should think about charging variable prices: charges are higher during the peak hours and lower during the non-peak hours so that people would have the incentive to schedule their travel time accordingly.

People do respond to economic incentives.

Til snow falls on Manila: a chat on globalization and labor migration

2007-12-06T23:47:00.000-08:00

Jenny: So how’s Manila now?

I met Jenny in California early this year through a Japanese girl, an accountant working for one of the big global accounting firms operating in Silicon Valley. Over dinner she told me she has several colleagues from the Philippines. She called several numbers and voila and I had an appointment the following day at Starbucks near our hotel in downtown San Jose. Jenny came in a runners’ outfit, clutching a book “The World Is Flat.” We walked around town for hours discussing Philippine politics, economy and globalization. We checked some bars and other things that the Valley of Hearts Desire could offer during the night and promised to keep in touch but we failed to reconnect after the Jefferson Fellowship. Her message through Yahoo Messenger the other day therefore was a pleasant surprise.

Jenny landed in Silicon Valley three years ago after a stint at one of the leading accounting firms in Manila. Her ticket was her accounting expertise and her mastery of the computer, SAP and other enterprise management software. Her parents moved to San Francisco fifteen years earlier but she didn’t follow because she was finishing a post-grad in economics at the University of the Philippines. And she loved the beaches. Until the big offer came.

Dave: Bubbling as ever. Politically, I mean

Jenny: As usual. That’s my frustration there really. I thought GMA was better than Erap so I supported Edsa Dos. It turned out we simply replaced him with someone as corrupt. But oh, I miss the beaches, I love Boracay!

Dave: And then we just had this Trillanes caper…

Jenny: But hey, the Philippines, or at least the GDP figures, have been doing quite good lately!

Dave: You mean you are actually following the trends here?

Jenny: Yup! I’m a frustrated economist, remember? Haha!

Dave: There are new growth drivers: outsourcing, mining, food and beverage, electronics, telecommunications, and financial services. Past reforms seem to have started bearing fruits. Globalization seems to have become a stabilizing force.

Jenny: Been reading about these. And ah, I remember you mentioning about a paper on that at the University of Hawaii. Could you send me an electronic copy?

Dave: Sure, here’s the link:http://davidllorito.blogspot.com/2007/06/globalization-as-stabilizing-force-in.html

Jenny: Thanks. Interesting analysis. Amazes me because our politics there has never been that conducive. I also heard about this “economics delinking from politics theory” from [Congressman] Salceda. Do you think he’s accurate?”

Dave: Honestly, I’m not sure. I’m trying to look at it myself. But the guy has some points.

Jenny: How did those people at the University of Hawaii reacted to your paper?

Dave: Mixed, but some are incredulous.

Jenny: Or even hostile, haha!

Dave: How did you figure that out, hehe?

Jenny: “Haay, Dave!, I’ve met lots of migrant Pinoys here who think that way.

Dave: When I presented that paper, I thought they’d be happy to hear some positive news besides the usual negative ones that they get from media. Many of them were disappointed that I didn’t tell them the usual horror stories. Weird!

Jenny: Probably a psychological thing. Many of those, not all, who left the country decided on the conviction that the country is hopeless, so when they hear that things are improving a bit, it unnerves them, irritates them.

Dave: Really? Why?!

Jenny: They are used to hearing about all the negatives, and there are lots of them in media, and they are happy because those stories tend to support the reasons why they abandoned ship. Now here comes some positive news that to them seems to question the basis of their decision to leave. But yeah, it’s weird.

Dave: In fairness, they are well-meaning people. They do sincerely believe the only way out for the Philippines is for every one to migrate. So they use every opportunity to petition relatives and convince friends to migrate. A friend in New York once told me to take up nursing or become a mortician. Or I could be a plumber in Australia. Be practical, he said. Ha ha ha!

Jenny: Ay totoo yan! [That’s so true!] Ha ha ha!

Dave: After that talk, someone asked if I was telling them to return to the Philippines. ‘Of course not,' I answered. 'Why should you; the Philippines doesn’t have snow yet,’ and all the participants burst into laughter.

Jenny: Ha ha ha ha!

Why the Trillanes caper failed

2007-12-05T01:17:00.000-08:00

Why the Trillanes caper failed? Simple: the success factors are not there.

First, Trillanes and company failed to consider the 2010 factor. Politicians these days are now looking at the 2010 election as the reference point for their short-term political decisions. Hence, they would look with discomfort any action or event that deviates from that, especially something that’s being pushed by the likes of Trillanes. A junta that would emerge from a military rebellion is anathema to the presidential ambitions of bigwigs like Senator Villar, Senator Ping Lacson, Mar Roxas, Loren Legarda, to cite a few.

Second is the economic growth factor. The Philippine economy grew by 7.1 percent in the first nine months of the year. Big business engaged in real estate and construction, mining, outsourcing, electronics, finance, telecommunications, etc are now raking in money. So are the technical, professional, and managerial classes supporting these fast-growing sectors. With the increasing globalization of labor markets, even the lower middle classes have options other than becoming pawns in political games. So these people—crucial to the success of previous “people power” cum military revolts—now have a stake in the relative “stability” of the system.

Third, we Filipinos have probably learned some lessons from our previous “people power revolutions.” We probably have realized that we need to develop constitutional liberalism in this country if we want to mature as a nation.

How to stage a coup like a jackass!

2007-12-02T01:22:00.001-08:00

On the same day that Senator and His Most Incompetent Putchist Antonio Trilanes launched his ill-fated “coup” at a five-star hotel, the National Statistical Coordination Board (NSCB) announced that the Philippine economy grew by 6.6 percent. The incident seems to remind us just how the dynamics of the Philippine economy has decoupled from our rambunctious politics. Nice trend, shall I say.

The numbers says it’s actually a pretty broad-based growth, with agriculture, industry, and services contributing altogether. With a 7.3 percent growth in the first quarter, 7.5 percent in the second, and a possible surge in the fourth quarter, we may yet grow close to or higher than 7 percent.

We sneer at these growth numbers, of course. They have yet to translate into lower poverty numbers. True. But we have been at this growth rates quite recently, after hovering at 5-6 percent in the last three years. Experience by the Asian tigers showed they grew 5-7 percent consistently for ten or twenty years before they started licking poverty. This means we have to growth at this rate or higher in the next ten years before we can see substantial reduction in poverty. So it’s a start, and its better late than never.

GMA has nothing to do with this. These improving growth numbers are legacies of the first wave of reforms done following the Edsa Revolution. So the credit goes elsewhere, especially Cory and FVR, and of course, to OFWs, the farmers, business, and entrepreneurs. Had GMA proved to be a better president, we could have achieved higher growth rates, probably at par with Vietnam and India (7-8 percent).

Certainly, she should go, and go to jail (for scandals like NBN, fertilizer scams etc), but can’t we wait two years for the 2010 election? That’s a better option than “taking over” a hotel and making us the laughingstock of the world.

Now that Trillanes is in jail, the latest rumor says he is planning to write a book entitled How to Stage a Coup Like a Jackass!

Trillanes and his five-star hotel revolutionaries forgot to read Wikipedia on the basics of coup d'etat

2007-11-29T02:15:00.000-08:00

He he he! It seems like our five-star hotel revolutionaries forgot to read the coup manual by Edward Luttwak before going on to launch their luxurious coup. Or if they are really so busy, they should have read Wikipedia on the basics of the coup:

Tactically, a coup usually involves control of some active portion of the military while neutralizing the remainder of a country's armed services. This active group captures or expels leaders, seizes physical control of important government offices, means of communication, and the physical infrastructure, such as streets and power plants. The coup succeeds if its opponents fail to dislodge the plotters, allowing them to consolidate their position, obtain the surrender or acquiescence of the populace and surviving armed forces, and claim legitimacy. Coups typically use the power of the existing government for its own takeover. As Edward Luttwak remarks in his Coup d'État: A Practical Handbook: "A coup consists of the infiltration of a small but critical segment of the state apparatus, which is then used to displace the government from its control of the remainder." In this sense, use of military or other organized force is not the defining feature of a coup d'État.

Since the French coup of 1851, the world has witnessed 99 coups, 17 of them failed. Eleven of these failed coups were in the 80s onwards. This information may indicate the growing difficulties of grabbing power through a coup, probably because of several factors, including the effectiveness of peaceful people-power revolutions as an alternative; and the continuing tide of democratization worldwide. Wikipedia says coups rarely solve the social economic problems of developing countries hence it has become less attractive to military leaders. Currently there are 13 serving leaders who came to power through coup.

One day, I'll buy this book (in the picture), have it xeroxed and give the photocopy to Trillanes and his luxurious five-star hotel commandoes for their own entertainment inside the cells.

Or should I send Harry Potter books instead?

Trillanes surrenders to avoid the "loss of blood"-- his blood

2007-11-29T01:16:00.000-08:00

It’s 5:10 pm and Senator Trillanes and General Lim decided to walk out of the hotel and surrender to avoid the loss of lives—their own. With the APCs and the SWAT troops moving in, there’s really no other option for them but to surrender. It was so stupid of them to initiate a “coup” in the first place. You want a coup and you launch it in a hotel?! My goodness! Such incompetent fools!

First, you don’t launch a “revolution” on a rainy day. Edsa I and II were done on a clear sunny day. And you don’t launch it on a five star hotel.

You want a real revolution? Learn from the lessons of Mao Zedong, Fidel Castro, Joseph Broz Tito, Garibaldi, and Michael Collins. These guys launched it in the real battlefield; not in five star hotels. Mao said a revolution is no picnic and he succeeded.

But Trillanes and Lim would rather have their revolution in the comfort of a hotel. And when they started to feel the discomfort of a tear gas, they chickened out. Funny guys!

Knee-jerk reaction to rising oil prices (or why bringing back OPSF is counterproductive)

2007-11-28T00:36:00.000-08:00

Here we go again! Every time crude prices in the world market moves up, some wise guys out there would call for the return of dreaded Oil Price Stabilization Fund (OPSF), or the institutionalization of its monster cousin, the so-called Oil Exchange. On Monday, it was Party List Representative (Bayan Muna) Teodoro Casiño’s turn to do so. Not only that, he wants the government to “nationalize” the country’s oil industry. He has bills filed in Congress to achieve his desires. The country has tried all these Marcosian measures in the past and it made us all miserable but it seems people simply don’t learn.

We share Casiño’s concern about the price of oil and its impact on the economy and Filipino people. For global crude prices to hover at a hundred dollars per barrel or higher would surely hurt the Philippine economy. But we don’t share his enthusiasm for “nationalization,” the return of the OPSF or its variant, and the Oil Exchange. These proposals are among the most misguided policies any policymaker could ever think of when dealing with prices of oil and oil products. There are better ways; we should avoid knee-jerk reaction that would do more harm than good.

Consider the OPSF established during the years of the Marcos dictatorship. We used to have a free and relatively competitive oil sector prior to the OPSF with wits 6 oil refining companies Shell, Caltex, Esso, Mobil, and Getty competing in the local market. Marcos set the OPSF as reaction to the rapid rise of global oil prices as a result of oil crisis in the 70s triggered by the Yom Kippur war. It worked this way: when prices are low, the government collects money from the industry for the fund (which is necessarily passed on the consumers as higher prices); when crude prices were rising oil companies drew money from the fund supposedly to prevent a surge in oil prices. The Central Bank also allocates dollars to oil companies at an exchange rate on the day the contracts for the shipment of oil were signed.

The government then set the prices and allows firms certain mark-ups based on landed costs, in effect guaranteeing their profits. There was also cross subsidies supposedly to help the poor. It looked fine on paper then but in reality the OPSF ended up draining the Treasury. As prices abruptly rose, the Fund easily got depleted, and the government was always forced to get money from the country’s coffers—from people’s taxes—to replenish it, thus causing massive fiscal deficits. These are not loose change: when the OPSF was depleted in 1990, the government infused P5 billion, and the cycle went on and on. So in reality, OPSF ended up as a massive state subsidy to oil companies, while domestic oil prices remained high despite lower international crude prices and remained even higher when global crude prices were rising. Do we want to get back to this messy policy environment?

The Oil Exchange seems to be an attractive option. The idea is for the government to determine the country’s monthly requirements and ask potential suppliers to bid for the right to supply the requirement. What Casiño has failed to see is that the he is trying to create a monopoly, a monster, this time however, to be controlled by government bureaucrats paid by people’s taxes. Doesn’t he realized that we suffered so much when Marcos had all those monopolies in various commodities (e.g. remember the sugar monopoly) around?

And we know monopolies, much worse a government one. It will surely be managed inefficiently by Malacañang cronies and its humongous cost passed on to consumers via higher prices. They are going to corrupt the bidding process and allocation of oil products. If the Oilex will try to earn money, as it may have to just to finance its operations and the huge layer of bureaucracy its going to create, it will have to charge prices on top of its inefficiency and corruption, thus making us all worse off. And there’s no guarantee that the Oilex officials will not collude with the bidders to rig the allocation of oil products.

An oil exchange either mean that the government will either have to commandeer the storage facilities of the private sector (especially for LPG) so it could bring oil products to every town without delay or it will have to borrow billions of money for the construction of its own depots and related facilities. It’s a prescription for deeper indebtedness.

Why oil prices are rising? It’s because China, India, and the rest of the Asia-Pacific region are growing fast. They need more oil and are buying more oil. Oil experts say the demand and supply of oil are fairly balanced but recently, speculators came into the picture with hedge funds, investment funds, traders, and ordinary investors going after oil futures and oil derivatives. Many of these characters are apparently using oil futures as a hedge against the weak dollar. All these dynamics suggests an OPSF, Oilex and nationalization of the downstream oil industry would simply create more disruptions and uncertainty that are going to manifest in high and unstable retail oil prices.

The solution lies neither in the dismantling the oil deregulation law nor returning to the dark days of Marcos. The solution lies in strengthening oil industry deregulation. These days, the big three oil companies (Shell, Petron and Caltex) still lord it over the industry especially in gasoline and diesel. But certainly some competitors have started to make inroads into their markets, with the new players getting about 15 percent of the market, based on 2005 data. In terms LPG, new players—based on government data—now account for 45 percent of the market. Overall, the downstream oil industry has more than 600 players engaged in different downstream activities from liquid bulk marketing, LPG bulk marketing, bunkering, to terminaling.

In effect, oil deregulation is imperfect but is working. The worry about the continuing dominance of the Big Three is valid but the solution is not another government monopoly but a different set of policy measures like an anti-trust law or a competition policy to promote efficiency and greater competition and discourage the formation of oligopolies and cartels. And we have to do that policy not only for the oil industry but for all other sectors like banking, shipping and port operations, aviation, insurance, among others.

Globalization makes cities feel familiar (or ogling at a priestess inside Cafe Havana)

2007-11-27T20:30:00.000-08:00

She was dancing close to a pillar at the corner of Café Havana unmindful of the world around her. A few feet away, couples dressed in their Friday tryst best where thumping furiously to a Caribbean beat. The room was full of souls searching for thrills but she was practically alone in the crowd, her slim hands raised over her head swaying gracefully in tiny controlled motions, eyes closed like a praying supplicant, her broad hips shaking spasmodically as if she was responding to an inner, passionate rhythm that she alone could sense or hear.

She was wearing high stilettos, tight acid-washed jeans that accentuated her shapely bottom, her plunging necklines agonizing against the strain of her ample breasts. We could see clearly her through the glass that separated her world and ours. The denizens of the night getting in and out the transparent door occasionally threw furtive and curious glances at her, but they always go around gently so as not to disrupt her trance-like supplications. Let the worldly priestess have her dutiful worship, they must have thought, whatever or whoever her god was.

Vic S and I were not supposed to be there. We were on the way to the underground car park headed for home when we came upon a multitude in front of the joint after an eyeball with Loida (a Multiply friend from Davao City) at Figaro, third floor, Greenbelt 3. It was past eleven pm when we were approaching Café Havana. Strings of tiny electric lights coiled up the trunks of giant palm trees highlighted the adjacent greeneries and the beautiful fountains. The full moon, the cool temperature brought about by Siberian winds, and the clear skies provided an exhilarating ambience for intoxication, bonhomie, and flirtatious laughter.

“Wow, look what we got here!” I exclaimed as we were approaching the crowd.

“Maybe we should have one for the road and see what’s in here,” Vic said.

“Nice idea!”

So we found ourselves treading through the perfumed throng to get closer to the bar. And there we saw her inside the room through the transparent glass dancing against the pillar. I certainly could do better than that stupid post, I told myself as I trained my eyes on her bewitching silhouette, but I was not in the mood for mischief. We stayed in front of the bar for several minutes observing her until a bar tender, a girl dressed in a white Caribbean hat, dainty yellow blouse, and tight floral skirt with a slit racing up her thigh, showed up with two cans of ice-cold San Mig Lite.

“To health and prosperity,” I heard Vic—or so I thought—exclaiming as he raised his drink for a toast. “For that girl dancing against the pillar,” I responded. Vic laughed.

We commandeered a table at the nearby Starbucks as we surveyed the crowd while exchanging notes and laughing about ourselves for our past manly misadventures. We saw young Pinoy men with well—nay minimally—dressed girls, middle-aged Caucasian guys with pretty exotic things half their age, blondes and brunettes mixing up with boys and men. Americans, Europeans, Arabs, blacks, South Asians, East Asians—it seemed like everybody was there. The crowd reminded me of Shanghai’s Xintiandi sans the debauchery. Globalization somehow tends to make all cities around the globe look or feel similar.

“This is the why the expats just love it here,” Vic said, showing me the bill.

Each can costs a hundred pesos, almost a third of a plumber’s basic daily wage, but the amount translates to just over two American dollars, loose change for people who reckon incomes in dollars. I was in Silicon Valley early this year; a mug of beer in bars in downtown San Jose was almost seven dollars.

“At The Fort, a bottle of beer only costs just about 35 pesos at a place that is as chic as this one,” he noted. “Man, that’s just about a dollar and twenty cents!”

It was close to two AM when I reached home. I slept after a quick shower and dreamed that we were in a remote island, enjoying the hospitality of the local village. At the background was a multinational force of men wearing war paints and menacing masks, holding spears and wooden shields, chanting songs as they violently thumped their feet against the soft, silvery sand, creating ripples along the shorelines.

At the center were girls in grass skirts dancing, singing, and running around a huge totem pole, a phallic symbol as tall as the coconut trees, their faces and topless bodies illuminated by the fury of burning driftwood and the moon in full bloom hanging up the cloudless sky. They were led by the priestess I saw dancing against the pillar in Café Havana, her supple hands raised over her head swaying gracefully in controlled motions, eyes closed like a praying devotee, her broad hips shaking spasmodically as she responded to the explosive rhythm of the tribal drums.

The way to progress passes through the farms

2007-11-26T19:45:00.000-08:00

READING the World Bank’s latest report on East-Asia and the Pacific entitled “Will Resilience Overcome Risk?”, one can’t help but think that the future indeed belongs to the region.

The report says growth in emerging East Asia is expected to grow 8 percent in 2007 and about 8.2 percent in 2008, to be underpinned by continuing rapid industrial development and urbanization. China and Vietnam will lead the way with growth rates within 8 percent to more than 11 percent. The Philippines is hitching on to that bandwagon through exports to China, Japan, Malaysia, Singapore and Korea and is poised to grow more than 6 percent this year.

But wait a minute, says the World Bank (WB). If we want to spread the benefits of growth, we need to get back to the basics, to the farms. In the same report, the bank noted that “as growth outside of agriculture has taken off, the gap between rural and urban incomes has widened, leaving behind many people in the rural areas generating social and political tensions.”

“Today more than 90 percent of the $1-a-day poor in EAP [East-Asia and the Pacific] live in rural areas,” said the WB.

Solution? The WB says it’s not enough to leave poverty reduction to economic growth and urbanization; governments in the region should develop specific programs to improve the rural areas. Such a strategy, the bank says, should have two major components. First is facilitating absorption of rural labor in the urban economy through investments in urban infrastructure, human capital and labor-market policies such as vocational training, transport services and job matching.

Second is promoting faster rural-income growth through several measures, including the promotion of high-value agriculture demanded by local and global markets as well as rural nonfarm employment. These measures could be complemented by policies like the liberalization of domestic trade. In the case of the Philippines, the full liberalization of shipping and port operations to effectively link the rural island-economies of the Visayas and Mindanao to Manila as well as to global markets would be extremely necessary to enhance market access among rural producers.

One of the major strengths of the Philippines when compared with its neighbors in the region is that it has sizeable areas for expansion for agribusiness, especially for high-value crops like ornamentals, flowers, fruits and vegetables. After an initial surge in investments in high-value crops like pineapple, bananas, rubber trees and oil palm until the 80s, especially in Mindanao, not much money has flowed into this sector since the country embarked on a “comprehensive agrarian reform program” (CARP) under the Aquino administration following the Edsa Revolution.

The reason is simple: agrarian reform has introduced uncertainty into the policy environment for the rural sector. Landowners were not willing to upgrade their farms (e.g., planting better and productive crops, buying better farm machines and equipment, and establishing orchards) knowing DAR officials will someday come and distribute the lands to agrarian-reform beneficiaries. The DAR, in fact, was able to distribute close to 7 million hectares, a significant portion of which were public lands, to more than 4 million farmer-beneficiaries. However, the failure of the government to provide support services for the “new landowners” suggests that productivity has not improved significantly in the countryside.

The Philippines has been implementing agrarian reform for 34 years now since Marcos promulgated Presidential Decree 27. If we want to inject vigor into the countryside, we should remove the uncertainty by completing or winding up such a program as soon as possible. We should put a timetable for its completion; otherwise, we will be implementing such a program till kingdom come with no additional benefit to the country.

Currently, DAR is asking for another 10-year extension for the distribution of additional 1.2 million hectares at a cost of another P100 billion. We say, enough! In fact, the best option is allowing the program to die a natural death by 2008. And if the government really has the commitment to improve the countryside, it would be wiser to spend that P100-billion funds for rural infrastructure and support services to existing CARP beneficiaries.

We have already extended agrarian reform once. It wouldn’t do us good if we extend it once more. This program has gone too far and too long to the point that the DAR bureaucracy seems to have evolved in some parts into a rent-seeking organization whose interest lies in not completing its mandate so that it could prolong its existence. DAR right now has 15,000 officials and employees, and 60 percent of its money is spent on salaries and wages. In other words, DAR has become one huge public-employment agency with less and less marginal utility for every minute of its existence.

DAR has been justifying its inefficiency by citing “landowner resistance” to land distribution. But its own statistics says that voluntary offers of sale and voluntary land transfers accounted for 120 percent and 180 percent, respectively, of its targets. These figures suggest more of DAR resistance to land distribution.

Let’s put an end to this charade and move on to give the rural sector a fresh slate. (Drafted as editorial for BusinessMirror, Nov 27 2007)

A new era for Australia?

2007-11-25T19:39:00.000-08:00

Australia has a new prime minister in the person of Kevin Rudd, who promised to pull out Aussie troops in Iraq and ratify the Kyoto Protocol. Are we going to see a sea-change in how Australia will do its economic and foreign policy? Time Magazine’s observations are interesting:

The new P.M. is likely to go Howard's way on foreign policy, too. What he described as "fundamental differences" with Howard — his vows to ratify the Kyoto Protocol on climate change and pull troops from Iraq — are largely symbolic. Though Australia is outside the Kyoto regime, the country has met its emissions targets. And on the question of a successor treaty to Kyoto, Rudd in mid-campaign abruptly took the Howard position: a Labor government would not ratify Kyoto II unless it required China and India to limit their emissions. On Iraq, Rudd has moderated Labor's earlier "pull-out-now" policy. He says he will bring home the 1,400 Australian troops in Iraq and the Gulf gradually, in a "negotiated, staged withdrawal." He is prepared to send more troops to Afghanistan.

Australia under Labor will remain a "rock solid" friend of the U.S., Rudd has said, but reserve the right to act "independently." Rudd, who spent eight years as a diplomat in Beijing, has criticized China's human-rights record but appears more sympathetic to the People's Republic than Howard. Rudd rejected the Howard government support of a potential alliance between the U.S., Australia, Japan and India, saying China would feel encircled.

Reminds me of France’s president Nikolas Sarkozy. He marketed himself as critical of Anglo-Saxon capitalism during the campaign but immediately turned pro-American and instituted market-oriented policies after gaining power. He is now battling the unions and is apparently winning.

The Left's strike against the people!

2007-11-25T02:00:00.000-08:00

The Left is going to launch a transport strike tomorrow morning. Stupid! What are they trying to prove? First, let’s face it guys, you followers of Joema who is enjoying a nice life in Euriope, there’s really nothing you can do. It’s a global trend and government couldn’t do anything about it, except do certain policies to cushion it. And indeed, the strong peso has so far been cushioning the rise in local prices.

And second, if you are protesting against the rise in prices, why is it that you guys, admirers of Joema, are trying to hurt us ordinary people? The rich in this country are going to their work in style in their SUVs while more than 70 percent of us ordinary guys are going to use public transport. And you guys are going to make life difficult for us! Why are you trying to hurt us?

If you communists out there want to hurt “the ruling class” in this country, go and picket the oil companies! Go block those SUVs and you will see. Simpleng tao lang ang kaya niyo!

Another rotten deal? Let there be "sunshine laws"!

2007-11-21T19:13:00.000-08:00

“The lust of gold succeeds the rage of conquest; the lust of gold, unfeeling and remorseless! The last corruption of degenerate man.” —Samuel Johnson, Irene (Act I, Section 1)

THE overpriced Diosdado Macapagal Highway, also called the “road to perdition.” The controversial Northrail project. The NBN-ZTE and the cyber-education project (CEP). What are the bottom-line issues in all these government projects? Corruption and lack of transparency. And, as usual, the people who are going to pay for all these projects with their taxes, their hard-earned money, are the last to know.

Just the other day, the World Bank (WB) “deferred” the implementation of a multimillion-dollar loan to the Philippines supposedly for “phase two” of the National Roads Improvement and Management Program (NRIMP) due to supposed corruption, specifically collusion and overpricing.

“Signs of procurement problems in the first phase of the program were identified. Between 2003 and 2006, the World Bank rejected two large road contracts in three successive rounds of bidding because of strong signs of collusion and excessive pricing,” said the World Bank, explaining its decision.

Here we go again! It seems the Philippine government can’t learn from its mistakes. It’s another national embarrassment that wouldn’t help our image as a nation—whatever is left of it—abroad. Do we wonder why Transparency International now considers us as among the most corrupt countries of the world?

In fairness, the Philippine government is saying the World Bank is the one to blame for insisting on its own “flawed public-procurement system” that is not tailored to the Philippine context. “That would not have happened had the World Bank not insisted on choosing its own system,” said Rolando Andaya, the Philippine budget secretary.

The problem, Mr. Andaya explained, lies with the fact that the World Bank supposedly allows bids higher than the indicated amount as against the Philippine approach, which only takes in bids lower than the indicated amount. “Now they are blaming us for something that they themselves insisted on adopting,” he said.

Andaya probably has a point there, but the truth is that the supposed collusion and overpricing happened within our borders. And given our recent experience with the NBN-CEP deals with the Chinese— where the government, specifically the National Economic and Development Authority, gave the go-ahead to projects that didn’t go through a bidding process—we are inclined to give more weight to the view from the WB.

Indeed, the World Bank actually expressed concern that the project could be vulnerable to corruption. In a project document prepared for the NRIMP, the bank, on “lessons learned” regarding the project, said: “The nature and political economy of corruption in the Philippines cuts through sectors and levels of bureaucracy, and bypasses preemption and law enforcement sanctions. National procurement has, at times, been affected by collusion and bid-rigging, with high payoff margins until bid ceilings were imposed.”

The WB document adds: “This has also affected foreign-assisted projects, where a bid ceiling is usually not permitted by international financing institutions, but corrective measures to date require further strengthening to be effective.”

Among the corrective measures suggested are the following:

1. Independent procurement assessment and technical audit that strengthens transparency of the bidding process;

2. Enhanced processes for procurement, financial management, internal controls and audits of the road-management agencies; and

3. Inclusion of a new and innovative coalition of citizen and road-user groups called Road Watch in the project-management setup. Road Watch will monitor project implementation and procurement and issue periodic report cards on the performance of the road sector.

Apparently, all these proposed measures have yet to materialize. That’s probably among the reasons we have another scandal in our midst.

Certainly, we need to speed up the implementation of these reforms, including the idea of including in the governance-procurement board the presence of the Catholic Bishops’ Conference of the Philippines and the Makati Business Club. And if these measures could be put right down to the provincial and municipal levels, they would surely make a difference.

What’s happening right now is another reflection of the utter lack of transparency in the country’s public-procurement system. And this is because despite all our pretensions to democracy and social openness, we have yet to enact “sunshine laws” like the Freedom of Information Act (FOIA) that would allow citizens and media access to all government documents and reports.

New democracies that emerged since the fall of the Berlin Wall immediately enacted sunshine laws to address corruption in their societies. We failed to do the same after the fall of the Marcos dictatorship, despite several attempts. This time we should have all these sunshine laws to stop these continuing tales of corruption in high places that have pervaded every fiber of our society.

The reason we can’t bring legislators to enact a FOIA is that there seems to be no widespread clamor for it. If we could muster the forces of academe, media, law groups, chambers of commerce, religious organizations and civil-society organizations, legislators and policy- makers would be forced to listen. (Originally prepared as editorial for BusinessMirror Nov 22 2007)

Loyalty is passé; engagement is now name of the game

2007-11-20T01:16:00.000-08:00

“O, where is loyalty? If it be banished from the frosty head, where shall it find a harbor in the earth?”—William Shakespeare, in King Henry the Sixth, Part II

IN these days of brain drain everywhere, there’s no longer any sense for companies to expect eternal “loyalty” from their employees. The game now—according to Russell Huntington, human-resource firm Watson Wyatt’s Asia-Pacific human capital director—is all about “engagement.” It means that if companies would like to hold on to their skilled or talented employees, both parties should be on the same page on where the company is heading for, and management should give workers more room to contribute to the achievement of company goals.

“Engagement is when employees help the company succeed,” said Huntington. “Loyalty is history.”

If loyalty is indeed passé, it’s not because workers have gone bad. It’s more because since in the 1980s, employers thought workers were disposable items in their pursuit of global competitiveness. Well, that’s the unionist’s perspective, anyway, although it seems to contain some grain of truth. The bigger reason really lies in the emergence of the “new economy” and the Information Revolution that accelerates the pace of globalization.

Manolo Abella, a Bangkok-based labor-migration expert formerly connected with the International Labor Organization, says the raging war for talent results from the growth of global-supply chains, as liberalization of trade policies has made it possible for transnational companies to move production to cheaper locations.

As an aside, globalization has diluted the notion of loyalty both ways: workers don’t have much qualms about leaving their companies because the “hooks” of those fishing for talent are numerous and varied, and there are so many choices and material attractions for anyone who’s skilled and determined and hardworking enough. But on the other hand, companies also tend to lose the kind of “loyalty” to employees as the past two generations know it—where they’d do everything to keep the workers who were there “at the creation” of the enterprise, so to speak. Indeed, what loyalty can one expect from a company based halfway around the world, and perennially looking to cut costs and stay competitive in a globalized industrial setting?

“The emergence of global production structures have been everywhere, accompanied by greater movements or transfers of technical and managerial personnel,” says Abella in a paper on labor migration. “Another important development has been the growth of informal as well as flexible forms of employment, opening markets for foreign workers willing to enter occupations or sectors abandoned by natives.”

And currently, it’s a lot easier for people to leave their companies or for companies to fire workers because of a paradigm shift in labor-management relations.

In the 1980s, “corporate downsizing” became the trend as companies moved heaven and earth to become “lean and mean.” There was a global economic slowdown and exports from the newly industrializing economies of East Asia were giving everybody hell in the global marketplace. It was easy to make the downsizing decision because powerful computers as well as new, better software enabled firms to use just-in-time production that didn’t require high inventory levels. Suddenly, the old labor-management ethos of “lifetime employment” and “company loyalty” vanished as hundreds and thousands of workers lost and found jobs across the globe.

What we are stressing here is that the old ways of doing things in human- resources management no longer apply. Workers, especially “knowledge workers,” can no longer be treated as inputs or disposable cogs in the production machine.

Company managers should take pains in explaining the future of the company and how each one fits into the overall picture. Companies should develop clear career paths for each. It should explain the goals, vision and mission and devise clear mechanisms by which each employee could contribute to the attainment of those goals. This way, employees can share in the company’s dream, giving them strong incentives to stay.

And employers shouldn’t forget about “base pay”—or that which employees get through payroll every 15 days! Huntington of Watson Wyatt said Filipinos, compared with their counterparts in the Asia-Pacific region (especially Hong Kong, Indonesia, Malaysia, Singapore and Taiwan), are not necessarily lured by money when they start seeking jobs fresh from university. Their main criteria for joining are the reputation of the company and career-development opportunities. In other words, they want to learn and grow with the company. That’s at the start, when they’re young and keener on learning from the best in the field. But inevitably, as they grow older and more settled in their careers, the base pay starts to matter more, if the experts are to be believed.

This information may imply that as these employees mature with the firm, they may start thinking about settling down, owning pieces of property like a house, lots or condominiums for their future families. That’s when base pay becomes a very important issue. Along this line, Huntington clarified that base pay has remained a very important reason why talented employees in the Philippines leave. Consider that that’s also the time when these employees, having gained significant experience and skills, become so attractive to headhunters here and abroad. The “pull” is very strong, and a company must be painfully aware at all times of such “lures” and do everything to “engage” or help them find greater sense in staying even if base pay can’t be substantially increased.

Without company “engagement,” they are likely to leave for greener pastures either here or abroad. That explains why increasingly we are sending skilled professionals, including IT engineers, construction engineers, nurses, doctors who became nurses, physical therapists, architects, managers, advertising experts, journalists and even soldiers.

The bottom line for a country like the Philippines is rather tough. That should mean local companies have a lot of “engagement” to do. And they should do it before it’s too late. (Drafted as editorial for BusinessMirror editorial, Nov 20 2007).

Should we privatize PNOC-EDC?

2007-11-15T01:42:00.000-08:00

SO, the government is thinking of selling 60 percent of the Philippine National Oil Co.-Energy Development Corp., or PNOC-EDC. For what? Because the government has failed to meet its tax-collection targets and, therefore, would sell some prized assets to compensate for its incompetence?

We had better be clear about our objectives because we might be losing track of our long-term interests in favor of some short-term gains. We should go easy on the privatization trigger on this one. Or, as Senate President Manny Villar Jr. counseled at Wednesday’s Quijano de Manila Symposium, the key word to privatization is “judiciousness.” In this case, you have to weigh both the financials and the energy-strategy considerations.

This is precisely the message of Sens. Joker Arroyo and Mar Roxas who are pushing Resolution 203 urging the government to “hold in abeyance” the bidding of the PNOC-EDC shares worth P35 billion. Indeed, why sell a prime state asset when it’s earning money for its own business and some for the government? If we lose control of the EDC, are we not abandoning our policy objective of developing indigenous sources of energy with the sale? Maybe, maybe not—but we first have to answer these questions before we can even think of selling those assets. And we do need lots of technical inputs in making that decision. A November 21 auction date, therefore, makes it impossible for the government and its experts—if it’s even tapping any—to find out whether or not we’d need to keep holding on to a strategic 60-percent stake in such a strategic company.

Privatization has its merits. If the company doesn’t have much money, the entry of private investments could translate to more cash for energy exploration and development. Yet, in truth, the company has been doing financially well and is projected to earn a net profit of more than P7 billion this year.

Supposedly, private companies, especially if they are those huge international oil companies (IOCs) like Royal Dutch Shell, possess new technologies and management expertise necessary to recover hard-to-reach and hard-to-find oil or gas, something that could rub off on our local oil and gas professionals, thus improving our own capabilities. The Norwegians privatized Statoil, their national oil company (NOC), and that policy decision seems to be working just fine for them.

But then again, privatizing NOCs has not always been the trend globally. It’s because NOCs perform certain social functions that are quite different from the IOCs’. While IOCs are driven purely by the profit motive, NOCs worldwide were often envisioned to ensure energy security and sustain local economies. In other words, NOCs, like our very own PNOC-EDC, are there to perform certain long-term strategic national objectives.

This role has even become more important during this “age of energy-supply anxiety” characterized by the rapid rise of energy demand from the Asia-Pacific region (especially China); the continuing political uncertainties brought about by terrorist threats to energy infrastructure; production disruption in oil-producing areas like Iraq; and declining access by IOCs to proven reserves controlled by states in the Middle East, Russia and Latin America.

There is, in fact, a paradigm shift in the way NOCs are behaving in response to this anxiety, said geologist Pete Stark, vice president for Denver-based IHS Inc., an energy and engineering think tank. It used to be that NOC businesses were simply all about managing the state’s energy resources for the country’s long-term benefit. Now, NOCs—according to Stark—are becoming international exploration companies, competing with IOCs in the home as well as global marketplace. The extreme manifestation of this paradigm shift is “energy nationalism” where countries like Libya, Russia, Venezuela and Angola moved to consolidate state control away from IOCs.

What’s the Philippines’ game plan, given these new global realities? How would the selling of the country’s crown jewels affect our chances of improving our indigenous energy sources? Will privatization work for us during this time of energy nationalism? It seems that the government is not looking at these issues quite well, as its mind is largely focused on getting the fresh billions that the sale would generate. Yet, meeting short-term fiscal balance this year will never be worth the potential loss of a long-term strategic resource.

We are concerned with the moral hazard that goes with this sale. Privatization per se, granting that it’s done properly and with great transparency, is a very good policy. This is clear enough with water privatization where, despite the problems with Maynilad, access to potable water has ceased to become a political issue in Metro Manila. But privatization could be a questionable policy decision when the primary purpose is to collect the cash to compensate for government failures elsewhere, and improving the economic-policy environment becomes secondary. The sale of PNOC-EDC seems to have these characteristics.

What’s to prevent the government from conducting a fire sale of an available public asset every time the Bureaus of Internal Revenue and Customs fail to collect the desired amount of taxes? Indeed, if revenue bureaucrats could sell anything every time they fail to do their mandate, there would no longer be any incentive for policy reforms. And when we run out of assets to sell, what happens?

Retirement villages: Pinoy's superb people's skills find a niche

2007-11-13T18:38:00.000-08:00

ON Tuesday, BusinessMirror ran a report that Angeles City Mayor Francisco Nepomuceno is eyeing the establishment of retirement villages in his hometown to boost development in the area. Wise move, we say.

Projects like these are among the most feasible for local governments, as these require less capital while easily generating tangible economic benefits down at the grassroots. It’s a good thing that the Philippine Retirement Authority (PRA) has recently included Angeles City in its list of “destination havens.”

Establishing retirement villages is like hitting several targets with one stone. The construction sector and its affiliated industries would surely perk up. Retirees usually favor places that are essentially less urbanized; hence, the jobs to be created by retirement villages would benefit local rural residents in terms of increased requirements for labor—not just skilled caregivers and health and wellness workers, but also construction workers, plumbers, food caterers, restaurant workers, masseuses, janitors and golf caddies, among others.

Currently, many of our medical professionals (nurses, physical therapists, doctors, medical technologists) leaving for jobs abroad cite the limited economic opportunities in the country. Retirement villages would necessarily need more medical professionals (especially doctors and nurses), hence, there would be incentives for them to stay.

Why do we have to send them abroad if we could just bring in the retirees from the United States, Japan and Europe for our nurses to care for? It’s probably one of the best ways to boost tourism as the retirees here would likely attract visits from their relatives from their countries of origin.

What’s good about retirement villages is that they are environmentally benign. Retirees would necessarily desire a very good environment, thus there is an incentive for the host communities to maintain clean and safe surroundings. There would be more economic motivations for communities to preserve and conserve watersheds, clean rivers and plant more trees.

But it bears stressing here that developing retirement villages is not as simple as it seems. Retirement villages should be planned carefully, taking into consideration the special needs of retirees. These places, while many of them should probably be close to the sea and sun, should have easy access to health facilities, good urban and cultural centers, sports facilities and other amenities. They should also be communications-ready, meaning foreign retirees used to computers and e-mailing or cyber-chatting would be looking for telco services.

Retirees should also have good opportunities to mingle with the local community while ensuring their safety. Many retirees, being well-educated and having retired from challenging jobs, would be interested to interact with other people and, possibly, even do pet projects with them.

All these factors suggest that the local governments and the private sector should delineate their roles well. The LGUs should assume enabling roles while allowing the private sector to plan, construct and develop these retirement villages, based on certain global standards. An enabling role for the LGUs and the government, in general, means that local legislators would have to pass supporting policies (especially on proper land use, waste management, conservation, improved town management, traffic, etc.) to ensure the success of these villages. (Note: drafted as editorial for BusinessMirror, 14 Nov 2007)

Holding up half the sky from the depths of hell?

2007-11-12T19:02:00.000-08:00

“People are more violently opposed to fur than leather because it’s safer to harass rich women than motorcycle gangs.”—Unknown

Congratulations, therefore, are in order for all the women: our mothers, daughters and sisters! And certainly, the entire society deserves credit as well. The Philippines’ 2007 Gender Gap Index ranking indicates that culturally, the Philippines has come a long way from a feudal past when parents thought society should not invest in women’s education and personal advancement because they were going to be married off anyway and will stay in the homes of their husbands. These days we are increasingly seeing the influential roles being played by women in Philippine society, be it in civil-society organizations, business or politics.

Indeed, it’s a fitting tribute to women in a society that is increasingly relying on its women to move the economy forward. If we look deeper into the numbers, it’s obvious that our new growth drivers—outsourcing, electronics and overseas labor migration—are mostly “manned” by women. Increasingly, we are sending more skilled professionals going abroad. They are mostly medical professionals, caregivers and artists who are predominantly women. We are increasingly sending abroad information-technology professionals, many of whom are women.

But on hindsight, some of these trends are not necessarily favorable to women and society as a whole. For one, it means we are increasingly sending abroad women who are sorely needed to give motherly care for our own children. The fathers and relatives could probably supplant the mothers, but reality—or at least the common anecdotal evidence in our immediate community—seems to indicate that households with single parents are not always the best environment within which children should grow up in. Horror stories about teenage pregnancy, alcoholism and drug abuse, even incest, among OFW families are too common to ignore.

That many of the women have to go beyond the borders to become breadwinners indicate that, increasingly, women are disproportionately bearing the burden imposed by a flawed economic strategy that traces its roots to the 1970s. Nothing is wrong with labor migration per se, but if it’s the only thing that keeps the economy afloat, as is the case of the Philippines lately, something must be wrong somewhere.

It means women are being forced to take roles and so much risk they probably wouldn’t want to take if only there were more options within the country. We are specifically referring to caregivers and domestic help, mostly women, who are prone to abuse in alien cultures. Isn’t that another form of oppression?

A recent episode in the multiawarded TV documentary Probe Team dwelt on human trafficking, and the stats were appalling, bearing out what we just had a hunch about all this time, i.e., that the Philippines ranks also among the top five countries from where originate victims of human trafficking, especially young women. This shouldn’t be surprising. For many decades, it had been quite easy for unscrupulous recruiters and the network of traffickers to ship out young, unsuspecting, unsophisticated poor women from the countryside, promising them jobs in the Middle East or some Southeast Asian destination (usually Malaysia or Indonesia), only for them to find themselves stranded in some brothel, broke and broken, their documents all tampered with or forged, and thus no good for any decent job.

Until recently, it wasn’t surprising to find queuing up at the Naia an illiterate woman bound for Kuwait or some similar destination, there to work as a domestic.

The government early this year bucked massive protests by setting a floor wage of $400 for domestics, at the risk of losing a big chunk of the overseas market to nationalities that will bite at cheaper rates. Policymakers justified this by saying it was one way of discouraging a surge of OFWs in such low-end positions, which attract the more vulnerable types, anyway, and encouraging deployment of better skilled—hence, more educated and less risky to abuse—workers. Last time we checked, the controversial policy seems to be working in this wise, although the recruiters are complaining because the deployment is declining.

To be fair, the government may be right after all on this score, but until then, it should keep pursuing the line that one can’t build an economy on the backs of its women, especially those prone to all forms of abuse, while tearing, because of their absence, the social fabric back home. Let’s hope next year’s gender index will show even better results.

Closing the gender gap (how the Pinoy machos are becoming domesticated!)

2007-11-11T23:58:00.000-08:00

For the second time, the World Economic Forum has ranked the Philippines number 6 in its 2007 Gender Gap Index, an indication that the country is one the most “women-friendly” countries in the world. Other countries in the top ten are Sweden, Norway, Finland, Iceland, New Zealand, Germany, Denmark, Ireland, and Spain.

In a related development, Dr. Romulo Virola says the Pinoy machos are getting domesticated.

The Global Gender Gap Report 2007 measures the size of the gender gap in four critical areas of inequality between men and women:

Economic participation and opportunity – outcomes on salaries,
participation levels and access to high-skilled employment;

Educational attainment – outcomes on access to basic and higher level
education;

Political empowerment – outcomes on representation in decision-making
structures;

Health and survival – outcomes on life expectancy and sex ratio.

According to the Report, the Philippines ranked second in the subindex on economic participation and opportunity for women and 14th in political empowerment. The country also ranked first in educational attainment along with Australia, Belgium, Belize, Denmark, the Dominican Republic, France, the Honduras, Ireland, Jamaica, Lesotho, Luxembourg, the Maldives, Poland and the United Kingdom.

The Philippines also shares first place in health and survival with Angola, Argentina, Austria, Belize, Brazil, Cambodia, Chile, Colombia, Costa Rica, the Dominican Republic, Ecuador, El Salvador, Finland, France, the Gambia, Guatemala, the Honduras, the Kyrgyz Republic, Latvia, Lesotho, Madagascar, Mauritania, Mauritius, Mexico, Mongolia, Panama, Paraguay, the Slovakia, Sri Lanka, Thailand, Trinidad and Tobago, Uruguay, Venezuela and Yemen.

In Asia, the WEF said the Philippines and Sri Lanka, which is at 15th place, remain the only countries included in the top 20.

“The Philippines is, once again, the only country in Asia to have closed the gender gap on both education and health and is one of only six in the world to have done so,” said the WEF. “The Philippines’s scores on political empowerment improved further, as did some of its economic indicators, such as estimated income, labor-force participation and income equality for similar work.”

I'll reflect on this tomorrow.

Reforming the PPA, invigorating Mindanao

2007-11-07T19:32:00.000-08:00

THE other day, the Mindanao Federation of Shippers Association called on the Philippine Ports Authority (PPA) to speed up the expansion and redevelopment of three major ports in the Mindanao, namely, the ports of Davao, General Santos and Zamboanga City. We support this call, given its tremendous positive impact not only on Mindanao but also on the entire Philippine economy.

There has been a continuing call for spreading the benefits of growth from all sectors. Even the government has been mounting similar objectives. But if our policymakers are serious about this, heeding the Mindanao shippers’ call is one of the surest bets, especially as it came following observations that the volume of cargo traffic in and out of Mindanao cities is on the upsurge. It means economic activities in the country’s second-biggest island are probably improving as well.

It’s probably a better investment than the so-called “national broadband network” which addresses nothing but the desires of lazy government bureaucrats for easy and faster access to Internet porn. Right now, Mindanao serves as the country’s food basket (producing rice, corn, sugar and livestock) as well as a major foreign-exchange generator through the production and export of agricultural and natural resource-based products, including bananas, rubber, pineapples, tuna, coconut products, mangoes, asparagus and other high-value crops. Given bigger and more efficient ports and related infrastructure, Mindanao has the potential of becoming a major growth driver for the country.

Mindanao shippers say since PPA funds are probably not enough to finance the development of these ports, the government might need to tap overseas development assistance, assuming of course that government could ensure transparency. For instance, government could tap funds from the Asian Development Bank, World Bank or the Japan Bank for International Cooperation. We cite these organizations because they seem to be sticklers for transparency and strict good governance rules, thus forcing local-government implementing agencies to behave properly.

Tapping overseas development assistance, of course, has it own limitations. If government couldn’t provide counterpart funding—not only because it doesn’t have money, but also because decision-makers in “Imperial Manila” have different priorities—nothing will happen. The best way to address the problem of funding for port infrastructure, therefore, is reforming the existing policy on port management and development to mobilize private-sector resources. If government can’t generate public money quick and fast, it can at least tweak policy and achieve the same end.

Right now, the country’s ports system—according to Gilbert Llanto, an economist from the Philippine Institute for Development Studies—is dominated by the PPA. A government agency, the PPA serves as the developer, operator, owner and regulator of ports, including those of the private sector. It also regulates cargo handling by awarding contracts to private cargo-handling services, and issues permits for the construction and operation of ports.

And how does the PPA finance its operations? From concession fees from the lease of the South Harbor; port charges such as wharfage, berthing and pilotage; and share of cargo-handling revenues from private cargo-handling operators and port charges of privately operated ports.

In other words, the PPA—according to Llanto—is suffering heavily from conflict of interest, being both owner and regulator. Since it earns money from its own ports, it has no incentive to grant permits for the construction and expansion of privately operated ports that may compete directly with PPA-owned ports. This is why there is practically no competition in the port-operations business. And since the PPA dominates the port business, it doesn’t also have the incentive to move quickly on requests for port upgrading. Mindanao shippers’ requests for upgrading the ports in Davao, General Santos and Zamboanga City have been there more than a decade ago, but the PPA and government in general has been slow to respond.

The PPA also regulates and approves tariff-rate increases in cargo handling and gets a 10-percent share from cargo-handling revenues. It, therefore, has the incentive to approve requests for tariff-rate increases since it’s going earn more money from such increases. No wonder, we have the highest shipping and port-handling costs in the Asia-Pacific region, making a lot of our exporters less competitive in world markets.

Solution? Llanto says there is a need to review and amend the PPA’s charter to separate its regulatory role from its ownership, development and operations functions. The government should consider the establishment of an independent port regulator. The ideal situation should be that the state serves as an enabler while the private sector owns and operates the ports under a competitive policy environment. The entry and exit of the private sector in this business should be wide open and transparent.

Under such an arrangement, the private sector could easily be relied upon to upgrade the ports and expand their operations once they sense there is a growing volume of cargo coming in and out. Their response to market demand would be fairly automatic. That way, shippers from Mindanao or other parts of the country don’t have to beg from PPA overlords once they suffer shipping bottlenecks. (Note: drafted as editorial for BusinessMirror, Nov 8 2007)

Related posts
1. Scandal in Philippine ports
2. Is PPA a fixer for port monopolists?
3. Reaping the whirlwind
4. Marshall Plan for Mindanao
5. Solving the Mindanao problem
6. “Disconnectedness defines danger”
7. Dysfunction in Philippine shipping policy

Is the world getting unequal?

2007-11-06T02:26:00.000-08:00

Is the world getting unfair? It’s so easy to form that impression these days especially if you live in the Philippines. In a study, NSCB director general Romulo Virola and company said the ranks of the middle class have been shrinking. The study however only covers from 1997 until 2003 and surely the rapid growth of outsourcing may have some positive effect on the fresh numbers. I really hope Dr. Virola updates us on this thing one of these days.

But in the US, Americans are also complaining about the same trend. Take if from political economist Robert Kuttner who recently said that:

For three decades, the [American] economy has increasingly become more unequal and more precarious for ordinary people. During the same period, risks that used to be absorbed by large, stable employers or social programs have been transferred back to individuals and families.

Meanwhile, the financial economy has become steadily more speculative and corrupt, as insiders, often with severe conflicts of interest, extract wealth from the real economy. The dot-com bust of 2000-2001 was the result of those conflicts -- accountants who were supposedly guardians of honest books colluded with management to pump up stock values and deceive investors; stock "analysts" compensated on the basis of their success in duping the dumb money.

Sounds familiar?

In the case of the Philippines, the supposed rising inequality could be due to the emergence of new growth drivers that are essentially urban-based: outsourcing, electronics, construction, real estate. Inequality however could also be “good” especially if its temporary. Let’s face it, any surge in economic growth usually starts from certain sectors of the economy (say certain sectors in manufacturing and services) before others catch up through demand linkages. We have yet to see whether or not this pattern will eventually manifest in the Philippine context, now that we started to have decent economic growth rates (5-7 percent).

I’m crossing my fingers.

From the farms to the slums

2007-11-05T17:33:00.000-08:00

"From the farms to the slums “Migration can be a climb up the income ladder for well-prepared, skilled workers, or it can be a simple displacement of poverty to the urban environment for others.”—World Development Report 2008, the World Bank

MIGRATION to the city, or even to other countries for work, says the latest report from the World Bank, is no way out for the rural poor. Not all the time, anyway, and still the best way to solve rural poverty is directly addressing rural folks’ problems right where they are.

We couldn’t agree more with the World Bank, especially in the context of the Philippines where the government seems to have abandoned the rural sector right after legislators passed the Agricultural and Fisheries Modernization Act (Afma) in 1998, supposedly to boost the competitiveness of the farm sector following the country’s joining the World Trade Organization.

The idea that urbanization could solve everything stems from the stylized view that countries with higher rates of urbanization are usually richer and, therefore, with lower poverty ratios, either rural or urban. This is correct, especially as regards the experience of most developed countries like Western Europe, the United States and Japan, where industrialization came as a flipside to urbanization.

In theory, investors usually set up factories close to the city, especially port cities, where they could hire workers to operate the machines, bring in raw materials either through the ports or rail systems, send the finished products through the same transport networks, and where overall costs are lower due to the availability of other support or ancillary industries and services like banks, insurance firms and accounting services, among others. That process, in turn, attracts workers from the countryside, extra hands that were made redundant by the increasing mechanization of farming and other technological innovations. The end result is a competitive industry and services sectors growing fast side-by-side an equally vibrant farm sector, a wonderfully dynamic process that soaks up joblessness and ultimately addresses poverty.

The presumption here, certainly, is that government has invested massively in infrastructure development, thus facilitating an economic interaction between the farms and industry, as well as the rural areas to the urban areas. This is one variable that has always been lacking in development strategies of most developing economies, leading to what development economies call “premature urbanization.”

Premature urbanization suggests that desperate rural folks—lacking the means to make a decent living in the farms due to lack of good infrastructure, health services, land tenure, credit, and market information, among other things—migrate in mass to the cities, hoping against hope to get a better deal for them and their families. In most cases, however, most of them end up in the slums doing all sorts of odd jobs and putting pressure on limited social services. There are simply not enough factories to work in. And if there are, rural folks are the last ones to get hired for lack of skills and urbane social graces.

Despite these drawbacks of premature urbanization, policymakers continue to stick with urban-oriented growth strategies, apparently for political reasons. Urban areas are where the influential economic elite and noisy middle class live, and it’s convenient for the state to forego public investments in rural areas when funds are limited due to failure to collect taxes from these elites. This was clearly manifested at the height of the fiscal crisis in the early 2000s, when the government practically stopped investments in health, education and rural infrastructure in the hope of achieving “fiscal consolidation” and getting into the good graces of the International Monetary Fund.

With higher charges collected from the people through the expanded value-added tax, the government now has supposedly some resources for rural development. And yet, we could hardly see any definite thrust toward this end. Whatever initiative the government had was just a pretext for a scam (the Joc-joc Bolante caper). It was convenient to ignore the countryside because the economy has been growing courtesy of outsourcing, electronics and the recovery of construction, which are urban-oriented. The idea now seems to be that eventually, economic growth will outgrow problems like joblessness and, later down the road, rural poverty.

This is a misplaced assumption, essentially because the way we are growing right now, economic growth might not be sustainable. An urban-oriented growth is inherently inequitable and is prone to accentuate not only the urban-rural divide but also the gulf between the haves and the have-nots. The latest study by Dr. Romulo Virola and his team from the National Statistical Coordination Board, saying the ranks of the middle class have been shrinking, seems to prove this point.

It will never be sustainable because such type of growth would produce a revolution of rising expectations that may, in its bizarre forms, manifestrising criminality (a form of income redistribution), and the continuing lack of political stability. The continuing threats from terrorism being seeded in a perennially undeveloped south, the persistent menace of communist ambushes and “revolutionary taxation,” and the disillusionment of the country’s professional classes that are driving them to leave for foreign shores, are just among the bad signs. (Note: drafted as editorial for BusinessMirror, 6 Nov 2007)

Revolt of the skilled and the middle class?

2007-11-03T22:16:00.000-07:00

Louise’s call woke me up from my afternoon sleep yesterday.

“Hey brother, I’m here at the Fort, having an eyeball with Multiply friends including Sally. I’m leaving for Singapore,” she told me. “This will be my third stint as ‘OFW,’ ha ha!

She’s going to work, she said, as architectural designer and estimator for a Singaporean firm, apparently with a very good pay.

Knowing Louise, I know it’s not really about the money. Or maybe it is, but it’s probably less of that and more about the new experience, professional advancement, and perspectives that she would gain from working in a new environment.

I’m happy when I hear friends with great skills leaving for some overseas stints. Those gigs surely make them happier, richer, better persons, more skilled, and innovative. And when they decide to return home someday after making a pile, they would surely contribute a lot to society. That’s what travel and global experience does to a person.

I am not comfortable with views that say skilled people need to remain within the borders to “help in nation-building.” Sometimes, such a collectivist view is a deception as it tends to subordinate the Individual to the State or some commercial interests bent on maintaining dominance in an inequitable social order. I’m talking about the Philippines, specifically.

Overseas employment could be a form of protest. It’s a protest against the local institutions and structures that couldn’t seem to appreciate talent. It’s a protest against the wickedness of local politics. It’s a heroic struggle by people who don’t want their choices limited by short-sighted policies.

But it’s a constructive kind of protest because instead of mounting a revolution or lining the bastards and shooting them against the wall, they channel their energies elsewhere, thus helping in the transformation of societies where their talents are appreciated while sending money back home for kin to build better homes, and pay for education. Why do you think countries like Australia, Canada, New Zealand, and Singapore are moving heaven and earth to attract talent from all over the globe?

Southern push: europeans look at Cebu as investment destination

2007-10-30T22:40:00.000-07:00

IT’S a good thing that European businessmen, specifically the members of the French Chamber of Commerce, are starting to see Cebu as an investment destination, not just as an exotic place to visit. That’s an important development that our leaders in both the public and private sectors should nurture because it’s the best way to address income inequality in the country.

Inequality in terms of income and wealth has always been a major problem in the Philippines. Inequality usually manifests itself in terms of “polarization,” a situation where economic activities are concentrated in the urban areas in few regional centers.

These days, for instance, economic activities are largely concentrated in Metro Manila and its immediate surroundings like Calabarzon, Clark and Subic. Naturally, these areas enjoy low poverty incidence (7 percent to 18 percent) in stark contrast to provinces in the Autonomous Region in Muslim Mindanao and Caraga, where poverty incidence is over 50 percent.

Geography plays a great part. The strategic location of Manila, being the national capital, and its expanding conurbation would naturally attract a lot of economic activities. Experts have been saying, however, that a significant explanation could be traced to misguided policies that favored “imperial Manila” as well and its immediate environments.

If we want to get serious about addressing inequality, therefore, we should put in measures addressing economic polarization.

In fairness, legislators have actually tried to address this problem since the ’90s through measures like devolution and decentralization. Local government executives now have more powers and resources to plan their own communities.

Reforms in aviation, interisland shipping and telecommunications have also started to bring the far-flung regions closer to the mainstream of development. Nevertheless, statistics continue to indicate that polarization persists, apparently due to the momentum of history and the continuing failure of the government to invest in strategic infrastructure that should link the regions with urban centers.

The idea, therefore, that Europeans are looking at Cebu as an alternative investment destination is a positive sign. Cebu, of course, has always been a major recipient of foreign direct investments, specifically Japanese companies that established factories for the assemblies of electronics and semiconductors since the early ’90s.

For long, it has been serving as the gateway to Southern Philippines, economically linking up the Mindanao regions and Metro Manila through its superb seaports and airports. With greater investments from European companies, Cebu’s economic transformation could produce positive ripple effects toward its neighbors, especially Bohol, and some urban centers in Mindanao, including Butuan City and Cagayan de Oro City, thus generating more economic activities and opportunities in the said areas.

What’s happening in Cebu right now is essentially market-driven, assisted only by forward-looking local political leadership. The task right now, therefore, is developing more regional centers in the Visayas and Mindanao that could complement Cebu as an economic center.

The national government, as well as the private sector, could catalyze this process by putting in more policies that encourage greater economic decentralization. Certainly, a well-designed infrastructure network providing economic linkages among production centers in the Visayas and Mindanao should be a priority. Also, programs that channel tourism flows from Manila to the Visayas via Cebu would help a lot. The country’s telecom industry could help by accelerating the rollout of broadband facilities in the Visayas and Mindanao.

The vanishing middle class

2007-10-29T23:55:00.000-07:00

The best political community is formed by citizens of the middle class. —Aristotle (384 BC-322 BC), Politics

Where justice is denied, where poverty is enforced, where ignorance prevails, and where any one class is made to feel that society is in an organized conspiracy to oppress, rob and degrade them, neither persons nor property will be safe. —Frederick Douglass (1817-1895), Speech, April 1886

‘UPPER classes are a nation’s past; the middle class is its future,” Ayn Rand (1905-1982), American novelist and philosopher, once said.

Sad to say, this dictum doesn’t seem to apply to the Philippines. The ranks of the middle class—according to the study by statisticians Romulo Virola, Mildred Addawe and Ma. Ivy Querubin—are in fact shrinking.

Mr. Virola, it should be noted, is secretary-general of the National Statistical Coordination Board (NSCB).

The trend doesn’t augur well for the stability of this country. It’s an irony that we need to worry about as we ponder the validity of the encouraging gross domestic product (GDP) figures that we have started to see in the last several years.

Entitled “Trends and Characteristics of the Middle-Income Class in the Philippines: Is it Expanding or Shrinking?”, this study was one of the papers presented during the recent National Statistical Conference. And the results are disturbing.

First, from 1997 until 2003, the ranks of the middle class were shrinking. In terms of absolute figures, the same study found out that while the number of middle-income families increased from 1997 to 2000, it decreased from 2000 to 2003.

That trend suggests the ranks of the poorer segment of society are expanding.

“As of 2003, less than one in 100 families belongs to the high-income class; about 20 are middle-income and 80 are low-income. And in a span of six years from 1997 to 2003, close to four families for every 100 middle-income families have been lost to the low income category,” said the study.

The study highlights what the authors say is the “increasing vulnerability” of the middle class that could translate into increased poverty incidence in the future. We could interpret the results to mean that we do have a shaky and insecure middle class that is prone to slide down the social scale.

The study, albeit limited, has identified certain predictors of incomes for Filipino households, like ownership of stereo, having air-conditioning units, and educational attainment and household size, for which government action could be anchored. The authors called for “timely intervention” from both the public and the private sector, specifically increased investments and reforms in the country’s education system.

These interventions are important because, according to the study, the mean income of the families with overseas workers is much higher by 75 percent in 2000 and 93 percent in 2003 than the mean income of all Filipino families. Out of the total number of families with one or two of their members working abroad, more than half are classified as middle-income families.

These statistics reveal to us just how difficult it is to rise up the Philippine social ladder. The study is telling us that the only way for someone who aspires to get a better life is through overseas labor migration. This is a serious indictment not only of the country’s political leaders but also of the behavior of its private business leaders, who resisted policy reforms intended to hasten economic growth.

And not to be ignored, of course, is a major factor: the worsening graft and corruption under the Arroyo administration, its complete lack of transparency, and its utter lack of moral direction.

And we are also talking here about entrenched monopolies and oligopolies in aviation, the shipping and port operations, and utilities, among others, which stranglehold on the Philippine economy have prevented us from attaining global competitiveness.

Recently, the country’s leaders from both the public and private sectors were heard lamenting the continuing drain in the country’s brains. Indeed, officials of the Philippine Overseas Employment Administration have been saying the Philippines has increasingly been deploying skilled professionals and technicians, thus making it hard for local industries to retain talent. But unless we do something that could raise the hopes and dreams of the middle class, from which most of the country’s talent comes, we could never solve the “brain-drain” problem.

For far too long, the country’s policymakers have largely been focusing their attention on the so-called poorest of the poor, through measures like minimum-wage setting and subsidies on prices of cereals through price supports, among others. They seem to assume that the middle class is doing just fine.

The NSCB study, however, indicates that we also need to attend to the needs of the middle class for the benefit of greater society. It’s from the middle class where we get the talent needed to run the bureaucracy, as well as manage businesses, offices and factories.

The middle class is usually well- educated, highly skilled and well- informed. It’s through an expanding middle class where we could attain political stability and real democracy.

But when a big chunk of the middle class is away, the country is left to two vastly different classes: the tiny elite who have a grip on most of the resources, and the overwhelming number of the poor and wretched and their increasingly angry voices. It’s an understatement to say that’s not a good environment for doing business. (Note: drafted as editorial for the BusinessMirror, 30 October 2007)

Good news from Philippine tourism sector

2007-10-25T01:49:00.000-07:00

The camera makes everyone a tourist in other people’s reality, and eventually in one’s own.—Susan Sontag (1933-2004), New York Review of Books, April, 18, 1974

We support the call of the joint chambers of commerce in the country for the upgrading of the country’s international and domestic airports, especially the Ninoy Aquino International Airport (Naia) that straddles two Metro Manila cities and the Diosdado Macapagal International Airport (DMIA) in Clark, Pampanga.

If there’s one strategic investment that we should undertake to immediately kick-start the economy, this is it. And we should do it soon.

For all our rambunctious politics, the tales about corruption in high places, bombings, and skirmishes between rebels and government troops, the country’s tourism industry has actually been growing quite decently in the last several years. By the looks of it, it seems to be an emerging industry that only needs a little tweaking from the government for it to become a really huge growth driver like outsourcing.

It used to be that we hardly attracted a million visitors each year despite all the good beaches, the huge shopping malls and the historic places we got all over. In the last few years, we have proven we can actually attract more than two million a year. This year, both the private and the public sectors expect visitor arrivals to reach three million. By 2010 we are supposed to get more than five million visitors.

These figures are probably achievable given the fact that from January to August alone, we already got more than two million. With the influx of more tourists and balikbayan in November and December, we could probably achieve the target this year. Given the rising trend in tourism arrivals in the last three years, the five-million target by 2010 is probably a conservative estimate.

Today, we can already feel the positive effects of this encouraging trend. Major hotels are now getting crowded, indicating that soon we are going to see increased investments in additional capacities. This year alone, the Tourism department said the country needs an additional 3,000 rooms. Meeting these requirements alone would mean that the Philippine economy is going to get at least $3 billion in fresh investments. This would certainly mean more jobs being created, not only in hotels but also in restaurants and the food industry.

And certainly, the money that the tourists are going to spend in the shopping malls, bars, restaurants, resorts and spas not only in Metro Manila but also in Tagaytay, Cebu, Bohol and Boracay would generate a lot of economic activities in these areas.

Right now, industry estimates indicate that the tourism industry probably employs more than three million workers, with about a million directly hired by hotels and restaurants. A five-million tourism-arrival figure therefore could easily translate to a total job creation of more than seven million by 2010.

What we are stressing here is that tourism is the best and the fastest way to address joblessness in the cities and the countryside. And it’s a kind of industry that really doesn’t require highly skilled labor.

But to achieve these targets, the government would need to make a major or strategic decision of giving time and resources to upgrading the country’s airports, particularly the Naia and, if possible, the DMIA. As stressed by the foreign chambers, the first and the last impression of the Philippines are created by the tourists’ experiences when they land and leave the country.

Today, most visitors enter the country through the Naia, and they are probably not pleased getting through the congested airport. The Naia Terminal 3 should have addressed that issue, but until now that terminal is still closed to traffic.

Right now, it would probably make sense if the government, in tandem with the private sector, could develop the DMIA as an alternative international gateway. But that would also mean investing in supporting infrastructure like ground-transportation links to Metro Manila.

Certainly, there’s an opportunity for the private sector to help the government in this effort, provided the public sector could ensure transparent bidding rules and procedures. It’s a sure bet that we need to make right away to propel the economy on a higher growth path. (Drafted as editorial for BusinessMirror October 23 2007)

Normalcy as weapon against terrorism

2007-10-23T02:09:00.000-07:00

They’re funny things. Accidents. You never have them till you’re having them.—Eeyore, Pooh’s Little Instruction Book, inspired by A. A. Milne

To be feared is to fear: no one has been able to strike terror into others and at the same time enjoy peace of mind.—Seneca (5 BC-65 AD)

WAS it an accident or a bomb? Whatever the real cause behind the explosion, the best thing for us to do is get back to our normal lives while taking the usual precautions.

Tragedies like what happened on Friday tend to disrupt people’s routines, causing severe economic losses. They also distract us from pursuing the things that matter in our national life. The right thing to do, therefore, is to get on with our normal lives to minimize losses.

Entrepreneurs should go on making decisions that should create jobs. Business managers should pursue their business plans. Employees should continue reporting to their workplaces. Shopkeepers should open their shops for buyers.

Let the wheels of industry and commerce flow while the police and forensic experts do their jobs to make our country safer. If there’s one institution that could easily bring us to normalcy and regain losses, it’s the marketplace where people could mingle, share information, buy and sell goods and services.

As of this writing, investigators are increasingly thinking that the blast that caused the deaths of 11 people and injured more than a hundred may have been triggered by an accident.

It may have been due to the fumes that leaked from the huge diesel container or the methane gas from the septic tank that ignited at the basement. If that theory holds true, there’s more reason for us to get a good night’s sleep and move on—without forgetting to make accountable those whose laxity made the accident possible.

Investigators, of course, are still not ruling out the bomb-terrorism angle. It’s understandable. Jihadists have all the motivation to seek attention given the serious setbacks they have suffered in the last several years due to the arrests and deaths of many of their leaders, both in the Philippines as well as in Indonesia.

And for all our problems, the Philippines remains an open society, making us so vulnerable to violent and/or “terrorist” actions from all directions—jihadists, rogue military groups, communists or even state-sponsored elements. Anybody who wants to create mayhem and destruction can easily do so. We are not a police state—or at least we seem to think so—that puts soldiers and cops in all nooks and crannies of the land. But it’s the same openness that makes us so resilient against terrorist actions.

Why? It’s in the nature of terrorism. Terrorists may have different motives and psychological makeup, but they all want to see ordinary citizens immobilized by fear. Terrorists want us to be scared to death and shun shopping malls, coffee shops, public markets and open spaces. They want us to live in the shadows, just like them.

Why? It’s because terrorists often feel helpless and confused about the rapid economic and social changes in society, and it’s only through fear and intimidation that they can assert control and gain attention. And they want to inflict immediate damage on people and their properties, hoping the paralysis that will follow will have a long-term impact on the economy. Normalcy, therefore, and the continuing openness of our society could easily undermine the goals of terrorists.

Necessarily, open societies like ours should remain vigilant and assiduous in our pursuit of those malevolent actors. Our justice system should continuously pursue them and bring them to justice. And while we are doing this, let’s get on with our normal daily routines about living and loving.

The second theory on the cause of the explosion points to some rogue elements in the military—one group out to destabilize the government, especially in the wake of recent controversies about the national broadband network (NBN) and the supposed bribery of local officials and legislators by Malacañang to buy their loyalty.

And the third theory being peddled by critics of the government is that the Makati blast was probably a way to distract people’s attention from these political controversies. In short, it was an operation straight out of Malacañang; or worse, insanely loyal rogue elements carrying out “black operations” for an unaccountable force working outside the chain of command: in short, a madman’s dream.

If the third theory is true, normalcy should mean that the Senate will continue investigating the NBN mess. The senators should also investigate recent efforts by Malacañang to purchase the loyalty of legislators and local government executives in view of the ongoing controversies.
The church should continue calling for moral reforms in the highest levels of powers. The media should continue investigating the shenanigans that seem to be popping up left and right under the government of President Arroyo. And militants and activists should continue their business of demanding fairness, justice and morality in this benighted land.

To paraphrase the great poet Dylan Thomas: We should not go gentle into that good night. Old age should burn and rave at close of day. We should rage, and rage against the dying of the light. (Note: I wrote this as editorial piece for BusinessMirror Oct 23 2007)

An explosion in glorietta 2

2007-10-18T23:44:00.000-07:00

As I write this blog post here at the office, ANC channel is reporting about an explosion in Glorietta II at the heart of Makati that killed four and injured more than a dozen others. My oh my! I was supposed to be somewhere there that time for a meeting with Giselle K to discuss something. But we decided to meet at Figaro in Greenbelt instead. I wonder if there is such a thing as a guardian angel.

“Gas leak” is the initial theory but there are fresh reports, its probably a bomb.

Abolish the SK!

2007-10-18T22:42:00.000-07:00

“The deepest definition of youth is life as yet untouched by tragedy.” —Alfred North Whitehead (1861-1947)

AS the country prepares for the upcoming elections for the Sangguniang Kabataan (SK), it’s time to rethink the relevance of this “institution” in the country’s political system. At the outset, allow us to say let’s consider abolishing it. With the corrupt nature of the country’s politics today, such an early initiation into the arena would conceivably heighten the risk of corrupting our children, turning them into cynical political operators at an early age.

The SK was supposedly a mechanism to channel the energies of the youth in nation-building. It was a nice idea, really, whose parentage could be traced to our national hero Jose Rizal’s prophetic words about the youth as “the future of the motherland.” Indeed, it’s nice to think of the young people planning their own sports activities, helping in the cleanup and management of the local environment, or even doing small projects like antidrugs campaigns as well as values education.

The reality, however, strays far from such expectations. Even before the start of the election-campaign season, we have seen youngsters brazenly aping the deadly sins of traditional politicians. We have seen young candidates resorting to the hakot system, hiring trucks and vehicles for their “supporters” to make an impression of popular support, as they troop to the Comelec office to file their candidacies. In essence, they are violating the rule on premature campaigning, but these youngsters say they are not since they don’t have posters saying “vote for so and so.” It’s a clever trick that most politicians resort to all the time.

SK candidates are also not supposed to spend so much money for campaigning. And yet, we can already see lots of huge posters of SK candidates around. Where did these young people get the money? This question is important because it seems we are actually socializing these young people in money politics in so early an age. And it’s not far-fetched that some of these young people might eventually be tempted to buy votes and manipulate the entire electoral process.

We are not against active participation of the youth in community affairs per se. In fact, we would like to encourage them. But politicizing this process is not the way to go. These days, there’s a lot of anecdotal evidence indicating that many SKs have become extensions of local political dynasties. Many of them have drifted into the web of the sleazy and corrupt network of patronage politics. Some of these youngsters ended up not finishing their studies and became local wheeler-dealers.

“So young and yet so corrupt.”

Does that line ring a bell?

Instead, why not just hold a simple local assembly of young people for them to elect among themselves their representatives, the way school kids elect their class officers? And once they have their own set of officers in the communities, they still can suggest important legislation by simply approaching their local adult legislators, whose job really is to draft local ordinances and rules for local development.

We are suggesting these simple roles for them in community affairs because at such a tender age, these kids should really be spending their time in school. Parents and the community as a whole should give time for the kids to study, to play, and enjoy local educational and ennobling cultural opportunities.

Let’s give the business of governance to adults. Let’s allow our children to enjoy their youth. A few years from now these young people will also become adults. Then they will have their time to serve the community and the nation as a whole. (Originally drafted as editorial for BusinessMirror, 19 October 2007)

A skunk by any other name

2007-10-18T01:40:00.000-07:00

WHAT have Malacañang’s “gifts” to members of Congress and some local government executives got to do with an overvalued peso that’s hurting exporters and overseas workers and killing off jobs? Simple: that “gift,” Malacañang’s “politically correct” term for bribes, is the same reason why we remain one of the lousiest performers in terms of investment inflows.

The other day, the United Nations Conference on Trade and Development (Unctad) released its report on global trends in investment flows, saying that the Philippines is not attracting investments, specifically foreign direct investments (FDIs), compared with its neighbors despite its huge potentials. Unctad, in effect, is saying that those publicly funded investment-promotion agencies—and there are four of them—are pulling our legs every time they release those dazzling figures on investment commitments.

Apparently, many of those investment pledges never materialize after Board of Investments (BOI) and Philippine Economic Zone Authority (Peza) gave them fiscal perks, including tax holidays and duty-free importation of machines, among many others.

We say this because despite the exuberant numbers from both the BOI and Peza, the country’s figures on capital formation hardly improved in the last several years. Imports, likewise, have not been rising, an indication that business managers and factory owners are not investing in new machines. Nor are they upgrading their office equipment or buying new ones.

That’s the same reason why we have an overvalued peso that is hurting the country’s bread and butter: the exporters and the families of OFWs. The OFWs have been sending dollars in increasing amounts. The problem is the business sector, the factories and importers are not using much of those dollars due to political uncertainties. Thus, the accumulation of those dollars within the borders is causing the peso’s overvaluation.

In fairness, FDI figures released by the Bangko Sentral ng Pilipinas have also been posting encouraging trends. But it’s likely that those figures simply reflect intercompany transfers that don’t translate to the building of factories. Proof: the jobs picture has not been improving despite the tremendous hype about a 7-plus-percent growth rate in the last two quarters.

Why? It’s because of lack of investor confidence. Despite some good economic statistics, investors are holding back. They are waiting for 2010 when the Philippines has a new president, and they are hoping that we could have a morally viable presidency then than we have today.
Some growth areas like business process outsourcing, mining, banking, wholesale and retail trade, and construction—of course—are growing quite well, but that’s because investors would rather put their bets in areas where they have really great chances of succeeding. Determinants of these new growth drivers are quite predictable owing to factors like the availability of cheap, skilled and English-speaking white-collar workers; the rising dollar remittances that props demand for consumer items; and housing.

But they are not plunking their money into job-creating factories and infrastructure development because of so many unpredictable variables. It’s so difficult to win a bid for infrastructure projects here because of the administration’s tendency to favor suppliers that are also willing to offer bribes to local officials just to get the contract. Traditionally, most of our investments here are from American and European companies. But under the current dispensation, they are wary about committing resources because—as publicly listed companies governed by strict disclosure rules back home—they could never justify the extra cost (“politically correct” term for bribes) that they would need to put here just to win business contracts. Thus, when compared with Chinese firms, many of them state-owned—with so much money to splurge but with too little public-accountability requirements to be bothered with—American, European and Japanese companies are always at a “competitive disadvantage.”

It is through this lens that we need to look at the ongoing controversy regarding the national broadband network and the cyber-education project. The Senate is currently investigating these deals and we still cannot figure out where it will lead us to. But it seems some officials in the Executive have internalized the ethos of corruption and wholesale bribery so well as to come up with bribes—nay, gifts—just to secure the loyalty of the members of the House of Representatives and some governors.

It’s a “gift,” said Malacañang spin masters. No, it’s an “allowance” for legislative work, they said days after. No, those are funds intended to help finance development projects, they said another day. But we know it’s a bribe, pure and simple. There are no receipts, and the Department of Budget and management denied it released money from government coffers.
A skunk by any other name stinks just as bad.

So where did the money come from? One can only assume they came from illegal sources. There’s no other way to explain that.

Malacañang has practically institutionalized bribery right at the top. It’s so brazen that any person with a sense of decency would be nauseated just hearing about it.

It’s this endless tale of massive corruption in high places that’s causing all our problems, and preventing us from moving forward.

Indeed, only the truth is Neda’s redemption

2007-10-15T20:47:00.000-07:00

THE refusal of the National Economic and Development Authority (Neda) to hand over to the Senate certain documents related to the national broadband network (NBN) controversy seems to confirm the view that Neda is part of the problem. It signals how Neda as an institution seem to have lost its way and drifted into the web of a corrupt bureaucracy that is hampering our efforts as a country to achieve progress.

Is Neda trying to hide something fishy as regards the national broadband network deal? Is it part of the huge sleazy transaction? Thus far there isn’t anything that gives reason to believe any one in Neda, from its top brass to the hardworking technical staff below, has made money from this or any other project—the integrity, or at least belief in the integrity, of its individual staffers represents the institution’s one noteworthy quality—but at the rate things have been going, many people understandably start to suspect that someone or some people in the agency is covering up for something stinky.

We used to call Neda the National Economic Council (NEC), a public agency funded by people’s taxes to coordinate government plans, policies and programs. Since its inception, the Filipino people always looked at Neda as an institution free of the taint of corruption and sleazy compromises that characterized Philippine politics—until the NBN came.

It’s unfortunate because prior to the NBN controversy, Neda has always been looked up to by the general public as a public agency that is above partisan and rent-seeking politics. Since the time of Marcos, Neda has never been linked to corrupt deals.

The common perception then seems to be that Neda is staffed by nonpolitical and geeky types whose judgments vis-à-vis programs and projects brought to their attention for evaluation and approval are guided by objective and sound technical and financial assessments and not by political considerations or instincts.

Neda’s recent actions therefore seemed to indicate that, as an institution, it has been dragged to the gutter of survival politics of this administration. The claim of “executive privilege” that its officers now keep invoking has been a classic Malacañang ploy to prevent Congress and the general public from unearthing the truth about controversial deals recently entered into, with questionable characters playing dubious roles.

Do Neda officials really think they can fend off Congress from seeking the truth? We think, however, that this question is secondary. The primary issue is, to what extent would Neda sacrifice its reputation and credibility to save a very unpopular leader or a cause that has been questioned and deserves a just closure?

For giving its approval to a project that was tainted by bribery and corruption (the offer having been exposed by Neda’s former head no less), for its failure to perform due diligence, it has destroyed its credibility as an organization. The only way it can regain this credibility is by coming clean and giving complete access to all the pertinent documents to Congress and the Filipino people. It could choose to tough it out with Congress, but it can only do so at the risk of completely losing the trust and confidence of the general public.

Do Neda officials really think they could ignore Congress’ subpoena powers forever? The doctrine of “executive privilege” by itself is a tenuous ground to stand on. There is no specific constitutional provision on that. The lawyers simply assume that executive privilege is embedded in the separation of powers between and among the Executive, Legislative and the Judiciary. And given the gravity of the issue—a multibillion-peso loan allegedly marred by bribery and wholesale corruption—it’s only a matter of time before they have to cave in to the clamor, not only from Congress, but the citizenry.

Section 5 of Executive Order 230, which reorganized the Neda, says: “In the formulation of basic policies, plans, programs and projects, there shall be maximum participation by and consultation with concerned private-sector groups, community organizations and beneficiaries and local government units in order to ensure that priority needs are incorporated into such policies, plans, programs and projects…”

The provision mandate Neda to ensure “maximum participation” by the private sector and civil society in development planning. Transparency and openness is assumed in the said mandate.

As of this writing, the news came in that Neda officials had declared that only a court order will compel them to open the NBN documents to the public. How they will then, given the premise such a court order indeed comes, make those fine distinctions between “official papers” and “official deliberations” is another thing worth watching. This is one game that won’t end that easily. The teasing out for truth is a long, difficult struggle in this country, as recent events have shown. The last thing that exercise needs is a respected central planning agency seen as having allowed professionalism to become subservient to politics. Indeed, complete transparency will be Neda’s atonement and redemption. There is no other way. (Note: written as editorial for BusinessMirror, Oct 16 2007)

Solving the "strong peso" puzzle

2007-10-10T20:55:00.000-07:00

The borrowing mix is important. We should keep reminding the government that we have lots of dollars. Why are we still borrowing from the outside, like the NBN? Just borrow dollars domestically and then prepay our debt. Then you will see the exchange rate will begin to rise to the benefit of OFWs. —Dr. Raul Fabella, professor, UP School of Economics

IT looks bizarre but it seems we are the only country in the world where the gross domestic product (GDP) is registering good numbers while some factories are shedding off thousands of jobs. In the latest labor-force survey, it appears the industry sector lost more than a hundred thousand jobs, the experts say.

That figure, of course, is probably inaccurate since the labor-force survey doesn’t really count jobs created and lost, but simply registers the difference between the number of employed persons per industry at present and in last year’s labor-force survey.

So what analysts do is simply get the difference between the present and previous employment figures to get the supposed number of jobs lost or created—a meaningless statistic, actually, when one is tracking the employment impact of GDP figures.

Nevertheless, the difference of about a hundred thousand jobs in the current survey suggests that we are not getting strong in job creation.

Yesterday our banner story dwelt on the condition of exporters downscaling their operations after being hit by the impact of the steadily appreciating peso. We are not talking about some “corporate downsizing” here to achieve efficiency. What we are witnessing is probably the hollowing out of the Philippine economy caused by the very reason we have those great GDP numbers in the first place: dollar remittances.

Exporters downscaling their business could only mean they are sending off workers into the streets. When businesses are getting less pesos for their dollars earned from selling goods and services abroad, there are only two options: either close shop, or minimize losses by scaling down operations, hoping that things will improve someday.

And yet, it’s not likely that things will get worse for exporters as well as for OFWs, unless the government does something. For long, government officials have been saying that the appreciation of the peso has been “market-driven” and therefore nothing can be done about it.

This is a lame excuse for inaction. The industries—those companies producing tangible products and providing jobs to those who are not “skilled enough” to work in outsourcing—are losing competitiveness. If the government doesn’t do anything, the economy will continue to hollow out as factory managers and business owners are likely to sell or close their factories and concentrate on buying and selling products produced by the Chinese, Vietnamese and the Thais.

In fact, this has been a continuing trend so far, as manifested by the continuing decline in the value of production index in the monthly integrated survey of selected industries. And it’s hurting us in terms of thousands of jobs lost.

And it’s going to polarize the economy even further. More than 60 percent of the country’s exports are accounted for by electronics. But these big exporters are not hurt by the strong peso because their raw materials and intermediate inputs are delivered on consignment basis.

Besides, these companies enjoy a battery of fiscal incentives like income-tax holidays, duty-free importation of machines, and duty-free importation of raw and intermediate inputs. Most of these firms operate in special economic zones; hence, they enjoy the added benefits of subsidized energy rates.

Those who are hurting are the small exporters who don’t have these perks. But since they are mostly labor-intensive operations, the closure of these small firms are likely to render so many poor people jobless, thus accentuating inequality.

But could the government really do anything about the peso-dollar parity given that the peso value of dollars is influenced by the local supply and demand as well as certain global dynamics? We say yes.

Certainly, the Bangko Sentral ng Pilipinas (BSP) has all the powers, like raising the country’s international reserve from, say, four months’ worth of imports to about a year as what our neighbors did. That would surely raise demand for dollars that will check the continuing overvaluation of the peso. The central bank is supposedly independent and Malacañang, therefore, is not supposed to influence the institution.

Still, that’s no excuse because Malacañang has other instruments in its tool kit. Take it from University of the Philippines economist Raul Fabella, who favors an “aggressive” foreign exchange-rate policy to ensure the competitiveness of the country’s export-oriented industries.

There are several ways the government could change the dollar-supply and -demand picture, he said lately, and one of them is for the government to stop borrowing dollars from abroad. For important projects, the government, instead, should source dollars from within the Philippine borders by borrowing greenbacks from the BSP. That’s shooting two birds with one stone: not only could it help exporters, it will also curb corruption à la the controversial national broadband network deal and the cyber education project now being investigated in the Senate. (Written as editorial for BusinessMirror, 11 Oct 2007)

It's the farm, stupid!

2007-10-08T19:57:00.000-07:00

LAST week Sen. Edgardo Angara called for the extension of the Agriculture Competitiveness Enhancement Fund (Acef), which is due to expire next year. We support that call.

The Acef comes from the proceeds of the importation of minimum access volumes (MAV) that we promised our trade partners under the Uruguay Round of Trade Agreements that eventually ushered in the World Trade Organization.

In that agreement, countries committed to convert quantitative restrictions (QRs) on imports into high or equivalent tariff, but allowed small volumes of minimum access imports to facilitate trade. That was not the best way to encourage trade, but it was the most convenient way to incrementally reform policies that, for a long time, have been hampering import and export of farm products.

Local farmers’ group naturally opposed the “tariffication” of QRs. They eventually budged when the government promised greater funding for “safety nets” which the Department of Agriculture (DA) called “competitiveness enhancement funds.” Part of the money was to come from the proceeds of the MAV, an amount that DA spin masters later called the Acef.

Simply put, the Acef is part of the promise to the farmers and fishers who, during that time, were thought to be among those at risk from a liberal trading order. That promise for safety nets was never really sustained as the DA budget waned a few years after the GATT-Uruguay Round Agreement was ratified.

Nevertheless, the Acef has provided some money for important farm and fishery projects like irrigation, farm-to-market roads, postharvest equipment and facilities, research and development, and marketing infrastructure, among others.

Four years after the fund was made available to farmers, the Acef, according to Angara, financed 93 sugar projects and 56 other projects in livestock, poultry, fruits and vegetables.

“As of 2006, Acef still had a balance of P5.81 billion and funded 173 projects worth P2.76 billion that year,” he said. “An additional 55 projects worth P1.14 billion was approved by the Acef committee this year.”

The Acef money, amounting to P1.9 billion this year, has also been also used to finance small farmers’ credit needs.

With the expiration of the Acef fund this year, however, this kind of money will revert to the national treasury, thus depriving farmers the much-needed resources for countryside development.

Of course, we don’t really know how effective the DA has used those billions of Acef money. It’s about to expire, and yet we never saw any effort to tell the public whether or not the money was really mobilized effectively and equitably.

Like most public monies being handled by the machineries of the state, there are temptations that some bureaucrats would dispense of the money for political and personal reasons. The fertilizer fund of Joc-joc Bolante, former undersecretary of the DA, easily comes to mind.

It’s also possible that some of this money may have been used to finance projects by rich and politically connected “farmers,” and not those who really need them. In this case it would be necessary for the DA or some civil-society groups to scrutinize them and show the results to the public.

Given this consideration, however, nothing yet beats the idea that the farm sector needs the Acef to enhance its competitiveness. In fact, this is just the best time to put more attention to the farm sector now that the economy has shown greater resiliency.

In the last several years, Philippine GDP has been growing quite decently and government planners have been wondering how to spread the growth to the less fortunate. The solution, really, is simple: pour more resources into the countryside, assuming enough safeguards are put in place to prevent a similar Bolante caper.

There’s no other way: close to 35 percent of the country’s labor force is employed in agriculture and fisheries.

Meanwhile, one truly beleaguered sector is asking the DA’s help for accessing the Acef, and its situation might be worth reviewing. The main story in this paper’s Monday issue focused on the plight of food exporters who have been reeling from the impact of a steadily appreciating peso.
Roberto Amores, the chairman of the Philippine Food Processors and Exporters Organization Inc. (Philfoodex), told the BusinessMirror in an interview that the government, specifically the DA, “should step up Acef releases so that it can be used for productivity enhancement.”

According to Amores, small and medium enterprises in their subsector have complained of a difficult time in availing themselves of the Acef because of the “tedious” process. Clearly, these are people who have been among the hardest hit by the impact of a strong peso; and in fact, nearly a third have scaled down operations, if we’re to believe Amores.

Carefully reviewing their situation might be a good start for officials looking at what to do to make the Acef more relevant. (Written as editorial for BusinessMirror, 9 Oct 2007)

Coffee, poetry and equanity

2007-10-08T02:56:00.000-07:00

I wrote this poem after writing an editorial piece on corruption. I felt sick of political events. I felt I needed to write something to purge my soul of negative vibes. So here, be my guest. I dedicate this one to all coffee lovers (especially MT), with due apologies to William Butler Yeats and Robert Frost.

Raise your cup, my friend.
Then let it touch your lips
Let’s honor those who pick the beans.
Let its scent stir your soul
As we pay tribute to those who toil
And make the mountains green.

Let’s drink the brew, my dear
Sip it slowly as if we’ll live forever.
The night is cold and tender;
Let its warmth flow like a beautiful dream
As we explore the heights of fervor
And its spiritual realm.

My dear, for every sip
We could challenge the whims of fate.
Or frolic in the court of William Yeats.
What will he beg of us, my friend?
That we should tread softly
For we are treading on his dreams

Oh dear, are you confused?
Let’s see Robert Frost.
I wonder if he’ll say it's treason
To yield with a grace to reason,
And bow and accept the end
Of a love or a season.

Reaping the whirlwind

2007-10-03T19:17:00.000-07:00

“For they have sown the wind, and they shall reap the whirlwind: it hath no stalk; the bud shall yield no meal. . . .” —The Book of Hosea, Chapter 8, verse 7

THE other day (October 2), the European Chamber of Commerce expressed concern that the Philippines is wasting a lot of time and opportunities by allowing some companies to corner the best sites for wind power, and yet have done anything to develop them.

“I do not understand why these sites have been cornered by some companies that are not developing anything,” said Hubert d’ Aboville from the European Chamber and president of the Paris-Manila Technology Corp. (Pamatec). “So to me, it’s a terrible waste of time,” he said.

Indeed, we share d’Aboville’s frustration. That the companies were able to corner those choice places and letting them stay idle suggests several things.

First, the firms probably didn’t have the expertise and resources to undertake such a capital-intensive undertaking. Second, the firms were probably out there simply for speculative purposes. This situation is not good, as it tends to raise the cost of entry into wind farming, an unfortunate condition given the huge opportunity costs involved and the urgency of the need to address global warming.

We are concerned because this kind of behavior seems to fit well into the classic rent-seeking type of wealth creation that is plaguing the country. It’s the same kind of practice that we see in the distribution of timber license agreements in the past, of mining tenements and other concessions dispensed by the State. We wonder if the government has been transparent in the allocation of these places for wind energy.

In the ’70s and the ’80s, the Marcos government parceled out large tracts of “public lands” in Mindanao to his cronies for agribusiness plantations, mining concessions and logging. It was a phenomenon that contributed to the displacement and poverty among indigenous peoples, and the continuing inequality and underdevelopment in the area.

Being among the first to get allocation for the choice sites certainly is not bad per se. It’s a “rational” behavior for any businessman in search of profit. But when such behavior goes against public interest, then the government should intervene. For instance, the government should reserve the right to cancel those allocations and give them to someone else if they stays idle for sometime.

Why not bid out the allocation of those sites? That way, the process of prequalification would ensure that only those who are really interested to develop wind power and have the financial and technical resources to do so would be interested to bid.

Ultimately, the problem lies in the existing policy of restricting foreign-equity ownership in energy projects. Wind farms belong to the energy and utility sector, where foreigners are allowed maximum ownership of only 40 percent. These types of projects are usually capital-intensive. Local businessmen would need the money, experience and expertise of foreign investors if they want to engage in such projects.

However, foreigners are probably not inclined to sink in huge amounts of money in a local firm, knowing that they are not going to call the shots. This is one reason why we end up having speculators cornering choice slots without seeing them put up Earth-friendly energy projects that we sorely need to reduce oil dependence and contribute to the healing of our very own planet.

In the ’60s and the ’70s, it was fashionable to have policies that were supposedly intended to restrict “foreign control of the commanding heights of the economy.” It’s an unfortunate conspiracy theory that has become counterproductive in the present context. It may be worth revisiting this kind of policy, especially when it comes to Earth-saving types of investments. (Written as editorial for BusinessMirror, 4 Oct 2007)

GMA cancels NBN deal, CEP next?

2007-10-03T01:55:00.000-07:00

The news says GMA cancelled the controversial NBN deal with the ZTE. Ah, the triumph of popular pressure. The Senators should look into the cyber education project (CEP) next. This is even a bigger problem. If the NBN is a shark, the CEP is the US$500 million great white shark!

For some background info on the controversial NBN-ZTE deal, you may read the following:
The NBN-CEP mess: Neda is part of the problem
Technical questions on DepEd’s cyber education project
Senate inquiry demolishes DOTC’s justification for NBN
Let’s junk the NBN-CEP deals

Amando Tetangco and our ‘fundamental’ problems

2007-10-01T18:47:00.000-07:00

What is called resignation is confirmed desperation. —Henry David Thoreau (1817-1862), in Walden, “Economy”

FINALLY, the power of public opinion has forced Benjamin Abalos to resign from the Commission on Elections (Comelec). His lawyer said it was an “agonizing decision” for Abalos.

But certainly, there was no other way for Abalos but to go. He is just too controversial to remain effective at the Comelec and too hot a potato for his friends in Malacañang. In fact, his resignation serves his friends in Malacañang well, in light of the belief that a full-blown impeachment trial at the House of Representatives could reverberate right up to the pillars across Pasig River.

Abalos’s departure from the Comelec is probably good for all of us. His tenure at the Comelec had been a stormy period; controversy marred his important election-related responsibilities as chairman of the Comelec—election computerization (read: the controversial Mega-Pacific deal), the 2004 fraud-ridden presidential election, and the loss of election returns in Maguindanao in the recent midterm election, among many others.

The ongoing investigation at the Senate shows that Abalos has really spent a great deal of quality time with ZTE. That seems to prove that his skills may lie elsewhere, outside the Comelec—including brokering for private and foreign interests.

He was so “good” at it that he got the national broadband network (NBN) onto the signing table in China despite all the technical, financial and economic issues against the deal. He was so good at it that the Senate is currently wondering how we could undo the close to a billion-dollar deal that people must pay with tax money in the next 20 years.

Now that he is free of his “public service” duties, the chairman could now devote himself to, besides defending himself against accusations of wrongdoing, the private deals that friends ask him to have a hand in. And certainly, he needs all the time and energy to defend himself in the courts of law.

For one, the ongoing investigation at the Senate may earn him lawsuits for possible malfeasance. For all the complaints about grandstanding and idiotic grilling by some lawmakers, the fact is that there have been inquiries in the past when the panel reports led to the filing of formal charges in the proper courts. There’s no reason why this cannot be done with this one—and the accused to include not just Abalos, but possibly, the executives of the implementing agency, the Transportation department, who actively pushed the NBN despite the questions surrounding it.

The Abalos resignation and the ongoing investigation by the Senate on the NBN deal is part of that process we need to purge our political system of undesirable characters, policies and processes. We need this purging to improve our standing in the international community.

A few days ago, Transparency International released its survey saying the Philippines ranked among the most corrupt places in terra firma. Unless we start posting good results in surveys like this, the outside world, especially foreign investors, are not going to take us seriously—not even after Amando Tetangco Jr., Bangko Sentral governor, announced the other day we have the best “fundamentals” in the last 10 years.

In the second quarter, the Philippine economy grew by 7.5 percent but the labor-force survey says we have not been producing enough jobs. This is why we are hardly making a dent on poverty.

Why? It’s because we are not attracting investments, be it local or foreign.

Investments promotions agencies like the Philippine Economic Zone Authority and the Board of Investments have been producing good numbers in the last three years. But when reckoned in real terms, based on the country’s national income accounts, those investment numbers hardly mattered as most of those “investments” were probably intercompany transfers that don’t build job-creating factories.

This is the backdrop of Tetangco’s analysis about our supposedly fantastic “fundamentals.” We believe we have good economic statistics, but then that is accounted for by the continuing diaspora of Filipino workers and expatriates.

It means we have those numbers for some bizarre reason: people leave for overseas placements either because they are sick and tired of local politics or for lack of economic opportunities, or both. And when they send their money back home, they produce “good fundamentals” that make government economic bureaucrats happy.

Well, the mall owners, of course, are happy as well. More remittances mean a very strong peso that cheapens imports and, therefore, raises profitability for retailers even if they don’t have to raise price tags so much. But it hurts factories, especially those that are producing for exports. That’s why the industry sector, when stripped of the contributions from construction and mining, has not been doing great.

In fact, the Philippine economy is probably “hollowing out.” Just like Tetangco, we believe the economy is undergoing an economic transformation, albeit it’s a transformation we are not going to be happy with. This is about business people shifting their operations toward nontradables, toward services, and shifting their factories elsewhere, like Vietnam, Cambodia, China and Laos.

They have to shift because the government is not doing anything to address the “strong peso.” They have to go elsewhere because the government doesn’t have the courage to do away with policies that hurt entrepreneurs and the economy, the latest being the tax amnesty and the law allowing nondisclosure of union members to companies where such unions are operating—both laws were “sneaked in” practically into the statutes books, because Malacañang merely allowed them to lapse into law, a classic copout by the government if there ever was one.

And entrepreneurs have to go elsewhere either because politicians are always squeezing them for bribes or because they can only get contracts if they offer the highest bribe.

Yes, Tetangco’s fundamentals are indeed good, but we need to address a lot of more fundamental problems, especially corruption that the NBN deal typifies, if we ever desire to get out of the current economic rut. (Written as editorial for BusinessMirror, 2 Oct 2007)

Comelec Commissioner Abalos resigns!

2007-09-30T22:32:00.000-07:00

TV is currently saying Comelec chair Benjamin Abalos has resigned from his post. He probably wanted to have more quality time with the ZTE guys. Lol! Why not? Brokering for private and foreign interests is more profitable than serving government, which is a thankless job. haha! The joke now is that after his resignation from the Comelec, Abalos now is a full time "commissioner."

For some background info on the the controversial NBN-ZTE deal, you may read the following:

The NBN-CEP mess: Neda is part of the problem
Technical questions on DepEd’s cyber education project
Senate inquiry demolishes DOTC’s justification for NBN
Let’s junk the NBN-CEP deals

In the company of Libya, Iran, Burundi and Yemen

2007-09-28T03:35:00.000-07:00

IS the Philippines as corrupt as Libya, Iran, Burundi and Yemen? We flinch at the suggestion, but Transparency International said we are indeed as corrupt as these countries based on their latest ranking in the 2007 Corruption Perception Index. This ranking seems to “validate” the perception that the Philippines is probably the most corrupt in Asia.

We think we know the reason—and that is the Philippines continues to be among the world’s most difficult places to do business in, based on the recent study by the International Finance Corp. (IFC) and the World Bank (WB). In this study the WB ranked us 133rd on the ease of doing business, a serious deterioration from the 120th we had in 2006, the reason for which is that the Philippines didn’t implement any business reforms this year.

The IFC-WB report said that among the 10 areas included in the study, the country had the lowest rank in “closing a business,” where it is pegged at 147, “starting a business” (144), “protecting investors” (141), “paying taxes” (126), “employing workers” (122) and “enforcing contracts” (113). The areas where the country had a higher ranking are in “getting credit” (97), “registering property” (86), “dealing with licenses” (77) and “trading across borders” (57).

The report shows that in most aspects of doing business, we have been penalizing entrepreneurs and business managers. And what would a business person do when faced with such artificial barriers as bureaucratic red tape and unnecessary barriers to economic activities? What will that person do, especially when he is facing delays and the deadline for delivery of goods and services to his clients is approaching? He would surely be tempted to bribe his way, and bribery corrupts the entire government procedures and processes, destroys institutions and ultimately shatters a country’s capability for development.

That’s the whole point here: the government has been maintaining a huge bureaucratic tangle that has been a barrier to progress. And scoundrels in government have been holding on to that precisely to extract “rent” or unearned money no different from the gangster’s “tong” from hapless citizens. And in this case, it’s the State itself that has institutionalized rent-seeking, a “tong” on its own people who are going to pay with their taxes, direct or indirect.

We don’t lack examples of this. The controversial national broadband network (NBN) and cyber education projects are humongous examples of these rent-seeking practices that have been destroying the economic and social fiber of our republic. The tales of bribe offers and bribe-taking, the story about a top election official apparently brokering for foreign interests for a broadband deal, and the supposed involvement of no less than the husband of the President in the controversial deal enforce public perception of this rent-seeking behavior permeating our bureaucracies.

The North Rail project, the fertilizer scam of Joc-joc Bolante and the “Hello Garci” controversy, which also smells not just of vote-rigging but wholesale bribery, are also among the recent examples.

And why, despite all those investigations at the Senate and House of Representatives, do we continue to have all these huge scandals? It’s because of the continuing lack of reform.

When the WB released the same report a year ago, the government responded that it will undertake serious changes to ease barriers of entry and exit of business to spur higher economic growth. But nothing has happened, so our ranking even deteriorated. Apparently, there is a resistance within the current administration and the bureaucracy to undertake reforms because some people high up are making so much money, courtesy of the people’s taxes. If Joey de Venecia’s accusations about bribery involving Comelec Commissioner Benjamin Abalos, bolstered by another claim by former socioeconomic planning director general Romulo Neri, are true, then people will easily conclude that the current administration wants to retain the tangle of stifling regulations and opaque policies simply to collect “tong” from the general public.

Given this reality, Congress—especially the Senate—should therefore step into the picture and initiate reforms. While sorting out the NBN mess, it should carefully look into possible measures that would streamline the National Economic and Development Authority and the processes and procedures that would make the approval of programs and projects more transparent. The Senate should extend its investigation, or do a separate one, into the ways to simplify business procedures in this country so that scoundrels in the bureaucracy would be prevented from further eroding the economic and social fiber of this country.

(note: wrote this as editorial for BusinessMirror, 28 Sep 2007).

The NBN-CEP mess: Neda is part of the problem

2007-09-25T21:56:00.000-07:00

By the time I got to the office 1 pm today, everybody knows that former Neda director general Romulo Neri has admitted being offered a P200 millon bribe by Comelec Chair Benjamin Abalos (which he denied) during the hearing on the controversial NBN deal at the Senate. That's a bombshell! But let me put it here that Neri himself is part of the problem why we have this mess. You may read my op ed piece I wrote for BusinessMirror today (26 Sept 07) below.

ON Monday the acting director general of the National Economic and Development Authority (Neda) said the suspension of the national broadband network (NBN) and cyber education program (CEP) deals is going to “affect investor confidence” in the Philippines.

Certainly, it will. But it’s not because legislators are investigating these controversial deals forcing President Arroyo to back off from a very hot rotten potato.

It’s because this recent brouhaha involving more than $800 million seems to prove the point that the government of President Arroyo doesn’t seem to learn the value of prudence after nearly getting toppled by popular unrest following the “Hello, Garci” and North Rail controversies and the fertilizer scam. Walang kadala-dala! in local parlance.

It’s unfair for acting Neda chief Augusto Santos to blame, even impliedly, the “lack of investor confidence” in the Philippines on the Senate investigation against the NBN and CEP deals. The determinants of investor confidence are many, the least among them being the government’s continuing failure to provide adequate infrastructure and its inability to pursue crucial economic policy reforms.

This is quite obvious if we look at the national income accounts: in the last three years, investments by the private sector on durable equipment in real terms have been miniscule.

Yes, we have been growing quite decently in the last several years—courtesy of dollar remittances. But jobs in greater numbers are not created because firms are not yet building more factories, upgrading their plants and equipment, or putting up orchards. These are the types of investments that we need to address joblessness, especially for those who can’t speak English to qualify for call centers.

And why is this so? It’s because since August 2004 the net satisfaction rating of President Arroyo has been in the negative. More people are not happy with the way she runs the affairs of the State despite the very obvious effort she puts into the job and her work ethic. More people simply don’t trust her mainly because of the continuing stream of accounts of corruption and misdeeds in high places, the latest being the controversies that have entangled the multimillion-dollar NBN and CEP deals with the Chinese government.

In the Philippine context, a perennially negative trust or satisfaction rating for the presidency tends to create uncertainty. It’s so hard for business managers to make long-term decisions when the ruling party sits on a house of cards ready to collapse anytime another political scandal bursts.

And certainly, corruption is a great turnoff to investors. Yes, there are “political noises,” but it’s the ones that are coming from the executive, and not somewhere else.

The Palace is making it worse by employing tactics like gag orders or the latest apparent attempt by Malacañang to spirit out of the country former Neda chief Romulo Neri to prevent him from being grilled by the senators, only to retreat at the last minute, apparently sensing the huge outcry against so blatant a scheme.

To be fair, Palace officials explained later that it wasn’t President Arroyo but Foreign Affairs Secretary Alberto Romulo who wanted Neri to come along because they will meet with Millennium Challenge Account (MCA) officials in New York, and Mr. Neri as ex-Neda chief is familiar with the MCA. But still, the damage to public trust was done.

If there’s one agency that can’t escape blame in these controversial deals, it’s the Neda itself. It acts as the secretariat of the Investment Coordination Committee (ICC) and has enough chances to see to it that projects proposed by line agencies are aboveboard.

Such huge projects usually go through the scrutiny of the Neda technical staff before being tabled at the ICC technical board. Then, they go through another round of discussions at the ICC Cabinet committee before they are set for approval by the Neda board, headed by no less than the President.

So in effect, Neda, as an institution of governance, has at least four chances to correct possible anomalies in the process of coming up with a proposal as the NBN.

The real problem with Neda is that it has been quite timid to play its role. In the discussions regarding the NBN and CEP, all the Neda did—according to sources within the organization—was determine whether or not these projects were “consistent” with government goals.

Did Neda officials bother to check the economics of the project, its costs and benefits, its technical feasibility and the possibility that it was overpriced?

Neda officials were not even bothered by the fact that there was no way it could determine whether or not it was bloated. They simply assumed that the proponents—bureaucrats from the Transportation department and Education department—submitted their proposals in good faith like angels. They simply assumed that a “government-to-government deal” is legally sound without ascertaining the true costs of the projects through economic measures such as open bidding.

It’s possible Neda failed to do its job for lack of technical expertise. In the last two Senate hearings on the NBN, the proponents (specifically Transportation Secretary Leandro Mendoza and his assistant secretary Lorenzo Formoso) could not provide enough justification for the NBN in financial and technical terms.

The hearings proved what professors from the UP School of Economics had said all along—that the project didn’t undergo any decent feasibility study. There was no honest-to-goodness numbers crunching. Grilled by senators, Transportation officials couldn’t answer even the most trivial details (like the cost components of government telecommunications expenditures) on the “savings” that the supposed NBN could bestow on the country’s coffers.

Apparently, the Neda technical committee assumed that the Transportation department’s numbers on the projects’ cost and benefits, as well as their economic rationale, were accurate.

Assuming that Neda indeed lacks technical expertise on the technical and economic nitty-gritty of NBN and CEP, the best thing it could have done is open the process to public participation and debate. It should have been transparent since the inception stages of the two projects by giving all the details of these projects to the media. Had it done that, the country could have been spared this wrenching political process.

Technical questions on DepEd's Cyber Education Project

2007-09-24T18:42:00.000-07:00

THE “suspension” of the controversial national broadband network (NBN) and the cyber education project (CEP) probably signals that these deals with the Chinese government are dead.

They should be. It was obvious right after the second day of hearings that there is no way the government could justify these deals in financial, technical and moral terms. The continuation of the hearings will probably confirm peoples’ suspicion all along—that they are all questionable deals attended by anomaly and corruption.

On the NBN, there was actually no need to “suspend” it because the Supreme Court had already issued a temporary restraining order. But the “suspension” from Malacañang signals a political retreat for which there is no recovery. It’s a political gambit hoping that the anger and frustration the people feel about this anomaly would somehow dissipate.

Not only should the senators continue to sort out the whole NBN mess; they should also examine the whole package more closely.

The CEP’s propagandists are saying that the project suffered collateral damage from the NBN brouhaha. We don’t think so. The CEP also carries many of NBN’s original sins: no competitive bidding, lack of transparency and no independent technical evaluation. And it involves an even bigger amount: $500 million, which we are going to pay in the next 20 years.

If the NBN is a shark, therefore, the CEP is a probably a great white shark!

Make no mistake about it: we are not against an Internet-based education per se. We believe that the country needs to upgrade its educational system and Internet-based education, or something to boost distance learning would help.

Of course, in a list of priorities, it’s also a question whether or not a satellite-based network should prevail over basic issues like teacher training, curriculum reform or providing the basic things like books and classrooms. But this question is secondary to the bigger issue of whether or not the CEP had also been tainted by bribery.

Analysts think this way because the CEP came to the signing table in China on April 21 despite many unresolved issues. Even the technical working group (TWG) from the Department of Transportation and Communications (DOTC) had been stressing all along that the CEP suffers from many technical questions. One such issue is the “overlaps” between the NBN and the CEP that would cost the government billions of money.

On February 13 the joint National Economic and Development Authority-Investments Coordination Committee (Neda-ICC) and Neda-Cabinet group meeting in Malacañang agreed to “sort out” this issue. On February 28 the DOTC TWG released its report, saying the CEP suffers from the following problems:

1. The system will use satellite communications (SatCom) which is expensive. SatCom may not be a long-term solution and will require high operating expenditures;

2. It’s a huge infrastructure for a single user, a waste of valuable government resources;

3. The operating capability of the Department of Education (DepEd) is at issue since its core competence is in education and not satellite communications. According to the report, the DepEd “cannot change-manage to become a technology provider as it is beyond its core competence;”

4. The DepEd needs connectivity but could achieve the same not through the Internet but through an Intranet. This option is achievable through a less-expensive network configuration; and

5. The CEP, to establish its own broadband system, is directly overlapping with the NBN.

And the recommendation? It makes sense to have a single backbone for government VOIP, e-governance and e-learning. The DepEd may implement its e-learning programs using the NBN “as provider for its transmission requirements instead of building its own backbone using satellite communications.”

In the March 26 ICC-Cabinet meeting, Lorenzo Formoso, DOTC assistant secretary, himself admitted that there is an “overlap” between the NBN and the CEP projects and that the two are going to be “underutilized.” Then-Neda Director General Romulo Neri supported Formoso, saying the cost of the overlap would reach P4 billion to P5 billion.

In the same meeting Formoso expressed reservations about the CEP, saying that the satellite technology to be used by the CEP “has not been widely used as a main transmission mode given cost-related considerations.”

So why did the government push through with the project despite reservations among the technical guys and the Cabinet?

The minutes of the March 26 meeting says: “Secretary Neri noted that the Chinese government’s position [is] that the NBN and the cyber education project be treated separately. He added that while the Chinese Embassy, in a letter, has expressed readiness to show flexibility should DepEd and DOTC reach an agreement, Secretary [Jesli] Lapus has already indicated his preference that the CEP network be dedicated to education. Secretary [Leandro] Mendoza, he shared, has also expressed readiness to remove schools as part of the NBN project design.”

That statement seems to mean that despite serious reservations from the Cabinet and the technical guys, the CEP and the NBN should proceed because the Chinese government wanted them as separate projects; Lapus wanted his CEP badly no matter what; and Mendoza also wanted his own NBN—all with no bidding and no transparency. It’s a classic quid pro quo “for the boys” deal that would make a few bureaucrats happy at the expense of taxpayers who are going to suffer a higher debt burden in the next 20 years.

Yes, the Senate investigation should continue. It should give an equally critical look at the CEP and let the ax fall on those who deserve it.

GMA "suspends" NBN

2007-09-22T01:07:00.000-07:00

The latest report from TV said President Arroyo has “suspended” the NBN project. What that “suspension” means remains to be clarified. What is certain is that NBN is beyond salvage and the president really has no option but to back off this controversial deal conceived by the dirty rotten scoundrels. The whole deal, as shown during the Senate inquiry could never be defended morally, financially, and technically.

NBN down, CEP next?

Senate inquiry demolishes DOTC's justification for the NBN deal

2007-09-20T03:14:00.000-07:00

This whole NBN thing, according to DOTC, is all about “security” and “savings.”All these justifications were blown away in today’s hearing (September 20) at the Senate.

When questioned by Senator Noynoy Aquino, Assistant secretary Lorenzo Formoso himself admitted that given time and resources, anybody can hack any system, including that of the NBN.

Well, the national security issue is really crazy. The truth is that government has been using private networks for its e-mail and other communications needs since time immemorial, but “security issues” was never a problem. It has never been a problem during the time of President Fidel V. Ramos, a former general who probably appreciates “national security” more than anybody else in the DOTC. Besides, if “national security” were an issue here, then wouldn’t it be riskier to entrust government’s information to a foreign state? Unless they’re saying a foreign government is trusted more than the Filipino private sector.

In our midst today are huge multinationals owning sensitive intellectual property, including patents and trade secrets worth billions of dollars greater than the Philippine GDP. Yet these MNCs never felt compelled to build their own separate fiber-optic backbone. Imagine a situation where everybody lays down fiber-optic cables for “security reasons.” Wouldn’t that be the ultimate “spaghetti sa ibaba,” underneath our soil and the seas?But private firms do have their own private and secure network, not by having their own separate physical backbone, but by buying capacities from existing privately run backbones—PLDT and Telecphil. For instance, it’s not uncommon for these huge firms to use Telecphil facilities for their Philippine operations while connecting to the PLDT backbone for their fiber-optic link to their headquarters in the US. And security has never been an issue because there are a thousand and one ways of securing them.

Senator Roxas also did a good job at demolishing the “cost justification” of the DOTC. Formoso said government will save P4 billion, but also admitted that he doesn’t know how much is the cost component for government calls outside the NBN system, meaning we are actually not going to save money at all.

In truth, it was President Arroyo herself who clarified that the bulk of those communications expenses by government are accounted for by mobile- phone calls, and government officials are going to continue using the facilities of the telcos. Recent advertisements by the DOTC indicate that government will even continue relying on existing private Internet providers despite the NBN. The DOTC says that government agencies will save through NBN’s voice-over-internet calls among themselves. That is true, but they are not saying something crucial: the government will still have to pay the telcos when it has to call outside of the NBN backbone.

And then Formoso also admitted, when questioned by Senator Zubiri, that the technology would be obsolete after ten years while we taxpayers are going to pay for it in the next 20 years!

I could only see that as this Senate hearing continues, this whole NBN deal will be in tatters. What could you expect, these whole NBN deals have always been based on myths and falsehoods.

Please see related posts
Let’s junk the NBN-CEP deals
Philippines’ NBN: government porn at broadband speed?
NBN: A backbone of waste and shame

Let's junk the NBN-CEP deals!

2007-09-19T19:02:00.000-07:00

What’s in these controversial national broadband network and the cyber education project deals with China that’s keeping Malacañang from junking it?

By the way things are unfolding, it appears that the costs—political, social and economic—vis-à-vis their supposed benefits to the government and the people, are just too enormous. These projects are not worth the troubles and sufferings that it will cause the Filipino people and the Republic.

The political costs are just too staggering. The people know that they are going to pay more than $800 million (P37 billion) in the next 20 years for projects of dubious benefit to the country. Hence, pushing through with the project would only polarize the people further, setting us for another round of ruinous political instability.

More political storms might yet sweep the ruling party off Malacañang, thus causing uncertainties. Or worse, we might wake up soon seeing some adventurous elements in the military attempting another coup in the guise of “saving the Republic.”

The economic costs are just as tremendous. In the second quarter this year the Philippine economy grew by 7.5 percent after several years of growing within the relatively decent 5-percent to 6-percent band. The employment outlook had actually improved to register a 7.4-percent jobless rate after hovering at 8 percent in the last several years.

That trend means that the Philippine economy has actually started to produce gains for the ordinary man on the street (although many would say that they could still not feel it).

At the start of the year, Filipinos were actually hoping that the economy is going achieve a momentum based on the common expectation that the ruling party, seeking a good “legacy,” would be inclined to behave well in the last three years of the Arroyo administration. We may have to kiss this encouraging growth trend goodbye should the government insist on pushing through with the controversial deal.

Why? Political instability will turn off potential foreign investors. Uncertainty will force local companies to wait for 2010—when a new President is elected—before making any significant business decisions, implying that we won’t be able to produce more jobs that are sorely needed to address mass poverty.

The government, especially the executive branch, will be distracted from pursuing programs and projects needed for development. Public investments are going to be wasted as the exigencies of political survival are likely to be the main determinant in decision-making.

A lot of questions were raised following the bombshell of a testimony exploded by businessman Jose de Venecia III.

Did government officials, including Elections Chairman Benjamin Abalos, Transportation Secretary Leandro Mendoza and former

Socioeconomic Planning Secretary Romulo Neri take the money that was reported they got? What’s an Elections top official like Abalos doing in the business about broadband? And why is the President’s husband, supposedly a private citizen, involved in the deal? Did he also benefit from the supposed bribes? What’s Malacañang’s role in this mess?

Answers to these questions and possible denials by government officials in the now-unfolding top-rating Senate hearings will only spur more questions and speculations until it swamps the very halls of Malacañang. And it will only be Malacañang’s fault because from the very start—from its inception until this very moment—the involved officials really tried to hide the truth from the public, the same public who is going to shoulder the burden of paying the humongous loan from China.

The only solution is to junk those deals. That’s the only way the government can lessen the political and economic impact of this raging controversy. The deals are not worth the agony the people are going to suffer. Junking it now while the Senate is investigating the issue is the only sensible way to go.

It’s the only sensible option available to us—unless, of course, Joey de Venecia’s allegations about bribery are true. Because if indeed government officials in high places, especially the dwellers of Malacañang, did take the money, we are in deep trouble. It means the government is going to ram those sleazy deals down our throat at all cost. These officials are going to tough it out because the deals have become their private or personal wealth that we have guaranteed with our taxes in the next 20 years.

But we, the ordinary Filipinos, are not only going to pay it with our taxes. We are also going to pay it with our national sovereignty, or whatever is left of it. Because from now on, the threat of China’s exposing the people in high places who are involved in bribery would likely force these government functionaries to kowtow to Beijing.

We should not wonder, therefore, if in the next three years, these Philippine officials would behave like Chinese lapdogs.

The signs are not encouraging at this stage. A day after de Venecia’s testimony, Transportation Secretary Mendoza assured Beijing that the deal would push through—at all cost.

A new loyal subject sucking up to a new master?

(Note: I wrote this piece as editorial for BusinessMirror, 20 Sept 2007)

Apec should get real

2007-09-18T04:06:00.000-07:00

Sadly, hopes that Apec would provide a valuable arena in which to pursue the goal of open markets for trade and investment have fizzled. As the trade agenda has weakened, interest in Apec around the region has waned, and some nations have turned their attention to other regional or bilateral agendas.—Edward B. Lincoln, Brookings Institution, Washington DC, December 2001

The conclusion of the meeting by Apec leaders about two weeks ago was pure ho-hum that it didn’t even merit any story from prominent newspapers like Wall Street Journal. It was as if the meeting didn’t happen at all. The International Herald Tribune online did banner the story in its Asia-Pacific section, but the article said it as what the meeting really was a junket for politicians that “fizzled into an inconclusive end.”

The ministers actually managed to come up with some vague statements on climate change, energy security and a code of conduct on corruption. But observers read these statements with a yawn as these simply highlighted the lack of tangible progress on trade and investment liberalization, the raison d’etre of the organization.

The last Apec summit should be a big disappointment for many who see it as a possible forum for resuscitating the Doha Round of trade negotiations that gave so much promise to the developing world.

Apec actually played that role when the Uruguay Round of trade negotiations under the General Agreement of Trade and Tariff (GATT) was sputtering due to the continued resistance of the European Community to subject agriculture to the trade-reform effort.

When Apec economies, however, issued the Bogor Declaration on November 15, 1994, calling for Asia-Pacific free trade starting 2010, Europe noticed and started softening on the draft agreement in agriculture, leading to the conclusion of the Uruguay Round of Trade Agreement (Gatt) in Marrakesh, Morroco, in 1994. That day, developed economies promised to do away with trade and investment barriers by 2010 and the developing economies by 2020.

In 1997 Apec members decided on the acceleration of the removal of tariffs on information-technology products, a landmark agreement that was eventually adopted by the World Trade Organization (WTO).

Since then, however, Apec started to drift into irrelevance as it has started moving away from its economic thrusts, especially after 9/11, when America’s attention shifted to the “war on terror.”

Some analysts, however, have been saying the problem lies in the structure of Apec itself, especially on how it does its business.

One such weakness is Apec’s belief in “open regionalism.” It means that members of Apec are supposed to eliminate barriers to trade and investments on a “most-favored-nation” basis, meaning that members and nonmembers alike benefit from the trade reform.

Economists would love this concept, but it appears to be naive since other countries wouldn’t have the incentive to offer concessions in return since they enjoy free-rider benefits. Let’s face it, even the most ardent admirer of free trade thinks like a mercantilist when it comes to trade talks.

Compounding this problem is its adoption of the principle of “concerted unilateralism. Under the WTO, countries negotiate concessions from each other. In Apec, members are supposed to voluntarily remove investment and trade barriers through individual action plans (IAP).

The results have been that most IAP simply echoed their commitments with the WTO, with no real tangible results except annual photo-ops of presidents and prime ministers wearing national costumes of the host country.

It has become a social club where leaders are not supposed to tax each other’s patience with real demands for real reforms in trade and investments, an annual masquerade ball that is fast drifting into irrelevance. Proof of this is the growth of the bilateral free-trade agreements between and among Apec members, a process that has undercut the influence of Apec as an economic forum.

Solution? Experts like Alan Oxley from Monash University think the economic grouping should now have a new mission focused on “growth and productivity.” That is certainly a laudable objective, but such a thrust would simply undermine further Apec’s relevance.

If its members want to remain relevant, it should stay within its core objective of promoting trade and investment liberalization, where growth and productivity are certainly assumptions.

It should consider reforming its ways of doing things and adopt what Edward Lincoln and Kenneth Flamm (analysts from the Washinton DC-based Brookings Institution, a think tank) consider as “open reciprocal regionalism.” Members should start negotiating among themselves, and the benefits of trade reform should accrue to all who reciprocate such reforms.

This way Apec could achieve three things. First, members would get serious in preparing their trade and investment-liberalization action plans. Second, the group would be able to address the free-rider problem inherent in its current setup. And third—who knows, Europe and the rest of the world might yet be interested in reviving the stalled Doha Round.

And why not? Apec certainly has the pull for it accounts for more than half of world trade and counts among its members the world’s largest and fastest-growing economies, including the US, Japan, Australia, Korea, Taiwan, China and India.

All Apec needs to do now is get real.

The looming talent crisis in the Philippines

2007-09-13T22:12:00.000-07:00

‘Brain drain” is a reality that the Philippines has to deal with squarely. And we should deal with it now.

As we have discussed in our recent five-part series on the issue, brain drain has gone mainstream, affecting all sectors of the economy, especially hospitals, airlines, mining, manufacturing, information technology, the performing arts, journalism, the armed forces, aviation, weather forecasting, hotels, advertising and accounting. It has negatively affected both the public and private sectors.

Name any profession these days, and chances are one could immediately hear complaints about companies finding it too hard to find or retain “the right people” for the simple reason that the best ones are leaving for better-paying jobs abroad. It has become a major headache among private companies and even a greater problem within government bureaucracy.

Gone are the days when employees are expected to stay with the company for the rest of their lives. These days, employees, especially the highly skilled ones, are in constant search for employers that can give them the best working environment, the best pay package, the best experience, and training that could even enhance their skills—companies that could give them the excitement of doing “the next big thing.”

With the rapid flow of information, national borders have become meaningless—more so because Filipinos, having imbibed the culture of both the East and West by virtue of our historical experiences, could easily adapt in any cultural environment.

Make no mistake about it, the trend toward greater global labor mobility is not just related to the personal decisions of individual employees and the greater ease to travel beyond national borders. The corporate world has also contributed to this trend.
In the ’80s, “corporate downsizing” became the trend as companies tried becoming “lean and mean” to cope with global economic slowdown and greater global competition brought about by the emergence of “newly industrializing economies.” Suddenly, the old labor-management ethos of “lifetime employment” and “company loyalty” vanished as hundreds and thousands of workers lost jobs across the globe.

Recent literature on labor migration says the term “brain drain” is old-fashioned given the mounting evidence for brain gain and “brain circulation,” a phenomenon described by AnaLee Saxenian, dean of the University of California Berkeley School of Information, as the tendency for skilled migrants to return to their native lands as entrepreneurs and bridges for investments and technological diffusion while maintaining their links with the US.

This is certainly an emerging trend in Ireland, Israel, China and India, and to a limited extent, the Philippines.

But we continue to call it “brain drain” because the diaspora of skilled professionals from the Philippines is likely to get worse before it could get better. The push and pull factors are strong as ever.

On the one hand, the continuing tales of corruption in high places (the latest of which involves the national broadband deal and cyber education project with the Chinese government), low pay and the continuing perception of lack of appreciation by many company managers of local talents, especially in areas like the medical profession, are among the major push factors.

On the other, demographic transitions (more people getting old) in countries like the US, Europe, Australia and Japan, and growing expenditures for health facilities in Middle Eastern countries, are forcing governments in said countries to open their labor markets to Filipino medical professionals (mostly nurses, doctors and medical technicians).

High crude prices are enriching the Gulf States, translating to a flurry of investments in commercial centers, oil rigs and platforms, thus attracting thousands of construction workers, architects, engineers and managers.

And more important, in this age of the knowledge world, even governments are actively seeking talents across cultures, hoping to maintain their economic edge. The governments of the US, Singapore, Canada, New Zealand and Australia are actively recruiting from all over the world, including the Philippines.

All these trends are beneficial to skilled professionals and technical people. The skilled ones now have more options in life. But soon these trends are going to hurt emerging industries that are dependent on the supply of skilled labor, like outsourcing, finance and mining. Give it three years, says one corporate executive, and skilled workers would really be a real problem, unless the private sector and the government could cook up policies to address the problem.

The Philippines is a democracy. We can never stop people from seeking happiness beyond our borders. The only way the country can effectively address the problem, therefore, is by raising the supply of skilled labor for both the local and global labor markets.

Who's next?

2007-09-12T19:33:00.000-07:00

Hey, our courts could actually convict a president! That's great! Who's next?

Talent war hits the Philippines hard

2007-09-12T04:00:00.000-07:00

By David L. Llorito, with Jesse Edep & Louise Francisco (Researchers, BusinessMirror)

When the management of Fairchild Semiconductors, a global electronics firm, offered industrial engineer Manuel Villa, 32, a management job in Singapore three years ago, he didn’t hesitate to grab the offer. Not only was the pay great—five to six times higher than what he is earning in the Philippines—moving to Singapore, he believed, could also open doors for future career advancement.

“The No. 1 factor [for my decision] was exposure—the opportunity to work and be trained in a different culture, in a headquarter-corporate level setting, which should open a lot of other doors for me in the future,” Villa explains. “It will greatly help my marketability should I decide to pursue a position in our US office or other companies, either in Singapore, other countries, or even back home in the Philippines.”

Fairchild has multiple operations in the region, including South Korea, Penang in Malaysia, Suzhou in China and Cebu in the Philippines. Since most of the sites are in Asia, the company decided it was time to set up a regional office.

“Singapore is the central and best location. A group was formed, by picking out specific individuals already working for the company, to form the pioneer team. I was one of those picked and endorsed from the Cebu site,” boasts Villa.

Villa is a typical beneficiary of what human-resource experts describe as the intensifying global “war for talent,” as companies—both local and foreign—fight tooth and nail for skilled workers all over the world. And while the stiff competition for talents is benefiting Filipino professionals, private companies are concerned that the loss of local talent would hamper the competitiveness of the domestic economy as companies find it hard to match the offers from multinationals.

A growing concern
In a study by Grant Thornton International released by the accounting firm Punongbayan & Araullo (P&A), 43 percent of Philippine companies picked the scarcity of skilled labor as the “major roadblock” to their expansion plans. Last year, only 15 percent of Philippine companies complained of the same problem.

With the steady exodus of the country’s best and brightest, it was only a matter of time, the study warned, before local businesses would begin to show signs of strain over the brain drain.

“The results this year clearly reflect the problem that employers across industries are experiencing, which is the draining of our local talent pool,” says P&A’s managing partner and chief executive Greg Navarro. “Even in the accounting practice, we are struggling to compete with foreign firms that see the Philippines as a good resource for highly trained, English-speaking certified public accountants.”

Indeed, official statistics from the Philippine Overseas Employment Administration shows that the country has been practically bleeding talents. Since 2000, the Philippines has been sending an average 79,000 professional and technical workers, 500 managers, 4,000 clerks and 70,000 production workers a year, many of whom are college graduates.

Within the same period, 10,000 nurses have left the country each year for Saudi Arabia, the United Arab Emirates, the United Kingdom, Ireland, the US and other destinations. On average, close to 13,000 caregivers, many of whom have nursing backgrounds, have left the country annually, many of them going to Taiwan, Israel, Canada and the United Kingdom. Japan and South Korea were the favorite destinations for performing artists, averaging 55,000 a year, while IT workers have been leaving at the rate of 300 a year to countries like Saudi Arabia, the US, Malaysia, Singapore and the United Arab Emirates.

The actual deployment of IT workers should be higher as most of them who are now working in countries like Singapore and Malaysia were directly recruited by their would-be employers. Others simply packed their bags and applied directly to companies. It’s so easy to do so because Singapore, being a member of the Association of Southeast Asian Nations, does not require visas from travelers from the Philippines.

“There are many Filipinos here [in Singapore], especially the professionals, middle-income class,” says Villa. “They are into IT and other fields as well, like management, restaurants and hotel-related, engineering, and logistics. Besides domestic helpers, I have met Filipinos working as waiters, department-store personnel, clerks, engineers, managers, academicians, church workers, airline personnel and others more. The Filipino population here has already reached 120,000, and still rising.”

Affecting all sectors
Analysts used to think that the diaspora of professionals only affected a few sectors of the Philippine economy, like seafaring, aviation, engineering, construction and nursing. But in the last three years, it has started to affect almost every sector of Philippine society. The Philippines is sending journalists to Singapore, Saudi Arabia and the United Arab Emirates; engineers and oil-rig workers to Nigeria, Russia and the Gulf states; speech and physical therapists to the US; and mining engineers and geologists to Australia and China. There are now Filipino accountants in Silicon Valley in California, and some are heading for Australia.

According to the Personnel Management Association of the Philippines (PMAP), industries suffering from high turnover rates these days include pharmaceuticals, banking, consumer goods, hotels and restaurants, electronics and semiconductors, and telecommunications and computers. About 33 percent to 59 percent of employees leaving their jobs in these industries, according to a PMAP survey, went abroad.

“In just 12 months, we lost about a dozen human-resource officers to other companies,” says a human-resource officer for a pharmaceutical company.

Even the public sector is increasingly being affected by the war for talent. The country’s weather bureau and the Mines and Geosciences Bureau are losing weather forecasters and geologists to the private sector here and abroad. The Department of Science and Technology (DOST) is hard hit as well. Sources from the DOST reveal that out of almost 3,000 scientists with PhDs in various scientific disciplines, almost 500 have already left the country in the last few years.

Even the military has not been spared from this phenomenon. Sources from the Philippine Army say the Australians are currently recruiting Filipino soldiers.

“They [the Australians] know that Filipino soldiers are well-trained in the different occupational specialties—infantry, cavalry, armor, signal, engineer, etc.—which makes them competent and efficient and can communicate or verbalize very well,” says an Army officer who doesn’t want to be identified. “The Armed Forces of the Philippines is using American military doctrines, and it is compatible with Australian military doctrines.”

The military officer adds that the Australians are luring Filipino soldiers with citizenship offers. Filipino soldiers are also being recruited because of their exposure in asymmetrical warfare or counterinsurgency operations. “For several decades, our soldiers have been fighting the NPA [New People’s Army], secessionists and terrorist groups. The Australians do recognize this Filipino talent,” the officer says, adding that Filipino soldiers who once served as United Nations peacekeepers “established connections during their tour of duty and after they retire or resign, they join the US or UN as civilian contractuals.”

Peter Goellnicht, principal migration officer of the Australian embassy here in Manila, however, denies that Australia is recruiting soldiers from the Philippine Armed Forces. In an interview, however, he admits that he is aware of “a couple” of former Filipino soldiers who were granted visas on the strength of their professional qualifications as soldiers.

Drivers of the global talent war
Noel de Luna, country manager of Mercer Consulting, a global human-resource company, attributes this increasing competition for workers in the Philippines to demographic changes in the US and the Asia-Pacific.

“There’s a war for talent out there because China is growing so fast and its population is aging,” says de Leon. “Japan also has an aging population. If you look at the demographic profile, its working population has been going down since five years ago. But the trend about rising demand for skilled workers is really Asia-Pacific-wide.”

In a region-wide survey by Mercer Consulting this year, de Leon reveals that 50 percent to 77 percent of companies in Japan, South Korea, China, Hong Kong, Taiwan, Singapore, Malaysia, Thailand, Indonesia, Vietnam, Australia and New Zealand have expressed hiring intentions even as many of them are experiencing double-digit attrition rates.

“And where are they going to get new talents? Naturally, many of them would recruit from the Philippines,” says de Leon.

Besides demographic factors, the larger forces of globalization seem to be the bigger explanation. In a paper entitled “Global Competition for Skilled Workers and Consequences,” Manolo aAbella, a Bangkok-based labor-migration expert formerly connected with the International Labor Organization, says that the raging war for talent results from the growth of global supply chains as liberalization of trade policies has made it possible for transnational companies to move production to cheaper locations.

“The emergence of these global production structures have been everywhere, accompanied by greater movements or transfers of technical and managerial personnel,” says Abella. “Another important development has been the growth of informal as well as flexible forms of employment, opening markets for foreign workers willing to enter occupations or sectors abandoned by natives.”

Still another factor is the rapid expansion of the knowledge economy and the demand it has created for a ready supply of young IT professionals, he adds.

According to economist Dieter Ernst, senior research fellow of the East-West Center based in Honolulu, the trend towards “downsizing” among American firms, is also a major factor. Ernst explains that because many American companies operate on a very lean staff, they have to scramble for specialized skills once demand from buyers shifts to new products that require new technologies.

“For many high-tech companies, competing for scarce global talent has become as major concern,” says Ernst. “As a result, global sourcing for knowledge workers now is an important global manufacturing and supply chain strategies. The goal is to diversify and optimize a company’s human-capital portfolio through aggressive recruitment in global labor markets.”

But what’s adding fire to the global talent war is that countries, especially those suffering from low population and labor-force growth, are engaged in systematic recruitment in response to the growing skills scarcity. The US, Canada, Australia and Singapore are among the most aggressive.
Canada and Australia have been offering permanent residence and citizenship as incentives for skilled migrants. Through its H1-B visa, Americans have been luring IT workers to Silicon Valley. Middle-East countries like Saudi Arabia and the United Arab Emirates have been giving temporary admission to skilled engineers, welders, pipe fitters, accountants, journalists, and advertising people from the Philippines and other Asian countries. Australia has also been using its universities as “academic gates” for attracting skilled migrants from all over the world.

Singapore has an office, Contact Singapore, that actively recruits talents from all over the world, offering incentives to would-be immigrants to become permanent residents and eventually become citizens.

“The government does encourage permanent residents with good standing to stay,” says Villa. “They extend all of the basic services they offer to their citizens, including medical services, wherein the social system will help you pay only a fraction of the medical costs. There are tax exemptions—tax rebate payouts—if the government performs well and has a budget surplus.”

Winners and losers
Certainly, skilled workers like Villa are the main beneficiaries of this global competition. Because of the increasing scarcity of talents, vulnerable companies are upgrading pay scales for their skilled workers in an effort to stave off staff piracy from other companies.

Patrick Marquina, an associate consultant for Watson Wyatt, a human-resource firm, notes that this year, 148 companies in manufacturing, business-process outsourcing, banking and other industries operating in the Philippines have raised their pay scales by an average of 9.21 percent, almost three times over the country’s inflation rate. Rising pay scales, Marquina explains, are particularly high in outsourcing and IT-related businesses.

Mercer-Philippines, another human-resource outfit, confirms the trend in a similar survey. Floriza Molo, information product solutions business leader, said 180 companies involved in the consumer, computer and telecommunications, pharmaceutical and other industries have, in the past year, increased their pay scales by an average of 8.13 percent and forecasted an 8.34-percent pay hike in 2007.

“In the Philippines, the scarcity of skilled workers has led to continuous increase in compensation and benefits for all the industries,” says Molon. “Though most companies remain conservative in giving increases, overall national competitiveness has driven local companies to compete with multinationals to be more aggressive in terms of base pay and giving premium to the employee.”

Analysts and corporate executives are worried that the continuing diaspora may hurt the country’s prospects for development. A critical mass of native people, Abella explains, is necessary to create new knowledge and technologies that are essential for progress.

“Experience has richly shown that human capital, rather than natural-resource endowments, is the key to economic development,” says Abella. “The current competition for the highly skilled has naturally raised alarms that it will further aggravate the problems of developing countries in creating a critical mass of professionals and technical workers needed to raise productivity.”

From OFW to Pinoy Expat: analyzing the Malu Fernandez controversy

2007-09-09T18:19:00.000-07:00

Global talent has never been more mobile, thanks to changes at the national, regional and international levels which have eased their flow across borders. Many countries, developed as well as developing, have designed policies and programs to attract talented people as students, temporary workers and immigrants. —Gerry Rodgers, Director, International Institute for Labour Studies, International Labor Organization

Ex·pa·tri·ate (n): somebody who has moved abroad; a citizen who has left his or her own country to live in another, usually for a prolonged period.—MSN Encarta Online Dictionary

WHY don’t we discard the term “OFWs” and use “Filipino Expat” instead?

“Filipino expat” is a neutral term used by most countries in the world, and free from the harsh and bitter narratives that characterized the evolution of the descriptor for the hardworking overseas Filipino.

The use of the term OFW (overseas Filipino workers)—and the social narratives behind it—may have gone out of date, and may account for why the blogosphere blazed in sheer hatred and venom when a certain Malu Fernandez denigrated Filipinos working abroad and typologized class stratification in Philippine society in terms of Jo Malone-versus-Charlie/Axe.

It’s possible that many OFWs now are wearing Bulgari or Gucci or Poison by Christian Dior or Chanel No. 5, hence the global moral outrage. In fact, what the matapobres in this world failed to realize is that the composition of expatriate Filipinos working abroad has slowly but surely undergone a profound transformation.

For decades we were sending many unskilled workers all over the world, after those heady days of the ’70s when the cream of our construction workers were tapped by Saudi Arabia and other Middle Eastern countries to build their infrastructure.

But then there was the wave of entertainers, mainly to Japan, and the domestic help—with many of the unskilled ones going to the Middle East and many of the college -graduate types, such as teachers—landing in Asia (primarily Singapore and Hong Kong) and Europe (Italy and Spain).

Unfortunately, besides the downside of labor export in terms of losing some critical skills for nation-building, the past decades were also littered with stories of abuse, primarily because of labor systems that were skewed in host countries. It was only in recent years, thanks to pressure from multilateral organizations, that host countries have worked more closely with labor exporters like the Philippines to substantially reform their work and wage systems.

These days, the share of skilled professionals (including those in the health field, such as nurses), technicians, managers, investors, engineers and accountants, among others, to the overall number of people leaving for work abroad are rising—partly owing to a deliberate, initially criticized state policy early this year to set floor wages for deployed domestic help in a bid to prevent labor importers from targeting uneducated, hence easily exploitable, workers.

Hence, if one looks at the distribution of Filipino expatriates abroad, one wouldn’t be surprised to have workers wearing varied types of fragrances, from the cheapest to the most expensive, befitting their economic status. .

This observation may find resonance in the fact that nearly half of the buyers of condominiums and properties in the prime areas of Makati and Fort Bonifacio, as well as in cities outside Metro Manila, are expatriate Filipinos. Why is the property sector on the upswing these days? Why are bookstores, boutiques and gadget shops selling expensive stuff proliferating? It’s the money from expatriate Filipinos. There is no longer any basis for the matapobres to look down on expat Filipinos anymore. Not that they were ever justified to do so anyway.

The typical narrative about the OFW is Angelo de la Cruz, that scrawny desert-truck driver begging for Philippine officials to bring the troops home so his captors would spare his life. It could also be Flor Contemplacion, the maid convicted for murder of a fellow Filipino maid in Singapore.

Their narratives—even when they were still called OCWs or overseas contract workers—are stories of privation and hopelessness, tales that particularly recurred during the ’70s and the early ’90s. From the perspective of the media covering the Philippines and even from many among us, the term OFW has come to be associated with images of despair and backwardness.

These narratives, however, have started to get obsolete since the late ’90s as more and more Filipino professionals and skilled labor are joining the global labor markets. Horror tales of maids getting raped are still there, but stories about successes of professionals abroad has also become prominent.

For every story about abused maids, there are several others about hotshot engineers, doctors, nurses, information technology professionals, accountants and bank managers making it big in the global scene. It’s now a mixed picture, one that won’t fit into the simplistic Jo Malone-versus-Axe class struggle format of Malu Fernandez.

There are many reasons for this phenomenon that goes beyond the usual Filipino-as-economic-refugee thesis. A significant part of this new trend is caused by global dynamics.

For instance, demographic change in advanced countries has prompted rising demand for medical and other professionals, and the Filipinos responded to this opportunity quite well. High crude prices brought riches to oil- and gas-producing countries. They are recycling these petrodollars in exploration and development, as well as the construction of rigs and oil platforms, and are hiring an increasing number of Filipino engineers, architects, geologists, mining engineers and skilled construction workers. That explains the double-digit growth of remittances each month in the last three years.

The rise of the knowledge economy is probably the most important factor. Global companies operating from Asia to Africa have realized that in this brave new world, competitiveness requires smart employees with good ideas in between their ears. Making money now is more about applying ideas to produce value; and it’s so easy to achieve that goal by bringing together critical masses of bright heads from various cultures. To produce graduates with “the global culture,” universities across the globe are recruiting professors from different countries to ensure “cultural diversity.”

It’s not only companies that are massively recruiting people; some countries, in fact, consider it part of their “national interest” to recruit people from various cultures. Countries like the United States, Canada, Australia, Singapore and New Zealand are among the most aggressive recruiters.

The world has changed—courtesy of globalization—and it’s making much of our biases, assumptions and perspectives about Filipinos working abroad obsolete. It’s time for us to appreciate and acknowledge this trend.

(Note: I originally wroted this piece as editorial for BusinessMirror, 10 Sept 2007)

Journeys and reminiscences

2007-09-08T22:36:00.000-07:00

I can’t just shake off these flashes of memories and images (from the Jefferson Fellowship) throbbing in my mind lately, so I captured them in a poem. Some good things never last but their imprints in our consciousness usually stay forever.

Excuse the stillness of Manoa’s nights

For in her depths I dreamed of heights

Unspoiled by the spells and slights

By sea-nymphs’ songs and liliths’ cries

Excuse those lazy Caltrain rides

Through the valley of hearts desires

For from her mighty brains flows forth

Furious torrents that charm men’s hearts

Excuse the dusts raining down from Beijing skies

For on her plains and glorious mountains stand

Imperial gardens and stone walls grand

Waiting for the fiery dragon’s rise

Myths and lies about the NBN and CEP

2007-09-04T18:53:00.000-07:00

FINANCE Secretary Margarito Teves recently told reporters the controversial national broadband network (NBN) and the Cyber Education project (CEP) deals with China are under review. The NBN contract, according to Teves, is far from perfect.

Indeed, the Department of Finance (DOF) should review them thoroughly and with great transparency because, if these deals push through, Filipino taxpayers are going to pay for them in the next 20 years. The amount is huge: $829 million in all, covering $329 million for the NBN and another $500 million for the CEP, for projects with dubious technical and economic merits.

“Far from perfect” is an understatement. Those deals have always been suspicious. They seem to possess most, if not all, indicators of anomaly, and the government has not explained properly the deals to the public. In fact, government agencies like the Department of Transportation and Communications (DOTC), which has been enthusiastically pushing the deal, and the National Economic and Development Authority (Neda), have been obfuscating the issue. The myths and lies thus far spawned are simply adding to the confusion.

At least three major myths or lies are easily detectable.

Myth number 1—DOTC officials say it’s the best deal the government could ever have. It will save the government bureaucracy close to P4 billion in government expenses on communications, including landline calls, cellular-phone calls and Internet connections.

DOTC officials say the NBN and the CEP deals are the most technologically superior vis-à-vis the proposals offered by competitors Filipino-owned Amsterdam Holdings Inc. (AHI) and the American firm Arescom. DOTC officials say AHI’s offer is limited to the urban areas while Arescom is satellite-based, which is supposedly expensive to maintain.

In truth, it was President Arroyo herself who clarified that the bulk of those communications expenses by government are accounted for by mobile- phone calls, and government officials are going to continue using the facilities of the telcos. Recent advertisements by the DOTC indicate that government will even continue relying on existing private Internet providers despite the NBN. The DOTC says that government agencies will save through NBN’s voice-over-internet calls among themselves. That is true, but they are not saying something crucial: the government will still have to pay the telcos when it has to call outside of the NBN backbone.

Right now one would never know the true worth of the NBN, because there are just too many unknowns. From the original amount of only $135 million (Arescom’s offer), the amount has inflated to more than $800 million after the government spun off the CEP from the original NBN component. Besides, both supply deals were not subjected to either a Swiss challenge or international bidding, so there’s no chance of knowing the real score.

And if indeed, a satellite-based technology as proposed by Arescom is obsolete and expensive, why did the government agree for such technology to be used in the other controversial cyber twin, the CEP? The fact is that the DOTC’s technical working group has always proposed a single backbone for both the NBN and CEP and has opposed satellite-based technology.

Myth number 2—The NBN will address the “digital divide.” This is Neda’s line, a dig at the private telcos, which officials say make money by concentrating their operations in the major cities but neglect the countryside. Neda officials say the NBN is a perfect foil to this trend.

In truth, the NBN won’t address the digital divide. The backbone the NBN is going to build will be used solely by government agencies, including about 50 percent of the barangay halls. Yes, barangay halls, but not the barangay residents! Residents in remote barangays will have to wait for the rollout of private telecoms before they can even fantasize about flying in the ethereal realm of the digital world.

And myth number 3—The government needs a dedicated state-owned and controlled Intranet and separate backbone for “national security” reasons. The government, DOTC officials say—and echoed by Neda—has to own and control that backbone so that neither a snoop nor a malevolent hacker could do mayhem.

This argument is really the craziest. The truth is that government has been using private networks for its e-mail and other communications needs since time immemorial, but “security issues” was never a problem. It has never been a problem during the time of President Fidel V. Ramos, a former general who probably appreciates “national security” more than anybody else in the DOTC. Besides, if “national security” were an issue here, then wouldn’t it be riskier to entrust government’s information to a foreign state? Unless they’re saying a foreign government is trusted more than the Filipino private sector.

In our midst today are huge multinationals owning sensitive intellectual property, including patents and trade secrets worth billions of dollars greater than the Philippine GDP. Yet these MNCs never felt compelled to build their own separate fiber-optic backbone. Imagine a situation where everybody lays down fiber-optic cables for “security reasons.” Wouldn’t that be the ultimate “spaghetti sa ibaba,” underneath our soil and the seas?

But private firms do have their own private and secure network, not by having their own separate physical backbone, but by buying capacities from existing privately run backbones—PLDT and Telecphil. For instance, it’s not uncommon for these huge firms to use Telecphil facilities for their Philippine operations while connecting to the PLDT backbone for their fiber-optic link to their headquarters in the US. And security has never been an issue because there are a thousand and one ways of securing them.

If there’s one agency that should be crazy about having a “secure network,” it should be the Department of Interior and the Local Government (DILG). The truth, according to sources from Neda, is that the DILG was never enthusiastic about the project, and this is why Arescom’s proposal, initially offered to the DILG, went nowhere. According to Neda sources, DILG officials thought the backbone was not their priority, thus giving DOTC officials the opportunity to disregard Arescom and endorse ZTE to the Neda Investment Coordination Committee.

The two deals could also be examined on transparency, governance and economic issues—something the professors of the University of the Philippines School of Economics have done extremely well without any reply from either the Neda or DOTC. The DOF should cover all these issues before even thinking of approving the deals.

We dare the DOF to make its own review open to the public.

(Note: I wrote this as an editorial piece for BusinessMirror, September 5 2007)

Please see also related posts
Philippines’ NBN: government porn at broadband speed?
National Broadband Network: a backbone of waste and shame
RP needs Freedom of Information Act to curb corruption